December 22, 2003

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Physicians Spared from Medicaid (MaineCare) Cuts
This past Wednesday, the Baldacci administration announced its latest plans for closing the gap in the Medicaid budget. Previous cuts totaling $7.6 million in savings had been previously announced, but were preliminary. The new proposals totaled about $9.5 million. Of most interest to physicians is the deletion from the previous list of cuts of the proposal to reduce by $1.00 each the reimbursement for office visits coded as evaluation and management visits.
The proposed reduction in the E & M codes was projected to save $100,000 of state funds between its effective date and June 30, 2004, the end of the state's fiscal year.  The cut would have also involved the loss of the federal match, thus costing Maine's physicians $300,000 over the period. While the amount may seem small, Maine Medical Assocation Executive VIce President Gordon Smith noted that an important issue of principle was involved.

 "At the Annual Meeting in 2001, the Association identified better medicaid reimbursement as its highest legislative priority.  We meet regularly with MaineCare officials and they assure us that they understand the impact of low medicaid reimbursement on medical practice in Maine and hope to increase reimbursement, hopefully achieving parity with Medicare eventually (the most recent proposal to increase rates would have brought medicaid rates to 60% of Medicare).  Therefor, it is particularly disappointing when the administration considers cuts in physician payments, as has been done now twice this year alone.  We are pleased that this latest ill-considered proposal has been taken off the table.  We look forward to working with the Baldacci administration on strategies to improve reimbursement in the coming months", said Smith.

A number of cuts announced will impact on MaineCare patients and physicians practicing in certain settings.  Among the most significant of the cuts are the following:

Service Limits

           Limiting the number of hospital inpatient discharges to 2 and outpatients visits to 5, with exceptions as appropriate; and limiting coverage to approved services in other venues. ($1,000,000 in savings)

             Discontinuing coverage of certain elective surgeries, including gastric bypass, removal of excess skin after major weight loss, acne surgery, skin tag removal, rhinoplasty, removal of impacted ear wax, circumcision and bunion surgery.  An anticipated 4000 MaineCare recipients would be affected, most of which would involve ear wax removal and newborn circumcision.  ($120,000 in savings)

               Limit the number of visits an enrollee can have at a federally qualified rural health center (FQHC) and/or rural health center (RHC) to 10 visits annually (combined).  This provision is expected to affect 4500 individuals, who would have the option to use other providers.  ($100,000 in savings)

                Limiting adult use of physical therapy, occupational therapy and speech therapy.  The annual limit for physical therapy would be approximately 30 hours for each service.  Approximately 180 enrollees would be affected.  ($125,000 in savings)

Reimbursement Adjustments

                  Reducing pharmaceutical dispensing fee from $3.35 to $2.00. ($1,380,000 in savings)

                   Discontinue primary care case managemnt fee for MaineCare managed care for Rural Health Clinics (RHC) which are presently receiving cost-based reimbursement. This provision will impact about 75 rural health clinics.  ($118,000 in savings)

                    Setting a reimbursement cap for adult and child mental health medication management.  The cap would be set at the median which is approximately $265 per hour.  This would represent an approximate 5% reduction. ($114,229 in savings)

                     Discontinue primary care case management fee of $2.50 for MaineCare managed care for hospital based practices which are presently reimbursed on the basis of costs.  ($82,000 in savings)

                       Discontinue primary care case management fee of $2.50 for MaineCare managed care for FQHC's which are presently receiving cost-based reimbursment. ($60,000 in savings)

Across the Board Reductions

                        Reduce reimbursement by 2%  across the board to all providers, except for physicians and dentists. ($538,000 savings from hospitals; $112,000 from psychiatric hospitals; $1,224,361 from all other providers subject to this provision)

        Most of the above actions can be legally implemented through emergency rule-making.  It is anticipated that the cuts could be effective by January 20th.  The Department of Human Services has announced plans to hold one public hearing on the proposals to allow for public comment in advance of the emergency rules taking effect.  Watch this publication for the date and details of the hearing.

           Materials describing all the proposed reductions are available to MMA members be contacting the office (622-3374).

Hospital Sentinel Event Reporting Effective Dec. 29, 2003
MMA has been advised by the DHS Division of Licensing and Certification that the legislation requiring the reporting of certain "sentinel events" enacted in 2001 will become effective and enforced Dec. 29th, 2003.   A delay in the implementation of the statute had occurred because of the failure of the legislature to fund the two staff positions called for in the law.  Apparently the first staff person has now been hired and the Division feels comfortable going forward with the rules which have been drafted and which will now be subject to a public hearing on Dec. 29th.  Both MMA and Maine Hospital Association staff were involved in the legislation and had input into the proposed rules.  The draft rule can be located on-line at

The public hearing for the hospital sentinel event reporting rule is scheduled for Monday, December 29 at 1:30 p.m. at the Bureau of Medical Services office at 442 Civic Center Drive, Augusta, Maine.  DHS will accept written comments on the proposed rule until January 8, 2004.  The public hearing for the ASU sentinel event reporting rule is scheduled for Tuesday, December 30, 2004 at 1:30 p.m. at the same location as above.  DHS will accept written comments on this proposed rule until January 9, 2004.  Written comments should be directed to:

Louis T. Dorogi, Director, Division of Licensing & Certification, DHS/BMS, State House Station 11, Augusta, Maine 04333-0011.

MMA staff will attend the hearing and provide comment on the draft rules.

The underlying legislation and the draft rules do NOT require the reporting of any errors or events in a medical office.  Rather, the rules impact only licensed heatlh care facilities such as hospitals and ambulatory surgical centers.  But, obviously, the reporting required by the institutions would frequently impact physicians, depending upon the nature of the event.  The underlying state law, which both MMA and MHA were able to support after significant amendments were accepted, can be located on line at

MMA members can also receive hard copies of the legislation or draft rules by calling the office at 622-3374. [return to top]

State Certificate of Need Unit to Conduct Public Information Gathering Meeting Dec. 22
The State Certificate of Need Unit will conduct a public information gathering meeting on Monday, Dec. 22 (probably TODAY for most of you reading this) to gather "information regarding the need for ambulatory surgery services in the greater Portland area."  The meeting will be held at the Portland Regional Human Services Building on Marginal Way in Portland, from 1:00pm to 3:00pm.  MMA representatives will attend the session.  The CON Office will also accept any written comments on the need for ambulatory surgery services in the greater Portland area until Jan. 7, 2004 at 5:00pm.

MMA apologizes for the late notice to MMA members.  We became aware of the meeting only this past Thursday, despite a communication apparently sent out by the CON Unit on December 10th addressed "To Whom it May Concern".

The meeting is being conducted in the context of an announced proposal by a group of surgeons to build a multi-specialty ASC in the Portland area and the anticipated expansion of outpatient surgery facilities by both Maine Medical Center and Mercy Hospital.  There is currently a moratorium on CON applications which is due to expire in May.  The surgeons' proposal noted above was filed prior to the moratorium and is not subject to the moratorium.  In fact, the surgeons' proposal may not be subject to the CON law, depending upon its cost. [return to top]

Number of Flu Cases Increasing: Update on Vaccine Availability and FluMist
Dr. Dora Anne Mills, Director of the Maine Bureau of Health announced on Dec. 18th that physicians participating in a program that monitors influenza reported that an average of 7% of all patient visits last week were for flulike symptoms, up from only 1% the previous week.  She also indcated that the initial results from the state laboratory indicate that the dominant flu strain in Maine is the same as in the rest of the nation, a so-called H3N2 virus.  Unlike in some other states, there has not yet been a report in Maine of a serious complication in a child.

The Bureau is searching for more vaccine after acknowledging last week that there are significant shortages, especially in pediatric offices.  The state obtained an additional 1,000 doses from the federal government in the last few days and is expecting another 500 doses to be available in the next three weeks.

The Bureau recommends flu shots for anyone who is 65 years of age or older, children 6 months to 23 months, women who are pregnant beyond the first trimester and anyone with a chronic health condition.  The federal Centers for Disease Control and Prevention are making the new nasal vaccine, FluMist, available for states to purchase at a reduced rate, reported to be $20 per dose.  Dr. Mills and the Bureau are attempting to come up with a system that would allow the state to make such a purchase and then make the nasal mist available to providers at cost.  FluMist, manufactured by Wyeth Pharmaceuticals is approved by the FDA for use  in healthy individuals between the ages of 5 and 49.  Unlike the injectable vaccine, the flu mist is made with live, weakened virus.  Therefore, it is reported to be more likely to cause a mild reaction, but also provide greater protection from the flu.

On the federal level, the Centers for Disease Control and Prevention stepped up its reponse to the potential epidemic by launching response teams to certain states and by asking all health departments to report any flu deaths of children.  On Friday, Dr. Julie Gerberding, the CDC Director, reported that 42 children have died from the flu this season.  She indicated, in response to a question at a media briefing, that the number of cases so far this season could be classified as an epidemic. 

The CDC has never required states to report flu deaths, largely because it is hard to distinquish flu from other winter viruses.




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Dirigo Health Update: Health System Advisory Council Holds First Meeting
The Health System Advisory Council held its first meeting this past week and focused on organizational details and on its statutory duties.  Under the Dirigo Health legislation, the Council is charged with the reponsibility to advise the Governor's office on the state health plan and to provide input on the establishment of the Certificate of Need Investment Fund.  The Council is to provide this input by May of 2004 which presents it with a very ambitious timetable.

MMA President Maroulla Gleaton, M.D. is a member of the Council, as is MMA member and former Bureau of Health Director Lani Graham, M.D., and former MMA President Robert Keller, M.D.    Dr. Graham was elected Vice-Chair of the Council.  Brian Rines, PhD., a trustee of Maine General Medical Center, was elected as the Chair.

Trish Riley, Director of the Governor's Office of Health Policy and Finance presented the Council with its charge and noted three options available to it with regard to the CON moratorium and Capital Investment Fund cap.  The options were to extend the moratorium, develop an interim state health plan or to attempt to complete the charge by May, 2004.   Rather than reach any decision at its first meeting, Council members chose to identify their priorities in a state health plan and to defer the decision on which option to pursue until a future meeting.  Staff will gather information from exisitng resources, such as the all-claims database and will also look at some other planning documents from other states.  The Council will meet again on Friday, Jan. 16, 2004 at 1:00pm with the precise location in Augusta to be announced.

The Governor's office announced that it had retained Lee Webb, PhD, as a consultant to assist in the process of determining the amount of the CON Capital Investment Fund.  Most recently, Dr. Webb was vice-president for real estate and facilities for Partners Healthcare System in Boston.  He will meet with interested parties, including MMA.  In fact, Dr. Webb is meeting wth MMA staff on Dec. 22 to receive MMA's initial input on the appropriate criteria to be considered in establishing the Investment Fund cap.  The Association opposed the cap on the Fund but will provide appropriate input to Dr. Webb and the Council.

The CON Capital Investment Fund cap ultimately will be part of a rule-making process that will be reviewed by the Legislature this coming session.

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CMS on Track to Implement Medicare Payment Changes in New Year
Senior officials at the Centers for Medicare and Medicaid Services (CMS) have indicated that they are on track to implement payment changes included in the Medicare prescription drug bill, effective for dates of service on or after January 1, 2004.  As you know, the bill replaces the 4.5% cut that had been forecast for 2004 with a 1.5% payment increase. 

Several other provisions of the new Medicare law that affect physicians also take effect on January 1st.  The law places a floor of 1.00 on the geographic index or GPCI for physician work, which will further increase the payment rate in Maine.  The law also changes the payment methodology for drugs administered in physician offices as well as for the service of administering the drugs.

CMS is working to publish a regulation in the Federal Register before the new year that will provide specific details on the changes in payment rates.  When the new regulation is released, CMS will instruct the Medicare carriers to immediately make information about the 2004 payment rates for participating and non-participating physicians and the limiting charges available on their web sites.  It has also been reported to us by the AMA that CMS plans to extend the participation decision period beyond the current deadline of December 31, 2003.

At this time, CMS has not released information on the specific conversion factor for 2004 or the new payment rates for drugs and drug administration.  MMA will continue to update members through this e-newsletter as we receive the information. [return to top]

Update on MMA Advocacy on MaineCare Preferred Drug List (PDL)
Representatives of MMA, the Maine Osteopathic Association and several specialty societies continue to meet with MaineCare officials to raise and attempt to resolve issues members have brought to our attention regarding the MaineCare Preferred Drug List.    Another meeting was held this past week with Jude Walsh and Acting Commissioner Peter Walsh.  Most issues raised have been associated with pain medication, anti-convulsant and and psychotropic drug categories, although some of the problems are across the board.  Calls have also been received regarding medications prescribed to nursing home patients.

At last week's meeting, we learned that, based upon third quater data, the State's contractor, GHS Data Management, Inc., is processing about 600 PA requests per day with an average 3-hour turnaround time and an 85% approval rate.  The Department expects to issue PA exemptions based uppon certain prescribing criteria on a quarterly basis in January, 2004.  The Department recently has asked the Muskie School of Public Service at USM to produce an independent analysis of the PDL program and its impact upon physicians and patients.

While the MMA has not believed it prudent or realistic to attempt to block implementation of the PDL, we have tried to keep physicians informed about the process through Maine Medicine and Maine Medicine Weekly Update since the expanded program began last spring.  The MMA's advocacy efforts have focused on:

  • improving the Department's communications with physicians and enrollees about the PDL, seeking clarity and more frequency of the communication;
  • ensuring input from all medical specialties in the development of the PDL; and
  • minimizing the burden of the prior authorization process on physician practices.

The MMA offers the following advice as members deal with this issue:

  • Contact the GHS web site for updated information about the PDL.  The site is located at;
  • If you have specific problems with the program and want to talk with someone at the Department, contact the program manager, Jude Walsh, at 287-1815 or by email at  Don't try to reach Dr. Clifford at GHS because his responsibility is to ensure that the PA process meets legal requirements rather than to resolve policy issues;
  • Remember that the physician has no right of appeal of the denial of a PA request, but the patient does and may request an appeal by phone.  The main number at the Bureau of Medical Services is 1-800-321-5557.  More contact information for the Bureau staff may be found at; and

  • Keep the MMA informed of your concerns!  Feel free to contact Andrew MacLean ( or Gordon Smith ( by email or by calling 622-3374.

As most of you know, the Baldacci Administration projected substantial savings (nearly $100 million) in the SFY 04-05 biennial budget through the implementation of a preferred drug list (PDL) as a drug management tool in the MaineCare program.  The primary criterion for placement of a drug on the PDL is the manufacturer's negotiation of a "supplemental" rebate with the State of Maine.  Physicians who wish to prescribe a drug not on the PDL must follow the prior authorization process established by DHS for the MaineCare drug management program in 2001.




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Maine Bars Go "Smoke-free" on January 1, 2004
On January 1, 2004, Maine will extend "clean indoor air" legislation to bars, one of the last public places where smoking has been permitted.  This is the effective date of L.D. 1346, An Act to Protect Workers from Secondhand Smoke & to Promote Worker Safety (P.L. 2003, Chapter 493).  L.D. 1346 was a priority on the legislative agenda of the Maine Coalition on Smoking OR Health chaired by emergency physician Jo Linder, M.D.

The Coalition has been developing a public education campaign to help ease the transition to compliance with the new law.  On January 1, Maine will be one of 5 states to have enacted a statewide ban on smoking in bars, joining California, Delaware, Connecticut, & New York. [return to top]

Opportunity to Serve on Board of Licensure in Medicine
The Baldacci Administration has sought MMA's input to fill an opening on the 9-member Board of Licensure in Medicine, the agency charged with the licensure and discipline of allopathic physicians in Maine.  The Board, chaired by Edward David, M.D., J.D.,  is composed of 6 physicians and 3 public members and meets the second Tuesday of each month.  The time commitment is approximately two days per month.  Candidates must have a M.D. and have been actively engaged in the practice of medicine for a continuous period of 5 years prior to the appointment.  The term of the appointment is 6 years.

If you are interested in this position, please contact Gordon Smith, EVP, at or 622-3374. [return to top]

Civil Justice Reform in NEWSWEEK
Common Good's campaign to focus national attention on the impact of negligence lawsuits on professions such as medicine and on our society as a whole recently has been the focus of extensive coverage in Newsweek magazine and related coverage on NBC.

See this and more at

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Holiday Wishes from MMA
Maroulla Gleaton, M.D., President, Gordon Smith, EVP, and all the leadership and staff of MMA wish you a safe and happy holiday season!  The MMA office will be closed on Thursday, December 25 and Friday, December 26.  The office will reopen at 7 a.m. on Monday, December 29.  The office also will be closed on New Year's Day. [return to top]

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