A weekly newsletter for members
of the California Medical Association
August 3, 2006 No. 2059
To download a printer-friendly PDF
version of this newsletter, click here.
Governor’s ‘Balance Billing’ Limit Misses the Real Problem
Gov. Arnold Schwarzenegger
last week issued an executive order directing the Department of Managed Heath
Care (DMHC) to limit so-called "balance billing" for emergency care. While the
order does not tell the department how to accomplish this, CMA is angered and
astonished that the order attacks the future viability of physician practices,
while doing nothing to solve the real underlying issue of for-profit HMOs refusing
to pay fairly for emergency care provided to their enrollees.
FULL STORY
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save $50 on CMA’s national provider identifier toolkit. CLICK HERE
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1. Governor’s ‘Balance Billing’ Limit Misses the Real Problem
Gov. Arnold Schwarzenegger last week issued an executive
order directing the Department of Managed Heath Care (DMHC) to limit so-called "balance
billing" for emergency care. While the order does not tell the department
how to accomplish this, CMA is angered and astonished that the order attacks
the future viability of physician practices, while doing nothing to solve
the real underlying issue of for-profit HMOs refusing to pay fairly for
emergency care provided to their enrollees.
"This executive order deals with a symptom and not the
true problem," says CMA President Michael Sexton, M.D. "The problem
is that for-profit HMOs have not provided a sufficient portion of premiums
to fairly fund emergency care and support the physicians and surgeons
who save our lives in a crisis."
CMA understands that
patients do not want or expect to be billed because their insurance
companies don't pay reasonable charges for covered services. However,
limiting balance billing without also addressing the underlying issues
would reward for-profit HMOs for refusing to pay for their insureds'
emergency health care, giving them a free hand to pay noncontracted
physicians as little as possible and eliminating any incentive for
the plans to contract with physicians and capitated medical groups
at fair rates. The result will be the collapse of the emergency room
system.
"While the governor's order leaves it up to DMHC to develop
regulations, CMA warns against adopting a solution that puts the burden
disproportionately on physicians and hospitals who provide more than
$1 billion in free care for uninsured patients in California annually," says
CMA CEO Jack Lewin, M.D.
For more than 12
months, CMA has been working in good faith with the Schwarzenegger
administration to create a fair payment dispute process for emergency
care. CMA hopes the governor's abrupt and ill-conceived order does
not derail the significant progress that has been made.It is also critical that DMHC enforce current regulations
that require health plans to contract with enough physicians to provide
care for all of their enrollees. If the plans were held to task for
their inadequate provider networks, they would be forced to offer fairer
contracts to both individual physicians and delegated medical groups.
CMA has developed
a legislative package that would help stabilize California's emergency
care system by ensuring that HMOs contract with sufficient numbers
of physicians to provide care for all their insured, and requiring
that they spend at least 85 cents of every premium dollar on health
care. Currently, several major for-profit HMOs spend less than
79 percent of premiums on patient care, with the rest going to administrative
and marketing costs and profit.
The issue of balance
billing inevitably stirs up strong emotions, and there is no doubt
that CMA has members on all sides of this issue. CMA's policy on this
issue is to oppose any proposed ban on balance billing, while advocating
for insurance reforms to protect fair funding for emergency care,
including the possible necessity of setting limits on the tax deductibility
of the soaring profits of health insurers. CMA policy is set by its
members and is carefully developed through a democratic process designed
to air all perspectives and find solutions that best protect the interests
of physicians and their patients. (For
more information on getting involved in this process, see
the article below.)
2. Deadline to Submit Resolutions to CMA’s 2006 House of Delegates Is Aug. 29 The most effective way an individual member can influence CMA’s policies and activities is to submit resolutions to the House of Delegates, the association’s legislative body. The delegates meet annually to debate and act on resolutions and reports dealing with myriad medical practice, public health, and CMA governance issues.
The deadline to submit resolutions to this year’s House of Delegates is August 29. Any CMA member may author a resolution, but a delegate, alternate delegate, component medical society, or specialty delegation must submit the resolution. Before authoring a resolution, physicians are strongly encouraged to review CMA’s policy compendium to make sure that the association is not already addressing the issue.
For more information on submitting a resolution, contact your county medical society. Detailed instructions (including required format, allowed subject matter, and submission rules) are available at CMA’s
members-only website.
3. Tell Your Member of Congress to Stop the Payment Cut and
Give Physicians a 2.8% Increase: Fix the Medicare SGR and GeographicPayment Formulas Now! Physicians, CMA needs you to turn up the heat on your members of Congress and motivate them to fix the Medicare payment problems before Congress adjourns in September. As you know, CMA has for years been fighting for long-term fixes to Medicare’s flawed sustainable growth rate (SGR) formula and the inequitable geographic payment locality groupings (GPCI).
If Congress fails to act before the end of the year, physician rates will be cut 4.6 percent on January 1 of next year, and rates will be cut by a total of 35 percent during the next six years. The cuts are an unintended consequence of a formula, established under laws passed in 1989 and 1997, that was supposed to establish a “sustainable growth rate” for spending on doctors’ services. The formula allows Medicare spending on physician services to grow at the rate of the gross domestic product (GDP), but it actually penalizes physicians because the cost of physician services rises more rapidly than the GDP.
Reimbursement for all other Medicare providers is calculated using the Medicare Economic Index (MEI), which is a market index of actual medical practice costs. Health plans, hospitals, and nursing homes are all seeing payment increases, while physician payments are being slashed.
The inequities are glaring:
2007 Medicare Provider Payment Updates
Health Plans:
+
7 percent
Hospitals:
+
3.6 percent
Nursing Homes:
+
3.5 percent
Physicians:
–
4.6 percent
Congressional leaders have hinted that they may only be able to freeze payments at 2005 levels. With practice costs increasing at a rate of 4 to 6 percent a year, a payment freeze would essentially be a pay cut.
Tell your members of Congress that a payment freeze is not acceptable and urge them to dump the flawed SGR physician payment formula and replace it with a new formula based on the MEI, which would increase physician payments by 2.8 percent in 2007.
Although fixing the SGR is CMA’s top Medicare priority, the association continues to urge Congress to fix the outdated geographic payment localities. The Medicare geographic payment formula includes a geographic adjustment factor (GAF) that adjusts the payment rate for local geographic market conditions. The goal is to base physician reimbursement on what it costs to provide care in a particular geographic region. The formula calculates a geographic adjustment factor for each county and assigns each county to a Medicare payment locality.
Unfortunately, the payment locality assignments have not been updated in 10 years, and the last update was made using 1966 demographic data. Practice costs in many recently urbanized counties have increased dramatically, yet the counties remain inappropriately grouped into payment localities with lower-cost counties. The result is that physicians in 174 counties in 32 states are paid up to 14 percent less than they should be according to their GAF. The ten most underpaid counties in California are Santa Cruz (-10.2 percent), Sonoma (-8.2 percent); Monterey (-6.7 percent), Marin (-6 percent), San Diego (-5.5 percent), Sacramento (-4.6 percent), Santa Barbara (-3.5 percent), El Dorado (-3.3 percent), Placer (-2 percent), and San Luis Obispo (-1.2 percent).
Physicians in Santa Cruz, for example, are paid 25 percent less than their neighbors in Santa Clara. The low payment rates in Santa Cruz have forced ALL local physicians to stop accepting new Medicare patients, requiring many Santa Cruz seniors to travel more than 25 miles to find a physician.
Current federal law requires changes in the Medicare program to be budget neutral. If the Centers for Medicare & Medicaid Services (CMS) were to simply reassign these underpaid counties to more appropriate payment localities, the budget neutrality requirement would result in a 4 to 6 percent cut for counties remaining in those localities.
CMA is therefore proposing a new money solution that would allow any county whose county GAF exceeds its locality GAF by 5 percent to move to its own locality and be reimbursed at the geographically appropriate rate. CMA’s proposal would also protect the physicians in counties remaining in the original payment locality by establishing a geographic payment floor at current levels.
Physicians are urged to meet with their members of Congress while the members are in their home districts during the August recess. Tell them that failure to reform the Medicare payment formulas will make it more difficult for seniors to find a physician and further jeopardize access to care for seniors. If you don’t have time for a face-to-face meeting, please call your representative’s office to register your position. Please also urge your representative to show the House leadership that he or she supports Medicare payment reform by cosigning both the SGR and geographic payment “Dear colleague” letters that are circulating in Congress. (Copies of these letters are available online.)
Click here for more information, including talking points and sample letters.
4. Aetna Agrees to Pay for EKGs Billed with E&M Codes Without Modifier 25
Aetna has agreed effective August 12 to begin to pay claims for electrocardiograms (CPT code 93010) when billed with evaluation and management (E&M) services (CPT codes 99281-99285), even when billed without a modifier 25.
Physicians will also be able to resubmit previously denied claims for the prior six months (February 10 to August 11, 2006). Physicians have until November 10 to resubmit these claims. Instructions for resubmitting previously denied claims will soon be posted at Aetna’s provider website, http://www.aetna.com/provider.
This victory for physicians nationwide stemmed from a RICO settlement compliance dispute filed by an emergency physicians’ group in North Carolina. CMA commends Aetna for resolving this compliance dispute and going beyond the letter of the settlement agreement to comply with the spirit of the agreement, which is to provide transparency and fairness in its payment practices and other business dealings with physicians.
CMA encourages California physicians to help ensure that Aetna and the other settling health plans keep their promises. If you believe that a health plan is not living up to the terms of its settlement, please contact CMA’s legal department at 415/882-5144 or legalinfo@cmanet.org. The compliance dispute process is simple. CMA, an official signatory medical society on the RICO lawsuits, can assist CMA members and file compliance disputes on their behalf.
Click here for more information on the RICO lawsuits, settlement agreements, and compliance dispute resolution.
5. CMA Publishes PacifiCare/United Healthcare Survival Kit
CMA has received a number of calls from physicians concerned with what they describe as heavy-handed contract negotiation tactics by PacifiCare/United Healthcare. Not only do the new PacifiCare contracts include troublesome contract terms and offer reimbursement well below that of other commercial payers, but many physicians have also reported to CMA that PacifiCare has resorted to threats and intimidation in an effort to get physicians to sign the new contracts.
To help physicians respond to these threats and to increase physicians’ awareness of their rights, CMA has posted on its website answers to common PacifiCare contracting questions.
CMA has also published a contracting toolkit, “Taking Charge: Steps to Evaluating Relationships and Preparing for Negotiations—A Focus on Payor Contracting.” The toolkit, designed to help physicians negotiate and manage complex third-party payor agreements, is available free to members at the members-only website. Nonmembers can purchase the toolkit for $100 in the CMA bookstore.
7. Register by Aug. 9 for CMA’s Pain Conference and Save $40 California law (AB 487) requires physicians to complete 12 hours of continuing medical education (CME) in pain management and the care of terminally ill and dying patients. Physicians have until December 31 to satisfy this requirement.
One way to fulfill the requirement is by attending CMA’s pain management conference, “Pain, Palliation, & Politics: Pain Management and End-of-Life Care in California’s Regulatory Environment.” This practical two-day CME program will be offered September 8-9 at the San Francisco Marriott Hotel and again December 1-2 at the Disneyland Hotel in Anaheim. CMA tailored this program to meet the needs of physicians who do not specialize in pain medicine. Offering 14 hours of Category I CME, this program completely fulfills California’s AB 487 mandate.
The early-bird deadline for the September program in San Francisco is August 9. Members who register by the early-bird deadline pay just $295 (nonmembers $560). After August 9 members pay $335 (nonmembers $600).
8. CMA Member Benefit of the Week: For 1 Month Only,
Save $50 on CMA’s National Provider Identifier Toolkit Next year, physicians will no longer have to keep track of and use multiple identification numbers assigned to them by health plans. Effective May 23, 2007, physicians will instead use a single “national provider identifier” (NPI).
NPIs will, however, pose a unique challenge to your software systems, including billing and electronic health records. Will your software systems be current with the new number when it is required? Physicians are advised to start an inventory as soon as it is practical.
CMA’s HIPAA partner, PrivaPlan Associates Inc., has developed an inexpensive CD-ROM toolkit to help physicians navigate the NPI process. For one month only, CMA members pay only $79 (in September, the price goes back to $99). Nonmembers pay $129. Order the toolkit by calling 877/218-7707.
9. 150th Anniversary Trivia: Did You Know?
Did you know that on Dec. 16, 1871, California Secretary of State Henry Nichols, M.D., a CMA member, was given the honor of placing and illuminating the ball on top of the dome of the newly constructed state Capitol building? The Capitol dome, at the time considered to be quite an architectural marvel, was illuminated by a gas light activated by an electric ignition system.
CMA is celebrating its 150th birthday! Visit http://www.cmanet.org/150 for other interesting information about CMA history.
No. 2059 
