November 10, 2003

Subscribe to Maine Medicine eNewsletters
Manage Your Subscriptions
Email our Editor...
Maine Medical Association Home Page
. Search back issues
. Plain Text Version
Printer Friendly

Congressional Action Necessary to Avert 4.5% Medicare Pay cut
On Oct. 30th, the Centers for Medicare and Medicaid (CMS) released the final rule for its 2004 physician fee schedule. The rule results in a 4.5% reduction in Medicare physician payments for 2004. This cut would be the fifth since 1991. Congress must take action within the next ten days to stop the reduction as it plans to adjourn by Nov. 21 and not return after the Thanksgiving Holiday.
The cuts in 2004 and subsequent years are due to the Medicare payment update formula, which is flawed because:

     (1)  Payment updates are based on a sustainable growth rate (SGR) system, which is tied to the gross domestic product (GDP).  This means that when the GDP declines as the economy softens, payments decline as well. 

      (2)  Physicians and other health professionals are penalized with lower payments when volume increases exceed the SGR spending target.  Yet, there are a number of factors driving these volume increases that are often beyond physician's control, including government efforts that promote greater use of physician services through new coverage decisions, quality improvement activities and many other administrative decisions that, while good for patients, are not reflected in the SGR.

The final CMS rule also makes a variety of regulatory modifications and asks for comments on changes to rules on aspects of physician self-referrals.  Other changes address the sustainable growth rate, the anesthesia conversion rate, and the Medicare Economic Index, which measures inflation in physician practice costs and general wage levels.  One of the changes to the MEI will increase the weight given to the costs of medical malpractice.  The rule also makes changes to the supplemental survey data for practice expense, geographic practice cost indices, and some coding issues.

CMS did not finalize a policy on AWP (average wholesale price) due to Congressional deliberations that are ongoing.  If  Congress does not act to reform payments for administered drugs, CMS will proceed with their proposal to cut the payment to physicians for drugs injected in the office from 95% to 85% of AWP.

The new fees become effective Jan. 1,2004.  The Medicare conversion factor will be reduced to $35.13 down from $36.78 in 2003 if Congress does not act.

It is not clear at this point whether the Congress, through the House-Senate Conference Committee working on Medicare prescription drug coverage, will come to an agreement that can pass both the House and Senate or not.  Last week, Senate Finance Committee Chair Charles Grassley (R, Iowa) indicated that negotiations to reconcile differing versions of the legislation in the House and Senate had resulted in an agreement to include a payment fix for physicians.  But he provided no further details and it is unclear whether the very delicate negotiations will be successful.  The message physicians should send to the Maine Congressional delegation is clear, however.  Ask that they stay in Washington until the  issues are resolved, and to include in the Medicare reform package the physician fee fix.

Need a little more ammunition?  The Medical Group Management Assn. has stated that the cost of operating a medical group practice has risen by an average of 4.1% per year in the last decade, including a 7.4% increase in 2002  If the cut is not prevented, the increasing gap between costs and payments will contribute to the growing access hurdles facing Medicare beneficiaries.  The cut will also further undermine the financial viability of medical practices in Maine.   "Historically low Medicaid and Medicare reimbursement, combined with increasing office expenses and increasing numbers of these patients is really taking its toll on Maine physicians", noted Gordon Smith, Executive Vice President of the Maine Medical Association.  "We regrettably get calls every week now asking how a practice can limit the number of Medicaid and Medicare patients it can accept."

The AMA's Top 12 Fictions & Facts About Medical Liability Reform: #12
FICTION #12:  MICRA works because California passed incredibly strong insurance regulation in 1988 called Proposition 103, which prevents insurance companies from raising rates.

Fact:  This law was passed more than a decade ago to help regulate the entire insurance market, but was specifically targeted at auto insurance.  This law has had virtually no effect on physicians' professional liability premiums.

Under this law, insurers cannot raise rates of more than 15% per year without a mandatory public hearing to determine why they need it.  Only once - in 2002 - did consumers require a hearing on an insurance company when SCPIE tried to get a 16% raise, but withdrew its request after consumer groups objected.

The bottom line is that while physicians in California have seen their rates increase 167% since 1976, physicians in the rest of the United States have seen their rates increase 505% during that time.  MICRA is the reason for California's lower rates and stable market - not Proposition 103. [return to top]

When Your Patients Have Problems with Their Health Insurance

The  Bureau of Insurance staff prepared this article for your information.


The Maine Bureau of Insurance, Consumer Health Care Division (CHCD) is available to help consumers with health insurance information and complaints.   In 2002, CHCD assisted over 7,250 callers by answering their questions and informing them of their rights.  These rights include the right to: apply for a standing referral from the primary care practitioner when a condition warrants ongoing care from a specialist, appeal decisions made by the health insurance carrier when the company denies a requested benefit, to know the name, title and qualifications of persons making medical decisions about them at the insurance company, to have assistance from the Bureau of Insurance when they disagree with the insurance company.


Bureau of Insurance regulations for fully funded insurance plans provide for two appeal levels with the insurance carrier and a third appeal level called “external review” for medical necessity denials.   Either the healthcare provider or the consumer can request a first level appeal following an adverse determination (denial for coverage) by a carrier.   Only the consumer or their representative can request a second level appeal or an external review.   The second level appeal differs from the first in that the issues are reviewed by a different medical peer and there is opportunity for the consumer to attend a hearing if they so choose.  The external review is conducted independent of the insurance company and consumers can also request a hearing which is conducted by telephone.   The three levels of appeal provide the consumer multiple opportunities to present their case and to be heard by three different review groups or entities.  


We encourage consumers to utilize the appeals process if they disagree with the insurance company’s decision and we encourage them to submit a complaint form to the Bureau of Insurance so that we can assist them in knowing their rights.  


Any questions or complaints regarding health insurance can be called in or mailed to:


Consumer Health Care Division

Maine Bureau of Insurance

State House Station 34

Augusta, Maine 04333

Tel.  1-800-300-5000


Check out the website at:

for helpful information on all types of insurance. [return to top]

More on New MaineCare ID Cards
Maine's Medicaid Agency, the Bureau of Medical Services, has taken exception to some of the information contained in the Oct. 27th edition of Maine Medicine Weekly Update relative to MaineCare's new ID cards for enrollees. 

The Bureau states that it does not expect providers to purchase the new swipe card system.  It is simply an option for those practices which wish to enhance and expedite the gathering of member information.  The system can also be used to verify member eligibility for third party payors other than MaineCare.  MaineCare providers who do not wish to purchase the service may continue to use the Bureau's Interactive Voice Response System (IVR) at no charge.

The Bureau has taken particular exception to the statement in the Oct. 27th article stating that, "the Bureau has actively discouraged participating providers from using the Interactive Voice Response (IVR)."   MaineCare representatives believe that they have gone to great lengths to encourage providers to utilize the present IVR system.  They note, also, that a contract has been awarded for the implementation of a new and greatly enhanced IVR system that will be implemented early in 2004.

The Oct. 27th article noted that in order to "swipe" the new plastic cards, a practice had to purchase the system and would be subject to both a monthly fee and a small fee per transaction.

MMA representatives are hoping to meet with Bureau representatives soon to talk about the new cards and the planned improvements in the voice response system. [return to top]

EMTALA Final Rule Effective Nov. 10, 2003
The Final Rule clarifying provisions of the Emergency Medical Treatment and Active Labor Act (EMTALA) became effective Nov. 10.  The Final Rule clarifies what circumstances trigger EMTALA, on-call requirements, prior authorization and more.  The Rule largely addresses concerns of the AMA, which worked in partnership with several medical specialty societies to ensure that several problematical provisions were clarified and some burdens lifted.

In what is considered a major positive change in the guidelines, the rule states that EMTALA requirements do not apply when patients come to a medical practice, unless it meets the requirements of a dedicated emergency department.  The rule also makes it clear that EMTALA requirements end once a patient is admitted to a hospital, as at that point, the patient is protected by the hospital's Medicare conditions of participation rules, as well as by laws against "patient dumping" and "abandonment."

The Final Rule also addresses the scenario of a hospital visitor who experiences a medical emergency.  In this case, the hospital is obligated to treat according to EMTALA guidelines.

In clarifying on-call requirements, the Rule states that, as a condition of participation, hospitals must maintain an appropriate list of physicians who will take call, and physicians who agree to be on that list must take call.  But the Rule also notes that the on-call standard for hospitals is that which best meets the needs of the patients who are receiving services required under EMTALA in accordance with the capability of the hospitals, including the availability of on-call physicians.  Hospitals do need to have written policies to cover all situations, including what to do if a hospital is unable to provide on-call coverage for a specific specialty. [return to top]

Bureau of Insurance Hearings on Chapter 850-Health Plan Accountability
The Maine Bureau of Insurance will be conducting hearings next week on proposed amendments to Rule Chapter 850-Health Plan Accountability.  This rule was an important part of MMA's push for a Patient Protection Act in 1996 which lead to enactment of Maine's Health Plan Improvement Act.

The hearing dates and details are as follows:

Monday, Nov. 17, 2003 at 10:00am.  Room 209 at the Burton M. Cross Building, 111 Sewall St., Augusta

Wednesday, Nov. 19, 2003 at 7:00pm. Room A at the Skowhegan Community Center, 39 Poulin Drive, Skowhegan

The proposed amendments to Subsections 7 (c) and 7 (H) of the Rule establish standards for the approval of financial incentives for members to use certain designated providers under a managed care plan filed pursuant to the law, including criteria to be used for the determination of better quality services of designated providers.  These amendments are required by P.L. 2003, c. 469, section E-20, which was part of the comprehensive health care legislation establishing the Dirigo Health Plan.

The purpose of the second proposed amendment to Subsection 7(G) of the Rule is to ensure consistency with recently enacted legislation requiring for the timely credentialing of physicians and other health care providers by health care plans.  The proposed amendments essentially incorporate the statutory language requiring a carrier to make credentialing decisions within a specified timeframe (normally within 60 days from the receipt of a completed application with the ability to extend such time period under certain circumstances).

All interested persons are invited to attend the hearings or to submit written comments.  Written comments must be received no later than Dec. 5, 2003 at 5:00pm and should be addressed to:  Jennifer Rice, Maine Bureau of Insurance, 34 State House Station, Augusta, Maine 04333.

The Maine Medical Association will consider its position on these proposed amendments at its meeting of the Legislative Committee scheduled for Tuesday night, Nov. 18th at the Frank O. Stred Building in Manchester.  Any MMA member is welcome to attend.  Once the position is established, MMA will file written comments on the amendments.

Copies of the proposed rule are available from the Bureau (Call Jennifer Rice at 624-8460) or from MMA (622-3374) [return to top]

What You Need to Know About the CIGNA Settlement of Class Action Litigation
Notices to physicians believed to be in the class of physicians potentially covered by the class action litigation against CIGNA were mailed on Oct. 6th.  Physicians have until Nov. 20th to opt out of the settlement.  To opt out, a physician must send a signed statement to that effect that includes his or her name, business address, telephone number and Federal Tax Identification Number to:  CIGNA Physicians Settlement; Settlement Administrator; PO Box 3170; Portland, Oregon 97208-3170.

Physicians wishing to participate in the settlement do not need to do anything at this time. Information about claims for compensation will be distributed after a final fairness hearing scheduled for Dec. 18th is completed.

More information is available on the following web sites or by calling 877-683-9363.

While the Maine Medical Association did not join the litigation against CIGNA, our advice on the settlement would be identical to what we advised relative to the AETNA settlement.  This advice was sent to all members prior to the Oct. 14 final hearing on the AETNA settlement.  If you would like to see the MMA document again, call 622-3374 or e-mail [return to top]

Maine Health Management Coalition Launches Physician Recognition Program - Pathways to Excellence
The Maine Health Management Coalition, a collaborative group of 32 Maine employers focused on improving the quality and efficiency of care (and no doubt, interested in the cost of care, as well) launched its newspaper advertising blitz this past weekend.  The campaign is aimed at recognizing those medical practices that responded to either last year's Phase I office systems survey, and/or this year's Phase II office systems survey.  Practices listed in the ads also received a certificate of appreciation for their office.

Over 400 primary care physician practices in Maine are listed on the MHMC website ( along with whether they responded to either survey.  Also listed are some HEDIS results for diabetes and asthma for 41 practices for which there was enough claims data available.  The latter section is password protected for MHMC member employers and their employees/family members. 

The Coalition sent a mailing to all primary care practices dated Oct. 6, which explained the purpose of the newspaper advertisements which began appearing this past weekend.  Practices were also given an additional opportunity to participate in the survey process and thus be added to the website as a participating practice. 

Early in 2004 the Coalition intends to list the results of this year's Phase II survey on the website. The Steering Committee for the project, which includes 8 physicians, is currently determining the most appropriate way to report those results.

Physicians interested in the Project may contact the Project Leader, Ted Rooney, RN, MPH at 729-4929 or  The eight physicians on the Steering Committee are Michael Albaum, M.D. at PrimeCare, Tom Claffey, M.D. at Intermed, Louis Hanson, D.O. at the Maine Med PHO, Barbara Crowley, M.D. at Kennebec Regional Health Alliance, Rich Engel, M.D. at Greater Portland Medical Group, David Howes, M.D. at Martins Point, Lisa Letourneau M.D. at MaineHealth and John Yindra, M.D. at the Central Maine Medical Center PHO. [return to top]

Large Crowd Celebrates MMA Sesquicentennial Gala - Including AMA Board of Trustees
Saturday evening, Nov. 8th, marked a milestone in Maine Medical Association history as over 450 members and guests convened in Portland to celebrate the Association's 150 year history.  Included among the guests were AMA President Donald Palmisano, M.D., J.D.  and his wife Robin, and l9 of the current 21 members of the Board of Trustees of the AMA.  Governor Baldacci also stopped by to make remarks and Congressmen Tom Allen and Mike Michaud attended the reception before heading to the Annual Jefferson-Jackson Day Dinner in Saco sponsored by the Maine Democratic Party.

The evening's program featured a 23 minute video of the history of medicine in Maine.  Broken up into five segments, the video presentation was introduced via remarks by Maroulla Gleaton, M.D., current MMA President and the first woman to serve in that role, Gordon Smith, Esq., the Association's Executive Vice President and Robert McAfee, M.D., former AMA and MMA President.  Krishna Bhatta, M.D., MMA Past President introduced Dr. Palmisano and Jacob Gerritsen, M.D, the Association's Chair of the Executive Committee,  introduced Governor Baldacci.

Four extraordinary physicians were recognized as "Sesquicentennial Physicians", each representing a unique period in MMA history.  The Association's first President, Isaac Lincoln, M.D., of Brunswick, who served in 1853, was the first physician named.  George Pratt, M.D. of Farmington, President in 1939 was the second.  Daniel Hanley, M.D. was the third and Dr. McAfee, the last of this group.  An appropriate plaque was given to Dr. McAfee, to Loring Pratt, M.D. accepting on behalf of his Uncle, George Pratt, M.D., and  to Maria Hanley and Sean Hanley accepting on behalf of Dr. Hanley.

Other physicians throughout the period recognized in remarks by the speakers included Sherman Boone, M.D., who practiced in Aroostook County in the later half of the 19th century and who began a three generation tradition of medicine with Drs. Storer and Alan Boone following.  Alan Boone, M.D. of Bangor was present to receive recognition on behalf of this three generation medical family.  Thomas Foster, II, M.D. was noted for being the third of  three MMA Presidents as both his father and grandfather had also served.  Lawrence Cutler, M.D. , the first residency trained physician in Bangor and a legendary promoter of education and mental health causes was also recognized.  The Cutler Health Center at the University of Maine is named for Dr. Cutler who also served as a Trustee of the University for some 19 years.  Portland cardiologists Josh Cutler, M.D. and Joel Cutler, M.D. were present to receive recognition on behalf of their father who died in 1984, just two weeks after closing his practice of some 50 years.  Frederick "Doc" Pritham, M.D., who established a medical practice in Greenville in l905 also was recognized.  "Doc" was still practicing in Greenville in 1970, at nearly 90 years of age, when Dorothy Clark Wilson's, "The Big Little World of Doc Pritham" was published.  It is still required reading for some of  of the Family Practice Residency Programs.  "Doc" also began a tradition of four generations of medical practice, as his great grandson is a student at Tufts Medical School.  Included in this remarkable medical family is Doc's grandson Robin Pritam, M.D. a family physician in Bangor who directs the Family Practice Residency Program

The evening concluded with music and dancing as the Tony Boffa Band delighted guests as they have at previous MMA Annual Meetings.

Net proceeds from the evening's events, which also included a Silent Auction, will benefit the Maine Medical Education Trust. [return to top]

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