May 16, 2005

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Judiciary Committee Hears Medical Liability Reform Bills - More Work to be Done
On Friday the 13th, the Legislature's Joint Standing Committee on the Judiciary held a marathon 8-hour hearing on four bills relating to medical liability, including L.D. 1378, advanced by the Coalition for Health Care Access and Liability Reform. Work sessions on the bills will be held this coming Friday, May 20, at 1:00p.m. With major increases in liability premiums pending, hopefully every Maine physician will find it in their interest to call their legislators this week about these important proposals.
L.D. 1378, An Act To Preserve the Medical Liability Climate in the state by Capping Noneconomic and Punitive Damages, is sponsored by Senator Karl Turner of Cumberland and would make three important changes to Maine's medical liability laws:

  • Establish a limit of $250,000 in non-economic damages in a medical liability case
  • Abolish the doctrine of Joint and Several Liability
  • Enact the "I'm sorry" legislation which would make inadmissible in a medical liability case the statements of a defendant expressing remorse

In addition to hearing L.D. 1378, the Judiciary Committee on Friday also heard a bill sponsored at the request of the Maine Trial Lawyers Association, L.D. 1582, An Act to Protect Maine Citizens from Medical Negligence.  This bill would greatly expand liability by:

  • Expanding the statute of limitations
  • Requiring sentinel event reports to be given to patients
  • Specifically authorizing the granting of punitive damages in certain malpractice cases, and
  • Requiring the Board of Licensure in Medicine to revoke the license of any physician who has three adverse judgments for professional negligence.

As the liability climate in Maine continues to significantly deteriorate, and with significant premium increases likely in the coming weeks, it is important for each physician to communicate to his or her legislators the impact of the current situation on their practice.  Of particular importance are the members of the Judiciary Committee.


  • Barry J. Bobbins, Chair (D-York)
  • Lynn Bromley (D-Cumberland)
  • David R. Hastings III (R-Oxford)


  • Deborah Pelletier-Simpson, Chair (D-Auburn)
  • Sean Faircloth (D-Bangor)
  • Stan Gerzofsky (D-Brunswick)
  • Marilyn E. Canavan (D-Waterville)
  • Mark E. Bryant (D-Windham)
  • Michael Edward Dunn (D-Bangor)
  • Roger Sherman (R-Hodgdon)
  • Roderick W. Carr (R-Lincoln)
  • Joan Bryant-Deschenes (R-Turner)
  • Joan M. Nass (R-Acton)

Senators can be contacted by calling 287-1540 or 1-800-423-6900.  House members can be contacted by calling 287-1400 or 1-800-423-2900.

The Coalition's testimony on L.D. 1372 featured presentations by Coalition Co-Chairs Lee Thibodeau, M.D. and Hector Tarraza, M.D., MOA President Bruce Bates, D.O. and President -elect Thomas DeLuca, D.O., MMA President-elect Jacob Gerritsen, M.D. and several patients, medical students and other physicians.  The Coalition also received support from the Maine State Chamber of Commerce,  Anthem Blue Cross Blue Shield of Maine and Medical Mutual Insurance Co. of Maine.  The Baldacci administration testified in the "neither for nor against" category.

Opposition to the bill was lead by the Maine Trial Lawyers Association, but the bill was also opposed by the Maine State Nurses Association, the Maine Bar Association and several patient advocate organizations.

The trial lawyer bill, L.D. 1582, which would have a devastating impact on medicine in Maine, was strongly opposed by the Maine Hospital Association (testimony by David Bachman, M.D., VPMA at Mercy Hospital), Gordon Smith on behalf of MMA, Dr. Bates on behalf of MOA and Medical Mutual.

Space Still Available for 14th Annual Physician Survival Seminar this Wednesday in Portland!
If you are an office manager or a physician interested in 7.5 hours of Category 1 CME credits, call MMA at once to register for the Physician Survival Seminar taking place this Wednesday from 8:30am to 5:00pm at the Sheraton Hotel in South Portland.  There is still space available.

This annual program, which will be presented in Bangor as well on June 8 (Spectacular Event Center) presents MMA with an opportunity to convey to member offices the critical information that is necessary to run a complex medical office in today's world.  The morning sessions will include updates on Pay for Performance, Dirigo Health, Quality Improvement, MaineCare and Medicare.  The afternoon breakout sessions present tracks on technology, compliance and practice management.

We would love to see you at the Sheraton on Wednesday, or in Bangor on June 8th.  Register now by calling 622-3374.  It is as simple as that. [return to top]

More Physicians Being Paid While On-Call
Nearly half of health care providers are paying physicians for being on-call, Modern Physician reported. A survey of 167 health care organizations by a human resources consulting firm found that 86 percent require physicians to provide on-call coverage. Of these, 46 percent indicated they paid affiliated physicians who worked on-call voluntarily, and 43 percent paid their employed physicians for on-call coverage. Orthopaedic surgeons, trauma surgeons, neurologists and obstetricians/gynecologist are the physicians most likely to be paid for being on-call. More physicians are demanding compensation for being on-call, something they once provided as a public service. The most frequently cited reasons were financial pressures from declining reimbursement rates and the growing ranks of the uninsured. For more information, visit (site registration required) [return to top]

GPCIs Studied
The U.S. Government Accountability Office (GAO) recently released its study of the geographic adjustment indices (GPCIs) used to raise or lower Medicare physician fees- physician work, practice expense, and malpractice expense. Our GEM (Geographic Equity in Medicare) coalition of state medical societies was successful in getting Congress in the 2003 Medicare reform legislation (MMA) to raise the physician work GPCI to a 1.0 floor for three years, which helped physicians in Maine and other rural states by narrowing the gap with more urban states. The GAO study was mandated by the MMA.

The GAO concluded that the GPCIs are essential to achieving Medicare's goal of ensuring that payments are adequate and appropriate in all areas but determined that data and methods need refinement: "Our analysis shows that opportunities exist to refine the GPCIs by improving the currency of the data used to construct all three GPCIs... . These improvements would likely have only a marginal impact on Medicare fees and physician incomes but may have a more significant effect on the GPCIs' credibility with the physician community." As an example, the study suggests that it would be desirable to adjust CMS's malpractice premium data for differences in specialty mix among insurers, but to do so CMS would first need to assess the feasibility of collecting data on each insurer's market share by physician specialty in each state.

The GAO made several recommendations, including transition from the Census Bureau's decennial census to the annual ACS for earnings and wage data, considering the feasibility of replacing the practice expense GPCI's current rent index with a commercial rent index; collecting malpractice premium data from all states; collecting data from insurers that account for at least half of malpractice business in a state; and standardizing collection of malpractice premium data.

Our GEM coalition continues to meet on these issues, as the temporary physician work threshold is scheduled to sunset after next year. [return to top]

CMS Announces Start Date for National Provider Identifier
The CMS Administrator has announced a May 23, 2005 start of enumeration for the National Provider Identifier (NPI). The NPI is the standard unique health identifier for health care providers that was adopted by the Secretary of Health and Human Services under the Health Insurance Portability and Accountability Act of 1996. The Administrator's announcement letter informs health care providers about the NPI, describes three ways to obtain an NPI, and gives them guidance as to what they should do once they have obtained their NPI. The letter, which also provides contacts and resources should health care providers have questions about the NPI, can be viewed at on the CMS website. [return to top]

MMA Testifies in Support of Cigarette Tax Increase
MMA Executive Vice President Gordon Smith testified last Thursday (May 12) before the combined committees on Health and Human Services and Taxation in favor of LD's 1448 and 1617, both of which would significantly increase the state's cigarette tax.  He testified on behalf of both MMA and the Maine Coalition on Smoking or Health, a coalition made up of dozens of organizations and individuals working to improve the health of Maine citizens by eliminating tobacco addiction and exposure to secondhand smoke.

L.D 1617 would increase the current state tax by $1.50 per pack, generating additional state revenue of $80 million.  While it would create a total state tax of $2.50, such a tax would still be competitive with most of the states in the region and the bordering Canadian provinces.  Our current tax is now the second lowest among the nine northeast states and bordering Canadian provinces.

A $1.50 increase would provide $438 million in long-term healthcare savings and reduce youth smoking by nearly 23 percent.  As with most products, when the price goes up, the demand for cigarettes drops, and kids are particularly price-sensitive.  Such an increase would also reduce sales by nearly 25 million packs annually, turn another 12,600 adults into non-smokers, avoid over 2,800 smoking-affected births over the next five years and save 10,000 lives.

L.D. 1617 also proposes to spend most of the new revenue on health-related programs.  The two legislative committees will be holding work sessions on the proposals between now and the end of May. [return to top]

GE Medical Protective Files for Average 12.1% Rate Increase
On April 14, 2005, The Medical Protective Company, a unit of General Electric, filed a proposed premium rate increase of 12.1% for its physicians and surgeons liability coverage effective August 1, 2005.  This carrier has 8 policyholders in Maine.  The company's rate increase request in April 2004 was for 7%.  This double-digit rate increase is another troubling sign about the current medical liability climate in Maine. [return to top]

Brief Notes on Quality Data and Provider Ranking
"Doctors resist push to publish individual quality data," Modern Physician, May 10, 2005

According to a recent nationwide survey conducted by Commonwealth Fund and published in the May/June issue of Health Affairs, 69% of physicians are opposed to sharing physician-specific performance data with the general public.  The study, based on a 2003 study of 3598 respondents, also found that 44% of physicians surveyed did not want to share the data with their own patients, and 27% were hesitant to share it with medical leadership.  Many physicians fear that performance data can often paint an inaccurate picture of the quality of care they provide to their patients, and that the measures could be used as the sole judge of their work.  Most physicians do not have access to their own practice-level performance data, so it is often generated by health plans.  Experts say that if physicians could generate their own data, it would provide information on their entire population, and it might do away with the general mistrust that data provided by health plans is flawed or incomplete.

"Medica rolls out provider ranking system," Star Tribune, May 11, 2005

Despite opposition to a recent announcement by Blue Cross Blue Shield of Minnesota that it was establishing a preferred provider tiered hospital list, Medica, the third largest insurer in the state, is following BCBSMN's lead.  Medica announced that its new tiering program can save employers up to 12% by steering patients to lower cost hospitals and physicians.  As with the BCBSMN system, many physicians and patients have questioned the criteria being used and have expressed concern over how the program will impact patient-physician relationships.

"Tackling pay for performance," Medical Economics, May 6, 2005

Several medical organizations have recently developed basic principles for the implementation of pay for performance (PFP) programs to address physician concerns about how PFP programs will be used.  The AMA, the American College of Physicians, and the Medical Group Management Association have each made statements about using a common set of principles to guide these programs.  These medical organizations agree that PFP participation should be voluntary, and that physicians or hospitals that do not participate should not be penalized with lower reimbursements or by being grouped into lower tiers.  In addition, these medical organizations want performance measures to be evidence-based and developed with the input of physicians. [return to top]

Focus on Dirigo Savings Offset Payment and Self-Insured Assessment Continues
When the Dirigo Health Legislation was proposed in 2003, it was to be funded (after the first year), by an assessment on health insurance carriers, not to exceed four percent of premium.  Originally, the proposal prohibited carriers from passing the assessment onto insureds through increasing rates.  However, due in part to an opinion from the Attorney General's office, a compromise was reached that led to the removal of the prohibition on passing through the assessment to insureds.  This compromise, which did not involve the business community, created a great deal of angst in that community because it had the potential of creating an immediate four percent increase in already rising health insurance premiums.  The problem was further complicated when it was learned that the assessment would apply also to self-insured employers, through an assessment on third-party administrators.

This resulted in a second round of negotiations, this time with business and consumer interests at the table.  The end result was the development of the concept of a "savings offset payment."  One of the basic concepts underlying the Dirigo Health legislation was that the legislation would result in cost savings, primarily through a reduction in the amount of bad debt and charity care experienced by Maine hospitals and health care providers through expanded health insurance coverage, either through the Dirigo Health insurance product or through the proposed expansion of MaineCare.  Those savings would be measured and "recaptured" through an assessment on health insurance carriers and self-insured employers.

Because of the controversy with respect to assessing self-insured plans, the Governor's Office of Health Policy and Finance agreed to work with self-insured employers to reach consensus on the issue of how such employers would be assessed.  In the past few weeks, talks have begun between and among the interested parties, but there has been no agreement as to the methodology of the assessment.  So far, the discussions have focused on how the savings are to be measured.  This is a threshold issue for the business community, indeed for all employers who pay for health insurance, whether commercially insured or self-insured.

The Dirigo Board is meeting overtime this month to work on the issue and agreements will need to be reached soon, or the issue may fall back into the lap of legislators.  Because most physician offices provide health insurance to their employees, the savings offset payment (SOP) is an important issue to them.  The funding of Dirigo Health is also important as it produces patients who are paying at commercial reimbursement rates.  MMA will continue to keep members informed of the SOP issue as the legislature completes the final weeks of the special session.

At this point, it appears that the parties are no closer to an agreement than they were two years ago.

(MMA acknowledges drawing from excellent articles in the weekly newsletters of the State Chamber of Commerce and the Maine Hospital Association on this complex but important issue, in preparation of the above article.) [return to top]

Dirigo Health "Tough Choices" Sessions Rescheduled for Saturday, May 21
The "Tough Choices in Health Care"  citizen meetings, canceled March 12 because of a snow storm, will now be held on this Saturday, May 21 in Orono (University of Maine) and Biddeford (UNE).  Eight hundred Maine citizens, selected to demographically represent the state's population, have been invited to participate and discuss what they see as health care priorities for the state.  These ideas will then be used to help shape the State Health Plan as required in the Dirigo Health legislation.

Participants received a discussion guide, prepared with input from MMA and other organizations, which is available at

The sessions are designed as a way for everyday citizens to apply common sense and life experience to the inter-connected questions Maine faces:  how do we reduce costs of care, increase the number of people covered by insurance, increase quality and help people make healthy choices in life - all at a time when there are no new state and federal dollars.  Participants will be able to vote with personal key-pads, with discussion and voting projected for both sites, connected by video. [return to top]

Governor Releases Overview of "Part II" Biennial Budget
On Friday, May 13, 2005, the Governor's office released highlights of the Baldacci Administration's proposed "Part II" budget for the SFY 2006-2007 biennium.  The principal issue in this budget for health care providers is the $73 million shortfall created by the change in the rate of federal financial participation (FFP) in the MaineCare or Medicaid program for federal fiscal year 2006.  The Administration proposes to address this gap as follows:

  • Creation of a modified drug formulary to generate $19 million in savings.
  • Expansion of the service provider tax to include MR services to raise $12.3 million in revenue.
  • Reallocation of $95 million of MaineCare funds available for hospitals in the Part I budget to cover $29 million of the rate change, as well as historic settlements of $36 million, certain current settlements of $5 million, and prospective interim payments of $25 million.
  • Extension of initiatives approved in the Part I budget ($6.3 million) and other miscellaneous savings to generate $6.1 million in savings.

You can read the Administration's press release on the Part II budget on the web at: [return to top]

Bill to Fix Medicare Physician Payment Formula Introduced in U.S. House
On Thursday, May 12, 2005, Representatives Clay Shaw (R-FL) and Ben Cardin (D-MD) introduced H.R. 2356, the Preserving Patient Access to Physicians Act of 2005.  The bill has been referred to the House Energy & Commerce  and Ways & Means Committees.  This bill stops the impending Medicare physician payment cuts and replaces the flawed physician payment formula. 

You can email Maine's two U.S. House members, Tom Allen (D-1st District) and Mike Michaud (D-2nd District), to urge them to co-sponsor the bill at the following addresses:

Congressman Allen:

Congressman Michaud: [return to top]

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