February 17, 2003

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Congress Fixes Medicare Payment Mistake
Last Thursday night, the Congress responded to physician requests to "fix the Medicare mistake" by passing the Conference Report on the Omnibus Appropriations package that includes language authorizing HHS to correct the errors in the payment formula.
Due to the hard work of physicians around the country, the Congress last week passed the Omnibus Appropriations package that includes language authorizing HHS to correct the l998 and l999 projection errors.  The House approved the report by a vote of 338 to 83 and the Senate passed it by a vote of 76 to 20.  The Congressional Budget Office projected that the physician payment provision would increase baseline spending by $54 billion over ten years.

At a House Ways and Means hearing on the 13th, CMS Administrator Thomas Scully indicated that as a result of the congressional action, he intends to implement a positive 1.6% update for the Medicare conversion factor effective March 1, 2003.  Without this vote, the conversion factor was scheduled for a reduction of 4.4%.  Logistics with Medicare carriers need to be worked out and there may be some lag time in payment adjustments.  MMA will keep your office posted on any billing advice once CMS makes any announcement.

Senators Snowe and Collins and Congressman Michaud all voted for the package.  Congressman Allen strongly supported the bill but was in Maine due to his father's death during the voting.  We have expressed appreciation to the entire delegation for their support during this long and hard fight.  This Congressional action is a big win for physicians as elimination of the projection error lifts physicians out of a significant budget hole and gives CMS the ability to fix the formula permanently.  While a 1.6% increase  may not seem substantial, the total impact of $54 billion over ten years gives you some idea of the overall impact.  Keep in mind that this increase was virtually all targeted to physicians with only a small piece for rural hospitals included as well.

What You Can Do:

                Take a moment to thank your member of Congress!  While this is a major step toward solving the Medicare problem, we still expect a fight for an increase in 2004 and there will be other critical issues we will be approaching  Congress on this year, including professional liability reform.


Details of State Budget Cuts Become Public
On Tuesday, 2/11/03, a draft of Governor Baldacci's biennial budget became available to the public.  Upon review, the most direct impact on physicians is a proposed 50% reduction in the Physician Incentive Program in MaineCare that is paid to primary care physicians each quarter.  The account is proposed to be reduced by $500,000 in each year of the biennium, but with the loss of the federal funds under Maine's medicaid match the total impact would be in the range of $3 million over the two-years.  There is no proposed reduction in the fee for service medicaid payments.

There are several other provisions of interest to medicine, including certainly the flat funding of most of the DHS and Department of Behavioral and Developmental Service's accounts.  This flat funding will amount to a significant loss of revenue to hospitals and other institutional providers who would otherwise receive yearly increases.  There is also a proposal to save $6 million through increased MaineCare copayments (we do not yet know which co-payments may be increased and whether there are co-payments proposed for office visits).  MMA will also be opposing a $6 million transfer from the Fund for a Healthy Maine to the General Fund.

MMA expects to have the printed budget document this week and will provide members with further information on the budget in both Maine Medicine and the Political Pulse prepared by MMA Director of Governmental Affairs and General Counsel Andrew MacLean each Friday. [return to top]

Baldacci Health Action Team Holds First Meeting
The Health Action Team appointed by Governor Baldacci to advise his Office of Health Policy and Finance held its first meeting on Feb. 11th.  OHPF Director Trish Riley advised the 26 appointees that the Baldacci health legislation is on a fast track and that she expected legislation to be introduced and acted upon this session.  This time-frame gives the Team barely two months to put a plan together that will propose to cover all Mainers with some type of health insurance product, public or private.

The Team agreed to meet every other Friday beginning on Feb. 28th with subcommittees meeting in the am prior to each Team meeting.  Maroulla Gleaton, M.D., the Associations's appointee to the Team and one of only two physicians on it, was asked and agreed to serve as Chair of the subcommittee on cost and planning.  Dr. Gleaton is President-elect of MMA and a practicing ophthalmologist in Augusta.  The second physician on the Team is Daniel Fishbein, M.D., with Aetna Health Plans who was appointed to represent the Maine Association of Health Plans.

Members wishing to have input into this important process may communicate with either Dr. Gleaton via e-mail at atleegleaton@earthlink.net  or with Gordon Smith at gsmith@mainemed.com. [return to top]

Final HIPAA Security Rule Released
As if the impending April 14th effective date for the HIPAA Privacy Rule was not daunting enough, the final HIPAA Security Rule was released last week.  This Rule deals with the technical security requirements that a medical practice must comply with if individual patient medical information is sent electronically either for billing purposes or for any other purpose, such as sending e-mail to patients.

While the effective date for the rule will be in 2005, practices sending individual patient information electronically are required now to exercise reasonable caution in preventing unauthorized disclosures, thus necessitating encryption or some similar means of security.

The Association is conducting one more seminar on the HIPAA rules (Privacy, Transaction and Code Sets and Security) in Waterville on the morning of March 26th.  Registration materials were included in the monthly issue of Maine Medicine (February).  Additional information is available from Susan Feener at sfeener@mainemed.com. [return to top]

Health Care Data Bank Begins Receiving Claims Data
Electronic files containing health insurance claims data have begun arriving in Maine, signaling the first step in the creaton of the nation's first comprehensive Health Care Claims Data Bank.  The Claims Data Bank is being developed through the new Maine Health Data Processing Center, a public/private partnership between the Maine Health Data Organization and the Maine Health Information Center.  The Data Bank is expected to be an important source of cost and utilizaton data as Maine tackles its health care cost problem.

Beginning in February, every health insurance company and third party administrator that covers Maine residents is required by law to submit paid claims data for those residents.  The data includes such information as diagnoses, what services were provided, who provided the services, the amount paid by the plan and the amount of out of pocket expense for the member. 

Medical, dental, and prescription drug data must be submitted for claims from all settings where a covered Maine resident has been treated, including a physician's office.

To prepare for the very significant volume of claims, the Data Bank has been working with hundreds of test files since November of 2002, refining the processes for validating and storing the data.

Medical practices need to keep in mind the kind of data that the Data Bank will have, although current rules do not permit the release of data identifying a particular practice or physician without the permission of the practice.  Nonetheless, aggregate data by specialty or geographic area can be released, as can data from individual hospitals.  An advisory committee has been created to help direct the Center's activities.  Mark McAuliffe of Orthopedic Associates in Portland is the Chairman of the Advisory Committee.  The potential impact of this data on your practice will be the subject of educational sessions offered at the Association's two practice management programs being held in Bangor on May 28th and in Portland June 25th.  More information on these programs will be included with the March issue of Maine Medicine or you may contact Susan Feener at sfeener@mainemed.com.

Further information can be found at the MHDPC website at www.mhdpc.org.  (Thank you and credit to the Maine Health Information Center for much of the information in this article.) [return to top]

Medical Mutual Insurance Company of Maine Retains A.M. Best Rating of A-
Despite the rating downgrades endured by numerous other medical liability carriers across New England and nationally, Medical Mutual Insurance Company of Maine, the Association's endorsed provider of medical liability insurance, has retained its A.M. Best rating of A-  ("Excellent") for the tenth consecutive year.  In issuing the rating, Best added, "As a conservatively managed company that maintains superior capitalization and a leadership position within the Maine medical professional liability market, A.M. Best expects continued improvement in operating results and that financial strength will be sustained.  Accordingly, A.M. Best views the rating outlook as stable."

Congratulations to Medical Mutual for achieving this milestone.

  [return to top]

Concannon's Last Day as Commissioner of DHS
Feb. 14th was Kevin Concannon's last day as Commissioner of the Dept. of Human Services, following an announcement last month that he would resign after serving 8 years as Commissioner in the King administration.  At 62 years of age, the Commission indicated he had no intention of retiring, but did not note what his future plans are.

The Commissioner called the Association during his last two weeks to thank MMA for its advocacy and to discuss, again, the need for physician fee increases in the MaineCare program.  Twice in 2002 the Commissioner had proposed significant  fee increases in the budget, only to have them shot down by the Legislature.

The Association did not always agree with the Commissioner, but we do give him very high marks for approachability and dedication.  He also was a tireless advocate for tobacco prevention and control and was instrumental in protecting the Fund for a Healthy Maine from legislative attacks.  Association staff and members had continuing access to the Commissioner and he would frequently call with news or about the need to meet.  We wish him well  in whatever his future plans hold. [return to top]

MMA Office Open Feb. 17, President's Day
The MMA Office in Manchester will be open during its normal working hours, 7:00am to 5:00pm on President's Day.  [return to top]

Comprehensive Medical Liability Reform Introduced in U.S. House
On Thursday, Feb. 6, Rep. Jim Greenwood (R-PA) announced the introduction of H.R. 5, the bipartisan HEALTH (Help Efficient Accessible, Low-Cost, Timely Health Care) Act.  The HEALTH Act, which passed the U.S. House of Representatiives last year, is intended to safeguard patients' access to care through the following common sense reforms:

        *  Limiting the number of years a plaintiff has to file a professional liability action to ensure that claims are brought while evidence and witnesses are available.

         *   Allocating damages fairly, in proportion to a party's degree of fault.

          *   Allowing patients to recover for full economic damages such as future medical expenses and loss of future earnings while establishing a cap on non-economic damages, such as pain and suffering, of $250,000.

            *   Placing reasonable limits on punitive damages to be the greater of two times the amount of economic damages awarded or $250,000.

     MMA members should communicate with Representatives Tom Allen and Mike Michaud and ask them for their support of this legislation. (Congressman Allen did not support the legislation last year.)  Physicians may use the AMA Grassroots Hotline at 1-800-833-6354 or the AMA Grassroots Action Center at www.ama-assn.org/grassroots to contact their representatives.  Additional background material and talking points are available at the above web site, as well.

      President Bush has called for medical liability reform, citing that "lawsuits can threaten access to health care by adding to the cost of medicine for taxpayers and families and by discouraging health professionals from providing critical services such as child delivery and trauma surgery." [return to top]

For more information or to contact us directly, please visit www.mainemed.com l ©2003, Maine Medical Association