August 13, 2003

 
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HIPAA Transactions & Code Sets Rule Compliance Deadline Approaches
AMA Executive Vice President & CEO Michael Maves, M.D., M.B.A. and CMS Provide New Guidance
In an August 5, 2003 memo to state and national specialty society CEOs, Dr. Maves described recent conversations with federal officials regarding enforcement of the transactions & code sets rule.  The memo states the following:

In late July, CMS scheduled a national conference call with the entire health community to describe how they would approach enforcement of the HIPAA transaction and code set standards which are scheduled to go into effect on October 16.  CMS and HHS are responding to considerable pressure being applied by the AMA, AHA, and medical specialty societies and other provider groups as well as the payor community who are concerned that without some flexibility in the enforcement of the HIPAA standard, there will be extensive claims processing problems for physicians in both public and private programs. 

CMS stated that they cannot provide a safe harbor for health plans to accept non-standard transactions after October 16, 2003, because their options are limited by law.  CMS indicated, however, that they have not yet determined if "legacy claims" would be acceptable without penalties by either Medicare or private payors during a transition period after October 16.  "Legacy claims" are electronic claims that physicians, providers and payors currently use that are not HIPAA compliant.  Fortunately, CMS today released a guidance document on compliance with the rule detailing a flexible approach to enforcement of the rule.  The CMS Deputy Administrator stressed the importance of keeping payments flowing after October 16.  Enforcement will be driven by a complaint-driven approach, similar to the enforcement approach for the Privacy Rule.  CMS will determine on a case-by-case basis if the entity is making a good faith effort to come into compliance.  If so, CMS will refrain from imposing fines and penalties.  CMS will seek corrective action plans from those not in compliance.  Given that CMS has provided the parameters by which they will evaluate compliance efforts, it becomes imperative that physicians immediately begin documenting all efforts to comply and to communicate with their trading partners. CMS also indicated that the rule on the small practice exemption from the electronic claims submission requirement for Medicare would not be released for several more weeks.

A provider and payor coalition, including the AMA, had been hopeful that CMS would indicate that it would be acceptable for physicians, providers and payors to submit and pay "legacy claims" in addition to HIPAA compliant claims for some reasonable transition period without penalties for violating the rule.  Private sector attorneys have argued that CMS has the authority to accept legacy claims.  CMS indicated that it is still in the process of making a legal determination and will likely decide whether Medicare will accept such claims in early October.  The coalition will be meeting in the next few days to consider next steps.  We would expect at a minimum that the coalition will urge CMS to expedite their decision about "legacy claims" as part of a future clarification of today's guidance.

Click Guidance on Compliance with HIPAA Transactions and Code Sets for the new CMS guidance document referenced in paragraph 2 above.

Maine Medical Association Nominations for Dirigo Health Plan Appointments

After a meeting of the MMA Executive Committee on Wednesday, July 30, 2003, the MMA submitted the following recommendations to the Governor's Office of Health Policy & Finance for appointments to the various boards and commissions established in L.D. 1611, the Governor's Dirigo Health Plan.

 

Maine Quality Forum Advisory Council

 

Krishna Bhatta, MD

Roger Renfrew, MD

Janice Wnek, MD

Robert Keller, MD

Richard Wexler, MD (1st)

Robert McArtor, MD

Barbara Crowley, MD

Donald Krause, MD

Rod Prior, MD

Terrance Sheehan, MD

Dieter Kreckel, MD

Lawrence J. Losey, MD

Mitchell Ross, MD

Lisa Letourneau, MD

 

 Advisory Council on Health Systems Development

 

Maroulla Gleaton, MD

Lani Graham, MD 

J.C. (Jim) Haley, MD, MBA, CPE, FAAFP

John Olin Langley, MD

Richard Wexler, MD (2nd)

Dick Dillihunt, MD

John Tyler, MD

 

Commission to Study Maine’s Hospitals

 

H. Burtt Richardson, Jr., MD, FAAP

D. Josh Cutler, MD

Craig Young, MD

Dieter Kreckel, MD

Richard Wexler, MD (3rd)

Kevin Kendall, MD

 

Task Force on Veterans’ Health Services

 

Lawrence Mutty, AB, MD, MPH, FAPA

 

Thanks to all of these physicians for their willingness to serve on these boards and commissions.  They will have a significant impact on the future of medical care in Maine.

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MMA Co-Hosts Portland Reception for Congressman Tom Allen, 8/26/03
Physicians and guests are invited to attend a reception with Maine's First District Congressman Tom Allen from 6:30 - 8:30 a.m. on Tuesday, August 26, 2003 at the Portland Regency Hotel.  The MMA is co-hosting this event with the Maine Hospital Association and the American Hospital Association.

Contributions in any amount would be welcome by the Allen for Congress Campaign.  Don't miss this opportunity to talk with Congressman Allen about the key health care issues in Washington - - Medicare drug benefit, Medicare reimbursement rates, and medical liability reform!

For more information, please contact Gordon Smith (gsmith@mainemed.com), Andrew MacLean (amaclean@mainemed.com), or Anna Bragdon (abragdon@mainemed.com) by email or at 622-3374. [return to top]

Join Your Colleagues for the MMA's 150th Annual Session, 9/5-9/7!
The MMA will hold its 150th Annual Session at The Balsams Grand Resort Hotel in Dixville Notch, New Hampshire from September 5-7, 2003.  The room block expired August 8th, so it is important that you submit your reservation request as soon as possible if you wish to join us.  The Balsams will now take reservations on a space- available basis.

The MMA's Sesquicentennial Annual Session promises to be one of the best meetings in recent history.  The program begins with an opening talk at 1:30 pm Friday (Sept. 5) afternoon by John Tooker, M.D., Executive Vice President of the American College of Physicians.  Dr. Tooker practiced in Portland for several years before being asked to join the ACP staff in Philadelphia.  His talk will be entitled, "The Current Status of American Medicine."  Following John will be Michael LaCombe, M.D., presenting "Legacies of Medicine." The remainder of the afternoon consists of several talks on the history of the Association and of medicine in Maine.  These talks continue on Saturday afternoon as well.

On Saturday morning, the Association will hold its first Annual General Membership Meeting, which replaces the traditional House of Delegate's sessions. (The House of Delegates was abolished last year in favor of a town-meeting like session where all members can vote and participate).  At 4:00 pm Saturday, Beck Weathers, M.D.,  will give a keynote talk describing his ordeal on Mount Everest.  Dr. Weather's book entitled, "Left for Dead", is a remarkable description of his preparation for the climb, its tragic consequences and its aftermath.  Dr. Weathers practices pathology in Dallas, Texas, despite the lose of his nose and much of his hands from frostbite.

The Annual Banquet Saturday evening will feature the bestowing of fifty-year pins on a number of our senior physicians and the unveiling of a video/documentary film highlighting the history of the Association.  Other awards will also be given.

 The CME program ends on Sunday morning with a second talk by Dr. LaCombe entitled, "Last Words."

The educational and business parts of the meeting will be complimented by the social and recreational activities including the traditional 2.6 mile road race, golf, tennis, hiking, mountain biking and boating.  The golf, tennis and road races are again sponsored by Medical Mutual Insurance Company of Maine.

More than 300 people are expected at the meeting.  You may call The Balsams for a reservation form (toll-free at 1-800-255-0800) or download it from the MMA website at www.mainemed.com.  Please complete a registration form to send to MMA as well.

You work hard.  Give you and your spouse or family a break and join your colleagues for a celebration of 150 years of Maine physicians caring for Maine patients. The Balsams Grand Resort is a very special place.   You will not be disappointed! [return to top]

CIGNA Posts $53 Million Second Quarter Loss
In early August, the Wall Street Journal reported that CIGNA Corp. posted a $53 million loss following the second quarter compared with a $214 net income a year earlier.  The company attributed the loss to a $286 million charge, rising medical costs, and membership losses. [return to top]

"Fast Facts" on Medical Liability Reform
Medical liability reform continues to be at the top of the MMA's and AMA's advocacy agenda in Washington.  The MMA urges you to continue discussing your experiences with and concerns about our medical liability system with Maine's congressional delegation.

The following "fast facts" are from the AMA's Washington, D.C. web site:

Key point:  While opponents of medical liability reform argue that physicians leaving medicine are mere "anecdotes," there are numerous sources of data outlining the benefits of California’s comprehensive reforms as well as the problems experienced in states without reforms. In addition to these pieces of data, the AMA has hundreds of news stories showing the direct effect to patients when their physicians are forced to retire early, limit procedures or move to another state.

  • California’s medical liability reforms (MICRA) were passed in 1975.
  • Since 1976, medical liability insurance premiums have risen 167% in California compared to 505% in the rest of the country. (Source: NAIC)
  • $60-108 billion would be saved in health care costs each year by placing a reasonable limit on non-economic damages. (July 24, 2002 HHS report)
  • A $250,000 cap on non-economic damages could produce savings of 5-7% for physicians. (Jan. 7, 2003 Tillinghast-Towers Perrin)
  • 78% of Americans are concerned that skyrocketing medical liability costs could limit their access to care; and by a wide margin (73% to 26%) favor a law that would guarantee injured patients full payment for lost wages and medical costs, and place reasonable limits on awards for "pain and suffering" in medical liability cases. (April 2002 Wirthlin Worldwide).
  • The median jury award has risen to $1 million – up from $375,000 in 1994 (Jury Verdict Research)
  • Ob-gyns in California pay about $57,000 for liability insurance, while the rate is more than $100,000 in Pennsylvania, Ohio, Nevada and Florida. (Medical Liability Monitor)
  • 7 hospitals to date (Jan. 2003) have closed their Ob units in the past year (Florida Hospital Association)
  • PIAA Data Sharing project shows that payments made on behalf of individual defendants in 2000 averaged $328,396.
  • 56% of BCBS plans say that physicians in AMA crisis states are no longer performing certain high-risk procedures compared to 32% of non-crisis states. (BCBS Jan. 2003 survey)
  • Neurosurgeons in 14 states pay more than $100,000. In some states, the rate is more than $200,000. (AANS)
  • A conservative estimate of the annual cost of defensive medicine to the U.S. health care system is $60 billion. And if reasonable limits on non-economic damages were enacted, taxpayers would save at least $30 billion annually by reducing federal health care spending. (July 24, 2002 HHS report)
  • Under MICRA’s contingency fee reform, patients would receive $778,334 instead of $666,667 for a $1 million judgment.
  • Investment Yields of medical malpractice insurers have been stable and positive since 1997. Those returns have been in the neighborhood of 5.0 to 5.5%; 5.2% in 2001. Investment Yield includes income from interest, dividends, and real estate income (Investment Income), and is driven predominantly by interest and dividends on bonds. (AM Best)
  • Medical liability insurers have approximately 80% of their investments in the bond market. (PIAA)
  • 15% or more of Ob-gyns in Florida, Nevada, New Jersey, New York, Pennsylvania, Washington, West Virginia, Oregon and Kentucky have stopped offering Ob care. (ACOG)
  • Pennsylvania physicians paid $352,309,905 (ranking them 2nd) – nearly 10% of the nation’s total, despite having less than 5% of the nation’s physicians. (Penn. Med. Soc.)
  • There is a 93 percent difference in average rates ($83,000 vs. $43,000) between Ob-gyns in California and Nevada. Same company, but different states mean different rates. (The Doctors Company)
  • Capping non-economic damages reduced premiums for general surgeons by 13% in the year following enactment of MICRA, and by 34% over the long term. Similar results were shown for premiums paid by Ob-gyns. Caps on non-economic damages decrease claims severity (Zuckerman et al. 1990).
  • 66% of jury awards in Texas went to non-economic awards in 1999, compared to only 36% in 1990. (Texas Department of Insurance) In Florida, between 1992-1999, non-economic awards averaged 69%. (Florida Medical Association)
  • 72 percent of Pennsylvania doctors have deferred the purchase of new equipment or the hiring of new staff due to the skyrocketing medical liability insurance costs. (2001 Pennsylvania Medical Society survey)
  • Non-economic damages represent an average of 69% of loss dollars paid to the plaintiff during the years 1992 through 2001. (Florida Department of Insurance Closed Claims Data Base)
  • From 1996-2001, there were $39,329,352 in total awards for 26 cases: $8,145,821-economic/$17,137,500-non-economic, or 67.8% for non-economic damage awards. (Background Information on Medical Malpractice. Volume 3: "Claims and Cases in Nevada" pp. 63-112. Legislative Counsel Bureau: Carson City, NV. July 29, 2002)
  • One of every 20 physicians in West Virginia have either left the state or gone into early retirement (National Center for Policy Analysis)
  • Only a last-minute $220 million bailout promise from Penn. Gov.-elect Ed Rendell made it possible for 42 surgeons to continue to practice. It is unclear whether the money will be paid, however. (Jan. 28, 2003 Wall Street Journal)
  • Five Tallahassee-area hospitals have either closed or reduced their mammography services. Waiting times for women in Orlando to get a mammogram have reached 150 days. (Jan. 3 Bradenton Herald)
  • Lawsuits have increased in Harris County, Texas from 611 in 2000, 641 in 2001, and 736 as of October 2002. (Jan. 2 Houston Chronicle)
  • 100% of South Florida neurosurgeons responding to a recent survey have been sued. 31% of physicians have limited their practice in hospital settings, and hysicians in South Florida can expect to be sued 1.44 times in their career. (Floridians for Quality Affordable Healthcare)
  • The number of malpractice claims has risen 43% in Florida between 1991 and 2001. (Jan. 3 South Florida Sun Sentinel)
  • Nine of 54 Ob-gyns surveyed in Wyoming have either stopped delivering babies or plan to do so because of rising liability costs. (Dec. 9 Wyoming Tribune-Eagle)
  • 66% of West Virginia physicians have personally avoided conducting certain procedures or interventions because of the risk of adverse outcomes and resulting medical liability. (Jan. 13, 2003 Harris Interactive)
  • Nearly 40% of Missouri physician practices were forced to find a new insurance carrier in 2002 because their previous carrier left the market. (Metropolitan Medical Society of Greater Kansas City)
  • One $8.5 million judgment forced the Roseburg Women’s Healthcare center in rural Oregon to close its maternity ward. In 2002, the town lost 5 of its 8 Ob-gyns. (June 21, 2002 Portland Business Journal)
  • In 2002, the average national premium for general surgeons increased 25%. The California increase was only 9.2%. For Ob-gyns, the average national increase was nearly 20%, while in California it was only 8.5% (Medical Liability Monitor)
  • More than half of Texas physicians surveyed said they are considering early retirement, and nearly one-third are reducing the types or kinds of services they provide. (Dec. 19, 2002 Austin Business Journal)
  • Nearly one in five Georgia physicians have stopped providing high-risk services, such as delivering babies. And more than 10% of Georgia physicians have stopped or plan to stop providing ER care. (Jan. 25, 2003 Associated Press)
  • Nearly 150 Nevada doctors have retired early, closed their practices or are seriously considering doing so because they either cannot find medical malpractice insurance or afford the skyrocketing rates, according to the Nevada State Medical Association. (Jan. 27, 2003 Las Vegas Review-Journal)
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The AMA's Top 12 Fictions & Facts About Medical Liability Reform: #1
Fiction #1:  Tort Reforms are Intended to Let Negligent Doctors Off the Hook.

Fact:  Common sense civil justice reforms are necessary to stabilize the medical liability insurance market so that physicians and other health care providers can continue to serve their patients.  The public recognizes this, as demonstrated in a recent poll that shows that 73% of Americans agree that we need reasonable reforms.

The existing medical liability system is inefficient and structured in a manner that exploits plaintiffs and defendants.  It breeds fear in health care professionals, who act "defensively" to avoid being sued, which increases costs across the health care system.  Awards have risen in many areas of the nation by percentages exponential to increases in the rates of inflation or the cost of living.  Insurers respond by drastically increasing professional liability insurance rates.  In many cases, this forces physicians and other health care providers to discontinue providing high risk services, or worse yet, move or quit practicing altogether.  And the cycle continues.

Doctors want affordable insurance coverage so they can continue to accept their professional responsibility for patient care they provide. [return to top]

Muskie School & Bureau of Insurance Seek Input on Access Standards

In each of the 120th and 121st Maine Legislatures, business groups and health plans have submitted legislation to allow financial incentives for patients to travel beyond the geographic access standards of Bureau of Insurance Rule Chapter 850, Health Plan Accountability. 

 

The MMA staff participated in an interview with representatives of the Muskie School and the Bureau during which we discussed the questions listed below.

 

The Muskie School and Bureau would appreciate further physician input as they develop rules under the L.D. 1611 provisions on access standards.  Please contact Andrew MacLean (amaclean@mainemed.com) with any comments about these issues.

 

LD 1611 permits a health plan to provide financial incentives to a covered person to a select provider beyond the travel limits presently defined in Rule 850, if “better quality services” are provided.   In no event can the financial incentives be utilized to permit travel that is twice the mileage and travel limits defined in Rule 850.

 

Example:  A health plan contracts with two providers of the same specialty service.  One is located within 20 miles of the subscriber’s home, well within the access limits of Rule 850, and the other is located 55 miles from a subscriber’s home.  The health plan will reduce co payments by one half if the subscriber receives services from the specialist provider who is located 55 miles away. 

This second distance is outside the limits of Rule 850 but would be within the expanded distances permitted under LD 1611 IF BETTER QUALITY SERVICES WILL BE PROVIDED AT THIS MORE DISTANT LOCATION. 

 

  1. Can you suggest specific examples of better quality services that can be used to differentiate providers? 

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  1. In the absence of specific examples, what would you suggest as criteria for establishing better quality services?

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  1. What process, if any, would you propose for purposes of defining better quality services?

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  1. Do you have any other suggestions/comments as to defining better quality services?

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IN ADDITION  to providing “better quality services” LD 1611 requires the health plan to demonstrate that the quality improvements “either significantly outweigh any detrimental impact to covered persons…OR the carrier has taken steps to effectively mitigate any detrimental impact” [emphasis added].

 

Example:  Providing a beneficiary a financial incentive to access a particular provider might be considered to have the detrimental impact of requiring twice the travel for the beneficiary and his or her family.  The requirements of LD 1611 are satisfied if: the carrier documents the clinical outcomes for the necessary service is statistically higher for this provider or the carrier provides mileage reimbursement to the beneficiary and his or her family for the extra travel distance.   

 

 

  1. What process would you suggest for evaluating how the quality improvement significantly outweighs any identified detrimental impact?

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  1. Given the new travel time and distance limits established by LD 1611, would there be any detrimental impact to beneficiaries?  If yes, please provide examples.

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  1. For the detrimental impacts that you listed in Question 7, what would you propose as steps to effectively mitigate these impacts?

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  1. What criteria would you suggest for purposes of identifying other detrimental impact?

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  1. What criteria and process would you suggest for assessing methods to mitigate any detrimental impact identified by the criteria in Question 9?

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  1. Do you have other suggestions/comments as to defining detrimental impact or methods for mitigating against detrimental impact?

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  [return to top]

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