Blues Concerns; April 26

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.