Governor Presents Biennial Budget; MaineCare Fee Increase and Cigarette Tax Hike

Items of particular interest in the proposed two-year state budget include a physician fee increase for MaineCare and a bold $1.00 per pack  hike in the state's cigarette tax.  The $3 state appropriation for the fee increase, coupled with the existing federal match, would result in an approximately $8.2 million increase overall.  This should move physician Medicaid fees to over 60% of Medicare.  The cigarette tax, if enacted, would make Maine's tax the highest in the nation.

Governor Baldacci presented the proposed budget on Friday at a press conference attended by MMA representatives.  Twice during his remarks, the Governor alluded to the need to better compensate Maine's physicians providing services to MaineCare recipients.

The physician fee increase is not scheduled to begin until July 1, 2008, the second year of the biennium.

As noted in an article below, the budget also eliminates 100 positions in the Office of MaineCare Services (OMS) beginning in the second year of the biennium.  This decrease in positions is presumably a result of a likely decision by the state to outsource the payment and management of MaineCare claims, rather than to continue to finance the MECMS system without the participation of the federal government.

Hearings on the budget will take place before the Joint Standing Committee on Appropriations and Financial Affairs before the end of January. 

In his budget address, Governor Baldacci said the following about health care services:

If we are to realize sustainable prosperity, we have to be successful at appropriately managing the costs of the MaineCare program.  This does not mean sacrificing our compassion for the most vulnerable and needy among us; this document does not reflect any reductions in eligibility or in scope of services.

This budget will expand medical management to all adults receiving MaineCare with the exception of those dually eligible for MaineCare and Medicare, behavioral health care and pharmacy services, helping ensure the provision of the right care and the right time in the right place.  It also envisions the implementation of managed care for behavioral health services and standardization of rates paid for those services to make them more consistent with those paid across New England.

At the same time, we will move to improve the efficiency of administration with the Department of Health and Human Services, eliminating a Deputy Commissioner and a Director of Special Projects, and reducing the number of Offices by three.  We will further reduce administrative costs by transitioning MaineCare operations to a fiscal agent, while increasing investment in program integrity and child support enforcement.

The budget proposal calls for a $1 increase in the cigarette tax and increases our support for tobacco cessation funding by $6 million over the course of the biennium.  Finally, this budget provides funding for outstanding hospital settlements, consistent with my commitment to Maine's hospitals and communities.

You can read the Governor's full budget statement and other budget documents on the web at:  http://www.maine.gov/tools/whatsnew/index.php?topic=Portal+News&id=28203&v=article-2006.

While the MMA staff continues to review the budget documents, the following items are noteworthy:

• The budget proposes to save $1.3 M in the first year and $1.4 M in the second year ($2.7 M total) as a result of an increase in the federal financial participation rate in the MaineCare program;
• The budget proposes to save $20.3 M in the first year and $27.4 M in the second year ($47.7 M total) as a result of clinical management of MaineCare members;
• The budget proposes to save $8.6 M in the first year and $11.2 M in the second year ($19.8 M total) by implementing a managed care effort for behavioral health services;
  
• The budget proposes to save $2 M in each year of the biennium in General Fund costs plus $17 M in each year in federal funds (approximately $20 M total) by adjusting mental health service payment rates to a standard rate per service.
  

Update on MECMS; State Likely to Pull the Plug

While a final decision is not expected to be made until the end of January, two events this past week send clear signals that the Office of MaineCare Services is likely to move away from the new claims management system and look for an outside vendor to process claims.  Such a transition would take several months and the transition to an outside vendor, while perhaps better than proceeding with the existing flawed system, will still present difficulties for providers.

The two events this past week providing evidence of this course of action were the presentation of the biennial budget on Friday and the meeting of the Governor's MECMS Provider Advisory Committee on Thursday.  In the budget, over 100 OMS positions are eliminated in the second year, beginning July 1, 2008.  The elimination of this number of positions appears to be directly related to moving away from MECMS.  At the meeting on Thursday, rather than providing the usual updates, the entire meeting consisted of a discussion of where the system is presently and comments from the attendees as to where the providers are with respect to the existing system and the potential of moving to a new vendor.  Both of these events seem to confirm that state officials just do not have confidence that the system can be fixed to provide the additional functionality required by the federal government and also promised as part of the original $16 million contract.

While it can't be easy to walk away from a system that so far has cost the state over $50 million, the continuing problems with the system apparently have caused the top decision makers to at least seriously contemplate moving in a new direction. 

Among other approaches, the state of Vermont outsources its claims processing and claims management to an outside company.   We have asked the state to provide us with other examples of where this approach has been tried successfully.  It is also possible that a combination of using some parts of the new system and outsourcing some of the functionality which has been so difficult to get out of the new system might be tried.

DHHS Commissioner Brenda Harvey indicated in  conversation on Friday that a final decision would be made by the end of the month. [return to top]

123rd Maine Legislature Begins Work in Augusta

The 123rd Maine Legislature returned to the State House on Wednesday last week to begin its first year of work that is expected to last until some time in June.  The legislature held two session days on Wednesday and Thursday with Wednesday's session being devoted largely to the Governor's inauguration.  The primary work of the general sessions now is referring bills to committees and the joint standing committees are organizing for their work. 

You can find the committee assignments on the web at:  http://janus.state.me.us/house/jtcomlst.htm.

You can find the session schedule for January and February on the web at:  http://janus.state.me.us/house/sch_sess.htm.

You can find the lists of bills submitted by legislator and by subject matter on the web at:  http://janus.state.me.us/legis/lio/publications.htm.

The MMA staff is reviewing the list of more than 2400 submissions and will summarize those of particular interest to physicians in the Weekly Update next Monday.

The new legislature will be engaged in orientation activities for much of January and public hearings likely will begin in earnest in early February.  [return to top]

MaineCare Drug Utilization Review Program Meeting, January 9, 2007

The next meeting will take place on Tuesday evening, January 9, 2007 at 6:00 p.m. at the Office of MaineCare Services, 442 Civic Center Drive, Augusta, Maine.

The draft agenda is available at the MaineCare website. [Link] [return to top]

Aetna May Owe You Money

In the wake of Aetna's settlement of its Multi-District Litigation lawsuit, physicians and their practice staff are encouraged to scrutinize claim payments to make sure Aetna adheres to the terms of its settlement agreements. In many cases, it will be up to physicians to hold Aetna accountable.

For example, Aetna has reached an agreement with state medical societies to pay resubmitted claims for Evaluation and Management visits billed with a Modifier-57-indicating that the decision for surgery was made during the visit-when billed with major (global 90-day) procedures. After seeking input from medical societies and the independent Physician Advisory Board, Aetna changed its policy effective Feb. 12, 2006, and began paying these claims that it had previously denied.  To be properly compensated, physicians must take action early in the new year. For 120 days starting Jan. 1, 2007, physicians can resubmit previously denied claims for service that took place between Jan. 1, 2005, and Feb. 11, 2006.

Visit http://www.ama-assn.org/ama/pub/category/12754.html to learn more. [return to top]

MMA First Fridays Presents "A to Z’s of Accounts Receivable Management," February 2, 2007

Vaughn Clark covers:

• opportunities on the front end process to allow each practice to recover the maximum amount of money in the shortest possible time frame.
• specific scenarios and how best to deal with those to ensure a successful outcome for the practice.
• how to collect money that is owed by your patient after the service has been rendered.
• critical components of the Maine FDCPA worth considering in terms of policies and procedures at the physician practice level
• telephone collection techniques, role playing specific scenarios attempting to collect by telephone, and the do’s and don’ts of leaving messages for consumers, insurance carriers and attorneys.

Andy Finnegan conducts a presentation on the National Provider Identifier. He will explain the process of obtaining an NPI number, but also will discuss the importance of reaching out to your payors to determine what changes may be made to the claim submission process after May 23rd.

Gordon Smith will address the “Fair Credit Reporting Law”

To register, faxback the linked registration form to the MMA office. [return to top]

The Coding Center's Coding Tip of the Week

Hospital Discharge

• Used to report the total duration of time spent by a physician for the final hospital discharge of a patient
• Includes:
• Final exam
• Discussion of stay
• Instructions for continuing care
• Preparation of discharge records, prescriptions, and referral forms
• 99238 – Hospital discharge day management – 30 minutes or less
  99239 – more than 30 minutes
• Code selected based on time

Questions? Call the Coding Center, 1-888-889-6597 [return to top]