The Federation of American Hospitals says that the CMS isnt being fair to for-profit hospitals in its application of revised Stark rules that went into effect Dec. 4, 2007. The CMS in November announced it would wait a year before applying the controversial stand in the shoes doctrine to academic medical centers and integrated not-for-profit systems. In a significant tightening of the rules governing physician referrals and financial relationships, the CMS said it would no longer grant latitude to relationships between hospitals and practices whose physicians refer patients to the hospitals. The physicians, in the eyes of the government, would stand in the shoes of their practice for Stark violation purposes. Academic medical centers and not-for-profit systems convinced the government that routine support payments made to their physicians groups would become a problem under the rule. The CMS may not have appreciated that for-profits run into an identical problem, said federation General Counsel Jeff Micklos. We have members who have gone forward and changed arrangements. ... Given how strong the penalties under Stark are, our members couldnt afford to take that risk. The federation is asking the CMS to expand the reprieve or modify the rule.
More than $1 billion in cuts to Californias Medicaid program, known as Medi-Cal, are included in Gov. Arnold Schwarzeneggers budget proposal to help close a projected $14.5 billion deficit for next fiscal year, drawing fire from providers. (See related Medicaid story on p. 12.) The Republican governors proposal for fiscal 2009, which requires legislative approval, would slash Medi-Cal reimbursements to physicians and hospitals by 10%. This year, $330 million in Medi-Cal fee-for-service payments would be delayed from June to July. The fiscal year begins July 1. The cuts would affect about 6.6 million Medi-Cal beneficiaries. C. Duane Dauner, president of the California Hospital Association, said that while he recognizes sacrifices are necessary, the payment delays and cuts would exacerbate the financial stress on safety net and community hospitals. While declaring a fiscal emergency, Schwarzenegger is still advocating a $14.4 billion healthcare reform plan in the state, which he said at a news conference has nothing to do with the budget.
A federal appeals court granted the city of San Franciscos request to implement the employer-spending portion of its universal healthcare plan immediately, despite a lower courts ruling overturning the requirement on grounds that it conflicted with a federal statute governing workers health benefits. A three-judge panel of the 9th U.S. Circuit Court of Appeals, San Francisco, unanimously approved a stay on the employer mandate pending the citys appeal of U.S. District Judge Jeffrey Whites December ruling striking it down (Jan. 7, p. 12). Since July, San Francisco has been rolling out its universal healthcare access program, called Healthy San Francisco, and employers were set to start contributing to the program or providing minimum health benefits to local workers starting Jan. 2. The Golden Gate Restaurant Association succeeded in persuading White in its legal challenge that the employer requirement, affecting businesses with 20 or more workers, was pre-empted by the Employee Retirement Income Security Act of 1974.
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