December 12, 2011

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Governor LePage's DHHS Supplemental Budget Will Severely Affect Maine's Medical Community & Patients; Appropriations Committee Holds Hearings Later This Week

Hundreds of Mainers are expected to converge on the state capital later this week to testify at hearings on the Governor's Supplemental Budget announced a week ago.  The Appropriations Committee will conduct the hearings on the $221 million budget-balancing proposal which will end MaineCare coverage for approximately 65,000 persons, hitting nearly all age groups but impacting most severely on the elderly and the mentally ill.  Hospital reimbursement would be reduced by approximately $40 million during the rest of  this fiscal year and the next.  The Fund for a Healthy Maine is also severely impacted.

Last Tuesday afternoon, the LePage Administration released its proposed supplemental budget for the Department of Health & Human Services for State Fiscal Years 2012 and 2013.  According to the Administration, the DHHS budget gap is $120 million in FY 2012 and $101 million in FY 2013.  

In an unusual procedural move, the legislature's Appropriations Committee is holding public hearings on just this DHHS portion of the supplemental budget on Wednesday, Thursday, and Friday of this week.  We understand that the Governor will release a supplemental budget for other state agencies in early January. 

Rather than simply balancing the state budget for the period ending June 30, 2012 (State Fiscal Year 2012), the Governor is proposing a major restructuring of the state's Medicaid program, a substantial shift in health policy that will have a negative impact on patients and health care practitioners and providers.  MMA and other advocacy groups still are reviewing the budget proposal and assessing the likely impact. But MMA and many specialty organizations, including the Maine Chapter of the American Academy of Pediatrics and the Maine Association of Psychiatric Physicians will be offering testimony this week against those aspects of the proposal which impact most negatively on patients and public health in the state.

Here’s an overview of the budget proposal (all figures are General Fund only, so FMAP (federal match) would have to be factored in on a roughly 2-to-1 basis to judge real impact:

  • Sweep approximately half of the Fund for a Healthy Maine to fill the budget gap
  • Eliminates all PNMI coverage, both behavioral health & other ($47.6+ M in FY 13)
  • Eliminates targeted case management services
  • Eliminates optional coverage for 19/20 year olds < 150% of FPL
  • Reduces optional coverage for children “who are behaviorally challenged who are in a residential setting"
  • Reduces funding for contracts for residential services in children’s mental health ($1.25 M in FY 13)
  • “Limits” mental health crisis intervention services to people with severe & persistent mental illness ($2.1M in FY 13)
  • Eliminates low-cost drugs for the elderly program ($837k in FY 12; $4.5 M in FY 13)
  • Reduces coverage for brand name drugs from 4/month to 2/month ($1.2 M in FY 12; $5.8 M in FY13)
  • Some adjustment in Cub Care program for families >= 150% of FPL, but < 200% (shift to Dirigo)
  • $8 M in salary savings in DHHS ($5 M in FY 12; $3 M in FY 13)
  • Eliminates $1.1 M in FHM funds that went to vaccines
  • Eliminates Head Start funding ($800k in FY 12; $2.5 M in FY 13)
  • Eliminates MaineCare coverage for families above mandatory federal levels ($2.2 M in FY 12; $8.5 M in FY 13)
  • Eliminates adult family care as optional service
  • Eliminates ASC services as optional service ($17,200 in FY 12; $93,274 in FY 13)
  • Eliminates dental services as optional service ($411k in FY 12; $2.2 M in FY 13)
  • Eliminates OT as optional service ($79k in FY 12; $427k in FY 13)
  • Eliminates vision services as optional service ($152k in FY 12; $823k in FY 13)
  • Eliminates PT services as optional service ($98k in FY 12; $529k in FY 13)
  • Eliminates podiatry services as optional service ($68k in FY 12; $371k in FY 13)
  • Eliminates STD screening clinics as optional service ($40k in FY 12; $218k in FY 13)
  • Eliminates chiropractic services as optional service ($69k in FY 12; $375k in FY 13)
  • Reduces Critical Access Hospital reimbursement from 109%to 105% of cost ($291k in FY 12; $1.2 M in FY 13)
  • Limits coverage to 15 outpatient hospital visits per year ($278k in FY 12; $1.5 M in FY 13)
  • Limits coverage to 5 hospital admissions per member per year ($92k in FY 12; $490k in FY 13)
  • Limits use of suboxone for opioid dependency treatment to 2 years ($148k in FY 12)
  • Eliminates childless adult waiver program (the “non-categoricals”) ($22 M in FY 13)
  • Eliminates coverage of smoking cessation products ($80k in FY 12; $430k in FY 13)
  • Reduces reimbursement for outpatient services at acute care hospitals by 5% effective 7/1/12 ($3.2 M in FY 13)
  • Reduces reimbursement for hospital inpatient services by 10% ($768k in FY 12; $3.1 M in FY 13) 

You can find the DHHS budget materials, including the budget documents, on the web at:

 You can find the Appropriations Committee schedule for the week on the web at:

 You can find the Appropriations Committee members and their contact information on the web at:

Countdown to a Medicare SGR Delay or Permanent Fix Continues

Congress last week continued to discuss ways to permanently fix the Medicare payment formula (SGR) or to at least delay the approximately 30% reduction in Medicare physician payments come January 1, 2012.  Reductions of this magnitude would obviously be devastating to physicians, other health care professionals and hospitals in the State.  Given the large number of patients on Medicare and Tri-Care, well over $100 million annually is at stake.  Fortunately, Congress does seem to be coming to grips with the fact that action must be taken before adjourning for the holidays.  Members of Congress are not likely to look forward to returning home to the districts and explaining to seniors that their doctors will be receiving a nearly one-third reduction in fees for treating them. Such reductions would result in serious disruptions in care and lead to difficulties with access.

The Republican leadership in the House last Friday released a bill called the Middle Class Tax Relief and Job Creation Act that would extend the payroll tax cut, extend unemployment insurance, fast track a permit decision on a controversial oil sands pipeline and provide a two-year SGR delay.   

The two-year postponement of the cuts would be accompanied by a one percent update in 2012 and 2013.  But it would create a CBO-projected 37 percent cut in 2014 and the cost of a full repeal in 2014 would rise to about $350 billion.  And the bill would pay for the delay by cutting payments for E & M services in hospital outpatient facilities by enactment of language which would limit payment to no more than is paid in a physician office.  Such a provision would be particularly devastating in Maine where most hospitals have adopted a provider-based reimbursement strategy.  The bill would also reduce funding for the Prevention and Public Health Fund in the Affordable Care Act, something the democrats would be loath to do.  Finally, the bill also increases the maximum amount of health insurance exchange subsidy overpayments that must be repaid by individuals (another anti-ACA provision).  So while the bill may pass the House, it is not likely to go anywhere in the Senate, leaving the Congress deadlocked once again.  Both parties are in agreement on the need to extend the employment tax and to fix the SGR, but they can not agree on how to pay for either.                                                                                                                   

As noted in last week's Update, each physician in Maine should communicate with Maine's Congressional delegation as soon as possible and emphasize what this cut would mean to them and their patients.  Time is running out.  Find contact information and a sample letter at the AMA Advocacy website.

The AMA also has some helpful guidance on Medicare participation options for physicians here.   [return to top]

Report on Final Meeting of L.D. 1501 Work Group Addressing Prescription Drug Abuse

The work group established  by L.D. 1501 continued its work at its final three-hour meeting Friday, December 9th.  The final report is currently being circulated for final editing and will be sent to the Legislature on December 16th.  The Health and Human Services Committee is expected to review the report and its recommendations and schedule a presentation by the Commission in January.

There was a final consensus around a number of important issues, as follows:

  1. Participating in the state's Prescription Monitoring Program (PMP) will be strongly encouraged, but not mandated.
  2. Appropriate continuing education courses will be developed but any mandated education will come on the federal level, not because of any state mandate.
  3. Prescribers will be encouraged to exercise universal precautions when starting a patient on opioid therapy for chronic pain.
  4. Prescribers will be provided with appropriate assessment, screening and risk reduction tools.
  5. The licensing boards for the various prescribers will be asked to review the current rule, Chapter 21, regarding guidelines for treatment of chronic pain and adopt any necessary changes. 
  6. A number of enhancements to the PMP are recommended, all aimed at making the program more valuable to physicians and other prescribers.  Additional access to the program by law enforcement is also being considered.  
  7. Local law enforcement agencies will be encouraged to provide diversion alerts to local health professionals.  These alerts would contain photos and names of individuals arrested for drug related offenses. 
  8. In order to decrease the number of deaths due to accidental overdose, a pilot project to provide naloxone kits will be recommended along with appropriate state legislation providing for protection of individuals who prescribe, dispense or otherwise intervene.
By next week, MMA should be able to put a link on its website to a copy of the final report.  Should you need a copy sooner than that, contact Gordon Smith,

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Highlights From MMA Board Meeting Held Dec. 7, 2011

The Maine Medical Association Board of Directors met last Wednesday for its regularly scheduled meeting.  The Board is chaired by Kenneth Christian, M.D. of Holden.  Highlights of the meeting included the following actions:

  • Deferred a request that the Board endorse the Maine Quality Forum Patient Experience Survey  in order to review the questions and deliberate further on the matter.
  • Supported a recommendation of the Annual Session Committee to hold the 2013 meeting in Portland in conjunction with a celebration of the Association's 160th anniversary.
  • Asked that the Board of Trustees of the Maine Medical Education Trust at its meeting on December 13th approve appropriate transfer of funds from the Trust to MMA pursuant to the MeHAF advocacy grant, as the various tasks are accomplished.
  • Approved a re-organization of the MMA staff as described by Chief Operating Officer Andrew MacLean, Esq.
  • Authorized a year-end appeal to MMA members to contribute to the MMET, MMEF, Stred Fund or COMFORT Fund.

The Board will meet next on January 20, 2012 at Sunday River Resort in connection with the annual President's Retreat. [return to top]

Bureau of Insurance Releases Draft Rule Eliminating Geographic Access Requirements

Maine's Bureau of Insurance has proposed completely eliminating Maine's geographic accessibility rule, found in what is known as Chapter 850, that has required managed care plan carriers to provide access to primary care services within 30 minutes travel time from an enrollee's residence and specialty care and hospital services within 60 minutes travel time.  The change comes in a draft rule released November 21st interpreting Public Law Chapter 90, the health insurance reform law that passed last session.  Under the proposal, managed care plan carriers would have no geographic network requirements.  Other changes to Chapter 850 found in the proposed rule include:

  • Eliminating standards for the incentives that carriers can have in place to encourage patients to use “designated providers.”  Some of the current standards include only allowing additional benefits to see a designated provider rather than reducing benefits for not using designated providers, using peer reviewed literature as a basis for determining high quality provider standards, and using data that is reliable and consistent to compare providers.
  • Requiring carriers to report on the time it takes to receive services, but eliminating the requirements for access to medically necessary primary care services within 7 days, preventive primary care within 90 days, urgent care specialty services within 24 hours and routine specialty care within 30 days.
  • Eliminating the requirement that emergency services be provided at the nearest participating facility unless the condition requires being transported.
  • Eliminating the requirement that primary care, and to the extent possible, specialty care services be available 24 hours a day, 7 days a week within the plan's service area.
  • Eliminating the requirement that adequate numbers of primary and specialty care physicians have admitting privileges at general hospitals within the managed care plan's service area.   And,
  • Eliminating the requirement that carriers submit to the Bureau of Insurance:
    • the percentage of physicians in network with open practices; 
    • a physician and health professional recruitment plan;
    • a plan for providing services for rural and underserved populations and developing relationships with essential community providers;
    • how the carrier will identify and address language and literacy barriers to needed services. 

The Bureau is holding a public hearing on the proposed rule changes on December 20th.  Comments are due by January 6th.  The notice of rulemaking can be found here and the full rule can be found here.  Any practice concerned about the impact of these rule changes and wanting to testify or submit comments is encouraged to contact the MMA:  Andrew MacLean (622-3374 x214, or Jessa Barnard (622-3374 x211, 

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CMS Responds to Questions on Billing by Nonenrolled Physicians

Recently, the AMA provided updated information on Medicare participation options for physicians. The AMA Medicare participation kit describes three ways of relating to the Medicare program: participation, nonparticipation and opting out/private contracting.

The AMA asked the Centers for Medicare & Medicaid Services (CMS) whether there is a fourth option: to not enroll as a Medicare provider and have patients submit claims on their own using form CMS 1490s.  If legal, this option would have allowed a physician to be free from the Medicare limiting charges and other payment policies and rules just as a physician who has opted out and privately contracted with their patients would be, but, in addition, their patients could still be reimbursed by Medicare for services they receive from the nonenrolled physician.  CMS indicated, however, that the option of having physicians not enroll in Medicare and have beneficiaries submit claims on their own using the form CMS 1490s is not consistent with Medicare law and unenrolled physicians who engage in this type of practice are subject to penalties.  [return to top]

Free Medicare Wellness Visit Billing & Coding Webinar, Dec. 16

The Medicare Wellness Visit

What practices need to know about billing and coding for the new Medicare Wellness visit and preventive services.  Make sure your office is taking advantage of the opportunity to bill for these new services. 

December 16th, 12-1 pm 

No cost to participate

Speaker: Laurie A. Desjardins, CPC, PCS

Laurie joined Baker Newman Noyes in 2006. She is a Senior Manager in the Healthcare Management Consulting Division specializing in revenue management including physician coding, provider based implementation, chargemaster analysis, fee schedule analysis, chart review, and coding and billing education.

To register: Jessa Barnard, MMA Associate General Counsel, or  207-622-3374 x 211 


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HHS Awards Grants To Portland, Lincoln School-Based Health Centers

On December 8th, the Department of Health and Human Services announced more than $14.5 million in grants to 45 school-based health centers, allowing them to expand services to some 53,000 children in 29 states.

The health centers currently enable about 112,000 children with acute or chronic illnesses to attend school, receive health screening, and participate in health promotion and disease prevention activities, according to HHS. The new grants will allow the centers to expand services and modernize facilities, HHS said.

The City of Portland was awarded $198,629 and Health Access Network in Lincoln was awarded $500,000.  

“These grants will enable school-based health centers to establish new sites or upgrade their current facilities, which will increase their ability to provide preventive and primary health care services, and help children improve their health and remain healthy,” said Mary K. Wakefield, administrator of the Health Resources and Services Administration, which administers the grants.

The Patient Protection and Affordable Care Act provided $200 million in funding from 2010 to 2013 for the School-Based Health Center Capital Program to address significant and pressing capital needs and to improve delivery and support expansion of services at school-based health centers. [return to top]

Change in Timeline For Providers Attesting to Meaningful Use

Providers and hospitals that attest to Stage 1 of the “meaningful use” incentive program in 2011 will not have to meet Stage 2 criteria until 2014, allowing extra time for early adopters of electronic health records (EHRs), Department of Health and Human Services Secretary Kathleen Sebelius announced November 30th.

By allowing more time for early adopters to reach Stage 2 of meaningful use, HHS hopes to make it easier to adopt health IT, and to encourage faster adoption, the agency said in a press release.

Under the current requirements, eligible doctors and hospitals that participate in the Medicare EHR incentive programs in 2011 would have to meet new criteria for the program in 2013. However, if they did not participate in the program until 2012, they could wait to meet these new criteria until 2014 and still be eligible for the same incentive payments.

Additional information on the EHR incentive programs is available here.

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Small Business Health Insurance Finder Launched on Website

Small businesses now can research locally available health insurance plans on the Department of Health and Human Services' website.

More than 530 insurers and more than 2,700 plans in all states and the District of Columbia are on the small business health insurance finder, HHS said in a release. It was launched November 18th on the website created under the Patient Protection and Affordable Care Act.

The small business health insurance finder is designed to help small businesses compare the benefits and costs of health plans so that they can choose plans for 2012, according to the release. “This new information will help business owners navigate what has traditionally been a complicated and confusing decision,” HHS Secretary Kathleen Sebelius said in the release. “Both owners and their employees can feel more confident that the plans offered will be the best to suit everyone's needs.”

The site allows users to search for health insurance plans by zip code, out of pocket limits, average cost per employee and other factors.  It provides a summary of cost and coverage for small group products, including deductibles, copayments, and benefits, as well as benefits that can be purchased at additional cost.

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DHHS Seeks Comments on Value Based Purchasing Strategy

The Maine Department of Health & Human Services recently released a request for comments regarding certain aspects of the Department’s Value Based Purchasing (VBP) Strategy, focusing on:

  1. The planned Accountable Communities Initiative, under which MaineCare will enter into alternative, risk-based contracts with qualified provider organizations that will align financial incentives for those providers to work together with the community to improve value and decrease avoidable costs.

  2. The Department’s plans to take advantage of Section 2703 of the Affordable Care Act, establishing Health Homes to serve MaineCare and Medicare-Medicaid dual enrollees with chronic care needs. 

The RFI and more information on the Department’s Value Based Purchasing Strategy, can be found here:

Any individual or entity may respond to the RFI, including individual health care practices. The deadline for final submission of comments is 5:00 p.m. December 14, 2011.  [return to top]

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