January 26, 2004

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Political Parties Diverge on Solutions to Budget Shortfall
The Maine Legislature's Appropriations Committee appears headed for a divided report along partisan lines on the Governor's $109 million supplemental budget. Despite working through the weekend, legislators and administration officials were not able to come to agreement on the cuts necessary to balance the state's books between now and the end of the state fiscal year on June 30.
The result of the stalemate is likely to be the passage of the supplemental budget by a mere majority vote, rather than the two-thirds vote required for the provisions of the budget document to take effect immediately.  Of the $109 million shortfall, only $22 million is proposed to be taken from the MaineCare program, but this $22 million has been the primary focus of the budget hearings.  Further complicating the matter is the fact that all but $2.5 million of the $22 million savings can be achieved through administrative action (emergency rule-making) by the Governor that does not require legislative approval.

The cuts most objected to by physicians have been restored, but the proposed budget includes another $8.5 million reduction in reimbursement to hospitals.  Because of the federal Medicaid match, the impact on Maine's hospitals would be close to $25 million.    The objections to the proposed reductions by the Maine Hospital Association has led to particularly harsh exchanges between the interested parties, with Trish Riley, the governor's director of health policy and finance launching the following verbal equivalent of a hand grenade., as reported by the Bangor Daily News.

             "Riley said Maine is home to the most costly hospitals in New England, which also are among the most costly in the country.  Rather than deal with those costs through efficiencies that could be imposed internally, Riley said hospitals always seek other alternatives."  "They talk instead about passing on costs to premium payers and I think there's a disconnect there,"she said.  "You sort of wonder what their motivation is when they're not prepared at all to talk about any kind of internal cost-savings." (Bangor Daily News, Jan. 24-25)

The Hospital Association has pointed out that Maine hospitals had already had proposed Medicaid reimbursement reduced by $58 million in the last budget cycle.

Also of interest to physicians is the position of the administration in adamantly refusing to agree to Republican requests to put on the table for budget balancing purposes the money set aside for Dirigo Health.  The Governor has stated that Dirigo Health is not negotiable and that the July 1 roll-out of the program will take place on schedule.  Many Republicans, and some Democrats, have opined that it is difficult to conceive of the success of Dirigo Health if the state cannot afford the health program they have responsibility for now, namely MaineCare.  MaineCare now insures over 240,000 Maine citizens, with the number of enrollees having more than doubled the past decade.

Dirigo Health Provision Requires Posting of Charges
Governor John E. Baldacci wrote to Maine physicians recently to remind them of a provision in the Dirigo Health legislation that required notification of patients of charges for "health care services commonly offered by the practitioner."  The provision took effect last September and applies to all licensed health care professionals, not just physicians.  Hospitals and other health care facilities are covered by a similar provision.

The provision does not dictate how many services are listed, nor does it state specifically how the written notification is to be given.  the entire statutory language is as follows;

        "A health care practitioner shall notify patients in writing of the health care practitioner's charges for health care services commonly offered by the practitioner.  Upon request of a patient, a health care practitioner shall assist the patient in determining the actual payment from a 3rd-party payor for a health care service commonly offered by a practitioner.  A patient may file a complaint with the appropriate licensing board regarding a health care practitioner who fails to provide the consumer information required by this section."

The intent of the law is to better educate consumers about the cost of healthcare.  Given the prevalence of third-party payments, it is believed that patients have lost touch with what services actually cost and that they will become more engaged in cost-containment efforts if better informed.  Some legislators also believe that patients will comparison shop based upon price if they are aware of such.

If you are in doubt as to how to comply with the new law, feel free to call MMA attorneys Andrew MacLean or Gordon Smith who can assist. (622-3374), or contact via e-mail at amaclean@mainemed.com or gsmith@mainemed.com. [return to top]

Anthem Blue Cross Blue Shield of Maine Loses Medical Director
Anthem Blue Cross Blue Shield of Maine announced on Monday (1/26) that its Medical Director, Karen Bell, M.D., had resigned, effective Jan. 30th.   Dr. Bell had been with the company since the Fall of 2001 and was highly regarded as an advocate for various quality initiatives, including a pay for performance strategy.  Dr. Bell was recently named to the Maine Quality Forum Advisory Committee and was involved with a number of quality projects, including the Pathways to Excellence Project of the Maine Health Management Coalition. Dr. Bell made a special effort to reach out to the practicing medical community and will be missed.  The Association wishes Dr. Bell well as she pursues other opportunities.

Anthem Vice President for Health Care Management Pat Richards, R.N., stated on Monday that the company will begin a search immediately for a successor to Dr. Bell and that the company is committed to continuing the strong quality agenda that Dr. Bell initiated.  While recruiting for a full-time medical director, the company may rely on one or more part time physicians to assist current Associate Medical Director Max Barus, M.D. Physicians interested in such a position should contact Pat at 822-7004. [return to top]

Dirigo Health Advisory Council on Health Systems Development to Draft Temporary State Health Plan
The Advisory Council on Health Systems Development, established in the Dirigo Health legislation, voted last week to work on a temporary State Health Plan that will be presented to the Governor by May.  The Council is required to produce such a report in the law, but there was considerable doubt as to whether the Council could meet the deadline.  Recognizing that a full Plan was not possible, the Council voted to prepare a draft plan that would be considered temporary.  The temporary plan will outline the general principles and values that would form the basis for the full Plan.

The Council also commented on a draft regulation establishing the amount of the Certificate of Need Capital Investment Fund, prepared by Ellen Schneiter of the governor's office of health policy and finance.  While the final figures were not included, the basic formula and process for establishing the limits on investment were approved.  The proposed rule must go through the rule-making process., including a legislative hearing as the rule is considered a major, substantive rule requiring legislative review.   Under the proposed draft, the size of the fund would be the average of the total third year operating costs of the projects approved through the CON process in calender years 1999 through 2003.  This amount will then be multiplied by the inverse ratio of the annual increase in health care costs in Maine to the annual rate of increase in total health care costs for the country.

Because of negotiations carried on during the 2003 Legislative session, at least 12.5% of the Fund will be set aside for non-hospital projects.  These projects will be divided between large and small, with the likely threshold between the two  being $500,000 in capital expense and operating costs in the third year of a project.

MMA President Maroulla Gleaton, M.D. sits on the Council which is chaired by Brian Rines, PhD of Gardiner.  Lani Graham, M.D., former Director of the Maine Bureau of Health is the Vice-Chair. [return to top]

MMA To Present to Hospital Study Commission on Feb. 2nd; Input Welcome
Representatives of the Maine Medical Association have been asked to provide a physician's perspective to issues being considered by the Commission to Study Maine's Hospitals.  The presentation will take place on Monday morning Feb. 1 and will be given by the Association's President Maroulla Gleaton, M.D.

The study commission is engaged in six months of intensive analysis of existing data and information regarding the status of Maine's hospitals.  The Commission has a broad charge to address issue of costs, quality and access in Maine's hospitals.   Specifically, Dr. Gleaton has been asked to present MMA views on the greatest strengths of Maine's hospitals, the greatest challenges they face and the issues of concern raised by physicians.

MMA members are encouraged to communicate with Dr. Gleaton concerning their thoughts and views regarding these issues.  Dr. Gleaton can be reached at her practice in Augusta at 622-3185 or via email at gleaton@adelphia.net.

The study commission is composed of nine individuals and is chaired by former BIW CEO William Haggett.  The two physicians on the commission are D. Joshua Cutler, M.D. and Richard Wexler, M.D.   Hospital representatives are Scott Bullock, CEO of Maine General Health and John Welsh, Jr., CEO of Rumford Hospital. [return to top]

Institute of Medicine Calls for Universal Health Insurance Program by 2010
The Institute of Medicine (IOM) on January 14 issued a report calling for the implementation of a universal health care insurance program by 2010.  The report is the culmination of a series of five IOM reports over the past three years on the challenge of dealing with the 43 U.S. citizens who are uninsured.

Portending the fact that the report may be the focal point of national debate, HHS Secretary Tommy Thompson called universal coverage by 2010 "not realistic" while Democratic leader Tom Daschle called it "doable" and "the single most important domestic issue facing the country."

Key recommendation of the report called for development of a system within the framework of the following guidelines:

       *  Health care coverage should be universal, continuous and affordable to individuals and families.

        *  The health insurance strategy should be affordable and sustainable for society.

         *  Health insurance should enhance health and well-being by promoting access to quality care that is effective, efficient, safe, timely and patient-centered.

      While a specific route to universal coverage was not included in the report, offered were four generalized prototype strategies - each of which would require a system change: 

             Prototype 1:  Major public program expansion and new tax credit;  The current favorable tax treatment for employment based private insurance would remain.  Employers would not be required to offer coverage.  Medicaid and SCHIP would be combined; Medicare would be extended to 55-year-olds who pay a premium.  A tax credit would be provided for moderate income individuals to purchase private insurance.

              Prototype 2:  Employer mandate, premium subsidy, and individual mandate.  Employers would be required to offer coverage and contribute to their workers' premiums, although a federal premium subsidy would be available for employers of low-wage workers.  Medicaid and SCHIP would be merged, and Medicare would remain as it is.  Individuals would be required to obtain coverage through work, through enrollment in a public program, or through individual purchase.

               Prototype 3:  Individual mandate and tax credit.  It would be the responsibility of individuals to provide health insurance for themselves and their families through the private market.  Each person would become eligible for an advance, refundable tax credit.  The federal government would administer the tax credit.  However, insurance regulation would remain at the state level.  Medicaid and SCHIP would be eliminated, but Medicare would remain as it is.

               Prototype 4:  Single payer.  Everyone would be enrolled in a single, comprehensive benefit package, but persons could purchase supplemental policies for non-covered services.  This approach would be administered and funded federally but would use contractors and private health plans to review claims and process payments, much as Medicare does now.  A "global budget" would help control aggregate healthcare spending.  Medicaid and SCHIP would be eliminated; those currently eligible for Medicare could be folded into the single payer model.

      The Maine Medical Association announced its own plan for universal coverage last spring, giving support to the notion of individuals being required to purchase health insurance coverage, just as they are required to purchase automobile liability insurance in most states, including Maine.  A copy of the MMA plan is available by calling the office at 622-3374.  A summary of the IOM report can be downloaded at www.iom.edu. [return to top]

MMA and Maine Psychiatric Association Prepare for Bill Contemplating Psychologist Prescribing
The leadership of the Maine Psychiatric Association has met several times during the past few weeks with MMA staff and other interested parties to address L.D. 1713 Resolve, to Establish a Commission to Study Access to Prescription Medication for Persons with Mental Illness.  Maine's psychiatrists and other physicians are particularly concerned about a provision in the legislation that would have the study commission consider whether prescribing authority should be extended to mental health providers other than physicians, such as psychologists.  The MMA and the MPA have voted to oppose this section of the bill, although both organizations will acknowledge that Maine's emergency and primary care physicians need more back-up with complicated psychiatric cases.

The MPA has scheduled a "Day at the Legislature" for Wednesday, Feb. 4, 2004.  The public hearing on the bill is scheduled for the afternoon of Tuesday, Feb. 10th, 2004 before the Committee on Health and Human Services.

Physicians wishing more information on the legislation or talking points on this topic may contact Warene Chase-Eldridge at MMA via weldridge@mainemed.com

Senator Michael Brennan (D, Portland), Chair of the HHS Committee is the sponsor of the bill. [return to top]

MMA Leads the Way in Protecting the Fund for A Healthy Maine
Last Thursday, 1/22/04, MMA EVP Gordon Smith was the lead speaker at a State House Press conference in support of L.D. 1612, a proposed constitutional amendment to protect Maine's tobacco settlement funds known as the Fund for a Healthy Maine.  The legislation would authorize a state vote to amend the state constitution in order to protect the fund.  The legislation was proposed by Governor Baldacci in last year's session and was narrowly defeated on an initial vote.  It must receive a two-thirds vote to go on the ballot.

At the press conference, attorney Smith released results of a recent public opinion survey demonstrating that 75% of Maine citizens support a constitutional amendment protecting the fund.  An even greater percentage, 78%, indicated that tobacco settlement dollars should never be used to balance the state budget.

We need to preserve the original vision for the Fund for a Healthy Maine - that every penny of tobacco settlement money should be used to get and keep Maine people healthy.  The fund should not be raided for short term purposes or spent on non-health related programs.  Only a constitutional amendment can ensure this protection.

While Maine is better than most states in the % of the funds used for health related purposes, even in Maine nearly $90 million has been diverted since the original receipt of the first funds from the settlement.  Call your legislator today and ask for his or her support of L.D. 1612! [return to top]

Anthem Reports Revenue Increased 27% in 2003
In a recent regulatory filing in Indiana, Anthem, Inc., reported that its revenue increased 27% in 2003 to roughly $16.5 billion.  The report also indicated that the insurer's earnings were $5.30 to $5.35 a share last year, compared to $4.51 a share in 2002.  Anthem's 2004 net earnings are expected to warrant per share earnings of $6.05 to $6.15, a 13 to 16 percent increase from 2003 levels.

In a related story, Goldman Sachs stock analyst Matthew Borsch predicts that nonprofit Blues plans' 2003 post-tax income should have risen approximately 80% over 2002 levels in 2003.  He noted that the positive increase in the financial results are largely attributable to lower medical costs and the rising demand for PPO-style products. [return to top]

Deadline to Challenge Aetna "Retained Claims" is February 4
As part of Aetna's settlement of a class-action lawsuit, physicians are still able to dispute claims that were still being processed on November 6, 2003 ("retained claims"), the date on which the Aetna settlement agreement became final. These retained claims include physician claims for services rendered before November 6 that are being processed by Aetna, as well as claims for services rendered before November 6 that had not yet been filed but fell within the allowed claim filing period (120 days unless extended for extraordinary circumstances).
Physicians with disputed claims ("retained claims") must use Aetna's internal appeals process. For internal appeals completed before January 5, disputes must be submitted by February 4. For internal appeals completed on or after January 5, disputes involving "retained claims" must be submitted no later than 30 days after the internal appeals process is completed.
To dispute a "retained claim," physicians must submit the required information, along with all supporting documentation and the filing fee by the appropriate deadline to Hayes Inc., the company selected jointly by Aetna and Plaintiff attorneys. Hayes, Inc. can be reached at 215.855.0615 (phone) or 215.855.5218 (fax) or via mail at 157 S. Broad St., Suite 200, Lansdale, PA 19446. [return to top]

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