November 24, 2003

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Landmark Medicare Drug Bill and Physician Fee Increase Headed for Passage
Shortly after 1:00pm today, one of the final hurdles to passage of the Medicare Conference Report on H.R. 1, the "Medicare Prescription Drug and Modernization Act of 2003" was overcome when 70 Senators voted to bring cloture to the debate, thus virtually ensuring a majority vote on the bill later today.
In addition to providing a prescription drug benefit for Medicare seniors, the bill also significantly benefits physicians by replacing projected cuts in reimbursement in 2004 and 2005 with a positive update of 1.4% in each of these years.  This provision alone will mean an average of $4700 per physician annually in Maine, and more in 2005.  Moreover, the geographical cost adjustments in the bill will improve  reimbursement in Maine by $7 million per year for three years. 

Both Senators Snowe and Collins supported final passage of the bill which passed the House early Saturday morning.  Congressmen Allen and Michaud voted against the bill in the Senate.   Statements from each of the Senators are available in this edition of Maine Medicine Weekly Update following this opening article.

The bill also provides some "regulatory relief" to physicians, modifies the e-prescribing mandates in the House bill and has acceptable language re ICD coding. 

These reimbursement and administrative improvements in the Medicare program will help to ensure that Maine's Medicare beneficiaries retain access to the broadest network of physicians and other providers in our state.

Maine's hospitals also do well under the provisions in the bill.  The package is estimated to mean $500 to $550 million for Maine hospitals over the next 10 years, with more than $100 million of that amount in improved payments.

See MMA's Letter Urging Maine's Delegation to Support the Medicare Report

November 21, 2003


The Honorable Susan M. Collins

United States Senate

172 Russell Senate Office Building

Washington, D.C. 20510





Dear Senator Collins:


On behalf of more than 2400 Maine physicians who comprise the Maine Medical Association, I am writing to urge you to vote in favor of the long-awaited conference report to provide a prescription drug benefit and to address critical physician reimbursement issues in the Medicare program.  While the conference report, like most legislation, is not perfect, it is a compromise that does respond to significant issues in the Medicare program for Maine patients and physicians.

The conference report provides real help to Maine seniors who cannot afford necessary prescription drugs.  For the first time in history, all 227,308 beneficiaries in Maine will have access to a Medicare prescription drug benefit beginning in January 2006.  Also, the report means substantial savings for the MaineCare program because Medicare will assume the prescription drug costs for 47,089 Mainers who are eligible for both Medicaid and Medicare.  As you know, the MaineCare program has struggled financially in recent years and Maine's health care and mental health, mental retardation, and substance abuse treatment systems face a current deficit of more than $113 million.

In addition to helping seniors with their drug costs, the conference report responds to reimbursement and administrative problems in the program that have troubled physicians for years.  I know that cost shifting and regulatory hassles come up in every conversation you have with physicians when you are home in Maine.  Without the 1.5% correction in the report, Maine will lose $14 million in Medicare physician reimbursement in 2004 (approximately $4700 per physician) and more in 2005 - - on top of the 5.4% across-the-board payment cut borne by physicians in 2002.  Moreover, the geographic cost adjustments in the report would improve practitioner reimbursement by $7 million per year for three years.  This provision is crucial to maintaining adequate health care services in rural Maine.  Finally, the report's provisions on "regulatory relief," electronic prescribing, and coding systems are very important to Maine physicians. 

These reimbursement and administrative improvements in the Medicare program will help to ensure that Maine's Medicare beneficiaries retain access to the broadest network of physicians and other providers in our state.  Thank you for considering the views of the physicians of the Maine Medical Association on the Medicare conference report.  We ask that you help to pass the conference report before the end of the year.



Maroulla S. Gleaton, M.D., President


MMA sent the same letter to Senator Snowe, Representative Michaud, & Representative Allen. [return to top]

See MMA's Press Release on the Medicare Conference Report

FOR IMMEDIATE RELEASE            CONTACT:     Gordon Smith, EVP

November 21, 2003                          207-622-3374/207-215-7461



Maine Medical Association Urges Congress to Pass the Medicare Drug Conference Report


(Manchester, Maine) - The Maine Medical Association supports the Medicare Prescription Drug and Modernization Act of 2003 conference report that is likely to be debated in the House and Senate before the Thanksgiving holiday.

            MMA President Maroulla S. Gleaton, M.D., an Augusta ophthalmologist, said that passage of the conference report is a positive step for elderly patients and physicians in Maine.  "Finally, Maine's senior citizens will get some help with the cost of their prescription drugs through Medicare."

            Dr. Gleaton also emphasized that improvements in reimbursement and administrative aspects of Medicare contained in the report will help to maintain access to the broadest range of physicians for Maine's Medicare beneficiaries.  "The reversal of new cuts in physician reimbursement scheduled to take place on January 1, 2004 and the geographic cost adjustments are crucial to enabling physicians to keep their office doors open and to serve patients."

            MMA's Executive Vice President Gordon Smith quantified the positive impact on Medicare funding for Maine.  "Passage of this bill will avoid the loss of about $14 million in Medicare physician reimbursement in 2004 - - that is about $4700 per physician," said Smith.  "With increasing malpractice insurance costs, low Medicaid rates, and flat reimbursement in the commercial insurance market, Maine physicians simply can't afford the scheduled 4.5% reduction in Medicare rates," Smith added. 

            The report's adjustment of geographic disparities in Medicare reimbursement between rural and urban areas is vital to rural states like Maine.  "The investment of $7 million per year for three years in rural health care in Maine certainly will help improve the availability and quality of medical care in northern and eastern Maine," said Dr. Gleaton.

            Dr. Gleaton also praised Senator Snowe and Senator Collins for announcing their support for the conference report today.

            The Maine Medical Association is a professional association representing more than 2400 physicians in Maine.

### [return to top]

See Sen. Collins' Statement on the Medicare Conference Report


Bill Includes Collins' Authored Provisions to Help Homebound Patients, Assist Rural Hospitals, and Make Generic Drugs More Accessible

WASHINGTON, DC-Congressional negotiators have released the final version of legislation that will modernize Medicare, create a prescription drug benefit, and provide relief to rural hospitals and physicians in Maine and throughout the nation. The bill also includes provisions that Senator Collins authored to ensure that homebound patients have more access to Medicare, dollars to help support Maine's teaching hospitals and a provision to lower the cost of drugs by making generic drugs more readily available to consumers.

Senator Collins has announced that she will support the bill when it comes before the Senate and has released the following statement:

"The Medicare Bill, which is now before Congress, represents the biggest expansion in the program's 38-year history and an historic opportunity that may never come again and that we cannot afford to let pass.

"Providing our seniors and disabled Americans with greater access to affordable prescription drugs is long overdue. Our health care needs have changed dramatically since Medicare's inception. Americans rely more and more on prescription drugs to maintain a healthy lifestyle, yet these vital drugs are becoming increasingly inaccessible to low income seniors, in particular, because the cost of drugs has skyrocketed and traditional Medicare does not provide coverage. If Congress were to create a Medicare program today, there is no doubt that it would include a prescription drug benefit.

"The Medicare program is in need of modernization and I believe this bill takes a number of important first steps. For example, it creates a prescription drug benefit that would be available to seniors who choose to participate and it would provide much-needed help to low-income seniors.

"The bill takes steps to immediately reduce the cost of prescription drugs for seniors. While the prescription drug program is complex and will take a few years to get off the ground, this bill would provide immediate assistance through a drug discount card to be issued to participating seniors. It also contains a provision that I authored in the Senate version of the bill to bring less expensive, generic drugs to the market sooner while still encouraging research and innovation among drug manufacturers.

"I also strongly support provisions in the bill that will provide $25 billion to rural hospitals and physicians. Hospitals in Maine would benefit by an increase of about $125 million over the next ten years. This bill will also increase payments to physicians in Maine by an estimated $7 million a year. Rural health care providers are often reimbursed by Medicare at rates much lower than those of urban and suburban health care providers. This situation is threatening the availability of good, quality care to individuals who live in rural communities. This increase would be welcome to rural hospitals, physicians and the patients who rely on their services.

"I am pleased that the bill includes a provision I support to ensure continued funding for Medicare graduate medical education funding for Maine's family practice residency programs, which are so critical to the continued supply of physicians in our state. This provision could mean an estimated $1.7 million for these important programs.

"The final Medicare bill also includes my provision that will make Medicare more accessible to our nation's elderly and disabled Medicare patients who are homebound. This "David Jayne," provision, named after a courageous advocate who inspired the legislation, will ensure that the homebound patients who most rely on Medicare, will have access to the services they need and deserve.

"I agree with many, including AARP, that this bill, while not perfect, is worth supporting. It is a good first step and an opportunity that we cannot allow to pass. Millions of older Americans and their families will be helped by this legislation. Millions more will be helped in the future.

"I will cast my vote in support of this bill."

[return to top]

See Sen. Snowe's Statement on the Medicare Conference Report


WASHINGTON, D.C. - After six years of effort as a leader in the fight for a prescription drug benefit under Medicare, U.S. Senator Olympia J. Snowe (R-Maine) has announced she will support the bill when it comes before the Senate.

"There can be no question that this legislation comes at a critical juncture for America's seniors, who have been reeling as their prescription drug costs have risen an average of 16 percent per year - seven times the rate of inflation -- at a time when nearly one in four seniors have no prescription drug coverage whatsoever.

"While Congress' journey to this day has been difficult, it has been infinitely more arduous for America's seniors who have waited too long for prescription drug coverage. The process has borne witness to a multiplicity of goals - some have sought to add a drug benefit to the existing Medicare program, while others have sought either the privatization of Medicare or a full-scale, government administered health system. Moreover, there have been differences between the House and Senate over the size and scope of benefits. Yet, we essentially all agree we are well beyond one question -- the question of need.

"The bottom line is, we must acknowledge the reality that, just as the journey thus far has been difficult, the road ahead would not be easier - not when the debate centers on expanding a program that assists 40 million Americans. This conference report provides our best available opportunity to secure, for the first time, a legislative foothold that ensures a universal, comprehensive and permanent drug benefit while also maintaining the security and stability of the traditional Medicare program.

"Throughout this process, I have said we cannot put our seniors at risk by building a prescription drug plan that tears down Medicare in favor of an option that has yet to be tested - and that is why 43 of my colleague and I sent a letter to the Senate Majority Leader urging modifications to a premium support proposal we believed would increase seniors' premiums and potentially destabilize the traditional Medicare program. Thankfully, that proposal has now been further limited to ensure it is truly a bona fide demonstration project that does not undermine traditional Medicare. Because Seniors should never have to accept a prescription drug benefit that comes at the expense of Medicare as we know it."


[return to top]

DHS/DBDS Budgets Face $113 Million Shortfall
During a day-long meeting of the Legislature's Appropriations Committee last Wednesday, Finance Commissioner Rebecca Wyke, Acting DHS Commissioner Peter Walsh, Acting DBDS Commissioner Sabra Burdick, & GOHPF Director Trish Riley projected a SFY 2004 (7/1/03 - 6/30/04) Medicaid budget shortfall of $113,013,107 and outlined a preliminary plan to fill the deficit.

The estimated shortfall breaks down as follows:

  • Unfunded liability from prior years:  $47 M.  This includes $39 M from the DHS' widely publicized "audit" problems, adjusted by about $11 M in credits and approximately $19 M in prior year hospital settlements that will have to be paid in FY 04.
  • DHS shortfall:  $40.5 M.  This represents a deficit of approximately $43 M in the DHS MAP account adjusted by a $2.8 surplus in the DHS NF account.  Physician spending is slightly below budget for the year - 31% actual spending with 32% of the budget to be spent at this point in the year.
  • DBDS shortfall:  $25 M.  The DHS & DBDS projected shortfalls are the result of straight line projection of current spending over 18 weeks - - spending is simply over budget.
  • Labor account shortfall:  $1 M.

The Baldacci Administration intends to submit two supplemental budgets in the Second Regular Session of the 121st Maine Legislature beginning in January 2004.  The Governor will present a FY 04 supplemental budget as soon as legislators return in January and will urge the Legislature to pass it quickly.  Later in the session, the Governor will offer a FY 05 supplemental budget.

Commissioner Rebecca Wyke sketched out the following plan to fill the deficit:

  • Medicaid program adjustments:  $7.6 M.  See description below.
  • TANF reallocated surplus from prior years:  $29.5 M.  This probably is one-time savings.
  • Federal fiscal relief reserve fund:  $28.9 M.  This is a portion of the supplemental Medicaid money provided to the states in the "Collins amendment" last spring. - also one-time money.
  • Debt service savings FY 04 & 05:  $9.3 M.
  • Revenue reprojection:  $6.6 M.
  • GF unappropriated surplus:  $6 M.
  • Miscellaneous DHD savings:  $2.9 M.
  • Other program reductions & allotment reserves:  $21.9 M.  Budget watchers have no idea what might be in these last 2 items. 

The proposal includes no diversion from the Fund for a Healthy Maine.  Earlier in the day, Bureau of Health Director Dora Ann Mills, M.D., M.P.H. presented a persuasive report card citing the successes of the FHM programs during the last 3 years.

The Administration's breakdown of proposals to achieve the $7.6 M savings through "Medicaid program adjustments" includes the following items of particular interest to physicians:

  • Reduce all physician E&M visit rates by $1:  $100,000.
  • Reduce the incentive payments for children's EPSDT office visits:  $52,000.
  • Implement mandatory copays for drugs & other services.
  • Limit adult use of PT, OT, & ST:  $20,000.
  • Limit number of hospital inpatient discharges to 2 and outpatient visits to 5, with exceptions as appropriate; and limit coverage to approved services in other venues:  $1 M.
  • Discontinue coverage of certain elective surgeries:  $120,000.
  • Est. PA for "non-categorical" MaineCare members for high cost services; implement high cost member medical management across MaineCare:  $750,000.

If you have questions or comments about this information, please contact Andrew MacLean, or Gordon Smith, [return to top]

Congressman Michaud Plans Augusta Fundraiser on December 8th
Maine's Second Congressional District Representative Mike Michaud will hold a fundraising reception at the Senator Inn in Augusta on Monday, December 8th from 5:30 - 7 p.m.

Suggested contribution levels are $500, $250, & $100, payable to "Michaud for Congress," P.O. Box 1119, Lewiston, Maine 04243.  For more information, contact Andrea at 207-721-0972 or by email at

Other invited guests include Governor Baldacci, Former Governor Joseph Brennan, A.G. Steve Rowe, Treasurer Dale McCormick, Secretary of State Dan Gwadosky, Sen. President Beverly Daggett, & Speaker of the House Pat Colwell.

This would be an opportunity to register your disappointment with his vote on the Medicare drug bill conference report!  [return to top]

Medical Errors Law to be Implemented
At the Oct. 29th meeting of the Association's Hospital Medical Staff Section, Mary Dufort, BSN, MEd, Health Services Supervisor of the State Division of Licensing and Certification, told attendees that she is in the process of hiring the necessary staff to implement the reporting system which was established by the Maine Legislature in 2002.  The implementation had been delayed because of state budget issues that did not allow the Division to hire the two new staff members authorized in the legislation to operate the reporting system.

The law does not impact on physician offices directly, as the definition of health care facility in the law does not include a physician office, but ambulatory surgical facilities are included and physicians may be involved when an ASC, hospital or nursing home has to report.

The reporting will begin after the publication of rules likely to be the subject of a public hearing in December.  The reporting law requires facilities to report to the Division of Licensing and Certification any of the following events:

A.  One of the following that is determined to be unrelated to the natural course of the patient's illness or underlying condition or proper treatment of that illness or underlying condition or that results from the elopement of a hospitalized patient who lacks the capacity to make decisions:

                 (1)  An unanticipated death; or

                 (2)  A major permanent loss of function that is not present when the patient is admitted to the health care facility;

 B.  Surgery on the wrong patient or wrong body part;

C.  Hemolytic transfusion reaction involving administration of blood or blood products having major blood group incompatibilities;

D.  Suicide of a patient in a health care facility where the patient receives inpatient care:

E.  Infant abduction or discharge to the wrong family; or

F.  Rape of a patient.

The facility must make an initial report by the next business day via phone, fax, e-mail etc. and follow up with a written report within 45 days of the initial notification.  The bill requires the Division by Feb. 1 of each year to "develop an annual report to the Legislature, health care facilities, and the public that includes summary data of the number and type of sentinel events of the prior calender year by type of health care facility, rates of change and other analyses and an outline of areas to be addressed for the upcoming year."

     The reporting law, entitled, An Act to Reduce Medical Errors and Improve Patient Health (P.L. 2001, Chapter 678; effective 5/1/03) may be found at [return to top]

Bureau of Insurance Rule 850 Hearing
Maine Medical Association representatives attended a public hearing last week on proposed changes to Bureau of Insurance Rule 850.  The change was necessitated by a provision in the Dirigo Health legislation which allows an insurance Plan to provide financial incentives encouraging Plan enrollees to use designated providers for a limited set of services, subject to the requirement that these providers meet certain quality standards.  Primary care, preventative services, maternity, obstetrical and emergency services are exempt from the new provision.  And in no case can incentives require travel in excess of 100 miles or a two-hour drive under normal driving conditions.

The proposed rules set forth the criteria to be used by the Superintendent in determining if an insurer's plan meets the required quality standard. 

Testimony at the hearing was provided by the Maine Hospital Association and the Maine Health Purchasing Collaborative.  MHA raised some issues concerning the quality criteria and the Collaborative testified that the proposed rule was far too restrictive. Written comments on the rule must be received by the Bureau by Dec. 5.

The proposed rule can be viewed at: [return to top]

MMA/MOA Convene Working Group on MaineCare Drug PDL Issues
The MMA and Maine Osteopathic Association continue to discuss physicians' issues with the MaineCare Preferred Drug List (PDL) with representatives of the DHS/Bureau of Medical Services and its contractor, GHS Data Management, Inc.

The physician organizations have scheduled a meeting with representatives of both agencies on Monday, December 1, 2003 at 4 p.m. at the MOA office at 693 Western Avenue, Manchester.  The MOA office is in a white farm house in front of the MMA office park.

Physicians who want to raise specific issues with the managers of the PDL are welcome to attend.  Several specialty societies are planning to send a representative.  If you cannot attend, but would like specific issues raised by the MMA/MOA staff, please contact Andrew MacLean,, or Gordon Smith,[return to top]

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