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Lawsuit, legislation put
Blues on notice about timely payment
By PAUL NATINSKY
Managing Editor
An attentive audience April 21 heard explanations of a lawsuit
against Blue Cross and Blue Shield of Michigan and descriptions
of legislation intended to improve the health care corporation's
payment policies.
WCMS President Edward Jankowski, MD, hosted the briefing, at which plaintiffs'
attorney William Horton, from Cox Hodgman, detailed the case filed July
31, 2003 by a group of OB/GYNs practicing in Oakland County. Horton was
introduced by MSMS legal counsel Dan Schulte, from the firm Kerr, Russell
and Weber. The OB/GYNgroup sued the Blues in federal court for violating
a number of laws including the antiracketeering statutes. In their case,
the Oakland County OB/GYNs allege that they submitted claims to the Blues
under new codes issued by BCBSM. The claims were repeatedly filed and
rejected without explanation for a period of six to eight months. The
practice began to feel the financial pinch of the unpaid claims and appealed
to the state insurance commissioner. Finding no relief there, the doctors
filed the lawsuit.
The Blues subsequently paid the claims 14 months later, explained that
the company's computer system had not been programmed to accept the codes
and "apologized for any inconvenience" the matter may have
caused.
The case was filed in federal court because "state remedies are
lousy," amounting to a chastising and interest on the money owed,
said Horton. Federal remedies allow recovery of triple damages.
But recovering money is not the sole impetus for the court action. Horton
said physicians want to punish the Blues and make them feel it with the
hope of instigating behavioral change at the health care corporation.
The lawsuit ran into some unexpected hurdles when a federal judge raised
a surprise question at a March hearing. "It was the lawyer's worst
nightmare," said Horton. "The judge threw a monkey wrench in
what we were prepared to present." That monkey wrench was questioning
whether the case belonged in federal court. The plaintiffs are hoping
the case stays in federal court. Both sides have submitted briefs and
expect a decision from the judge sometime in May.
BCBSM's widely reported recent financial turnaround renewed the company's
profitability while physicians struggled to get claims paid.
MSMS and WCMS Board Chairman Michael Sandler, MD, who has a full head
of gray hair, said he has been hearing about the Blues computer problems "since
my hair was all brown." Dr. Sandler said an MSMS "town hall
meeting" resulted in the introduction of several bills penalizing
all insurers for not paying clean claims. He also mentioned another possible
bill that would require insurers to provide a name and phone number indicating
who at the insurance company rejected a claim. Dr. Sandler urged all
present to support MDPAC to help move legislation forward.
State Rep. David Robertson, who introduced the Blues bills, said he will
do whatever it takes to get the bills passed and would introduce them
again next session if he is reelected.
"I feel it is a simple moral principle that once services are rendered payment
should be forthcoming in a timely manner."
Robertson said he supported the Blues successful drive for small-market
insurance reform and expected to use that as leverage to move timely
payment legislation.
News & Notes
Blues Note
MSMS recently was alerted to a problem with double payments
by BCBSM. I have attached the notification and the response from
Pam Yanis at BCBSM. We will get back to you when we have more
information or a resolution.
Thanks to Katie Greenfelder from Mid Michigan Dermatology for notifying
me of this problem.
From Pam Yanis at BCBSM:
Hello all,
It was just brought to our attention that Providers are receiving a check
and voucher for the same claim on voucher dates 3/31 and 4/7. Our
systems area is currently researching the problem. I will definitely
keep you in the loop on the situation.
If you have any questions, please let me know.
Local ties lure Nobel laureate
When Iranian lawyer and human-rights activist Shirin Ebadi,
winner of the 2003 Nobel Peace Prize, speaks May 6 at a Detroit
Economic Club dinner in the Detroit Marriott Renaissance Center,
family pride has something to do with it.
Seems her nephew is Ali Moiin, a Troy dermatologist who includes among
his patients Detroit lawyer Alan E. Schwartz.
"Dr. Moiin told me with pride and excitement that his aunt had been designated
as a Nobel Peace Prize winner," Schwartz said, and that he was going to
Oslo for the Dec. 10, 2003, ceremony.
At age 28, Ebadi was one of the first female judges in Iran, and president
of the city court of Tehran. Forced to resign after the 1979 revolution,
she now teaches at the University of Tehran and works as a lawyer on
refugee rights and those of women and children. She is the founder of
the Association for Support of Children's Rights in Iran and has written
many articles and books on human rights.
"It occurred to me that it would be a great opportunity to hear from her
on her work and accomplishments, and that a good forum would be the Economic
Club," Schwartz said, "So I put Dr. Moiin in touch with Beth Chappell," the
Economic Club president.
Moiin told Chappell his aunt had received almost 7,000 invitations to
speak.
"So we really got lucky that her favorite nephew and only close relative
in the United States is in Detroit and a friend of Alan Schwartz," Chappell
said.
Reservations for the 5:30 p.m. reception, 7 p.m. dinner and 8 p.m. program
can be made by calling (313) 963-8547 or online at www. econclub.org.
Tickets are $60 for members and spouses, $75 for guests of members and
$100 for nonguests.
Editorial: Appropriate Care
By RICHARD HENDERSON
WCMS
The cost of health care seems to just keep going up. No
one likes it, no one wants to pay for it; but everyone wants
to get their fair share.
A recent editorial in the JAMA, entitled “The Complex World of Prescribing
Behavior,” begins by stating “better decision making by physicians could
materially improve the balance of benefits and harms in health care while
saving billions of dollars.” The editorial goes on to state that for
many years, the challenge has been modifying physician behavior.
For example, I have been on the Drug Utilization Review Committee for
Michigan Medicaid for the past 15 years. At this time, the quarterly
Medicaid costs for drugs is in the neighborhood of $200 million and rising!
The top five second generation antipsychotic drugs account for $40 million.
Clozopine is the most effective. It is also the most toxic and the most
cost effective at $83 per month. It is prescribed 16 percent of the time.
Olanzapine at $326 per month, risperidone at $190 per month and quetiapine
at $195 per month are almost as effective as clozopine and are less toxic.
They are prescribed 80 percent of the time with risperidone No.1 in popularity,
olanzapine No. 2 and quetiapine No. 3. If olanzapine was in the cost
range of risperidone and quetiapine or was prescribed only if it was
approved as medically necessary, Medicaid would save close to $24 million
per year.
That is a lot, but there is more. A recent contribution in the JAMA demonstrated
no advantages of olanzapine over haloperidol, a first-generation antipsychotic
drug ($42 per month). If this is true, why not consider starting with
a first-generation drug and save even more money?
Reviewing the top four selective serotonin reuptake inhibitor drugs results
in similar cost saving possibilities. These four SSRI drugs for depression
account for $9.13 million per quarter and are equally efficacious. By
using the generic drug Prozac at $17 per month, as a first choice, rather
than Paxil at $72 per month, Zoloft at $74 per month or Citalpram at
$65 per month, another $6 million per quarter could be saved. Generic
Paxil would also be a good first choice and recently has been added to
the Medicaid Preferred Drug List.
So, here we have the opportunity to save almost $50 million by better
decision making. By being reasonable and deciding what is not only efficacious,
but what is also cost effective. The last I heard, $50 million was enough
to bail out the DMC for one year.
Going from the general to the specific, I was recently asked to take
a drug for one week. Its purpose was prophylactic and was recommended
even though guidelines suggested it wasn’t necessary. The resident physician
prescribed a once-a-day quinolone for $196. He could have prescribed
a twice-a-day quinolone at $126. He also had a third choice, which wasn’t
considered. That choice was an old favorite, Septra single-strength at
$12. How is this resident learning to behave? His signature could have
cost me or my insurance company $196 rather the $12 option that I eventually
received.
Unfortunately, this kind of decision making behavior occurs on a regular
basis, and not only with drugs. If, as physicians, we request more from
Medicaid, Medicare and other insurance programs, shouldn’t we make a
better effort to spend their money wisely?
As the JAMA editorial stated, the challenge remains. And that is how
to modify physicians’ behavior so that we provide more cost-effective
appropriate care. It would be good for our health and it would be good
for the country.
OBITUARY
Stanley Wicha, MD
Dr. Stanley Wicha, who had been in good health and enjoying
life until the very end, had a pleasant Sunday morning breakfast
with his lovely wife Bernadine in their Bloomfield Hills home
on March 21, 2004. He then went to his computer room. Bernadine
heard a noise and found that Stan had collapsed on the floor
and was not conscious. Very prompt EMS efforts on the spot and
a quick trip to the Emergency Department at nearby St. Joseph
Mercy Oakland in Pontiac were to no avail.
Many of Stan's friends and colleagues last saw him only 10 days earlier
at a meeting of the Academy of Surgery of Detroit held at the Detroit
Athletic Club. All present enjoyed a social hour with cocktails and chatter,
an excellent dinner, and then a presentation by heart transplant great,
Dr. Norman Shumway of Stanford University. At age 73, Stan had retired
just a few years before but his commitment to surgery continued.
A graduate of the Medical Academy in Lublin, Poland, Stanley Wicha interned
at Grace Hospital and took a surgical residency at Harper Hospital. He
was a Diplomate of the American Board of Surgery and was Recertified
in October, 1996. Professional society memberships included the Academy
of Surgery of Detroit, the Wayne County Medical Society, the Michigan
State Medical Society, the American Medical Association, the Society
for Surgery of the Alimentary Tract, the Wayne State University Surgical
Alumni Society and he was a Fellow of the American College of Surgeons.
Stan's career was spent mostly in the Detroit Metropolitan area and his
major hospital appointments were all in the city. He was on staff
at the Detroit Medical Center at both hospitals where he trained, and
until its closure, he was Chief of Surgery at Doctors Hospital on Jefferson
Avenue. Stan was a believer in extensive postgraduate education and was
a participant in the renowned and intense postgraduate courses at Harvard
Medical School, Cook County Graduate School of Medicine, the Albert Einstein
School of Medicine, Jackson Memorial Medical Center in Miami, and he
was a 20-year attendee of the University of Minnesota's "Advances
in Surgery" Courses in Minneapolis. Until the end, Stan was a dependable
attendee at Wednesday morning Grand Rounds at Harper (University) Hospital
and was Assistant Clinical Professor of Surgery at the Wayne State University
School of Medicine.
On occasional weekend afternoons in recent summers, my wife Ina and I
were a foursome with Stan and Bernadine, poolside at the Wicha home.
We enjoyed talking, grilling steaks and swimming.
Stan leaves daughter Deanna McEachern; two sons, Ronald Wicks and Dr.
Christopher Wicks, and four grandchildren. I know his "doctor son" Christopher
very well. Chris, a graduate of the Wayne State University School of
Medicine and the anesthesiology program at the University of Wisconsin,
is an anesthesiologist at St. Joseph Mercy Oakland. We occasionally have
a quick cup of coffee during a morning break and Chris sometimes provides
anesthesia for my surgical cases. One thing is certain, Chris is clearly
a chip off the old block and he carries Stan's DNA forward in the medical
profession.
Rest well, Stan, you deserve the peace but we will miss you so much.
-Allen Silbergleit, MD, PhD
AMA Position Paper
AMERICA’S MEDICAL LIABILITY CRISIS
American Medical Association March 2004
THE PROBLEM:
America’s medical liability system is broken. Skyrocketing medical liability
premiums across the nation are seriously threatening patient access to
care.
Identifying the Problem: Jury
Awards
The primary cause of the medical liability crisis is the
unrestrained escalation in jury awards that are part of a legal
system that in many states is simply out of control.
-Between 1994-2001, the average
liability award increased 176 percent (Jury Verdict Research
{JVR}, 2002).
-The average jury award is $3.9 million. Fifty-four percent of all awards
were $1 million or more (JVR, 2002).
-On average, it costs physicians $77,000 to defend themselves in cases
they win (Physicians Insurers Association of America, Claim Trend Analysis,
2002).
-In 2002, medical liability insurers paid more in claims than they received
in premiums. For every $1.65 in claims paid, they received $1 (AM Best
Aggregates and Averages, 2002).
The Patient Crisis
Physicians are forced to limit services, retire early, or
move to other states where liability premiums are stable - all
of which seriously threaten access to quality health care. Emergency
departments are losing staff and scaling back critical services
such as trauma units. Many OB/GYNs and family physicians have
stopped delivering babies, and some high-risk procedures are
being postponed.
-19 Crisis States - Serious patient
access problems have emerged in 19 states, and 25 more are
nearing crisis (AMA, 2003)
-Seventy-six percent of physicians believe that concerns about medical
liability litigation has negatively impacted their ability to provide
quality care (Wirthlin Worldwide, 2002).
-Fifty-six percent of Blue Cross/Blue Shield plans in crisis states report
that physicians are leaving their practice or retiring or no longer performing
some high-risk procedures (Blue Cross/Blue Shield, 2003 report).
-Twenty-six percent of health care institutions have reacted to the liability
crisis by cutting back on services and/or eliminating some patient care
units (AHA TrendWatch, 2002).
-Seventy-eight percent of Americans fear that skyrocketing medical liability
costs could limit their access to care (Wirthlin Worldwide, 2002).
-Forty-eight percent of America’s medical students surveyed said that
the medical liability crisis was a factor in their choice of specialty,
threatening patients’ future access to critical care services. (AMA,
2003).
The Costs of the Liability
Crisis
All patients pay the escalating costs generated by our nation’s
dysfunctional medical liability system. The federal savings incurred
if effective medical liability reform is passed are tremendous:
-If legislation such as HR 5/S
11 is signed into law, the Congressional Budget Office estimates
that the Medicare, Medicaid and Federal Employees Health Benefits
Programs would save $14.9 billion in federal spending over
the next 10 years. State and local governments would also save
about $8.5 billion - state spending for Medicaid alone would
decrease by $2.5 billion over that period.
-Medical liability costs add $60 billion to $108 billion to the costs
of health care each year, diverting scarce health care resources to the
legal system and away from direct patient medical care, research and
quality (US Department of Health and Human Services, July 2002).
-The Joint Economic Committee estimates an additional $16.7 billion will
be saved over 10 years due to reduced defensive medicine (May 2003).
-3.9 million uninsured Americans would be able to receive health insurance
if Congress were to pass common-sense reforms (Joint Economic Committee,
May 2003).
-Injured patients receive less than 50 cents on the dollar of jury awards
due to the broken system (“US Tort Costs,” Tillinghast-Towers Perrin,
December 2003).
THE SOLUTION:
HR 5/S 11, the “HEALTH Act/The Patients First Act” is modeled after California’s
proven liability reform law, known as MICRA. MICRA stabilized California’s
medical liability market for nearly three decades - increasing patient
access to carte and saving more than $1 billion per year in liability
premiums.
Effective reforms based on
MICRA include:
-Unlimited economic damages (e.g., past and future medical expenses,
loss of past and future earnings, cost of domestic services, etc.);
-Reasonable limits on non-economic damages of up to $250,000 (e.g., pain
and suffering, mental anguish, etc.). States would have the flexibility
to establish or maintain their own laws on damage awards, whether higher
or lower;
-Punitive damages, when available, of up to $250,000 or two times economic
damages, whichever is greater;
-A “fair share” rule that allocates damage awards fairly and in proportion
to fault; and
-A sliding-scale for attorney’s contingent fees, thereby maximizing patients’ recovery.
S 2207, the “Pregnancy and
Trauma Care Access Protection Act of 2004”
-S 2207 provides the reforms listed above for physicians
who provide obstetrical and gynecological services related to
childbirth and physicians who provide emergency and trauma care
services.
-S 2207 was expected to come to the Senate floor for a vote the week
of April 4, 2004.
-Urge Senators to vote YES on S 2207 to highlight the continued and urgent
need for medical liability reform.
AMA Position Paper
EXPANDING HEALTH INSURANCE COVERAGE
American Medical Association February 2004
THE PROBLEM:
-A staggering 21 million to 31 million Americans are without health insurance
for at least one year. Most of the uninsured are employed - 78 percent
are full-time workers and 84 percent are in families headed by a
worker.
-Studies demonstrate that individuals who lack health insurance forego
needed medical care and are sicker once they seek care. They visit emergency
rooms and are admitted to hospitals in disproportionate amounts, raising
medical care costs which are passed on to an already overburdened system.
Clearly, it is time to rethink health insurance.
Recent Progress
Members of Congress from both sides of the aisle, as well
as the Bush Administration, began 2004 by expressing the need
to address America’s uninsured.
-In December, Congress enacted the “Medicare Prescription Drug, Improvement,
and Modernization Act of 2003” (MMA). The AMA supported the inclusion
of Health Savings Accounts (HSAs), which allow an individual or family
to purchase a high-deductible health plan, while saving money in an interest-bearing
account which will pay for qualified medical expenditures.
-President Bush has proposed in his FY2005 Budget a refundable, advanceable
tax credit aimed at helping low-income individuals pay the cost of health
insurance. The maximum credit would be $1,000 for individuals and $3,000
for families ($1,000 per adult; $500 per child). The credit would be
available to individuals not covered by employer plans or public programs.
Based on the prior year’s tax return, the tax credit would be phased
out completely at $30,000 in income for individuals and $60,000 for families.
THE SOLUTION:
-Encourage individual ownership and selection of health insurance as
well as expand coverage to low income workers
who currently cannot afford coverage.
-Support reforming the individual health insurance market to create new
opportunities to pool risk, obtain group insurance at lower rates and
choose among a variety of plans.
-Ensure that all children and adults who are currently eligible for Medicaid
and Children’s Health Insurance Program (CHIP) are enrolled in those
programs.
THE AMA PROPOSAL:
The cornerstone of this plan is a system of individual tax credits for
the purchase of health insurance that are refundable and income-related.
The AMA would replace the current tax exclusion for health insurance
with a tax credit for the purchase of health insurance. Specifically,
the AMA supports the following:
-Converting the current tax exclusion
to a tax credit for those who purchase health coverage, whether
or not they receive health benefits from their employer. The
tax credit should be advanceable and inversely related to income
(i.e., those in the lowest income brackets should receive the
largest credit). The credit should be refundable so those who
do not earn enough to owe taxes can still claim a credit. The
size of the tax credit should be large enough to ensure that
health insurance is affordable for most people.
-Reforming the individual health insurance market to create new opportunities for
individuals to pool risks, obtain “group” insurance at lower rates, and
choose among a variety of plans to suit their individual insurance needs.
To achieve this goal, the AMA supports the formation of “Health Insurance
Marts” by affinity groups that could include coalitions of small employers,
unions, trade associations, voluntary health insurance cooperatives,
chambers of commerce and other community organizations.
-Protecting vulnerable populations by intensifying outreach efforts to
ensure that the 5 million children and adults who are eligible are enrolled
in Medicaid and the Children’s Health Insurance Program (CHIP).
FREQUENTLY ASKED QUESTIONS
How do tax credits differ
from the current tax exclusion?
Currently, the federal government subsidizes the purchase
of private health insurance by excluding from taxable income
the portion of an employee’s total compensation that the employer
gives in the form of health benefits. The tax exclusion is sometimes
loosely referred to as a tax exemption or deduction. (The differences
are that an exemption or deduction is taken at the time of income
tax filing, with the exclusion health benefits are simply not
reported as taxable income.) In contrast with the tax exclusion
for employment-based health insurance, health insurance
tax credits - available only to those who obtain health insurance
- would be subtracted from an individual’s tax bill.
Can employers continue to
offer health benefits under the AMA proposal?
Employers who currently offer health benefits do so voluntarily
in order to attract and retain workers, and this will continue
to be the case. Further, health benefits for employees will continue
to be deductible business expenses, regardless of whether those
employment-based health benefits are based on defined benefits
or defined contributions. Employers are unlikely to stop offering
health insurance benefits just because of the employees’ tax
change.
Some employers will decide to
change their health benefits to defined contributions. In this
case, instead of continuing to arrange and offer specific health
plans, the employer would contribute a certain dollar amount
(defined contribution) toward an employee’s choice of plan.
Employees would be able to combine defined contributions with
tax credits to obtain group coverage through insurance marts.
Will health insurance be affordable
under the new system?
Affordability of health insurance depends not only on health
coverage choices and premiums in the transformed market, but
also on the size of tax credits. Tax credits should be large
enough to ensure that health insurance is affordable for most
people. They also should be both income-related and refundable.
That is, larger credits would be available to lower income families
and individuals; and, if the credit were bigger than the total
tax, the difference would be returned to the taxpayer. The credit
must be sufficient to cover a substantial portion of the premium
costs for individuals in low-income categories.
Why should tax credits be
inversely related to income?
The current exclusion is inequitable because it provides
a higher subsidy for those with higher incomes. Moreover, a large
portion of the 42.6 million uninsured Americans are low-income
wage earners who are not eligible for Medicaid. Under the AMA
plan, the tax subsidy would be redirected toward those who need
it most. Furthermore, compared to a tax credit that does not
vary with income, a sliding scale tax credit reduces the federal
spending necessary to expand coverage.
Would those with no tax liability
be able to receive the credit?
Yes. The AMA proposes that tax credits for the purchase
of health insurance be refundable, which would allow anyone
who purchases health insurance to be eligible to receive a tax credit.
To the extent the credit exceeds taxes owed, the individual would receive
a payment. Examples of existing refundable tax credits include the federal
earned income tax credit and the child care tax credit for families with
children.
The two AMA Briefs appearing
in this edition were forwarded by WCMS President Edward Jankowski,
MD. They are the last two of a total of six that have appeared
in the last three editions of the DMN. Dr. Jankowski urges
your support in the furtherance of these six issues.
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