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Health care reform a rough
road for state
Rhoades lecture reveals challenges ahead for Wayne County
By PAUL NATINSKY
Managing Editor
At the Twelfth Annual Francis P. Rhoades, MD, Memorial Lecture
April 2, a sizable audience of physicians, friends and family
was shown with numbers what they already know from experience:
The health care picture in Detroit and Wayne County is dire and
Michigan Medicaid is in deep trouble.
"We have a constellation and a concentration of health care problems in
this part of the state," keynote speaker Janet Olszewski told physicians.
Olszewski, Director of the Michigan Department of Community Health, explained
that 59 percent of Detroit residents live in areas considered short of physicians,
compared with 33 percent statewide. "This sets up tremendous pressure for
the health care system."
While Olszewski applauded past efforts to reform health care in Detroit
and Wayne County, she said something different must now be tried. Olszewski
chaired a workgroup that recommended two major initiatives.
The first is a public health authority that would help coordinate resources
in the area, secure low-interest loans, expand or add to the number of
federally qualified primary care centers, and possibly operate facilities.
The second, and of immediate importance to physicians, is to develop
a benchmark rate that increases Medicaid payments to doctors. The goal
is to coordinate public and private efforts to establish a payment rate
at least on par with Medicare.
Gov. Jennifer Granholm's administration resisted shrinking eligibility
to save Michigan's Medicaid program, which is $200 million short for
this year and projected to be $1.3 billion in the red for 2005. Instead
of limiting the program's eligibility, Michigan made $500 million in
spending cuts elsewhere and adopted an aggressive cigarette tax that
is expected to net another $400 million.
Still, such measures are only a finger in the dike in the long term.
Detroit Medical Center CEO Michael Duggan responded to Olszewski's remarks
and lamented that the Wayne County Commission and Detroit City Council
have dragged their feet and not moved forward on establishing a public
health authority, despite the fact that the authority has been authorized
by the state for four months. He asked physicians to urge commissioners
and council people to move on the issue, pointing out that the stadium
deals for Comerica Park and Ford Field took only 10 days to get through
city and county regulatory bodies. Duggan said the issues holding the
process up are "not material," and include items such as the
number of appointees to the public health authority board and who appoints
them.
Wayne State University Medical School Dean John Crissman, MD, also responded
and vividly detailed the human cost of the crisis to patients and physicians. "There
is essentially no primary care physician base in Detroit to take care
of 500,000 patients," he said. "Primary care has left the city." Dr.
Crissman estimated that the 600-member WSU Physician Group provided $50
million in free care during a recent year; that's $85,000 per member.
Dr. Crissman lauded the governor's efforts, but said he is concerned
about the trend of large, national companies buying local HMOs. He said
those purchases are not made for "altruistic reasons," and
wonders if money targeted to save the Medicaid program will actually
get to physicians.
Phase II Final Stark Regulations are here - are you ready?
By Wachler & Associates, PC
Overview
On March 26, 2004, the Centers for Medicare
and Medicaid Services (CMS) issued the long-awaited
Phase II final Stark regulations. In 1998, CMS
first issued the proposed Stark II regulations. CMS
split the final rule making process in two phases.
Phase I was issued in 2001 leaving Phase II until
now. In Phase II, CMS addresses the comments received
from Phase I, making some revisions as well as
providing final regulations on the provisions of
the Stark II law that had not been addressed.
While Phase II provides greater flexibility, physicians must keep in
mind that they cannot ignore Stark as nearly every financial relationship
between physicians and entities that furnish designated health services
(DHS) implicate Stark. Physicians must be in compliance with the
new regulations by July 26, 2004. In addition to the penalties for violations
of Stark, physicians should also be mindful that Stark violations can
be used in Federal False Claims Act cases. These cases can be initiated
by the government or private individuals under the whistleblower provisions.
What Do the New Regulations Mean for Physicians?
Stark prohibits physicans from referring Medicare/Medicaid
beneficiaries to an entity in which they (or an immediate family
member) have a financial relationship for DHS. DHS include: clinical
lab; physical therapy; occupational therapy; radiology, including
MRI, CAT scans, and ultrasound; radiation therapy and supplies;
DME and supplies; parenteral and enteral nutrients, equipment
and supplies; prosthetics, orthotics, and prosthetic devices
and supplies; home health services; outpatient prescription drugs;
and inpatient and outpatient hospitalization services.
Financial relationships that can trigger Stark include, but are not limited
to physician relationships with:
-Hospitals (e.g., lease, personal services, employment, medical director
and recruitment agreements)
-Managed Care Entities (e.g., risk sharing arrangements)
-Other DHS Providers (e.g., physician groups, hospitals, HHAs, DME companies)
-Academic Medical Centers
Stark even applies to referrals of DHS within a group. For example, if
a group provides services such as x-rays, labs, ultrasound or physical
therapy within the practice, Stark will be implicated. Once the prohibition
is triggered, the physician's relationship must fit within a Stark exception.
Of particular importance to physicians is that Phase II clarified and
made changes in a number of areas, including without limitation:
-Physician Compensation: Phase II provides clarification as to how physicians
can be compensated under the various exceptions including:
-A percentage of revenues/collections for personally performed services
-Productivity bonuses for personally performed services
-Risk-sharing payments made pursuant to participation in a physician
incentive plan
The In-Office Ancillary Exception
This exception has arguably been one of the most important.
CMS made important changes to the same-building test by creating
three new, more flexible alternative tests.
The Group Practice Definition
This definition has significant meaning for
groups trying to meet the in-office ancillary exception.
Phase II clarified certain aspects and created
new aspects including grace periods for non-compliance,
deletion of utilization review requirements, and
allowance for bonuses or profit distributions based
directly on "incident to services."
Given the fast-approaching compliance date, physicians are well advised
to make sure that their relationships are properly structured.
The authors are experts in
all aspects of health care law, including Stark regularions.
They can be reached at (248) 544-0888 or www.wachler.com
President’s Report
From Washington to You
By EDWARD JANKOWSKI, MD
WCMS President
The cherry blossoms are in full bloom as Washington
prepares for another election year. Our Executive Director
Adam Jablonowski, President-Elect Dr. Richard Smith
and yours truly attended the AMA's annual President's
Forum and subsequent National Advocacy Conference in
late March. It is a time for peer-to-peer networking
with an open exchange of ideas and redefining of the
issues of medicine that affect all physicians and our
patients.
Keynote speaker Ron Faucheux , PhD, JD, a national policy analyst and
author, noted that although not much meaningful legislation will occur
this year, being persistent with a consistent, clear message and viewpoint
is very effective in influencing Congress.
A session on national liability reform brought forth two notable speakers.
Dr. Barry Manuel, chairman of a liability insurance company; and Philip
Howard, JD, founder of Common Good. Both expressed their concern and
disgust with our broken system of justice. Dr. Manuel advocates medical
injury insurance similar to the Vaccine Injury Act of 1986. Patients
would receive direct compensation for injuries as determined by a panel
of health care professionals and representatives of the public. Mr. Howard
proposes a Health Court with reliable standards using expert judges who
make rulings on standard of care as a matter of law. Expert witnesses
hired by the court as well as scheduled limits on non-economic damages
set by an independent body are additional features. Predictability of
consequences, not open-ended, inconsistent verdicts, would be the norm.
Political sparring regarding health care was engaged in between former
Democratic Gov. Jeanne Shaheen, who is the chair of Sen. John Kerry's
presidential campaign, and Republican Congressman Tom Davis, immediate
past-chair of the National Republican Congressional Committee. Both were
well received, though the governor received a few curt comments from
the audience regarding tort reform. Further viewpoints by Republican
Sen. Bill Frist, MD, and Democratic Congressman Steny Hoyer were both
eloquent and impressive. We also heard from the new CMS Director, Dr.
Mark McClellan, who promised his agency will be more physician-friendly.
Another session was a stunning presentation from a small group of military
physicians who served on the front lines of the Iraq war. We were enlightened
by the incredible coordination and speed that evolved from the MASH unit
on the field to the hospitals in Germany and even the United States.
All the injured were cared for, military and civilian, American and Iraqi.
We were all very proud of our colleagues. They received a standing ovation.
Mr. Kevin Kelly of MSMS once again coordinated our congressional visits.
We were joined by WCMS members Dr. Michael Sandler and Dr. Hassan Amirikia
as well as other outstate colleagues. We met with Congressmen Fred Upton,
Dave Camp, Mike Rogers, John Dingell, John Conyers and the staff people
for Vern Ehlers and Candice Miller. We also visited Sen. Debbie Stabenow.
I was glad to see all of these officials were up to speed on many of
the health care issues affecting Michigan and the rest of the country.
They all expressed appreciation for our time and efforts.
We, as physicians in organized medicine, must persist with persistent,
clear messages to our elected officials as well as our patients. I have
instructed that the Detroit Medical News print position papers on the
top six health issues as identified by the AMA. The March 29 issue of
the DMN dealt with antitrust relief needed for physicians and the Medicare
payments update crisis. The current issue of DMN discusses improving
patient safety and student loan debt relief (please see pages 6 and 7).
The next issue will explore expanding health insurance coverage and America's
medical liability crisis. Please read these carefully. As always, we
appreciate your input. Have a blessed holiday.
Editorial: Inquiry And Authority
By JOSEPH WEISS, MD
Editor
The Detroit Wayne County Health Authority continues to require
our scrutiny and support. First we should give it our scrutiny.
We need a close reading of its purpose, programs and proposed
mode of operation so we can speak with conviction in our advocacy.
The purpose of the Authority is to manage and improve the delivery of
health care to unemployed individuals, the working poor or those who
lack medical insurance sufficient for their needs. The programs designed
by the Authority will permit the development of a health care system
that contains facilities ranging from neighborhood clinics to intensive
care units. The Authority will have the ability to bring the resources
of the county's four hospital systems - DMC, Ford, St. John, and Oakwood
- to bear on this care in a coordinated way. The Authority will also
take on the task of putting clinics and hospitals together in a manner
designed to garner the maximum federal health care funds available. The
charter of the Authority also includes the creation of Advisory Committees
to assist in identifying the care the community feels it needs, and doctors
the voice they must have in carrying out the day-to-day activities of
health care.
The text that includes the details of these topics is available from
the Wayne County Medical Society.
After scrutiny comes action. We need to step forward to urge adoption
of this charter. To exist, the Authority needs approval by the Detroit
City Council and The Wayne County Board of Commissioners. These legislative
bodies should hear from us. We must be prepared to use every encounter
with any state, county, or city legislator as an opportunity to forward
the cause of the Authority. State and even federal legislators should
hear that common message: support the Authority. In any meeting with
businessmen, the press, the mayors and councilman of the municipalities
of Southeastern Michigan, we should bring up the Authority and recount
its purpose and potential.
Our words are not wind, but are the many small sparks that come together
to light a great flame.
AMA Position Paper
IMPROVING PATIENT SAFETY
American Medical Association February 2004
THE PROBLEM:
-The systemic problems that are associated with health care errors persist
mainly because of the misguided belief that blame and punishment
are the primary and most effective means to achieve improvement in
patient safety.
-The culture of blame and punishment in today's health care system is
a major stumbling block to improvement because it does not encourage
identification of potential problems and provides disincentives for reporting
errors and adverse events.
-The common reaction when an error occurs is to blame someone, even though
single adverse events or errors are most often due to the convergence
of multiple contributing factors or system failure.
THE SOLUTION:
-The AMA has been a pioneer in the effort to reduce health care errors,
establishing the National Patient Safety Foundation - a group of
health care professionals, consumer advocates, and others dedicated
to improving the quality of health care.
-In its 1999 report, To Err is Human: Building a Safer Health System,
the IOM recognized that patient safety reporting systems will not achieve
their full potential to foster learning about errors and their prevention
without "a more conducive legal environment" in which health
care professionals can report errors without increasing the threat of
litigation.
-"Congress should pass legislation to extend peer review protections
to data related to patient safety and quality improvement that are collected
and analyzed by health care organizations for internal use or shared
with others solely for purposes of improving safety and quality" (IOM
report, p. 96).
-The AMA strongly supports H.R. 663 and S. 720. The US House of Representatives
passed H.R. 663 in March 2003 by a vote of 418 to 6. The Senate Health,
Education, Labor and Pensions Committee unanimously passed S. 720 in
July 2003. We urge the full Senate to pass S. 720 so it can be reconciled
in conference with H.R. 663 and sent to the president for his signature.
Among other things, these bills would:
-Establish a confidential, voluntary reporting system in which physicians
and other providers could report information on errors to organizations
known as Patient Safety Organizations (PSOs) without the fear of lawsuits
or punishment.
-Allow voluntary collection and analysis of error reports and feedback
to providers on patient safety improvement strategies.
-Not preempt state or federal laws that require reporting of adverse
or sentinel health care events that result in serious harm or death.
-Not limit or affect the availability of any information or evidence
that is currently available from sources other than the PSO and information
that can be collected under other laws (e.g., medical records, state
reporting requirements, etc.).
-Allow a database or a network of databases to provide interactive evidence-based
management for providers, PSOs and others.
-Strike the proper balance between improving patient safety and ensuring
accountability. Such a balance was envisioned in the IOM report and has
been corroborated by numerous patient safety experts, the Department
of Veterans Affairs, the Agency for Healthcare Research and Quality and
a broad base of medical and health care organizations, including the
AMA.
AMA Position Paper
STUDENT LOAN DEBT RELIEF
American Medical Association March 2004
THE PROBLEM: Medical students
incur huge debt to finance their education. Student loan debt
continues to be a tremendous hardship, especially during the
years a physician is undergoing his or her residency program.
-In 2003, the typical medical
student graduated from medical school with an average of $109,500
in student loan debt. This is a 5.4 percent increase from 2002.
-However, during their residency training, physicians often work at low-paying
jobs and still face enormous debt.
-The cost of education affects graduates' career choices. With such high
loan debt, careers serving the public are often put aside so borrowers
are able to pay off their loans. Those who may be considering practicing
medicine in an "underserved" area, entering public health service,
starting a career in medical education or research, or practicing primary
care medicine, are often deterred from such fields.
THE SOLUTION: Support legislative
proposals to reduce the burden of high loan debt incurred by
medical students and resident physicians.
-Student debt relief is a high
priority for the AMA and its student, resident physician and
young physician members.
-Currently, Congress is considering several issues to be incorporated
into the upcoming reauthorization of the Higher Education Act (HEA).
The AMA is pleased that members in both the House and Senate are considering
loan debt relief for all students, and we urge Congress to include -
in either the reauthorization of the HEA or in stand-alone legislation
- debt relief proposals to:
-Repeal the "Single-Holder" rule. This would allow loan consolidation
with any lender on the market, not just the borrower's current lender.
Such action would broaden consumer choice and improve market competition,
while aiding in the affordability of the overall cost of higher education.
The AMA supports H.R. 942/S. 835, the "Consolidation Student Loans
Flexibility Act of 2003," that would eliminate the "Single-Holder" rule
in the federal loan consolidation program.
-Allow refinancing of consolidated loans at lower interest rates. Currently,
once student loans are consolidated, the borrower is not allowed to refinance
- even if student loan rates drop.
-Permit fixed rates for consolidated loans. This would allow borrowers
to avoid escalating interest rates and uncertainty in payments.
-Preserve the loan consolidation system. The loan consolidation program
is good public policy and should otherwise remain as part of the Higher
Education Act.
-Expand the loan deferment period. Currently, loan deferment can be granted
for up to three years during the residency training period. The deferment
period should be extended throughout the entire residency and fellowship
period.
-Expand the tax deduction for student loan interest. The tax deductibility
of student loan interest should be expanded to reflect increases in educational
costs. Therefore, income thresholds should be increased so borrowers,
especially those with high debt, would be able to qualify for this benefit.
The AMA supports tax relief provisions in H.R. 3412, the "Higher
Education Affordability and Equity Act of 2003," that would expand
the student loan interest deduction, increase the income eligibility
threshold for the interest deduction, and exclude scholarship, fellowship
and grant amounts from taxable income in certain circumstances.
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