Bill to allow HMO patients to go out of network draws angry opposition from Maryland plans
ANNAPOLIS, MD—Managed care organizations are voicing angry opposition to a bill that would require HMOs to allow patients to see the doctor of their choice—even if the physician isn’t in the HMO network. The only requirement for out-of-network providers is that they must be willing to accept the group’s fee schedule. The bill also would give doctors the final say on a number of care decisions now made by HMO administrators.
The bill is one of more than two dozen pending in the Maryland General Assembly that would place more mandates on an HMO market that already is one of the most heavily regulated.
According to the Maryland Association of HMOs, the state currently has 41 mandates, more than any other state. HMO officials charge that a piecemeal approach to regulation—what HMO officials call "legislation by anecdote" or "legislation by body part"—has increased customers’ costs by 20%.
Other bills introduced in the current session would:
• require insurers to pay for a minimum two-day hospital stay for women who have had mastectomies;
• force HMOs to pay for a minimum one-day hospital stay after the insertion of a catheter in a patient;
• require HMOs to pay for blood work and products;
• prohibit health plans from requiring women to get approval from a primary care physician before seeing an obstetrician-gynecologist for routine care; and
• require companies to cover the cost of certain diagnostic tests for prostate cancer.
Washington Post, March 2, 1997.
Florida’s crackdown on Medicaid fraud will save state $200 million over two years, analysts say
TALLAHASSEE, FL—A crackdown on Medicaid fraud by doctors and clinics will save Florida nearly $200 million over two years, including $81.5 million in fiscal 1997 and $111 million in fiscal 1998, analysts say.
Savings in this fiscal year include:
• $55.5 million from reducing unnecessary physician services;
• $19 million from medical equipment costs;
• $7 million from laboratory and X-ray services.
Sparked by a critical statewide grand jury report in January 1996, the campaign against Medicaid fraud has been carried out by the Agency for Health Care Administration, the office of Attorney General Bob Butterworth and the Florida Department of Law Enforcement.
Miami Herald, March 2, 1997.
Top California court says counties can require state to reimburse them for indigent medical care
SAN FRANCISCO—The California Supreme Court ruled March 3 that counties can require the state to reimburse them for the cost of providing health care to the poor.
But, concern that the state could carry through on a 1991 threat by the Legislature to take away nearly $900 million in license plate revenue from the counties if it lost the case have dampened the counties’ celebration parties.
The dispute began when the state eliminated certain low-income adults without private medical insurance from Medi-Cal in 1982. The state continued to provide counties with money to cover them until a state budget crisis in 1989. The state reduced payments during fiscal years 1989-90 and 1990-91, prompting San Diego County to sue for $22.6 million in unreimbursed costs.
Los Angeles County previously had filed a claim against the state for unreimbursed costs under the indigent medical care program, but dropped the matter when a settlement was reached.Ventura and Orange County officials say it is too early to gauge the impact of the ruling on their coffers.
Los Angeles Times, March 4, 1997
Florida HMOs back bill that requires them to resolve urgent medical disputes within 72 hours
TALLAHASSEE, FL—The Florida Association of HMOs says it will support legislation that would require managed care organizations to resolve any dispute over an urgent medical problem within 72 hours. Currently, an HMO has up to 60 days to resolve a patient’s grievance.
Stung by controversies regarding their quality of care, HMOs say their willingness to place themselves under tougher state regulations is evidence of their interest in "providing care at the right place, at the right time and in the right setting."
The proposed 72-hour guarantee for resolving urgent medical complaints from HMO patients goes beyond what the state Agency for Health Care Administration planned to ask for in this legislative session. A bill proposed by Sen Howard Forman (SB480) would have required the agency to establish methods for resolving urgent or emergency HMO patient grievances, but sets no deadlines for HMOs to address such complaints.
Sun Sentinel, Fort Lauderdale, FL, March 4, 1997.
Blue Cross Blue Shield of New Jersey challenges judge’s decision to declare the company a charity
TRENTON—Blue Cross and Blue Shield of New Jersey is asking a Superior Court judge to block Attorney General Peter Verniero’s decision to declare the company a charity. That decision, "called erroneous" in the company’s suit, could force Blue Cross to turn over some of its assets in a planned merger with Anthem Inc. of Indianapolis.
The firm is converting to a mutual company to prepare for the merger. In January, the Attorney General ruled that Blue Cross "satisfies the requirements" as a charity, and the state is currently attempting to account for the value of tax breaks and other financial benefits Blue Cross has received in the past. A coalition of labor, consumer and civic groups contends that Blue Cross has accumulated $1 billion in assets from its charitable status and should be required to donate that money to charity.
Fred Hillmann, spokesman for Blue Cross, says the company has more than $800 million in liabilities and wants the courts to decide the question of whether it is a charity.
The planned merger between Blue Cross and Blue Shield of New Jersey and Anthem Inc. of Indianapolis would create the fifth largest health insurer in the country.
The Record, Bergen County, NJ, Feb. 23, 1997
Medical society chief seeks to start doctors’ union
PHILADELPHIA—Another physicians’ union is forming in the Philadelphia area. The president of a regional medical society says he will start a doctors’ union, which would most probably be affiliated with the Office and Professional Employees International Union, part of the AFL-CIO.
Raymond Lodise, president of the Philadelphia County Medical Society, says a major goal of the union is to remove some of the barriers to quality of care under managed care. He downplayed the importance of physician reimbursement.
Antitrust issues make negotiations over reimbursement tricky, says Gabriel DeTolla, a Philadelphia-area podiatrist who is organizing a chapter of the Federation of Physicians and Dentists, a Florida organization that represents 3,000 physicians nationwide. But, he believes any organization that doesn’t bargain collectively will be "just another front for another medical organization."
The federation uses the "third-party messenger" method to discuss its members’ income with insurers without violating antitrust laws. It gets information about reimbursement from a group of doctors, but talks about contracts individually.
Inquirer, Philadelphia, Feb. 22, 1997
Federal judge dismisses tobacco suits in California
OAKLAND, CA— A Federal judge in Oakland dismissed tobacco suits by San Francisco and 11 other counties in California seeking compensation for spending on health services by smokers.
However, the judge gave plaintiffs a month to refile amended suits. His ruling included a requirement that damages be shown smoker by smoker, making the case more difficult for plaintiffs.
New York Times, Feb. 28, 1997
Oregon-based enrollment broker files petition
to reorganize in bankruptcy court
PHILADELPHIA—Pennsylvania officials and consumer advocates are worried about how Benova, Inc.’s financial troubles will impact enrollment into Health Choices, the state’s Medicaid managed care program. The Oregon firm, which serves as enrollment broker in several Medicaid programs, has filed a petition to reorganize itself in bankruptcy court. The company said it took the action because of "prolonged delays in payment" from the California Department of Health Services. The California agency has sued Benova in a dispute over billings. Benova officials claim the state of California owes the company $6 million.
In a written statement, Benova officials said the California lawsuit could have been resolved in the state had followed its contractual agreement to question invoices within 15 days of their receipt. The company statement characterized the lawsuit as an attempt "for political purposes to unfairly place blame on Benova" after the state agency decided to rapidly expand its Medicaid managed care program. The company has had to manage "an unprecedented five-fold increase in enrollment" during the second half of 1996, and the state should pay for those services, officials said.
Benova, which says it generates about $22 million in annual revenues, also has contracts with Connecticut, Virginia and Oklahoma to enroll and counsel Medicaid patients.
Inquirer, Philadelphia, Feb. 19, 1997
Virginia rejects ban on incentives to pharmacists
RICHMOND, VA—A bill that would make it illegal for pharmacists to accept financial incentives for encouraging doctors to switch their patients’ prescriptions was rejected by a legislative committee here. This would have been the nation’s first such law.
Opponents say the bill is too broad and would drive up health-care costs because it would cut competition among drug companies. Supporters fear that if pharmacists receive incentives, physicians would be suspicious of recommendations for changes.
Among those who testified in favor of the bill was Mark Green, the public advocate for New York City, whose office is pursuing similar legislation in New York. His office conducted a six-month study last year that showed that pharmacists switched a physician’s prescription 15% of the time because the prescribed drug wasn’t on the HMO’s formulary.
"I would assume that tens of thousands of patients in Virginia are getting less therapeutically valuable drugs because of a kickback scheme that would be illegal if a record company tried it with disc jockeys," Mr. Green says.
Richmond Times-Dispatch, Richmond, VA., Feb. 14, 1997
Colorado officials seek input on creating foundation
from conversion of Blue Cross Blue Shield
DENVER—An informal group of state officials is soliciting advice from the health care and philanthropic communities on how to create a foundation that would be established as part of the conversion of Blue Cross Blue Shield of Colorado to a for-profit corporation.
The seven-member committee, formed at the request of Gov. Roy Romer, includes representatives from the insurance division, the health and environment department, the governor’s office and rural health services, as well as two outside attorneys.
Headed by Alan Weil, executive director of the Colorado Department of Health Care Policy and Financing, the group will make recommendations to Insurance Commissioner Jack Ehnes who will make the final decision on how, and if, the foundation is formed.
The state law allowing Blue Cross to convert from a not-for-profit organization to a for-profit corporation requires formation of a charitable foundation to serve the health care needs of residents. The foundation is to be endowed with the worth the
value of the company being converted. An amount equaling the worth of the company also could be contributed to an existing foundation. The value of Blue Cross Blue Shield of Colorado has been assessed at $300 million.
Rocky Mountain News, Denver, CO, March 3, 1997.
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