July 30, 2007

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U.S. House Committees Mark Up CHAMP Bill Containing Medicare Fee Fix

Last Thursday, July 26, 2007 the House Committees on Energy & Commerce and Ways & Means marked up the newly released Children's Health & Medicare Protection Act of 2007 (CHAMP Act), H.R. 3162, and the bill is expected to be voted upon by the full House of Representatives this coming week before the Congress recesses for its August break.

The CHAMP Act will reauthorize the State Children's Health Insurance Program (SCHIP) and provide increased funding for health insurance coverage for low-income children.  The CHAMP Act also replaces scheduled Medicare physician payment cuts of 15 percent over the next two years with positive updates of 0.5%.  To pay for the increased spending, the CHAMP Act increases federal taxes on tobacco and eliminates overpayments to Medicare Advantage plans.

The Ways & Means Committee approved the proposed legislation on a 24 to 17 party line vote.  The Energy & Commerce Committee also approved the bill which President Bush has threatened to veto.  Prior to that step, the Senate will have to enact legislation and a conference committee reconcile the differences, which would then have to be approved by each body.

The American Medical Association sent a letter of support for the CHAMP Act to all members of the Committees, including Maine's First District Congressman Tom Allen who is on the House Energy & Commerce Committee.

Although it addresses several major priorities, there are concerns about some provisions in the CHAMP Act and it is hoped that some of these issues will be addressed prior to conference committee negotiations between the House and the Senate.  The legislation partially funds two years of positive updates but resorts to past practice of deferring part of the cost of averting cuts in the next two years.  As a result, physicians would face cuts of 12 percent in 2010 and 2011 instead of 5% each year.  Whether facing cuts of 5 percent in 2010 under current law or the proposed cuts of as much as 12 percent in 2010 and 2011 that could occur under this bill, legislation will be needed before 2010 to avert future pay cuts.  Congress would hopefully intervene before these proposed cuts would take effect in 2010.  There are other provisions in the bill which are objected to by some specialties, with objections to decreases in payments for imaging services leading the list.

Below is an outline of the key provision in the CHAMP Act.

SCHIP:  Continues coverage for millions of children currently covered by SCHIP and strengthens outreach programs to get millions of children covered who are eligible for SCHIP or Medicaid but not enrolled by:

  • Providing a performance bonus payment for states that improve outreach, enrollment, and retention efforts;
  • Allowing states to rely on findings from other government-funded programs, such as school lunch and food stamp programs, to conduct simplified eligibility determinations; and 
  • Requiring the Secretary of HHS to establish a demonstration project in up to 10 states for employment-based family coverage. 

Medicare Physician Payment:  Provides updates of +0.5% for all physicians in 2008 and 2009.

  • Extends the work GPCI floor and physician scarcity area provision for two years;

  • Effective in 2009, provides a 5% bonus payment to physicians in areas with the lowest per capita Medicare spending

  • Establishes six separate categories defined by type of service with their own target growth rates, replacing the Sustainable Growth Rate system

  • Effective in 2008,  prospectively removes the cost of Part B drugs and lab tests from target growth rate calculations and increases target growth rates by requiring CMS to include new national coverage determinations;

  • Establishes an expanded medical home demonstration program for up to 500 medical practices.         Adjusts payment locality definitions in California and ultimately makes similar adjustments in other states;

  • Creates an expert panel separate from the RUC to help identify misvalued services to be included in the five-year review of relative values; and

  • Significant changes in payments for imaging services, include:
    o        requiring accreditation of staff and equipment as a condition of payment for imaging services beginning in 2012 for ultrasound and in 2010 for other services ranging from x-rays to PET scans; and
    o        directing CMS to make several methodological changes that will reduce imaging payments in 2008 and thereafter. 

Medicare Advantage Reforms:  To offset the cost of replacing the 2008 and 2009 physician pay cuts with positive updates, establishes a level playing field with regular Medicare by phasing-out overpayments to MA plans over a four-year period.

  • Curbs illegal and misleading marketing practices by MA agents, brokers, and plans by providing state insurance commissioners with added oversight authority

  • Requires development of model marketing practices with the input from a cross section of stakeholders and increases fines for violating marketing protections;

  • Prohibits the auto-enrollment of Medicaid beneficiaries into a MA plan;

  • Limits out-of-pocket costs in MA plans for Medicaid patients to the amount of cost-sharing for the same service in a State's Medicaid program; and

  • Expands HHS authority to ensure MA plan compliance with statutory and regulatory requirements including a requirement that HHS audit MA plan risk adjustment data.   

Part D and Low-Income Beneficiary Improvements:   

Removes administrative barriers and expands the number of individuals that would qualify for assistance with premiums and cost-sharing. 

  • Permits mid-year changes in enrollment for material formulary changes that would reduce coverage or increase cost-sharing of a patient's prescribed drug;

  • Removes the exclusion of benzodiazepines from Part D;

  • Allows the drug compendia under Part D to be updated using a similar process to Part B; and

  • Codifies the six protected classes of drugs under Part D and limits plans' use of prior authorization and step therapy requirements for drugs in these six categories. 


  • Reduces Medicare cost-sharing for outpatient mental health services to 20% from the current 50% by 2012;
  • Establishes a federally funded Center for Comparative Effectiveness Research in the Agency for Healthcare Research and Quality responsible for conducting research on the outcomes, effectiveness, and appropriateness of health care services.  Creates an independent Comparative Effectiveness Commission to set priorities for the Center;
  • Eliminates the Practicing Physicians Advisory Council;
  • Eliminates the deeming authority of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) 18 months after enactment, rather than a phase-out over five years as recommended by JCAHO;
  • Requires the Secretary to designate a single organization, such as the National Quality Forum, to establish a national strategy for performance measurement, coordinate measure development, and endorse national consensus healthcare measures;
  • Reduces the inpatient and outpatient hospital updates by 0.25% for 2008;
  • Freezes 2008 payments for skilled nursing facilities and home health;
  • Eliminates the whole-hospital exception for physician referrals to facilities in which they have an ownership interest but grandfathers physician-owned specialty hospitals that have a Medicare provider number as of July 24, 2007.   Prevents expansion by and imposes other conditions on the grandfathered specialty hospitals. 

Dirigo Health Agency Board Declares $78 million in Third Year Savings

Following hearings involving interested parties, the Board of Directors of the Dirigo Health Agency on Thursday, July 26, 2007 declared that the Dirigo Health Program would save the state's health care system $78 million in its third year of operation.  The savings determination is the starting point by which the "savings offset payment" (SOP) , the current funding mechanism for the DirigoChoice health insurance product, is determined.   The Acting Superintendent of Insurance will now review the estimated savings and determine his own number before the final SOP is determined.

After participating in the hearings before the Agency, the Maine Association of Health Plans called the savings number excessive and unreasonable.  The figure is nearly double the amount established last year.

Earlier in July, the Dirigo Agency staff had calculated savings of $92.7 million.  That number was revised downward to $88 million and the board further lowered it another $10 million on Thursday.

Dr. Robert McAfee chairs the Agency Board and a second MMA former President, Edward David, M.D., J.D., also serves on the Board.  The Dirigo Health Program currently serves about 15,000 enrollees in the DirigoChoice plan, which is administered by Anthem Blue Cross Blue Shield of Maine. [return to top]

"Collaboration Skills for Healthcare Professionals" Offered Friday, September 7, 2007.

MMA's popular "First Fridays" CME offerings will continue in September with a program entitled, "Collaboration Skills for Healthcare Professionals."  The program will be held on Friday, Sept. 7, 2007 from 9:00 am to noon at the offices of the Maine Medical Association in Manchester.  There is a $60 fee which includes all course materials and a light breakfast.

The program will be presented by Beth Boynton, RN, MS, who is an organizational development consultant who has worked with many health care organizations in Maine.  Beth has twenty years experience as an RN in consulting, management, or direct care positions and more than ten years as a Nurse Consultant to business and industry for workers compensation and employee heatlh issues.  She also served as Adjunct Faculty for both the New England Healthcare Administration Program and Antioch New England Graduate School's Certificate in Healthcare Management program.

For further information or registration materials, visit the MMA website at www.mainemed.com or call Gail Begin at 622-3374 ext. 210.  [return to top]

MMA Annual Session Room Block (Harborside Hotel) Extended to August 10

If you are interested in attending the Association's 154th Annual Session being held at the Harborside Hotel and Marina in Bar Harbor, the room block has been extended until August 10.  But do try to make your reservations as soon as possible.  To make your reservations, call the Harborside toll-free at 1-800-328-5033.  If you are not interested in staying at the Harborside, the Association has a list of alternate housing in Bar Harbor ranging from $50 per night to more than $200. 

The meeting will be held Sept. 7th through Sept. 9th and will feature a CME program entitled, "Maine Medicine  2020:  NEW HORIZONS,"  which is intended to give a preview of what practicing medicine will  be like 13 years from now.

Registration materials have been sent to each member and will also be included with the July/August issue of Maine Medicine.  You may register at any time on the MMA website at www.mainemed.com

Meetings planned in conjunction with the Annual Session include specialty meetings for orthopedics, urology, and psychiatry and county society meetings for the counties of Penobscot, Kennebec, and Aroostook.  [return to top]

MMA and MDI Hospital Present CME Program on "Medical Responses to a Mass Casualty" Sept. 6

MMA and Mount Desert Island Hospital are pleased to announce a program in connection with the MMA Annual Session entitled, "Medical Reponses to a Mass Casualty Incident in Maine" on Sept. 6, 2007 in Bar Harbor.  The program is being held a day prior to the MMA Annual Session at the same location which is the Harborside Hotel and Marina.  The program will run from 9:30 am to 4:30 pm and is, in part, funded through a grant from the Maine CDC.  Six hours of category 1 CME is available. 

There is a $40 fee which includes lunch and all course materials.   A registration form will be included as an insert in the July/August issue of Maine Medicine.  For more information, please contact Melanie Modine at MDI Hospital at 288-5082 ext. 444.

Objectives for the course include:

  • Understand the challenges of caring for multiple trauma victims, especially in a small health care system.
  • Understand how to utilize state emergency assistance and legally use outside providers to assist.
  • Be able to develop practical strategies for coping with a public health or mass casualty disaster, both advance planning and when one occurs.

Speakers include Col. Robert McAleer, USMC-Ret., Director of the Maine Emergency Management Agency.  [return to top]

Advisory Council on Health Systems Development: Report on July 27th Meeting

The Advisory Council on Health Systems Development met on Friday, July 27, 2007 to consider a full agenda which had grown over the past few months.  The Council was established as part of the Dirigo Health legislation and is chaired by Brian Rines, PhD, a forensic psychologist from Gardiner.  Several physicians are on the Council, including former MMA President Maroulla Gleaton, M.D, Maine CDC Director Dora Ann Mills, M.D., MPH, former Bureau of Health Director Lani Graham, M.D., M.P.H. and D. Joshua Cutler, M.D., the Director of the Maine Quality Forum.

After meeting with the Certificate of Need Public Health work group, the Council utilized most of the rest of the meeting discussing its work plan for the remainder of this year which includes the following:

  • Follow-up on the new legislation, L.D. 1849, which expands the work of the Council to include an annual evaluation of the various cost-drivers leading to high health care costs in Maine.
  • Input into the next edition of the State Health Plan, due Dec. 1, 2007.
  • Input into the Chronic Disease report authorized by L.D. 723.

Committee members reviewed some documents prepared by staff, including a matrix crosswalking the 1849 cost indicators to existing data sources and a timeline for the Council's obligations regarding L.D. 1849 and related reports.

The Council will meet again on Friday, August 24 at 9:00 am in Augusta.  [return to top]

Potential Vendor for MaineCare Imaging Pre-Certification Program Wants Your Input

Representatives of ACS, a national company with a focus on medical technology and medical management, will meet with interested radiology practices at the MMA office in Manchester on Wednesday, August 8, 2007 at 2:00 pm to receive input on how the new MaineCare imaging requirements might be structured.  The state budget, effective July 1, 2007, included a $2 million savings from implementation of a pre-certification program in MaineCare for imaging services, similar to what is required by commercial insurers.

ACS was the only company that attended a recent vendors' conference on the RFP that the Office of MaineCare services issued.

Any radiologist or other owners of imaging equipment are invited to attend, or representatives of such practices.  RSVP to Warene Eldridge at MMA at 622-3374 ext. 227 or via e-mail to weldridge@mainemed.com if you are interested in attending this session.  Warene serves as the administrator of the Maine Radiological Society. [return to top]

CMS Administrator Nominee Weems Has Confirmation Hearing

On Wednesday, July 25, 2007, the Senate Finance Committee held a confirmation hearing for Kerry N. Weems, President Bush's nominee to be Administrator of the Centers for Medicare & Medicaid Services.  Weems would be the first permanent administrator of the agency since the departure of Mark B. McClellan, M.D., M.B.A.  Herb B. Kuhn, an acting deputy administrator, has been in charge of the agency since the departure of acting administrator Leslie V. Norwalk who left the agency earlier this month.  A native of New Mexico, Weems has worked in the Department of Health & Human Services for 24 years.  During the hearing, Weems promised committee members that he would work to improve CMS' relationship with Congress and would address a variety of problems with the Medicare program.

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MaineCare Proposes Definition of Medical Necessity

The Department of Health & Human Services has proposed amendments to the introductory section of the MaineCare Benefits Manual - Chapter I, Section 1, General Administrative Policies & Procedures.  Many of the amendments are technical, but physicians should be aware of several more substantive changes.

For the first time, the Department is proposing a definition of "medical necessity."  The proposed definition follows:

D.  Medical Necessity or Medically Necessary services are those reasonably necessary medical and remedial services that are:

1.  provided in an appropriate setting;

2.  recognized as standard medical care, based on national standards for best practices and safe, effective, quality care;

3.  required for the diagnosis, prevention and/or treatment of illness, disability, infirmity or impairment and which are necessary to improve, restore or maintain health and well-being;

4.  a MaineCare covered service (subject to age, eligibility, and coverage restrictions as specified in other Sections of this manual as well as Prevention, Health Promotion and Optional Treatment requirements as detailed in Chapter II, Section 94 of this Manual);

5.  performed by enrolled providers within their scope of licensure and/or certification; and

6.  provided within the requlations of this Manual.

The Department also proposes to adopt a "prudent layperson" standard for emergency care.

As previously reported, the Department is pursuing a behavioral health managed care initiative and this rule includes language describing the initiative.  It includes the following new requirement:  "All providers must submit notification of their intent to initiate behavioral health services identified in the MBM prior to the start of services for all members." 

The rule also appears to deny reimbursement for off-label use of prescription drugs.  It states that MaineCare does not reimburse for "experimental procedures or drugs not approved by the Food and Drug Administration (FDA) or drugs used for non-FDA approved indications."

Finally, the rule proposes changes to the provider sanctions and appeals processes.

If you have comments on the proposed rule changes, please contact Andrew MacLean, Deputy EVP, at amaclean@mainemed.com or 622-3374, ext. 214 by Friday, August 3, 2007.

You can find the rule and submit comments on the Office of MaineCare Services web site, http://www.maine.gov/dhhs/bms/rules/provider_proposed_mcare.shtml.

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