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Practice Beat




Practice Beat

By Joan R. Rose, Senior Editor

Fraud andAbuse
Is Uncle Sam erecting obstacles to care for senior citizens?

Government red tape and threats of prosecution against physicians are making it increasingly difficult for Medicare patients to find doctors to treat them, according to an Association of American Physicians and Surgeons survey.

Eighty-two percent of the 331 doctors polled say their fear of investigation or prosecution has increased over the last three years, with 71 percent making changes in their practices that adversely affect patients. For example, more than a third have restricted the services they provide to Medicare patients, and nearly a fourth say they don't accept new Medicare patients. Among those who do accept new patients, one in five gives a lower priority to those appointments. And more than a third of the respondents say they have difficulty finding physicians who'll accept referrals of their Medicare patients.

Once again, doctors go to court over Medicare fees

Five specialty societies are suing the federal government over the Health Care Financing Administration's refusal to reimburse physicians for the cost of clinical support personnel who assist at surgery. Although HCFA originally included those costs in calculating practice expenses for 1999 (the first year of transition to resource-based practice expenses), the agency later decided to disallow them beginning this year.

HCFA claims that the costs don't appear to be typical and that, in any event, Medicare is already paying for these support services under Part A. But doctors argue that the Balanced Budget Act of 1997 requires HCFA to develop new resource-based relative value units that include all practice expenses incurred by physicians.

The lead plaintiff is the American Society of Anesthesiologists. Co-plaintiffs are the American Society of Cataract and Refractive Surgery, the American Association of Neurological Surgeons, the American Association of Ophthalmology, and the Congress of Neurological Surgeons.

A separate suit, filed by the American Medical Association, challenges HCFA's use of projections instead of actual values in calculating the annual update in the Medicare fee schedule's conversion factor. HCFA's formula, the AMA says, underestimates the growth in Medicare spending and results in an aggregate underpayment to physicians of $3 billion.

In 1998, a coalition of 11 specialty societies challenged the method HCFA used to phase in Medicare's base-year resource-based allowable charges for practice expenses. The doctors contended that the method conflicts with the transition formula required by the Balanced Budget Act of 1997. That lawsuit is still pending.  

Wrongful Death
Oklahoma's high court broadens doctors' liability risk

In a precedent-setting decision, the Oklahoma Supreme Court has ruled that damages can be awarded for the death of a nonviable fetus. "Live birth, regardless of viability, marks the point at which a human fetus must be recognized as a person for purposes of the wrongful death statute," the court said.

A couple claimed that their child died because of improper prenatal care. The woman had experienced a troubled pregnancy, including unusual bleeding and cramping and an overnight stay in the ER. Even though she was warned more than once that she was in danger of a miscarriage, she stopped seeing her doctors when the fetus was about 13 weeks old. At 21 weeks, she returned to the ER with labor contractions, and delivered that night. But since doctors had concluded that the fetus wasn't viable, no attempt was made to treat the baby.

The couple then sued, alleging that the prenatal care rendered by her first two physicians was negligent, and sought damages for personal injury. They also filed a second claim alleging that the doctors' negligent acts and omissions contributed to their son's early birth and resultant death.

The trial court ruled for the doctors on both claims. The appellate court affirmed the judgment on the personal injury claim, but reversed a finding in the doctors' favor on the wrongful death claim. The Supreme Court upheld that decision.  

Managed Care
More evidence that HMOs are losing favor with patients

By the end of the 1990s, enrollment in employer-sponsored HMOs was waning, and PPOs were poised to assume the leading role in health care delivery.

Membership in traditional closed-panel HMOs has remained relatively flat at 30 percent for the last two years, according to the Mercer/Foster Higgins National Survey of Employer-Sponsored Health Plans. Open-ended HMOs fared even worse—declining from 20 percent in 1997 to 16 percent in 1999. PPO membership rolls, on the other hand, increased from 35 to 43 percent during the same period. And when asked to predict the direction their HMO enrollment would take over the next three years, most employers forecasted more of the same. Only 36 percent expected enrollment to increase.

Employers prefer PPOs because they don't limit coverage to a closed panel of providers. And since most PPOs allow self-referrals to specialists and don't require doctors to get the plan's approval before beginning treatment regimens, patients are less likely to be denied needed care. That reduces employers' risk of liability: One in five companies with 20,000 or more workers reported being named in at least one lawsuit involving a health plan with which they contract.

Alternative Medicine
This Blue's interpretation of a state law was way off key

The Washington State Supreme Court has upheld a 1996 state law that requires health plans to cover treatment by licensed or certified alternative providers. Two policy holders had challenged Regence BlueShield's decision to cover such services only for its managed care patients.

Under regulations adopted by Washington's insurance commissioner, all insurance plans are required to cover care by any licensed professionals—including chiropractors, naturopaths, and massage therapists—who treat covered health conditions. But Regence argued that the statute applied to managed care plans only. The high court disagreed, finding the commissioner's interpretation consistent with the legislature's intent.

This isn't the first attack that the law has survived. Just days after it went into effect on Jan. 1, 1996, a dozen of the state's largest health insurers charged that it conflicted with ERISA. A federal district court agreed, but the Ninth Circuit appellate court overturned that decision, pointing out that the law is intended to regulate the coverage offered by insurers—not the benefit plans offered by employers. Therefore, the court said, the law properly falls within the state's jurisdiction and isn't pre-empted by ERISA. That ruling was upheld by the US Supreme Court last year.  

Health Benefits
Why AIDS patients may find it harder to get lifesaving care

Now that the US Supreme Court has refused to hear a discrimination case brought by two HIV patients, health insurers that arbitrarily limit coverage for one disease and not another won't run afoul of the Americans with Disabilities Act.

At issue in this case was a Mutual of Omaha decision to place a lifetime ceiling of $100,000 on one plaintiff's coverage and a $25,000 cap on the other's. Noting that the insurer generally provides up to $1 million in coverage for other diseases, the men charged that Mutual of Omaha's HIV policy violated the ADA. US District Court Judge Suzanne B. Conlon agreed, after the insurer admitted at trial that the caps weren't based on actuarial principles, and that HIV- or AIDS-related care was no more costly than that provided for other medical conditions.

Six months later, however, a divided appellate court reversed that judgment. In effect, the appeals court found that although the ADA prohibits insurers from refusing to sell coverage to a person with HIV or AIDS, the law doesn't prevent companies from offering lower coverage limits based on a policyholder's disabilities.

Online Prescribing
The FDA goes after foreign-based suppliers

The Food and Drug Administration has broadened its crackdown on Web sites that offer to sell prescription drugs without valid prescriptions. The agency has sent "cyberletters" to a dozen operators of foreign-based Internet sites, advising them that such sales violate US law. The electronic letters, which are similar to traditional versions that the agency sends to organizations or individuals it believes are engaged in illegal activities, warn that future shipments of their products to this country may be automatically detained or turned away. To date, two of the sites have agreed to halt such sales.

To report Web sites that you believe may be acting illegally, contact the FDA through its Web site, www.fda.gov/oc/buyonline.

Campaign 2000  
How the candidates feel about HMO liability

Three times a week, The Associated Press asks presidential candidates to address a particular issue. Recently, the question was whether federal law should be changed to give patients the right to sue their HMOs and, if so, whether that right should be limited. Here's what they said:

George W. Bush advocates "a speedy and impartial forum to resolve disputes over health care coverage. Texas has a . . . strong, independent review process and other protections designed to encourage quick, out-of-court resolutions instead of costly litigation." (Texas also has a law that gives patients the right to sue, but Bush allowed the measure to become law without his signature.) He'd "support similar federal protections . . . provided they don't supersede [state] law."

Al Gore supports "granting patients the right to an independent appeal when they are denied treatment, access to specialists, guaranteed coverage of emergency room treatment—and the right to hold HMOs accountable for their actions."  



News coverage of health-related issues continues to hold patients' interest. Here are the news stories that drew Americans' attention and the proportion of people who "closely followed" them:  

Source: The Kaiser/Harvard Health News Index, November/December 1999


Joan Rose. Practice Beat. Medical Economics 2000;6:38.

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