March 15, 2004

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Hearings Today on MaineCare Budget Cuts; MMA to Testify
The Appropriations and the Health and Human Services Committees will spend all day today and some time this evening hearing public testimony on the Baldacci Administration's FY 05 Supplemental Budget plan that was announced early last week and which has been the subject of considerable public commentary, even prior to the public hearing.
The FY budget gap is nearly $160 million dollars, the majority of which represents shortfalls in the MaineCare account.  To address the deficit, the Administration proposes the following savings or revenue sources.

  •           $80 million in net MaineCare adjustments
  •           $9.4 million in projected Powerball revenue
  •           $38.5 million from "divesting the Internal Service Fund for Retiree Health"
  •           $2.1 million in increased motor vehicle fines
  •           $4.9 million from unappropriated surplus
  •           $9.2 million from Maine Revenue Services 'initiatives"
  •           a variety of other fee increases, transfers and one-time savings.

The following are highlights from the $80 million in MaineCare adjustments.

     A.  THE MAINECARE BASIC PLAN.  This represents the Administration's proposed redesign of the MaineCare benefit package to achieve $20.7 million in savings from all adults and an additional savings from childless adults.  Many optional MaineCare services are proposed to be eliminated, and several other services become subject to more prior authorization, medical management and utilization review.

     The following services are eliminated for adults:

  •           *  Podiatric
  •           *  Dental
  •           *  Occupational and Physical therapy
  •           *  Speech & hearing therapy
  •           *  Audiology
  •           *  Optometric
  •           *  Speech pathology
  •           *  Social worker services
  •           *  Ambulatory care clinics
  •           *   Prosthetics/orthotics
  •           *  Hearing aid dealers
  •           *  Rehabilitative (Brain injury)
  •           *  Adult day health
  •           *  Psychological services

     The budget also contains savings from several acute care proposals, including a doubling of the hospital tax (tax and match) from 0.74% to 2.2%.  The tax proposal is expected to generate $6 million in savings.  $900,000 is proposed to be saved from moving some hospital-based physician practices (those which have been designated as "provider-based" ) to CPT billing (See related article below).

    Additional savings are:

  • $6.25 million from the MaineCare pharmacy program through, among other things, "stricter prior authorization criteria for the preferred drug list."
  • $5 million in savings from a voluntary mail order drug program for the MaineCare drug program and the Low-Cost Elderly Drug program.
  • $3 million is savings from implementing a strict formulary in the Low-Cost Drug Program for the Elderly and DIsabled
  • $203,000 in savings from redesign of the Medical EyeCare Program

      Several million dollars are proposed to be cut in long-term care and in behavioral and developmental services.  MMA will offer testimony opposing many of these cuts at the hearing today.  The testimony will be given by MMA President-elect Lawrence Mutty, M.D.

       More details of the Governor's Supplemental Budget can be found in MMA's Political Pulse published last Friday, March 12.  Go to and proceed to the most recent issue of Political Pulse.

     Below is a draft copy of the Association's testimony opposing several of these reductions:








Joint Standing Committee on Appropriations & Financial Affairs

Joint Standing Committee on Health & Human Services

Augusta Civic Center

Monday, March 15, 2004


            Good morning Senators Cathcart and Brennan, Representatives Brannigan and Kane, and Members of the Appropriations and H&HS Committees.  My name is Lawrence B. Mutty, M.D. and I am the President-elect of the Maine Medical Association (MMA), a professional organization representing more than 2600 Maine physicians.

            Thank you for the opportunity to share the views of the MMA on the latest supplemental budget.  Also, I am presenting testimony on some aspects of the proposal on behalf of the Maine Psychiatric Association.

Maine physicians realize that the Governor and his staff faced a difficult challenge in assembling a balanced budget.  With the presentation of L.D. 1919 to you, the challenge is now yours.  In good financial times, the Legislature has, with the support of the MMA, expanded eligibility for the MaineCare program and for related health care, mental health and mental retardation, and substance abuse services in a strategy of incremental health care reform.  Given the 2-to-1 federal match in the Medicaid program, this has been a rational strategy. 

            The last half dozen or more budgets have, however, preserved eligibility while cutting provider reimbursement and the benefits available to the public under these programs.  During the debate on each of the recent budgets, the MMA has expressed concern about the impact of continued cuts in our health care, MH/MR, and substance abuse services on patients and on the practitioners and facilities who serve them.  Our concern grows more acute with each budget that attempts to balance the MaineCare budget solely by adjusting the MaineCare budget.  Today, we cannot warn you strongly enough that you cannot run the programs Maine has built during the last 5 years while cutting reimbursement and benefits without harming patients and threatening the financial viability of some providers.

            Governor Baldacci and the Legislature’s leadership have asked for public feedback about alternatives to the proposed cuts in L.D. 1919.  One alternative is obvious - - the MMA and other public health advocates argued during the SFY 2004 supplemental budget that you should consider raising the cigarette tax by $1 to $2 per pack.  Not only will this generate somewhere between $50 and $70 million in new revenue, it will have the greatest impact on consumption of any single tobacco policy decision you may make.  In the course of one short year, Maine has moved from having the second highest cigarette tax in New England to the second lowest.  This certainly is a more rational policy decision than the “tax and match” approach affecting Maine’s nursing homes and hospitals.  I have attached a fact sheet on the cigarette excise tax prepared by the Maine Coalition on Smoking OR Health.

            The MMA has the following specific comments about portions of L.D. 1919.


1.            MaineCare Basic.            The MMA objects to the elimination of coverage for the 15 services in the MaineCare Basic package.  The MaineCare system is certain to experience additional costs elsewhere in the system if these services are eliminated.  The Maine Psychiatric Association is particularly concerned about the proposed elimination of psychological services from the benefit package.  Appropriate mental health care depends upon the skills of both psychiatrists and psychologists being involved in the patient’s care.


2.            Hospital “tax and match.”  The MMA is concerned that the expansion of the hospital “tax and match” in Part HH of the budget is poor health policy that we should not come to depend upon.


3.            Paying hospital based physician practices on the same basis as independent physician practices.  The MMA opposes this $900,000 (General Fund) cut in physician reimbursement.  The MMA supports the principle that physicians performing the same medical services should be reimbursed the same, regardless of setting.  But, the State should accomplish this by bringing reimbursement for physicians in private practice up to reflect their practice costs as is the case for hospital based practices, federally-qualified health centers, and others.  As members of both committees know very well, the MaineCare program’s reimbursement rates for individual practitioners are among the worst in the country - - 44th according to one recent study (Comparing Physician and Dentist Fees Among Medicaid Programs, Medi-Cal Policy Institute, June 2001).  I have attached, for your information, a comparison of 2002 MaineCare, Medicare, and Anthem rates for 20 common primary care codes - - this is a document that members of the H&HS Committee will recognize from a bill earlier in the 121st Legislature.


4.            Stricter prior authorization criteria in the MaineCare drug management program.  The MMA acknowledges the need to save money in the MaineCare drug budget and we have worked in good faith with the Bureau of Medical Services staff and contractor to ensure that patients still are able to obtain medically necessary drugs with as little burden on physician practices as possible.  The Preferred Drug List (PDL) program, however, still imposes an overwhelming administrative burden on physician practices.  Many practices have found it necessary to devote a staff member almost full-time to processing MaineCare prior authorization requests.  Physicians are concerned that the proposal to seek an additional $6.25 million in savings through “stricter PA criteria for the PDL” will make it even more difficult for physicians to negotiate the PDL and will raise the risk of harm to patients.


5.            Redesign of the Medical Eye Care Program.  Section DD-2 of the budget would save $203,000 by severely restricting both the eligibility for and scope of services available under the Medical Eye Care Program.  Saving this small amount of money will threaten the eyesight of a significant number of poor elderly and other vulnerable Maine citizens.

Samuel Solish, M.D., an ophthalmologist from Falmouth who is the President of the Maine Society of Eye Physicians & Surgeons, has offered the following initial comments about this proposal.


By deleting "or" they make it that they have to have both a blinding disease and bilaterally severely impaired to be treated.




Pt has an eye injury in only one eye....the state will not treat! Absurd!




Patient has cataracts in both eyes. They have to wait until both eyes are worse than 20/70 to have surgery AND only one eye can be operated on! There goes any chance that they could POSSIBLY have a job which involves vision prior to meeting eligibility and forget a job that involves driving.




Glaucoma is a potentially blinding disease but central visual impairment is often a late manifestation of this disease.  Peripheral vision loss can be very severe before vision decreases to 20/70 best corrected.


These kind of rules keep people in poverty.


If I am not mistaken, I think 20/70 is used by the state division for the blind as visual impairment and qualifies for assistance from the division!  I know the Iris Network (formerly the Maine Center for the Blind and Visual Impairment) is able to assist people with 20/70 or worse.


6.            Authority of the Commissioner of DHS to amend the MaineCare benefit and service structure without legislative review.  The MMA strongly objects to Section DD-6 of the budget that appears to give the Commissioner of DHS broad authority to make major changes to the MaineCare program for adults without legislative approval “in order to manage the program.”  Such an amendment would eliminate the Legislature’s proper oversight role and would jeopardize the public’s opportunity to participate in the policymaking process.


7.            Expansion of the mental health parity law to include coverage for crisis and crisis residential services.  The MMA and Maine Psychiatric Association long have advocated for parity in health insurance coverage for mental health care services and for medical services and both organizations support this limited expansion of Maine’s mental health parity law. 


8.            Reporting of infants with prenatal exposure to drugs.  Part Z of the budget amends the provision of Title 22 requiring health care practitioners, among others, to report instances of suspected child abuse or neglect to DHS by including a reporting requirement if “the provider knows or has reasonable cause to suspect [the infant] has been born affected by illegal substance abuse or suffering from withdrawal symptoms resulting from prenatal drug exposure.”  The MMA is uncomfortable with the inclusion of this substantive proposal in a budget document.  Part Z suggests that the intent of the change is to ensure that the infant receives appropriate services and that the proposal does not require prosecution for illegal behavior.  Still, the MMA believes that such a significant change should be presented as a stand alone bill to the committee of jurisdiction - - probably in the next Legislature - - when the committee and all interested stakeholders can consider the merits of the proposal without the pressure of the budget process. 


The MMA urges you to seek alternatives to the proposed cuts to health care, MH/MR, and substance abuse services in L.D. 1919.  After several years of budget cuts in our health and social welfare system, further cuts will cause real harm to the Maine citizens who depend upon these programs and will damage the moral and effectiveness of the providers upon whom the success of these programs depend. 

Thank you and I would be happy to respond to any questions you may have.


FY 05 Budget Focus: "Provider-Based" Physician Practices
This past week, a Maine Hospital Association legislative update suggested that the Baldacci Administration included a $900,000 reduction in MaineCare reimbursement to "provider-based" hospital owned physician practices at the urging of MMA. Once the Association learned of the publication of this comment, an e-mail was sent to all hospital CEO's indicating that MMA was not involved with the development of the Governor's Supplemental Budget, did not recommend the provision, has not been lobbying for it and will, in fact, oppose it at today's hearing.

While MMA does generally support the standardization of physician reimbursement regardless of setting, our position has always been that any inequity must be eliminated by bringing physicians paid on the basis of the low fee schedule up to a formula based upon cost, not by decreasing reimbursement from those practices now receiving cost-based reimbursement.  An immediate reduction of the current cost-based reimbursement to the six hospital systems which have moved their physician practices into "provider-based" status could cause significant access problems for MaineCare patients, as well as making it more difficult to recruit and retain physicians into these practices.  The six hospital systems impacted by the provision are Central Maine Health Care, Eastern Maine Health Care, Franklin County Memorial Hospital, MaineHealth and Mid-Coast. [return to top]

Bangor Neurosurgeon Dennis Shubert named Director of Maine Quality Forum
Dirigo Health officials announced on Friday the appointment of Dennis Shubert, M.D. as Director of the Maine Quality Forum established in the Dirigo Health legislation.  Dr. Shubert recently retired from the practice of neurosurgery in Bangor, where he served as Chair of the Surgical Department at Eastern Maine Medical Center.  In January, Dr. Shubert was elected to the governing board of Eastern Maine Healthcare.

In additional to his medical education, Dr. Shubert in the recent past acquired a Master's Degree in Public Health.

The Quality Forum is responsible for a wide variety of initiatives spelled out in the Dirigo Health law, including the development of performance measurements and the assessment of new medical technology.  Another Bangor physician, Clifford Rosen, M.D. chairs the Performance Measures subcommittee of the Advisory Council to the Forum.  Robert McArtor, M.D. of MaineHealth chairs the Advisory Council which also includes physicians Laureen Biczak, D.O., Medical Director of MaineCare and Jan Wnek, M.D. a pediatrician active in the Maine Health Management Coalition.  At least five additional physicians will be appointed soon to a provider advisory committee which will provide professional expertise to the Council.

Reacting to the announcement, MMA Executive Vice President Gordon Smith noted, "The Dirigo Health Board and the citizens of Maine are fortunate to have a person with Dr. Shubert's background staff the work of the Forum.  Following a distinguished career in neurosurgery,  Dr. Shubert continued his interest in health policy, obtained an MPH, and is now in an important position to advance the quality of health care in the state.  We wish him well in his new role." [return to top]

"Quality Counts! Part 2" at Eastland Park Hotel, Portland, Wednesday, April
Following up on a very successful conference in Augusta three months ago, a consortium of health organizations in Maine present "Quality Counts! Part 2"  on Wednesday, April 7, 2004 at the Eastland Park Hotel in Portland.  Including both plenary sessions and ten interactive breakout sessions, the conference is designed to share practical information on successful strategies to implement models of managing chronic disease.

For registration materials or to learn more, go to [return to top]

Update on HIPAA/ Privacy, Security and Transaction and Code Sets

Approximately 3,000 HIPAA Privacy complaints were filed against covered entities by mid-November with the Office of Civil Rights of the U.S. Department of Health and Human Services.  The most frequently alleged violations in the complaints reportedly include inappropriate disclosures of protected health information in provider settings, the visibility of computer screens of health care workers to other patients or those who pass by, and the failure to provide a privacy notice.

As the Office of Civil Rights, which has lead enforcement authority over the Privacy Rule, has repeatedly stated that it intends to enforce the Rule by complaints received and not by audits, medical practices should implement sound internal HIPAA complaint procedures in order to resolve patient complaints before they go to the Office of Civil Rights.  A clear and workable mechanism for managing complaints will help employers avoid more protracted HIPAA dilemmas.


A quarterly survey conducted in early January, 2004 by HIMSS and Phoenix Health Systems shows continuing difficulties in health care payers and providers nationally complying with the various aspects of HIPAA.  Over 600 payers, providers and clearinghouses responded to the survey.  Despite the Oct. 16, 2003 deadline for compliance with the Transaction and Code Set Rule,  less than one-half of the respondents reported that they are ready to conduct all HIPAA standard transactions in a compliant format.  Only 50% of respondents had even completed external testing.  85% of payers continued to accept non-compliant transactions into January.  34% will stay on this course for at least three more months and another 34% will continue until the Centers for Medicare and Medicaid Services terminates its contingency plan.

Respondents indicated that technical obstacles and poor communications among healthcare trading partners remained severe ongoing impediments to compliance with the Transaction and Code Set Rule.

Twenty % of providers and 14% of payers reported that they remain non-compliant with the Privacy Rule, nine months after its effective date.  The security rule does not become enforceable until 2005.

At least one breakout session at the MMA's Physician Survival Program in Auburn on May 26 and in Bangor on June 23 will update attendees on HIPAA issues related to the Transaction and Code Sets Rule and the Security Rule.  Registration materials will be mailed with the March-April issue of Maine Medicine.  For advance registration, readers may contact [return to top]

WellPoint-Anthem Merger Seen Resulting in $250 Million in Savings
The merger between WellPoint Health Networks, Inc and Anthem, Inc was recently approved by federal anti-trust authorities.  The deal was approved, partially on the ground that the plans do business in different states and rarely overlap.

This past week, WellPoint announced that it expects the merger to result in combined administrative cost savings of $250 million annually.  David Colby, Chief Financial Officer for WellPoint, said that the estimated savings are expected to come from $75 million in information technology, $75 million in specialty businesses, $50 million in operations and $50 million in corporate and shared services.  These areas represent about 4 to 5 % of combined administrative expenses.  Colby also indicated that the new merged entity should generate approximately $2.5 billion in cash flow, some of which will be reinvested in the company. [return to top]

The Week Ahead at MMA
On Monday, March 15, the Board of Directors of the Coding Center, jointly owned by the medical societies in Maine, New Hampshire and Vermont, will meet at 2:00pm in Concord, N.H. for its quarterly board meeting.  Board members will hear an update from Center Director Laurie Desjardins and CPC Jana Purrell. The Center continues to operate profitably through the first five quarters of its existence.

On Wednesday, March 17,  MMA's Executive Committee will meet in Manchester at 2:00pm, followed by the Budget and Investment Committee at 5:00pm and the Committee on Peer Review and Quality Improvement at 6:00pm. The Committee on Peer Review and Quality Improvement will hear a report from Johnny Walker of the National Patient Safety Institute.  The Institute is meeting with various organizations in Maine exploring the possibility of creating a health information network.

The Executive Committee meeting will feature a report on CarePartners and a proposal for group dental insurance from the Association's insurance broker, Philips Sargent of the Dunlap Corporation. [return to top]

L.D. 1713, Implicating a Study of Psychologists' Prescribing Killed by Committee
At a work session on Wednesday, March 3, the Health and Human Services Committee voted unanimously "ought not to pass" on L.D. 1713, Resolve, to Establish the Commission to Study Access to Prescription Medication for Persons with Mental Illness.  Instead the Committee will write a letter to state mental health officials asking them to conduct a departmental study of issues identified through the Committee's work on the bill.  This past Thursday, the Committee reviewed the language of the letter to be sent.  The letter asks the department to be a liaison between the committee and a stakeholders group, to convene the group on March 17, and to report back to the committee on April 1.  The department is further asked to report again in January, 2005 after more of the study can be completed. The letter does not mention expanding prescriptive authority to any other providers. [return to top]

L.D. 263, Expanding Acupuncture, Tabled in Senate: Call Your Legislator!
MMA continues to oppose L.D. 263, An Act to Define a Scope of Practice for Acupuncture, a 12-1 "ought to pass as amended" report from the Business, Research and Economic Development Committee.  This past week, the bill was to be considered by the Senate but was tabled, when it became clear that passage was not assured.  The sole committee member siding with MMA on the bill, Senator Kevin Shorey (R-Washington) invited MMA to address the Senate Republican caucus about the bill on Wednesday morning. This caucus presented the Association with its first opportunity to explain in detail its concern about the bill, which would sweep over a dozen kinds of eastern medicine under the definition of acupuncture.

MMA remains concerned that patient safety may be compromised if patients are encouraged to pursue these techniques such as sotai, shiatsu, gi gong, zero-balancing and tui na.  The BRED Committee endorsed passage of the bill against the recommendations of the Commissioner of Professional and Financial Regulation Robert Murray, in his "sunrise" report.

It is ironic that in this time of increasing pressure for medicine to embrace evidence-based medicine,  the legislature is about to embrace techniques and modalities which have no established medical efficacy. Don't hesitate to call your legislator on this one! [return to top]

Watch for MMA Mailing and Survey on Care of Veterans
MMA members in active practice in specialties other than anesthesia, radiology and pathology will receive a mailing early this week, dated March 10, from MMA on behalf of the Governor's Task Force on Veteran's Health.  The Task Force was established in the Dirigo Health Legislation and is charged with reviewing and assessing the needs of the State's veterans for health care services.  It's review will include an examination of the availability, accessibility and quality of public and private health care services being rendered to Maine's veterans.

Because the duplication of services occurring when veterans access the VA medical system just for prescriptions has been identified as an important issue, MMA and the Maine Osteopathic Association is assisting the Task Force by sending out a brief survey to members.  The survey is to be returned directly to the Task Force c/o Nancy Plourde, Bldg 7, Camp Keys, Augusta, ME 04330 or faxed to:  207-626-4471.  We appreciate member's cooperation in taking a moment to complete the survey and returning it.

MMA President-elect Lawrence Mutty, M.D. is a member of the Task Force. [return to top]

Maine Cancer Foundation Seeks Grant Applicants
Funds available for research, education and patient support programs

The Maine Cancer Foundation, which distributes funds to a variety of cancer research and education programs in the State of Maine, is currently seeking Maine-based applicants to receive grants supporting clinical and laboratory research, professional and public education, and for patient support programs.  In 2003, $180,000 was awarded to 10 programs.

The Maine Cancer Foundation provides education to professionals as well as the public through speakers and seminars on the genetics of cancer as well as gene testing.  This non-profit organization is dedicated to educating the public on cancer as well as supporting those organizations involved in research, education and patient care and support.

Organizations selected for research grants must be science-based, and seek to study molecular basis of cancer, improve cancer prevention, detection and treatment, or to analyze treatment outcomes.  Grants are awarded to education programs seeking to expand public and professional knowledge or molecular origins of cancer, the role of genetics in cancer, cancer prevention methods, and/or early detection strategies.  Patient support programs should seek to create supportive programs that assist patients and their families in dealing with the diagnosis of cancer.

Proposals for grants must be short-term (one year) and have clearly defined goals and measurable results.  Grant recipient's work must further the charitable purpose outlined by the Maine Cancer Foundation.  MCF reserves the right to make grants at the discretion of its board members.

Information and applications are available at or 207.773.2533.  Completed applications are due by April 1, 2004 with funds disbursed by June 30, 2004. [return to top]

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