Transcript Slide 1

MHA Update
Western Michigan Healthcare Financial
Management Association (HFMA)
January 22, 2014
Vickie R. Kunz
Senior Director, Health Finance
Michigan Health & Hospital Association
1
Who is the MHA?
• Advocacy organization representing all hospitals in
Michigan.
• Activities include:
– State advocacy on proposed legislation, including
Medicaid funding and policy activities
– Federal advocacy and policy on Medicare and
Medicaid issues
– MHA Keystone Center – Quality Improvement and
Patient Safety Initiatives
– BCBSM Contract Administration Process
• Unique to Michigan
2
Payer Issues
• The role of the MHA is to assist in resolving
systematic payer issues.
• Individual hospital contracts determine terms and
conditions and take precedence.
• Communicate issues to Marilyn Litka-Klein or
Vickie Kunz at the MHA.
3
Health Insurance Expansion
4
Health Insurance Exchange
• Health Insurance Marketplace/Exchange opened Oct. 1 for
enrollment – lasts through March 31
• Launch dominated by technical glitches, website failures;
some improvement in recent weeks
– Improved speed
– Site now permits users to see plans/prices without creating an
account
– Additional staffing in call center, Web chat feature
• But… many still encountering problems and have resorted to
paper/phone application
5
Coverage on the Exchange
• Single portal of application for 36 states, including Michigan:
www.Healthcare.gov
• What does coverage look like?
– No denial for pre-existing conditions
– Insurers must cover a minimum set of services called essential health
benefits
– Must organize their plan offerings into five levels of patient costsharing from least to most protective
– No gender- or illness-based rate setting
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10 Essential Health Benefits Required
• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder services, including behavioral
health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care.
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Michigan’s Exchange
What does Michigan’s exchange look like?
• 13 insurers offering multiple products
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Michigan’s Exchange
• Variety of plans (162), premiums and subsidies
• Coverage began as early as Jan. 1, for those enrolled by Dec.
15
• Wide range of prices dependent on age, tobacco use, county,
etc.
– Less than $140 to more than $1500 before subsidies
– Michigan average: about $300 before subsidies
9
Who can receive a subsidy?
• Individuals with household income between 100 and 400
percent of the FPL ($11,400 and $45,960)
• Between 100 and 133 percent of the FPL: choose the
exchange or a Healthy Michigan Medicaid managed care plan
• Plans available through Medicaid are likely to be lower cost;
co-pays, deductibles and premiums will apply to some higherincome Healthy Michigan Medicaid enrollees
10
Michigan Enrollment – Healthcare.gov
• As of Dec. 28:
• Approximately 135,000 have submitted applications
• 75,511 have selected a marketplace plan
– 70% selected a silver plan
– 16% selected a bronze plan (much lower % than expected)
– 14% selected a gold or platinum plan
•
•
•
•
•
84% are eligible for financial assistance (tax credits)
25% are age 18 – 24
(slightly higher than 24% nationally)
55% are female
No info regarding actual health status.
22,221 assessed for Medicaid/MIChild eligibility
– Don’t know how many have actually enrolled or eligible Apr. 1.
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Impact of High Deductibles
• Medical debt is number 1 cause of bankruptcy in US.
• 34% of people in higher-deductible plans had difficulty paying
medical bills compared with 24% in lower-deductible health plans.
• Deductibles for plans on the federal exchange average $3,000 and
those for the least expensive bronze-level plans average $5,082.
• Lowest out-of-pocket limits on Healthcare.gov plans were $4,350 for
individuals on bronze plans and $8,700 for families.
• Most Americans have less than $3,000 to cover such out-of-pocket
costs.
• ACA requires consumers’ portion of expenses to be capped at:
• $6,350 for individuals
• $12,700 for families
Source: USA Today, 1/15/14.
12
Average Deductibles
Average deductible for employer-provider plans has increased 54%
since 2008.
• 2013 average: $1,135
• 2008 average: $735
Source: USA Today, 1/15/14.
13
The Changing Marketplace
• Roughly 6 million additional Americans had health insurance on Jan.
1, as a result of the ACA.
• 2 million through Health Insurance Marketplace
• 4 million through Medicaid/CHIP
• Enrollments accepted up to Dec. 31, with the final date for premium
collection extended to Jan. 15.
• Some insurers may accept January enrollments as late as Jan. 31,
with benefits retro to Jan. 1.
• Insurance companies needing extra time to process the late
enrollments, and collect premiums before they can verify coverage.
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Impact on Hospitals
•
Some patients put off needed elective care until they could obtain coverage.
•
Patients may schedule appointments, diagnostics or other procedures
without having their insurance cards, ID numbers or documentation of
benefits.
•
Hospitals may not be able to verify coverage and will need to work with
patient on appropriate care plans and financial strategies.
•
Have patients bring a copy of any enrollment confirmation.
•
Some patients have called their new health plan to obtain group health plan
number.
•
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Temporary insurance cards available online for some.
In many cases, insurance coverage will be new and patients may not fully
understand their financial obligations and how it is impacted by their
benefits and provider network.
•
For elective services, provide patients with as much information as
possible prior to service.
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Continued, Impact on Hospitals
•
See AHA Advisory included in Jan. 20 MHA Monday Report.
•
Hospitals are encouraged to monitor the volume of :
•
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Non-emergency services and procedures
•
Calls to managed care and PFS departments
•
Patient complaints or problem escalations
•
Calls to insurance insurers and their response time
•
Private pay billings; and
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Uncompensated care or charity care
Business offices encouraged to carefully review claims denials. If claims were
automatically denied because patient’s enrollment was not fully processed
at time service was provided, hospital encouraged to resubmit claim.
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Healthy Michigan Plan
• Expected to cover about 450,000 low-income adults who are currently
uninsured but fail to meet current eligibility requirements.
• Who would qualify?
− Individuals that are at least 19 years old.
− Those that are single, working with annual earnings up to $15,856 or
in a family of four with earnings up to $32,499.
• Based on 138% of 2013 FPL
• Governor Snyder signed bill into law Sept. 16.
• Would take effect 90 days after legislative session ends.
• March 14
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Cont., Healthy Michigan Plan
• Waiver approved by CMS Dec. 30.
• Enroll Michigan Coalition recently hosted a kick-off webinar.
• Plans to initially enroll ABW population in Healthy Michigan.
• MDCH goal of enrolling 322,000 individuals in 2014.
• Patients, caregivers and others are encouraged to text “InfoMI” to 69866
to receive updates.
• Updates available at www.enrollmichigan.com.
18
Healthy Michigan Implementation
• Uncertainty surrounding status of individual applications that
may be submitted before law takes effect.
• In the mean time…
– MDCH developing a state-specific Healthy Michigan application
– Expansion population will not be penalized for lacking coverage for
first three months of 2014
• MHA working with coalition partners on ways to
identify/track potential enrollees now
19
Payment Limitation - Uninsured
•
E-Alert distributed Jan. 15 to CEOs, CFOs, and various other titles
•
Healthy Michigan Plan includes a provision that hospitals cannot require
payment for service of more than 115% of Medicare from certain uninsured
individuals beginning March 14.
•
Law specifies that a hospital participating in the medical assistance program
under the act and rending services to an uninsured individual shall accept
115% of Medicare rates as payment in full if their annual income level is up
to 250% FPL.
•
See MHA Advisory Bulletin # 1352, dated Oct. 28, 2013 for guidance on
methodology to calculate the effective Medicare payment rate.
•
that hospitals be prepared to communicate their updated payment policies
in the event they receive requests from patients, consumers or local media.
•
Ensure that hospital employees are prepared to direct all phone, email and
in-person inquires to the appropriate individual or department who can
respond to requests for payment estimates.
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Cont., Payment Limitation
MHA recommends:
•
Hospitals be prepared to communicate their updated payment policies in
the event they receive requests from patients, consumers or local media.
•
hospital employees are prepared to direct all phone, email and in-person
inquires to the appropriate individual or department who can respond to
requests for payment estimates for the service requested.
•
Staff may consider answering “no more than Medicare rates plus 15%
prior to the specific calculation for each patient.
•
Preparing hospital staff to answer similar inquires from patients in ER,
observation, inpatient and outpatient settings of the hospital.
•
Updating hospital website contact as necessary to reflect these newly
adopted policies.
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Medicaid Presumptive Eligibility
• Presumptive eligibility = immediate access to services,
coverage for those services
• ACA expands PE privileges for hospitals
• CMS banned use of outside entities in future PE
determinations
• MHA working with AHA to urge the reversal/modification of
this ban
• MHA working with DCH/DHS on getting state guidance to
hospitals as soon as possible
• Some hospitals using their staff with outside entities
providing oversight.
22
Estimating Hospital Financial Impact of Health Insurance
Expansion
• Hospital-specific model available for purchase at
$5,000.
• See MHA Advisory Bulletin # 1350, dated 9/16/13
for link to webinar PPT and recording.
• In general, most hospitals believe bad debts will
increase as individuals enroll in plans with higher
deductibles/copays and as employers implement
higher deductible plans.
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Medicaid
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Payment Reform
• Group Finding Report released Dec. 19.
• MSA staff presented their summary of the results to the
steering committee on Nov. 15.
• MSA staff were requested to complete additional modeling
which will be evaluated prior to the next steering committee
meeting.
• No changes have been recommended at this time.
• No definitive timeframe for MSA decision.
25
Rate and Weight Update
• Effective Jan. 1:
• inpatient DRG and inpatient rehab per diem rates
updated.
• hospital capital rates.
• implementation of MS-DRG Grouper 31.0, implemented
by Medicare Oct. 1.
• Rates available on MSA website.
• HMOs should pay minimum of these rates to noncontracted hospitals.
26
Integrated Care Demonstration Project
• Phased-in implementation of pilot project expected
to begin July 1, 2014.
• Hospitals responsible to negotiate payment
parameters in their contracts.
• Regional implementation
– 4 regions comprised:
– 8 SW counties
Macomb County
– UP
Wayne County
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Integrated Care Project – Cont.
• MSA has selected plans to serve as ICOs with plans currently
conducting readiness reviews.
• Simultaneously, MSA is working to finalize an MOU with CMS
to specify the conditions of Michigan’s wavier.
• No guarantee of Medicare rates for I/P and O/P services
• Ambiguity in rate for SNF payments
28
Integrated Care Project – Cont.
• Third Quarterly Public Forum – Jan. 28 – Kalamazoo
– Pre-registration not required.
– Dial-in option available
• See Jan. 20 MHA Monday Report for additional info.
29
Summary of Hospital QAAPs
• Available in MHA Advisory Bulletin # 1353 dated 11/25/13.
• Provides overview regarding payment allocation for each of
the four programs.
– MACI/FFS
Outpatient Uncomp DSH
– HRA/HMO
Inpatient Psych HRA
• The same tax base is used for all four programs.
• Data updated annually for both payments and tax.
– Can result in change in hospital net benefit/loss.
30
DSH Audits
• Beginning with audits of FY 2011 DSH
ceilings, hospitals subject to DSH payment
recoveries if audits indicate DSH payments
exceeded their actual DSH ceilings.
• Prior year audit reports available on MSA’s
website.
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DSH Audits – Cont.
• Final 2010 audit report submitted to CMS by
Dec. 31, with report available on MSA website.
• A number of hospitals would have experienced
DSH payment recoveries.
• All DSH payments must be considered in the
calculation:
•
$45 million regular DSH
•
$60 million tax-funded OP uncompensated DSH
•
Indigent Care DSH
•
Governmental hospital DSH
32
Revised DSH Policy
• MSA will use a multiple-step DSH process:
– Initial DSH calculation
– Interim DSH settlement – 2 years after
payment
– Final DSH audit-related redistribution – 3 years
after payment
33
DSH Calculation
• FY 2011 Step 2 - MSA expects to complete by late
February 2014, prior to start of audits.
• FY 2011 Step 3 - Audits expected to begin March 2014.
• MHA will host DSH education session prior to FY 2011
audits.
• FY 2012 Step 2 – MSA expects to complete by April 30,
2014.
34
Medicaid Interim Payments
• MSA released a final policy to change from bimonthly to monthly MIP and CIP payments.
• This change delayed but took effect Nov. 11,
2013, after CMS approval received.
• MIP and CIP payments will be made the second
Thursday of each month.
35
Hospital Post Payment Audits Contract
• Contract awarded to MPRO for July 1, 2013 –
June 30, 2016.
• MPRO will use both automated and medical
records reviews for audits of FFS claims.
• Initial focus will be on one day inpatient hospital
stays for certain DRGs to evaluate whether the
services provided could have been provided in a
different setting.
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Cont., Hospital Post Payment Audits
• MPRO will begin sending record requests soon.
• Hospitals notified via US mail.
• Correspondence sent to address listed in CHAMPS
addressed to ‘Medical Records – Medicaid
Liaison’ with a copy to CEO.
• Hospital have 30 days to respond.
• Check MPRO website.
• Contact Janet Howe at MPRO
• [email protected]
37
BCBSM
• BCBSM launching narrow network product for individual
policyholders.
• Expected to provide affordable options
• Two BCBSM health insurance products offered on
healthcare.gov. starting Oct. 1, 2014, and effective Jan. 1,
2015.
• Policies only cover policyholders who use hospitals and
physicians that are part of the designated EPO network.
• Policyholders must pay for out-of-network care, except
for emergency services.
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BCBSM - Two Products Available
• EPO contract offered by BCBSM covering providers in
eight counties: Lenawee, Livingston, Macomb, Monroe,
Oakland, Washtenaw, Wayne and St. Clair.
• Blue Care Network – cover providers in seven counties:
Livingston, Macomb, Monroe, Oakland, Washtenaw,
Wayne and St. Clair.
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Contract Terms
• Must allow audits of utilization, quality and health
management programs.
• Agree not to request or accept payment for denied
services.
• Agree to include all employed physicians in the network.
• Agree to coordinate benefits.
• Agree to allow referrals to other hospitals in network
when a service is not available.
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Medicare
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Federal Legislation – December 2013
• 24% physician payment cut averted for 3 months.
• 6-month extension
– Medicare Dependent Hospital (MDH) Program.
– Low Volume Hospital Adjustment.
• 2-year delay in ACA-mandated Medicaid DSH cuts.
– Pushes first year of cuts to FY 2016 (rather than FY 2014)
• 1-year extension of Medicaid DSH cuts
– Into 2023
• 2-year extension of sequestration cuts
– To 2022 and 2023
42
Federal Activity Ongoing
• 24% physician cut delayed 3 months
– Long-term funding?
• Extend sequestration to fund restoration of
unemployment benefits
• Hospitals remain target for additional cuts
43
Existing Medicare Cuts (10 Year Impact)
44
Additional Medicare Cuts Under
Consideration – 10 Year Impact
45
2014 OPPS Final Rule
• Rule effective Jan. 1.
• Provides a net 1.9% increase after 2.5% MB update
is reduced by the ACA-mandated adjustments and
budget neutrality.
• Hospitals that fail to successfully participate in
the OPQRP are subject to a 2% MB reduction.
• Outlier threshold of $2,900, a 43% increase to the
2013 threshold of $2,025.
• Statewide impact is an increase of $17 million, or
0.9 percent overall.
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• Impact will vary by hospital.
2014 APC Weights & Changes
•
CMS used 2012 hospital FFS claims data to recalibrate APC
weights.
•
Adopted policy changes that will change how hospitals code
and be paid for evaluation and management (E/M) clinic
visits.
•
Collapsed the previous five levels of E/M clinic visits into one.
•
Expanded the categories of items/services that are packaged
into APCs for payment rather than separately paid.
•
Established 29 comprehensive APCs for certain devicedependent services.
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Impact on Top APCs
APC
Medicare
Cases
Description
% Change
0246
26,605
Cataract Procedures with IOL Insert
↓ 1.03%
0080
15,845
Diagnosis Cardiac Catheterization
↓ 10.08%
0083
10,304
Coronary or Non-coronary Angioplasty
↑10.58%
0377
41,818
Level II Cardiac Imaging
↑43.88%
0412
67,487
IMRT Treatment Delivery
↑10.40%
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Other 2014 OPPS Changes
•
Adoption of four of the five proposed quality measures.
• Influenza vaccination for healthcare personnel in the
hospital-based outpatient setting.
• Endoscopy/polyp surveillance – appropriate follow up for
patients with normal findings.
• Endoscopy/polyp surveillance – appropriate follow up for
patients with a history of adenomatous polyps.
• Cataracts – improvement in patient’s visual function
within 90 days following surgery.
•
Continuation of 7.1% payment increase for SCHs.
•
Adoption of the proposal to end moratorium on enforcing
direct supervision policy for outpatient therapeutic services in
CAHs and small rural PPS hospitals.
49
Data Collection Delayed
• Data collection for 3 new hospital OP and ASC
quality measures delayed from Jan. 1 to Apr.1.
• Includes data collection for 3 new colonoscopy
surveillance and cataract surgery quality
measures which impact payment for 2016.
• Delay since specifications were not available until
Dec. 31.
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OPPS Impact
51
Physician Fee Schedule Rule
•
Expansion of the definition of a rural health professional
shortage area to allow payment for telehealth services
originating in certain rural areas of MSAs.
•
Finalization of proposal to pay physicians and qualified nonphysician practitioners for care management services
provided to patients with 2 or more complex chronic
conditions.
•
Adoption of proposal to allow physicians who provide OP
services at CAHs and bill using Method 2 to participate in EHR
incentive program.
•
Application of outpatient therapy cap for services provided in
a CAH.
52
Legal Challenge of Medicare Rate
Cut
• 0.2% rate cut implemented Oct. 1, for “two midnight”
policy.
• Hospitals must file their cost reports under protest for
periods that include Oct. 1, 2013, and after.
• Some hospitals have been contacted by law firms
encouraging them to appeal within 180 days of Federal
Register publication.
• Hospitals can appeal within 180 days after issuance of
Medicare NPR as long as they file their cost reports under
protest.
• See MHA correspondence sent Jan. 9.
53
Medicare Payment Challenges
• Absent Congressional action, 2% sequestration across-theboard cut continues through FY 2023.
• 2% reduction to annual rate update if hospital fails to comply
with quality reporting program requirements.
• Readmissions Reduction Program – Hospitals at risk for up to
2% payment penalty, increasing to 3% in FY 2015.
• Value Based Purchasing – 1.25% payment withhold, hospitals
can earn back that amount, earn more or earn less.
• 1.25% withhold increases to 2% for FY 2017 and beyond
• Hospital Acquired Condition (HAC) reduction program – 1%
reduction to 25% of hospitals nationally.
• Begins in FY 2015
54
Value Based Purchasing Program
• MHA provided provided for FY 2015 (Year 3).
• Current estimates indicate statewide impact of
$120,000 payment increase.
• Conservative estimates indicate $15 million
decrease.
• Anticipates improvement in VBP program scores
over time
• Nationally, VBP program is budget-neutral with
hospitals having an opportunity to earn more than
their contribution.
55
Readmissions Reduction Program
• Began Oct. 1, 2012 (FY 2013), FY 2014 = Year 2.
• Readmissions reduction program penalty increased
from 1% to 2% in FY 2014 and then increasing to
3 % in FY 2015.
• Unlike VBP program, readmission reduction
program is not budget neutral.
56
Inpatient Quality Reporting Program
• For 2014 payment determinations, hospitals required to
report on a 55 quality measures.
• For FY 2015, hospitals required to report on 59 measures.
• For FY 2016, hospitals required to report on 57 measures in
order to receive the full IPPS marketbasket update.
– Hospitals that fail to comply are subject to a 2.0 percentage
point reduction to the IPPS marketbasket update for the
applicable year.
57
HAC Reduction Program Overview
• ACA-mandated – must start in FY 2015
• First program policies outlined in 2014 rule
• 1% reduction in IPPS payments for hospitals with
highest HAC “scores”
− Would penalize 25 percent of hospitals nationally
− Expected to reduce IPPS payments by about $300 million
annually.
58
2% Sequestration Cut
• Absent federal legislation, cuts continue through FY 2023.
• 2% cut was applied to Medicare FFS claims beginning for dates
of service on/after April 1.
− effective 2013 – 2021
− mandated by the Budget Control Act of 2011.
• Michigan annual impact projected at $144M.
− IPPS payments reduced $95 million
− OPPS payments reduced $34 million
• May apply to MA payments depending upon hospital
contractual agreement with MA plans.
• Also applies to other Medicare payments including GME, bad
debts, EHR incentive payments.
59
Medicare Advantage Plans
• As of October 2013, 28 plans in Michigan, with 502,000 or
approximately 28% of Michigan’s 1.8 million Medicare
beneficiaries enrolled.
− Up to 21 plans in some counties.
• Review MA payment rate for all plans.
• CAH entitled to Medicare cost reimbursement.
• Each MA plan may determine own utilization model and is
not required to maintain electronic transactions.
• Many MA have instituted “RAC-like” utilization programs.
• Matrix of MA plans by county available at MHA website –
updated quarterly, with MHA Monday Report article.
− Nov. 18 Monday Report.
60
MA Plans & Sequestration
• CMS payments to plans were reduced for enrollment
periods beginning on/after April 1, 2013.
• Individual hospital contracts govern whether payments
will be reduced.
• In cases of non-contracted plans, plans have discretion
whether to pass the 2% cut on to hospitals.
• See May 13, 2013 MHA Monday Report.
61
2014 Deductibles & Coinsurance
• CMS recently announced.
• Part A deductible increasing from $1,184 to $1,216.
• Daily coinsurance:
• $304 for days 61-90.
• $608 for lifetime reserve days
• $152 for days 21-100 of extended care services
in a SNF.
• See Nov. 4 MHA Monday Report.
62
MHA Resources
•
Monday Report is available FREE to anyone and is distributed via email each
Monday morning.
– Go to website and select “Newsroom”, then Monday Report
•
MHA Monday Report – electronic publication issued weekly
•
Request password if you don’t have one.
– Email Donna Conklin at [email protected] to obtain MHA member ID
number
•
Advisory Bulletins – Extensive communications available only to MHA
members, as needed. (Require password to obtain from website).
•
Hospital specific mailings as needed for various impact analyses, etc.
•
Periodic member forums
•
See mha.org for other resources.
•
Monthly Financial Survey (MFS) provides free benchmarking of financial and
utilization statistics.
63
???Questions???
Vickie Kunz
Senior Director, Health Finance
Michigan Health & Hospital Association
110 West Michigan Avenue, Suite 1200
Lansing, MI 48933
Phone: (517) 703-8608
Fax: (517) 703-8637
email: [email protected]
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