June 26, 2006

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Physician Income Declines by Seven Percent Nationwide Over Eight Years
According to a report released this past week by the Center for Studying Health System Change, the average physician net income dropped 7% from 1995 to 2003, after adjusting for inflation.

According to the Washington D.C.-based Center, while physician income dropped, lawyers and other professionals' net income increased by 7% during the same period.  The report was based upon a national telephone survey of approximately 6,600 physicians during 2004 and 2005, as well as earlier surveys by the Center. 

Primary care physicians fared worst, with a 10.2% decline in real income, while surgeons' real income dropped 8.2%.  Contributing factors to the decline in income include flat or declining reimbursement from Medicare and private payers.

From 1995-2003, the general inflation rate was 21% but Medicare payments only increased 13%.  The study also showed that physicians are spending more time on patient care, and less time on "medically related activities" such as administrative tasks and professional activities

MMA EVP Gordon Smith noted that a number of trends in Maine support the conclusion of the report, including the continuing trend of physicians becoming employed by hospitals or other facilities, such as FQHC's.  "Certainly the continuing viability of private practice is a serious issue in Maine, " Smith noted.. 

For more information, go to http://www.hschange.org/content/852.

Report on MaineCare MECMS Meeting June 22, 2006
The Governor's MaineCare Providers' Advisory Group held its regularly scheduled meeting on Thursday, June 22.  Highlights from the regularly scheduled meeting include the following:

  • A series of  "Releases" are scheduled for MECMS, with the first scheduled for July 1.  Subsequent releases are scheduled for September, October and December.  The July 1 release is the first of a multiple-release plan to implement groups of changes and to add new functionality to MECMS. 
  • Release 1 will include new functionality for 837-I Institutional Claims, for Crossover-Part A Claims and for voiding of claims.  It is intended to give more stability to MECMS by correcting operational issues.
  • The Part B Cross-over claims are expected to be part of Release 2 planned for September 1.  The correction of the Part B functionality and the adjustment functionality are considered the most complex fixes.
  • While the release is set for Sept. 1, it still must clear through testing and the backlog of tapes for Part B is considerable.  While most of these claims have now been paid on paper, there is still concern about the long period of time it has taken to successfully run the Part B tapes.
  • Recoupment of the interim payments has now reached over $265 million (collected or agreed to) which exceeds the $225 million needed to fund the budget through June 30.
  • The $40 million weekly cap on payments will be lifted in July which is the first month of the state's new fiscal year.

OMS will hold a series of conference calls to enable providers to ask questions about MECMS Release 1 that will be implemented on July 1.  These sessions will be held on Wednesday, July 12 at 11:00am and Thursday, July 13 at 2:00pm.  Watch upcoming issues of the MECMS Update for the dial-in numbers and web links that you will need to access the sessions.

The weekly metrics showed processing of paid and denied fresh claims at 89.95%.  Number of suspended claims was down to 187,206 , the lowest yet.

The Committee will meet again on July 13, 2006.

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MMA Payor Liaison Committee to Meet on State Employee Health Program Thursday Night
The Association's Payor Liaison Committee will hold a regularly scheduled meeting this Thursday evening, June 29 at the Frank O. Stred Building in Manchester.  Dinner will be available at 6:00pm wth the meeting beginning at 6:30pm.  The topic for the evening is the Maine State Employee Health Plan and its new program to steer participants to certain hospitals based upon certain criteria.  The Plan has established a tiered hospital network with about 16 hospitals in the top (favored) tier.  Plan Executive Director Frank Johnson will be the presenter.

Any MMA member or their office staff are welcome to attend the meeting, but give Diane a call at 622-3374 ext. 216  if you plan to attend so we can be sure to have enough food. [return to top]

15th Annual Physician Practice Seminar June 21, 2006
The MMA's 15th Annual Physician Practice Education Program was held this past Wednesday in Bangor with nearly one hundred physicians and practice managers in attendance.  Eric Handler, M.D., M.P.H., Medical Director for CMS in Region One was the key note speaker and updated attendees on the CMS Physician Voluntary Reporting Initiative (PVRP).  Initially the PVRP involved five medical specialties:  emergency medicine, nephrology, general surgery, internal medicine and family practice.

Participants capture data about the quality of care provided to Medicare patients as a way to identify the most effective way to use measures to improve quality in routine practice.  To accomplish this goal, 16 quality measures were developed by physicians working with organizations such as the Ambulatory Quality Alliance, National Quality Forum and the AMA Physician Consortium.  Seven measures are for primary care, two are for emergency medicine, two for nephrology and five for surgery.

Most observers believe that CMS and Congress may make the reporting of such data a quid pro quo for revising the current Medicare payment formula based upon the sustainable growth rate which is penalizing physicians for expenditure growth in the Medicare program.

Other presentations focused on such topics as improving quality, the HealthInfoNet project, MaineCare, ADA obligations, DirigoHealth, healthplan payment practices (enforcing provider agreements), the Board of Licensure in Medicine, EMR, and Coding and Reimbursement issues.  Andrew MacLean, MMA Deputy Executive Vice President and General Counsel presented a legislative and regulatory update and copies of the legislative summary of the two year session are available from MMA. 

A limited number of binders containing the power point presentations are available by calling MMA at 622-3374 (Ask for Jess or Gail) at a cost of $25. 

Many thanks to the sponsors of the event,  the presenters and to the attendees as well for making this year's program one of the most successful.

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United States Supreme Court Rejects Requests from Five States (including Maine) to Block Medicare Part D Provision
The United State's Supreme Court last Monday (June10) rejected, without explanation, the request of five states, including Maine, to block a key provision of the Medicare Part D drug program.  The states had sought an injunction that would have let them contest state payments to the federal government for some of the drug benefit's expenses.   The states contended that the payments were unconstitutional as a federal tax.

Five states, including Maine, Kentucky, Missouri, New Jersey and Texas had filed the lawsuit which was also supported by amicus briefs filed by another 10 states.

The drug benefit went into effect Jan. 1 and about 43 million people are eligible. 

Under the law, states help finance the drug coverage through a monthly payment.  The amount is based on a formula that is supposed to approximate what states would have paid if they had continued to provide drug coverage for residents enrolled in both MaineCare and Medicare. [return to top]

Sign Up for State Prescription Monitoring Program
Physicians concerned with potential misuse of prescription drugs by their patients can receive real-time, on-line information from the state's prescription monitoring program (PMP).  The information from the state's database of patients who have received schedule ll, lll or lV drugs is now available on-line but you need to register for access.  Contact the program coordinator Chris Baumgartner to register.  He can be reached at 282-3363 or via e-mail to chris.baumgartner@maine.gov.  There is also information available, including a privacy guide prepared by MMA General Counsel Andrew MacLean at http://www.maine.gov/dhhs/osa/data/pmp/faq.htm 

Once registered to receive such information, searches can be made by patient name and birth date.  The website information is updated every two weeks. [return to top]

Doug Jones Installed as Maine Hospital Association Board Chair/ Gregory Leach, M.D. Recognized
Doug Jones, President and CEO of Maine Coast Memorial Hospital in Ellsworth was installed last  Wednesday as Chair of the MHA Board of Directors.  The installation took place at the Association's Summer Forum at the Samoset Resort.  Jones succeeds Roy Hitchings, CEO of Penobscot Bay Medical Center in Rockport. 

Other officers installed are Peter Chalk , CEO of Central Maine Medical Center, Chair-Elect, Thomas Moakler, CEO of Houlton Regional Hospital, Treasurer and Kris Doody-Chabre, CEO of Cary Medical Center as Secretary.

Gregory Leach, M.D., a hospitalist at Southern Maine Medical Center in Biddeford was selected as the MHA's 2006 Caregiver of the Year.  He is the first physician to receive the five-year-old award.  In additional to providing in-patient care, Dr. Leach also volunteers at the Biddeford Free Clinic.  An enthusiastic group of colleagues, including Clinic Founder Francis Kleeman, M.D. filled a bus and joined the occasion Wednesday night, a real tribute to Dr. Leach's work. [return to top]

Network Systems, Inc. Announces Collaboration with Allscripts on A4 HealthMatics EMR
Network Systems, Inc. announces that it has been selected by Allscripts as the Maine distributor of the nationally recognized A4 HealthMatics Electronic Medical Record application.

Network Systems, Inc. will be conducting a series of seminars to present information on how this technology can assist a medical practice.  In the meantime, questions about this announcement can be directed to the office at 1-800-439-9770 or via e-mail to info@network-systems.com.

Network Systems, Inc is a valued corporate affiliate of the Maine Medical Association. [return to top]

HHS Committee to Hear Updates on MECMS, Mental Health Managed Care
The Joint Standing Committee on Health & Human Services has scheduled a briefing on several key state health care initiatives for Tuesday, June 27. 2006 from 10:00 a.m. to 3:00 p.m.  The meeting will take place in the Committee's regular room, Room 209 of the Cross State Office Building.  The Committee's schedule for the day is:

10:00 a.m.:  Riverview Psychiatric Center

11:00 a.m.:  Mental Health Managed Care

 1:00 p.m.:  Maine Quality Forum

 1:30 p.m.:  MECMS

 2:15 p.m.:  Medicare Part D

DHHS Commissioner Harvey continues to communicate regularly with behavioral health care providers about the status of the State's behavioral health managed care initiative.  The following is a memo to members of the Appropriations and HHS Committees dated June 21, 2006.

June 21, 2006





TO:                 Arthur F. Mayo, III, Co-Chair

                        Hannah Pingree, Co-Chair

                        Members of the Joint Standing Committee on Health and Human Services


                        Margaret Rotundo, Co-Chair

                        Joseph C. Brannigan, Co-Chair

                        Members of the Joint Standing Committee on Appropriations and Financial Affairs


FROM:            Brenda M. Harvey

Commissioner, DHHS


SUBJECT:            Behavioral Health Managed Care


This is to update you regarding our efforts to implement managed care for behavioral health and to identify issues that cause us to delay the issuance of an RFP.


Highlights of Events to Date


Feb. 2006: Because of significant comments from providers, consumers and families, the Department proposed implementing managed care on a phased-in basis, starting with an Administrative Services Organization (ASO) model that would accomplish prior authorization for selected behavioral health services and utilization review for all behavioral health services.  This was to be accomplished through a sole source contract with Beacon Health Strategies effective July 1, 2006. 


April 2006: As a result of further concerns expressed by providers. DHHS did not pursue prior authorization or utilization review which were the key components of the ASO prior to January 1, 2007. 


May 2006: The Department shifted to a “service review” model of selected behavioral health services. This was in response to providers’ request for a “readiness review.” This contract was effective May 1, 2006 and awarded on a sole source basis, continuing our work with Beacon Health Strategies.


This shift in plans requires the Department to issue an RFP to implement a risk based managed care program. 


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Challenges to Awarding a Managed Care Contract by January 1, 2007 (current date in LD 1968)


There are significant challenges to awarding a managed care contract by January 1, 2007.


Assessing stakeholder involvement: Consumers and families continue to press for more involvement in the development of the RFP.  The Department has created a stakeholder group, subgroups and some smaller working groups to assist in drafting language for the RFP, but more involvement is being requested, even by the Court Master in his May report to the court.  We have promised to hold statewide forums and the Court Master expects these to happen.  To include consumers and families in more significant ways requires more time.


Managing funds: Because the Department will be paying a managed care vendor on a prospective basis, we are accountable for assuring that we manage the funding for all parties.  It is critical that we develop an RFP detailing the requirements for service delivery, solvency, financial and other reporting, etc.


Capitation rates: The capitation rate setting is anticipated to be available in October, rather than the spring, as originally anticipated.  DHHS staff and Muskie staff have held weekly conference calls with Mercer since January in order to identify all of the data necessary for the development of the capitation rates and the cost neutrality section of the Medicaid Waiver.  This process has taken longer than anticipated because of the complexity of codes and funding mechanisms supporting the behavioral health system.  Because of this significant change from our original work plan, the capitation rates are significantly delayed.


Time to review bids: We expect to receive at least three proposals in response to the RFP. This definitely signals that the savings we are projecting can be achieved even with what we have already stated as our requirements. The review of these proposals is a very complex process that requires adequate time. 


CMS approval: Complicating all of our planning efforts is the fact that our overall implementation schedule is contingent upon CMS approval of the Waiver and the final managed contract.  While we plan to have informal submissions to minimize the time necessary for the formal approval process, CMS has 90 days to approve, deny, or ask questions (thus stopping the clock) on the waiver.  Once DHHS responds to questions, another 90 day clock starts.


The Department will also have to seek expert assistance in a number of additional areas.


Financial Management:  Financial staff within DHHS will be shifting some of their activities to financial oversight of the managed care organization.  They need to identify the reports required of the managed care organization; they need to know how to analyze these reports and how to recognize early warning signs. 


Page Three


Federal requirements: There are also a number of federal requirements under managed care waivers that we did not anticipate. These include an External Quality Review and an Independent Assessment.  These will review both the operation of the managed care vendor as well as the Department’s oversight of the vendor in the areas of quality, access and cost.


MCO readiness: Prior to implementing managed care, the Department must assess the readiness of the chosen vendor. 


DHHS continues to believe strongly that our plans to manage behavioral health care will result in greater access for consumers and enhanced quality of care.  This delay will only serve to make the full implementation of managed care a smoother process.



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Senate HELP Committee Briefed on "Health Courts" as Medical Malpractice Solution
On June 22, 2006, the U.S. Senate's Health, Education, Labor, & Pensions Committee held a hearing on "health courts," a concept of specialized courts dedicated to resolving medical malpractice claims advocated by the group Common Good among others.  The concept has several proponents in the Senate, including Senate HELP Committee Chairman Mike Enzi (R-WY) & Sen. Max Baucus (D-MT) who have introduced a bill (S. 1337) on the subject and Sen. John Cornyn (R-TX) who advocates a federal pilot project, perhaps in the Medicare program, to test the concept. 

The health courts would reimburse a plaintiff's medical costs & lost wages, & would provide a fixed amount according to a pre-determined awards schedule.  Plaintiffs would be prohibited from pursuing a malpractice action in the general courts if they were dissatisfied with the result in the health court.  Critics of the concept, including Senate HELP Committee ranking member Edward Kennedy (D-MA) & the American Bar Association (ABA) object to the award schedule, calling it "non-economic damage caps in disguise" & the preclusion of other judicial remedies.

Witness David Studdert, associate professor of law & public health at Harvard University, said that the current system seems to be doing a "reasonable job" of properly compensating injured patients, but he also said that the system is expensive.  He presented some interesting statistics:

  • 54 cents of every dollar won by a plaintiff is dedicated to attorney's fees, court costs, & expert witness fees;
  • medical malpractice cases take an average of 4 - 5 years to resolve;
  • as little as 5% of those injured received compensation through the courts - the rest either don't know they've been injured or can't navigate the system;
  • 60,000 medical malpractice cases are filed in the U.S. each year, but only 3000 - 4000 reach a verdict;
  • plaintiffs lose 80% of jury verdicts

The AMA testified that it remains committed to the $250,000 cap on non-economic damages, but that it's willing to consider alternatives such as health courts.

You can find more information about the hearing on the web at:  http://help.senate.gov/Hearings/2006_06_22/2006_06_22.html.

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