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Practice Beat


ReimbursementFraud and AbuseMecicareHealth Care Reform, etc.

Practice Beat

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Choose article section...Reimbursement: Doctors seek class-action suits against HMOsFraud and Abuse: Careless hiring can get you in trouble, HHS cautionsMedicare: The new millennium may give beneficiaries more to worry aboutMarijuana: Patients in California: waiting to inhalePPOs: To consumers, they're still a mysteryHealth Care Reform: California sets out to overhaul managed care ina big wayOrgan Transplants: A new push to increase donationsLooking Ahead

By Joan R. Rose, Senior Editor

Doctors seek class-action suits against HMOs

Earlier this year, Florida lawmakers created the Advisory Group on theSubmission and Payment of Health Claims to examine problems doctors andother providers encounter in getting paid. But now HMO payment abuses havebecome so widespread that doctors have turned to the courts for relief.

The Florida Physicians Union and the Florida Physicians Association,affiliates of the Florida Medical Association, are seeking class- actionstatus in lawsuits against five HMOs: AvMed, HIP, Humana, Prudential, andUnited HealthCare of Florida.

Among the charges: The HMOs automatically downcode claims for established-patientvisits, and systematically reject others. In some cases, the doctors say,the insurers maintain that the claims are covered under a "coordinationof benefits clause" when there's no evidence that such a clause exists.In others, carriers contend that the claims were lost or never received.Some of those "unreceived" claims had been hand-delivered, otherssent certified mail, according to two of the complaints.

The Florida Department of Insurance recently entered the fray as well.In an advisory bulletin, the department warned HMOs that automatic downcodingof medical claims is a violation of the state's Unfair Claim SettlementPractices statute. Under that law, before an HMO can deny a claim, it mustconduct a reasonable investigation and allow doctors (or other providers)at least 35 days in which to provide additional information in support ofthe disputed claim.

Fraud and Abuse:
Careless hiring can get you in trouble, HHS cautions

The Department of Health and Human Services maintains an extensive listof people excluded from participation in federal health care programs. Now,in an advisory bulletin, HHS Inspector General June Gibbs Brown has warnedphysicians to periodically check the exclusion status of their current andpotential employees as well as the individuals and vendors they contractwith. Federal law prohibits federal health care program payments for servicesfurnished, directly or indirectly, by those excluded from participation.

Health care providers who employ or contract with excluded parties couldbe hit with civil monetary penalties of $10,000 for each service they provide.

"Exclusion is one of the most important tools . . . for protect[ing]beneficiaries and stem[ming] fraud and abuse," says Gibbs. "Weneed the cooperation of the entire health care community to make sure excludedindividuals aren't involved in any way in the care of federal program beneficiaries."

To check a person's status, visit the OIG's Web site:

The new millennium may give beneficiaries more to worry about

Elderly patients on fixed incomes may find it prohibitively expensiveto follow treatment regimens that include prescription drugs, a new HHSstudy suggests. Next year, 99 HMOs in 33 states will end or reduce theirparticipation in the Medicare+ Choice program. That will force many beneficiariesto join, or rejoin, traditional Medicare plans, which offer less coverage.

In addition, many of the remaining 793 Medicare+Choice plans will raisepremiums, limit drug coverage, and reduce or restructure benefits in otherways that increase out-of-pocket costs. In 2000, 86 percent of them willcap spending on prescription drugs--both brand name and generic--and thecaps will be more restrictive. For example, while only 21 percent of planshave a cap of $500 or less on drugs this year, 32 percent will put thatlimit on each enrollee in 2000. And for the first time, all M+C organizationswill charge copays for prescription drugs.

At the same time, the proportion of beneficiaries with access to a zero-premiumplan is expected to decline this year--from 85 percent to 77 percent. Andthe average premium for a basic plan will almost triple--from $5.35 to $15.84per month.

Doctor visits will cost patients more, too. On average, the copay fora primary care visit will increase 20 percent (from $6.90 to $8.33), whilepatients will pay 37 percent more ($10.52 vs $7.67) to see a specialist.

Patients in California: waiting to inhale

In the wake of California's passage of an initiative supporting the medicaluse of marijuana, the Ninth US Circuit Court of Appeals has ordered a federalDistrict Court judge to reconsider a 1998 decision that closed a Californiacannabis club.

When he first granted the federal government's request for an injunction,District Judge Charles R. Breyer concluded that clubs engaging in marijuanadistribution were probably in violation of federal antidrug laws. The OaklandCannabis Buyers' Cooperative and its agents then sought to modify the injunctionto allow cannabis distribution to those for whom it is a medical necessity,but the motion was denied. Now, the Circuit Court has found that the co-ophad "identified a strong public interest in the availability of a doctor-prescribedtreatment that would help ameliorate the condition and relieve the painand suffering of a large group of persons with serious or fatal illnesses."The three-judge court also noted that the government offered no evidenceto rebut the club's contention that treatment with cannabis is safe andeffective.

Now the appellate judges have directed the lower court to reconsiderthe club's request for modification of the injunction and, should it grantthe request, to spell out the criteria for a medical-necessity exemptionin the modification order.

To consumers, they're still a mystery

Patients don't know enough about PPOs or how they operate to make trulyinformed decisions on health care coverage, consumer representatives say.

Health plans should use performance measures, such as HEDIS and CAHPS(the Consumer Assessments of Health Plans Survey), to enable patients tocompare PPOs and HMOs, the consumerists contend. PPOs also should reporton structural elements--such as grievance and appeals processes, informationsystems, and special programs--that can improve care for specific patientpopulations.

The recommendations came from a recent meeting of consumer groups convenedby the American Accreditation HealthCare Commission. In attendance: AARP,the National Health Council, the National Partnership for Women & Families,the Office of Minority Health, HHS, the Consumer Coalition on Quality HealthCare, and the Center on Disability and Health.

Health Care Reform:
California sets out to overhaul managed care ina big way

California has become the second state to allow managed care patientsto sue their health plans for compensatory and punitive damages. The HMOliability law was just one of 21 managed care bills that Gov. Gray Davisrecently signed into law. Other reforms will:

  • Require health plans that provide telephone medical advice to have a medical license.
  • Require health plans to allow a second opinion if the patient requests it.
  • Provide for external review of coverage decisions by an independent group of medical experts.
  • Require health plans to respond in writing to patient grievances--and to do so within three days.
  • Prohibit health care providers from releasing information about outpatient psychotherapy without the patient's permission.
  • Establish a state agency devoted exclusively to licensing and regulating health care service plans.
  • Require health plans that provide an outpatient prescription drug benefit to include contraceptives.
  • Require coverage for the screening, diagnosis, and treatment of several specific, often-excluded health problems.
  • Prohibit health plans from refusing to enroll patients with a history of breast disease.
  • Require that hospice coverage be included in basic benefits.

Organ Transplants:
A new push to increase donations

Although most Americans say they support organ donation, only about halfthe families asked to donate a cadaveric organ give consent, because theydon't know what the deceased family member would have wanted. So now, toincrease organ procurement nationwide, the Clinton administration has announceda three-year, $13 million grant program designed to educate families aboutthe importance of organ donation.

The money will be used to test strategies aimed at 1) encouraging individuals to sign up as donors when they renew their drivers' licenses, 2) developing school-based and workplace education efforts, and 3) improving the ability of health professionals to effectively handle end-of-life discussions.

The program, administered by the Health Resources and Services Administration,will also feature public service TV ads to familiarize families with organdonation and encourage individuals to apprise family members of their decisionto donate. The ads will include a toll-free number (800-355-SHARE) for moreinformation and help in discussing the subject with loved ones.

This year, one of every 13 patients on the national organ transplantwaiting list will die waiting for an organ. Fewer than a third of the 65,000waiting patients are likely to receive transplants.

Looking Ahead

A handy reference of telephone numbers, as well as e-mail and Web siteaddresses for some sponsoring organizations.

Mark your December calendar

December 1-31 National Drunk and Drugged Driving (3D) Prevention Month

3D Prevention Month Coalition

National Commission Against Drunk Driving

1900 L St. NW, Suite 705 Washington, DC 20036

Phone: 202-452-6004

Web site:

December 1-7 National Aplastic Anemia Awareness Week

Aplastic Anemia Foundation of America, PO Box 613, Annapolis, MD 21404

Phone: 800-747-2820 or 410-867-0242

Fax: 410-867-0420


Web site:

December 1 World AIDS Day

American Association for World Health

1825 K Street NW, Suite 1208 Washington, DC 20006

Phone: 202-466-5883

Fax: 202-466-5896


Web site:

Joan Rose. Practice Beat. Medical Economics 1999;21:19.

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