December 17, 2007

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Advisory Council on Health Systems Development Hears Thoughts on Health Care Cost Containment

The Advisory Council, chaired by Brian Rines, Ph.D., must make recommendations to the Health & Human Services Committee by March 1, 2008.  You can find more information about the Advisory Council's work on the web at:


On Friday, December 14, 2007, the Advisory Council on Health Systems Development concluded a series of meetings devoted to reviewing health care cost data assembled by the staff of the Governor's Office of Health Policy & Finance and to receiving comments on cost containment from Maine's health care system stakeholders.  The Advisory Council is one of the advisory groups established in the Dirigo Health Program legislation in 2003.  Originally established to assist with the development of the State Health Plan and the oversight of the CON program, the 123rd Maine Legislature expanded its role to include specific cost containment research and advice through L.D. 1849, An Act to Protect Consumers from Rising Health Care Costs (P.L. 2007, Chapter 441).

The Advisory Council's expanded duties are described as follows:

7. Duties.   The council shall advise the Governor in developing the plan to the extent data and resources are available by:

A. Collecting and coordinating data on health systems development in this State;

B.  Synthesizing relevant research; and  

C. Conducting at least 2 public hearings on the plan and the capital investment fund each biennium . ;

D.  Conducting a systemic review of cost drivers in the State's health care system, including, but not limited to, market failure, supply and demand for services, provider charges and costs, public and commercial payor policies, consumer behavior, cost and pricing of pharmaceuticals and the need for and availability and cost of capital equipment and services;

E.  Collecting and reporting on health care cost indicators, including the cost of services and the cost of health insurance. The council shall report on both administrative and service costs. These indicators must, at a minimum, include:

(1) The annual rate of increase in the unit cost, adjusted for case mix or other appropriate measure of acuity or resource consumption, of key components of the total cost of health care, including without limitation hospital services, surgical and diagnostic services provided outside of a hospital setting, primary care physician services, specialized medical services, the cost of prescription drugs, the cost of long-term care and home health care and the cost of laboratory and diagnostic services;

(2) The interaction of indicators including, but not limited to, cost shifting among public and private payors and cost shifting to cover uncompensated care to persons unable to pay for items or services and the effect of these practices on the total cost paid by all payment sources for health care;

(3) The administrative costs of health insurance and other health benefit plans, including the relative costliness of private insurance as compared to Medicare and MaineCare, and the potential for measures and policies that would tend to encourage greater efficiency in the administration of public and private health benefit plans provided to consumers in this State;

(4) Geographic distribution of services with attention to appropriate allocation of high-technology resources;

(5) Regional variation in quality and cost of services; and

(6) Overall growth in utilization of health care services.

F.  Identifying specific potential reductions in total health care spending without shifting costs onto consumers and without reducing access to needed items and services for all persons, regardless of individual ability to pay. In identifying specific potential reductions pursuant to this paragraph, the council shall recommend methods to reduce the rate of increase in overall health care spending and the rate of increase in health care costs to a level that is equivalent to the rate of increase in the cost of living to make health care and health coverage more affordable for people in this State; and

G.  Beginning March 1, 2008 and annually thereafter, make specific recommendations relating to paragraphs A to F to the joint standing committee of the Legislature having jurisdiction over insurance and financial services matters and the joint standing committee of the Legislature having jurisdiction over health and human services matters and to any appropriate state agency.

You can view the Advisory Council's health care cost Data Book on the web at:

2008 Physician Quality Reporting Initiative (PQRI) National Provider Question & Answer Session, December 19

The Centers for Medicare & Medicaid Services’ (CMS) Provider Communications Group will host the second in a series of national provider conference calls on the 2008 Physician Quality Reporting Initiative (PQRI).  This toll-free call will take place from 3:00 p.m. – 5:00 p.m., EST, on Wednesday, December 19, 2007. 

The call will cover the 119 PQRI measures available for reporting by eligible professionals in 2008.

Information on the 2007 and 2008 PQRI programs are posted to the PQRI web page located at,, on the CMS website. The website is continually being updated, so check it often for the most current information available.  There are many educational resources available on the webpage, so feel free to download the available resources prior to the call.

In addition to a formal presentation, this toll-free question and answer teleconference will provide eligible professionals the opportunity to ask questions of CMS subject matter experts. Materials for the call will be posted at least one day prior to the teleconference on the PQRI webpage at,, on the CMS website in the Educational Resources section so that you can follow along with the presenters.

In order to receive the call-in information, you must register for the call. It is important to note that if you are planning to sit in with a group, only one person needs to register to receive the call-in data.  This registration is solely to reserve a phone line, NOT to allow participation.  If you cannot attend the call, replay information is available below.

Registration will close at 3:00 p.m. EST on December 18, 2007, or when available space has been filled.  No exceptions will be made, so please be sure to register prior to this time.

To register for the call participants need to go to:

  1. Fill in all required data.  
  2. Verify your time zone is displayed correctly the drop down box. 
  3. Click "Register". 
  4. You will be taken to the “Thank you for registering” page and will receive a confirmation email shortly thereafter.   Note: Please print and save this page in the event that your server blocks the confirmation emails.  If you do not receive the confirmation email, please check your spam/junk mail filter as messages may have been directed there. . 

For anyone unable to attend, a replay option will be available shortly following the call.  This replay will be accessible from 5:30 p.m. EST 12/19/2007 until 11:59 p.m.  EST 12/26/2007.  The call-in data for the replay is (800) 642-1687 and the passcode is 24219737. [return to top]

Maine Still # 1 in Deterring Smoking

For the sixth year in a row,  the State of Maine ranks No. 1 in funding programs to protect children from the ravages of tobacco, according to a report released this past week.

Maine is one of only three states - joining Delaware and Colorado - in funding tobacco prevention programs at or above the minimum levels recommended by the federal CDC.  But while the state commits $16.9 million dollars to the cause annually, that amount is dwarfed by the $66 million spent by the tobacco companies in marketing efforts in the state.

The annual report on states' funding of prevention programs, titled, "A Broken Promise to Our Children," was released by the Campaign for Tobacco-Free Kids, the American Heart Association, the American Cancer Society Action Network and the American Lung Association.

In Maine, 16.2 percent of high school students still smoke, and 1900 children begin the habit every year, as noted by the report.

In reacting to the report, MMA EVP Gordon Smith noted the consistent and vigorous work done by the Maine Coalition on Smoking or Health and the efforts of Dora Ann Mills, M.D., MPH, Director of the Maine CDC.  "For over twenty five years, the Coalition has been blessed with passionate leadership and volunteers who feel deeply about this cause.  In this case, the effort has also been assisted by the strong support of many Governors and legislators.  But in the last ten years, no one has done more than Dr. Mills to advocate for public spending on this effort," he said. [return to top]

Kellie P. Miller, M.S., to Join MMA Team in January

The Maine Medical Association is pleased to announce the hiring of Kellie P. Miller, M.S., of Hallowell to serve as Director of Public Health Policy at MMA, effective Jan. 2, 2008.  Kellie will also serve as Executive Director of one or more medical specialty socieites or related organizations that contract with MMA for administrative services.

Kellie  most recently served as Director of Emergency Preparedness for the Maine Primary Care Association in Augusta.  Prior to that position, she served for 12 years as Executive Director of the Maine Osteopathic Association in Manchester.  Prior to that position, she had served in various capacities for ten years with the American Lung Association of Indiana.

At the Maine Primary Care Association, Kellie was responsible for the development and implementation of the Association's efforts regarding community planning for response to public health emergencies, with particular emphasis on Pandemic Influenza preparedness, including Community Health Centers All Hazards Preparedness.

Kellie received her Bachelor of Science Degree in Health Education at Ball State University and her Master of Science Degree from Purdue University.

Kellie currently serves as President of Medical Care Development and recently served on the Boards of the Maine Health Information Center, the Maine Health Data Processing Center and as a member of the Medicaid Advisory Committee and the Hallowell Board of Trade.

"After admiring Kellie's work for over a decade, we are now thrilled to have her join our MMA team and community," stated Gordon Smith, MMA Executive Vice President.  "She knows our issues, knows many of the physicians and the state and will be an important asset on her first day and beyond. We also believe that Kellie can be an important link to establishing stronger relationships with Maine's Osteopahic community. We could not be more excited to have her working here at MMA." [return to top]

Medicare Fee Fix Still Possible but Hopes Fading

AMA staff participated in a conference call with AMA Washington D.C. lobbying staff Friday and heard an update on the complicated situation regarding the attempts by Congress to prevent the implementation of the scheduled 10% reduction in physician fees by Medicare Jan. 1, 2008.  With the Senate and House scheduled to recess for the holidays on Dec. 21, time is running out, although it is possible that a fee fix wil be included in an omnibus appropriations bill expected to pass by the end of this coming week.

On Thursday of this past week, the House handed the proverbial football back to the Senate to craft a solution.  The Senate and the Bush administration have for the past year been unwilling to pay for the fee fix by taking funds from the Medicare Advantage plans, which are currently paid at rates exceeding the Medicare fee schedule.  Without using such funds under the current offset rules, any fee fix will probably end up being paid for by steeper cuts in the years following 2008, a result the AMA adamently opposes.  It is this same flawed policy that has led to the annual reductions the last few years.

Another possibility that surfaced in discussions this week involved a plan to only restore the fees for a three month or six month period, thus limiting the amount of offset needed.  This approach is also opposed by the AMA and most of the national medical specialty societies, as any temporary fix would simply place physicians in the same situation they are in now within a matter of weeks.

If the Medicare physician fee fix is not passed this week, it is very likely to be dealt with in January or February.  Many members of Congress are not anxious to recess and face angry seniors who are concerned that some physicians will start limiting the number of Medicare patients they treat.

Watch for another report in next week's Update.  Hopefully, something positive will happen this week.  Because of geographical factors and the latest DHHS Medicare rulemaking, effective Jan. 1, 2008,  the fee reductions in Maine without Congressional action will be 12% in Cumberland and York counties and 13% in the remainder of Maine. [return to top]

AMA Highlights Medicare Participation Options for Physicians

In a final rule released November 1, 2007, the Centers for Medicare & Medicaid Services (CMS) confirmed that effective January 1, 2008, the Medicare physician payment schedule conversion factor will be cut by 10.1% to $34.0682.  Facing such a steep reduction in payments, many physicians may wish to review their Medicare participation options.

Physicians who wish to change their current Medicare participation or non-participation status for 2008 must do so between November 15 and December 31, 2007.  Prior to that time, carriers are expected to provide each physician in their area with a CD-ROM containing information about the 2008 participation sign-up and a "Medicare Participating Physician/Supplier Agreement."  Actual payment rates may or may not be included this year so physicians will need to check the carrier web site or request that the carrier mail payment rates to them at no charge.  CMS also publishes Medicare Learning Network articles for physicians outlining changes that will be in effect for the following year.

To help ensure that physicians are making informed decisions about their contractual relationships with the Medicare program, the AMA has developed the following brief overview of the current situation with respect to the Medicare payment update for 2008 and the various participation options that are available to physicians.

 The AMA, the MMA, and others in organized medicine continue an aggressive campaign to pass legislation that would prevent the cut and provide a positive update in 2008.  While we will continue to press for congressional action, there is no guarantee that Congress will act before January 1, 2008.

Once finalized, Medicare participation and non-participation decisions are binding for the entire year.  If the rates change because of congressional action during the participation decision period, however, the deadline may be extended further as was the case in 2006 and 2007.

Physicians who currently are participating ("par") and who want to remain par for 2008 do not need to do anything to maintain their current status.  Likewise, physicians who currently are non-participating ("non-par") and who want to remain non-par for 2008 do not need to do anything to maintain their current status.  To switch from being par to non-par, physicians will need to notify their Medicare carrier in writing before January 1, 2008. 

The 3 options 

There are 3 Medicare contractual options for physicians.  Physicians may sign a par agreement and accept Medicare's allowed charge as payment in full for all of their Medicare patients.  They may elect to be a non-par physician, which permits them to make assignment decisions on a case-by-case basis and to bill patients for more than the Medicare allowance for unassigned claims.  Lastly, they may become a private contracting physician, agreeing to bill patients directly and forego any payments from Medicare to their patients or themselves.

Physicians who wish to change their status from par to non-par or vice versa will need to do so before January 1, 2008.  Once made, the decision will be binding throughout calendar year 2008 except where the physician's practice situation has changed significantly, such as relocation to a different geographic area or a different group practice.  To become a private contractor, physicians must give 30 days notice before the first day of the quarter the contract takes effect.

Those considering a change in status should first determine that they are not bound by any contractual arrangements with hospitals, health plans, or other entities that require them to be par physicians. 


Par physicians agree to take assignment on all Medicare claims, which means that they must accept Medicare's approved amount (which is the 80% that Medicare pays plus the 20% patient copayment) as payment in full for all covered services for the duration of the calendar year.  The patient or the patient's secondary insurer still is responsible for the 20% copayment but the physician cannot bill the patient for amounts in excess of the Medicare allowance.  While par physicians must accept assignment on all Medicare claims, Medicare participation agreements do not require physician practices to accept every Medicare patient who seeks treatment from them. 

Medicare provides several incentives for physicians to participate:

  • The Medicare approved amount for par physicians is 5% higher than the Medicare approved amount for non-par physicians;
  • Directories of par physicians are provided to senior citizen groups and individuals who request them;
  • Carriers provide toll-free claims processing lines to par physicians and process their claims more quickly.


Medicare approved amounts for services provided by non-par physicians (including the 80% from Medicare plus the 20% copayment) are set at 95% of Medicare approved amounts for par physicians, but non-par physicians can charge more than the Medicare approved amount.

Limiting charges for non-par physicians are set at 115% of the Medicare approved amount for non-par physicians.  However, because Medicare approved amounts for non-par physicians are 95% of the rates for par physicians, the 15% limiting charge is effectively only 9.25% above the par-approved amounts for the services.

With a 10% cut about to be imposed, many physicians may consider balance billing an extra 9% as one means of helping close the gap between 2007 and 2008 payment amounts.  When considering whether to be non-par, however, physicians should consider whether their total revenues from Medicare, including amounts the program pays, patient copays, and balance billing, would exceed their total revenues as par physicians, particularly in light of collection costs, bad debts, and claims for which they do not accept assignment.  The 95% payment rate is not based on whether physicians accept assignment on the claim, but whether they are par physicians.  When non-par physicians accept assignment for their low-income or other patients, their Medicare approved amounts still are 95% of the approved amounts paid to par physicians for the same service.

Non-par physicians would need to collect the full limiting charge amount roughly 35% of the time they provide a given service in order for the revenues from the service to equal those of par physicians for the same service.  If they collect the full limiting charge for more than 35% of the services they provide, their Medicare revenues will exceed those of par physicians.

Assignment acceptance, for either par or non-par physicians, also means that the Medicare carrier pays the physician the 80% Medicare payment.  For unassigned claims, even though the physician is required to submit the claim to Medicare, the program pays the patient, and the physician must then collect the entire amount for the service from the patient.

Private contracting

Provisions in the Balanced Budget Act of 1997 give physicians and their Medicare patients the freedom to privately contract to provide health care services outside the Medicare system.  However, private contracting decisions may not be made on a case-by-case or patient-by-patient basis.  Once physicians have opted out of Medicare, they cannot submit claims to Medicare for any of their patients for a 2-year period.

Private contracts must meet specific requirements:

  • The physician must sign and file an affidavit agreeing to forego receiving any payment from Medicare for items or services provided to any Medicare beneficiary for the following 2-year period (either directly, on a capitated basis, or from an organization that received Medicare reimbursement directly or on a capitated basis);
  • Medicare does not pay for the services provided or contracted for;
  • The contract must be in writing and must be signed by the beneficiary before any item or service is provided;
  • The contract cannot be entered into at a time when the beneficiary is facing an emergency or an urgent health situation.

In addition, the contract must state unambiguously that by signing the private contract, the beneficiary:

  • gives up all Medicare payment for services furnished by the "opt out" physician;
  • agrees not to bill Medicare or ask the physician to bill Medicare;
  • is liable for all of the physician's charges, without any Medicare balance billing limits;
  • acknowledges that Medigap or any other supplemental insurance will not pay toward the services; and
  • acknowledges that he or she has the right to receive services from physicians for whom Medicare coverage and payment would be available.

To opt out, a physician must file an affidavit that meets the above criteria and is received by the carrier at least 30 days before the first day of the next calendar quarter.  There is a 90-day period after the effective date of the first opt-out affidavit during which physicians may revoke the opt-out and return to Medicare as if they had never opted out.

This article is based upon the AMA's Medicare RBRVS:  The Physicians' Guide 2007.  The complete guide is available from the AMA Press by calling toll free 1-800-621-8335. [return to top]

Monthly MMA Educational Programs Begin Jan. 4 with "Marketing Your Practice"

MMA begins its third year of the popular "First Fridays" educational programs with an innovative program offered January 4, 2008 at the MMA offices in Manchester entitled, How to Market Your Medical Practice & Collateral:  Production & Printing.  The program will be presented by Healthcare Marketing, a Portland marketing and public relations firm.  Since 1989, Healthcare Marketing has helped clients throughout New England promote their products and services with outstanding creative design, planning, production, and media placement expertise. 

The market for health care services is rapidly expanding and your practice can benefit significantly from the knowledge of experienced marketing professionals.

Begin your new year by learning to execute a superior marketing campaign.  Health care today is not immune from the forces of the marketplace.  Whether you need a new patient brochure, a new website, or a promotional video, this three hour program will be your best investment.

A $60 fee covers all materials and breakfast.  The program runs from 9:00 am to noon and you may register on-line at or by calling 622-3374 (press O for assistance). [return to top]

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