Practice Beat

By Joan R. Rose, Senior Editor

Managed Care: Doctors say it's a racket and will try—once again—to prove it in court

The California Medical Association has filed an amended complaint in US District Court, charging that managed care plans have enriched themselves at doctors' and patients' expense, broken their contracts with physicians, and jeopardized patient welfare. The medical associations of Georgia and Texas have joined the suit; defendants include Aetna and its Prudential unit, Cigna, Coventry Health Care, Foundation, Humana, PacifiCare Health Systems, UnitedHealth Group, and WellPoint Health Networks.

The CMA's lawsuit was consolidated in Miami last June with several dozen suits filed by individual physicians. The district court rejected the claim of CMA's earlier filing that the health plans constituted a "racketeering enterprise" under the federal Racketeer Influenced and Corrupt Organizations Act (RICO). At the same time, the court refused to dismiss allegations that insurers engage in unfair contracts and wire and mail fraud.

The amended complaint names specific "fraudulent and extortionate" practices that violate RICO, including:

• Denying and delaying payment on legitimate claims for medically necessary care.

• Forcing doctors into contracts that don't cover the cost of care.

• Utilizing financial criteria unrelated to patient care to deny claims.

• Providing incentives for claims reviewers who meet arbitrary claim-denial quotas.

"Our purpose is to force managed care to put doctors and patients back in the health care delivery equation. Right now [health plans'] only accountability is to Wall Street," says lead plaintiff attorney Archie Lamb.

Physician Discipline: Arizona legislators to medical board: You get tough, or we will

Just days after a Phoenix physician was found guilty of manslaughter in the 1998 death of a patient who underwent a late-term abortion, the Arizona Senate endorsed three bills that would force the state Board of Medical Examiners (BOMEX) to get tougher with doctors accused of professional misconduct. The doctor in the case was allowed to continue practicing despite a history of untoward results in performing abortions, including another death three years earlier.

The bills, which were also passed (with minor changes) by the House, would prohibit the board from issuing a license to any physician who has had a license refused, revoked, suspended, or restricted in another jurisdiction; has surrendered his license to avoid disciplinary action; or is under investigation for professional misconduct in another state. The board would also be required to launch an investigation if an Arizona physician was under investigation elsewhere.

Moreover, in determining what action to take, the board would have to consider all previous actions—nondisciplinary as well as disciplinary—taken in regard to the doctor's license. And if a disciplinary action required a vote of board members, the board would be required to conduct a roll call and keep a record of each member's vote.

According to the Federation of State Medical Boards, the Arizona board took action against just 54 of the state's 8,867 doctors in 1999.

For more on doctor discipline, see "Shaping your profile on the Web" in this issue.

Drug Samples: These doctors' supply cabinets will include generics, too

Pittsburgh-based Highmark Blue Cross Blue Shield is distributing free samples of generics among doctors throughout Western Pennsylvania and encouraging them to pass along the samples to their patients.

The generic samples program is being offered in conjunction with Merck-Medco, which expects to expand it to 7,700 physicians nationwide this year. Highmark is the first health insurer to sign on.

Doctors in Highmark's network write about 20 million prescriptions a year at a cost of approximately $944 million. Brand-name drugs account for about 90 percent of the insurer's drug expenses.

Medicare: Premiums take a double-digit jump

Medicare premiums for Part A and B coverage are nearly 12 percent higher this year than last. After remaining relatively flat over the last three years, Part B premiums increased about 10 percent. Beneficiaries—who are obligated under the law to pick up 25 percent of Part B spending—will pay $50 a month in 2001, up from $45.50 in 2000.

The Health Care Financing Administration defends the hike, pointing out that overall increases have been less than half the amount originally projected when the Balanced Budget Act of 1997 was passed. At that time, Part B premiums were projected to jump from $43.80 in 1997 to $59.40 this year. In addition to physicians' services, Part B covers durable medical equipment, hospital outpatient care, and other outpatient services.

Seniors are also paying a higher deductible ($792) for inpatient services—the $16 increase represents a growth rate of 2 percent. Premiums for Medigap policies that include prescription coverage are climbing, as well. Over the last three years, they've increased an average of 37 percent—2.4 times more than the premium growth for nonprescription coverage—according to a study by Weiss Ratings of Palm Beach Gardens, FL.

Quoteworthy

"Managed care is basically over. People hate it, and it's no longer controlling costs . . . . But like an unenbalmed corpse decomposing, dismantling managed care is going to be very messy and very smelly, and take a while."

—George D. Lundberg, MDEditor in chief of Medscape, a medical Web site

Recruitment: The doctor search heats up in cities

Traditionally, the demand for physicians has been greater in rural areas and small cities. But now that trend is reversing, according to Merritt, Hawkins & Associates. For the first time in the seven years that the Irving, TX-based physician search firm has compiled its report on physician recruitment incentives, the majority of its assignments were for positions in large cities.

The company's review of 1,901 searches and consulting assignments undertaken from April 1, 1999, to March 31, 2000, found that 41 percent were conducted in cities of 100,000 or more. In the previous six years, no more than 25 percent of the firm's searches were done in communities of that size.

Office-Based Surgery: New York cuts out CRNAs—and they feel the pain

The New York State Association of Nurse Anesthetists has gone to court to challenge the state health department's new rules governing office-based surgery. The guidelines, which require the presence of an anesthesiologist during procedures performed in doctors' offices, effectively prohibit CRNAs from administering anesthesia.

It's the CRNAs' view that the health department overstepped its authority. The department, the CRNAs contend, has jurisdiction over hospitals and ambulatory surgery centers, but not physicians' offices.

The association's complaint also alleges that the health department is interfering with the nurses' scope of practice under the state education act. CRNAs provide 65 percent of the 26 million anesthesia procedures administered in the US each year and are the sole providers in more than two-thirds of rural hospitals, according to the American Association of Nurse Anesthetists.

Early last year, the Health Care Financing Administration sidestepped the issue, leaving it up to individual states.

 

Joan Rose. Practice Beat. Medical Economics 2001;9:16.