News summaries for May 10, 1999 - Top Stories - News Briefs

When Sen. Robert Bennett (R, Utah) introduced his medical records privacy bill in late April, he was flanked by supporters from hospital, health plan, information management and patient advocacy organizations. Noticeably absent were physician and privacy advocacy groups. The third Senate medical records privacy measure introduced this session of Congress, the Bennett bill has more clearly drawn the lines between organizations with competing interests in the debate. Although all sides agree on the need for federal medical records confidentiality legislation, they disagree on such fundamental issues as whether federal law should preempt state rules and how to handle patient consent for the release of health data. Under Bennett's bill, federal law would overrule state medical record privacy laws -- even those that are stronger. Health information management, hospital, health plan, research and employer groups supporting the Bennett bill said they want uniformity because their organizations and activities don't follow state lines. But privacy advocacy groups said Bennett's bill takes federal preemption too far. ... Go to full text.

N.J. doctors fight rules for crash victims

Many New Jersey physicians fear that new state regulations intended to curb soaring auto insurance premiums could make a wreck of patient care. The regulations, which took effect in March, implemented the Automobile Insurance Cost Reduction Act passed last year. New Jersey has the nation's highest auto insurance premiums, and the governor had pledged to cut rates by 15%. Curbing overuse and fraud in medical treatment reimbursed through auto policies was seen as critical to such a reduction. Doctors, however, are up in arms over the tools designed to achieve that. What they see are stringent, scientifically flawed practice protocols and an onerous managed care system that will limit patients' access to care. Insurers and regulators, they said, have gone well beyond the Legislature's original intent. After failing to gain an injunction to block the controversial regulations from taking effect, thousands of doctors are pledging to boycott them, risking reimbursement denials. This month the doctors will take their concerns to a state appellate court. The regulations make New Jersey the only state to have written specific treatment protocols into law to guide care. A handful have legislation recognizing certain clinical protocols to defend doctors from liability claims; such protocols are not to be used against physicians. The idea could catch on quickly, however, with pressure from insurers.

Government & Medicine |HCFA revamps Medicare coverage process

The Health Care Financing Administration has unveiled a more open decision-making process for determining Medicare coverage decisions. The new procedures, announced at an April congressional hearing, will allow more public input into decisions about whether new medical treatments will be covered under fee-for-service Medicare. The proceedings are triggered when Medicare carriers in various locales make conflicting decisions about whether to cover a new medical treatment or when there is disagreement among medical experts about a treatment's effectiveness. Such national coverage policies are binding on all Medicare contractors and on administrative law judges who hear appeals of claim denials. But the agency estimates that national policies govern only about 10% of coverage decisions. About 90% of decisions are made by local carriers relying on their own policies. HCFA will also publish a proposed rule this summer explaining the general criteria it uses to evaluate whether items and services covered under Medicare are "reasonable and necessary." Testifying on behalf of the AMA, Trustee William G. Plested III, MD, told the panel that reform of Medicare's coverage decision and appeals process is long overdue. He outlined AMA recommendations: treat program integrity as a separate issue from coverage; develop local coverage policies through a standardized, open scientific process; develop a fair and independent appeals process; and establish a means to appeal policies, not just individual claims.

Aetna slapped with RICO suit charging false advertising

A Racketeering Influenced and Corrupt Organizations Act lawsuit has been filed against Aetna U.S. Healthcare by the consumer group Foundation for Taxpayer and Consumer Rights. The suit alleges Aetna falsely advertised that its primary commitment was to maintain and improve the quality of care when it was driven instead by cost-cutting concerns. Aetna has called the lawsuit baseless. "We believe the lawsuit announced by press release from the self-styled 'Foundation for Taxpayer and Consumer Rights' is without any possible merit, and we plan to defend ourselves vigorously," said an Aetna spokeswoman, adding that 20 of Aetna's health plans had received full accreditation by the National Committee for Quality Assurance and that the company had invested millions of dollars in information management systems that use health data analysis to help physicians increase the quality of care. Legal experts say the Santa Monica, Calif.-based consumer group, which is seeking class action status to represent millions of people who enrolled or renewed their HMO, faces a high hurdle, because other similar consumer cases based on advertising claims have been thrown out of court.

Consensus over medical necessity proves elusive

A California coalition has developed model language to describe treating physicians' authority in health plan contracts. But medical and consumer groups fear it wouldn't give physicians enough decision-making weight. The project was sponsored by Stanford University and Integrated Healthcare Assn., a coalition primarily of insurers, medical groups, health systems and businesses. The model language defines treatment as medically necessary if, as recommended by the treating physician and determined by the plan's medical director or physician designee, it is: a health intervention to treat a medical condition; the most appropriate level of service, considering the potential patient benefit or harm; known to be effective in improving health outcomes; and cost-effective for the condition involved, compared with alternative treatments. However, the model isn't playing well with the California Medical Assn. The definition doesn't ensure that the treating physician's opinion is "paramount" in determining what is medically necessary for individual patients, according to a CMS spokesperson. Consumer groups have a similar concern. A physician's ruling should be questioned only if the doctor failed to meet one of the tests laid out in the model language, according to a spokesperson for the California chapter of the National Multiple Sclerosis Society.

Professional Issues |Despite discord, FSMB reaffirms resident licensure policy

Delegates at the Federation of State Medical Boards annual meeting in St. Louis unanimously rejected a resolution to water down a controversial policy to license residents and oversee medical students. It was a stunning rebuke to organized medicine -- including AMA, the Assn. of American Medical Colleges and the American Osteopathic Assn. -- that has tried to halt a controversial policy that encourages the nation's state medical boards to license residents and monitor students. Representatives of those groups said the proposals are overly intrusive and potentially harmful to oversight systems already in place to protect the public from incompetent or impaired residents and troubled students. The majority of medical board directors expressed support for FSMB's policy that recommends the institution of a licensure system for the nation's 110,000 allopathic and osteopathic residents. However, physicians representing at least two state medical boards indicated they would not adopt the federation's policy. The policy also encourages, but does not mandate, medical schools to share disciplinary action information with state boards. One criticism of the policy is the vagueness of the reportable information that should be compiled on residents. In response, the federation devised a model resident reporting form. The five main questions require program directors to note disciplinary actions on residents, unusual absences from the program of greater than two weeks, resignations, dismissals and referrals to substance abuse programs.

Consent problems cause VA to revamp all research rules

Reports that patients were used as unconsenting guinea pigs in risky research have prompted the Dept. of Veterans Affairs to overhaul its human subjects' protection program. The announcement follows the shutdown of all research at the VA West Los Angeles Healthcare Center due to numerous violations, including informed consent transgressions. The VA will establish a new Office of Research Compliance and Assurance, which will oversee all research activity going on within the VA system. The agency will also create a new external accreditation system to inspect and accredit all VA research facilities every three years. A similar accrediting body oversees animal research in the United States and abroad, but no comparable entity exists for research on human subjects. The Los Angeles research program and affiliated facilities in the area were shut down after the federal Office for Protection from Research Risks cited it for numerous violations. The Los Angeles Times reported in late March that doctors at the facility blatantly ignored a patient's refusal to participate in an experiment, and kept an electrophysiology probe inserted in his heart for 45 minutes after his operation in order to collect research data. A VA investigation also discovered the physicians failed to get written consent from patients in studies who underwent cardiac catheterization and were given intravenous doses of isoproterenol to cause their hearts to race.

Medical Markets |California orders HMOs to keep drugs on formularies

After a three-month investigation, the California Dept. of Corporations has ordered six HMOs to keep dozens of drugs on their formularies -- despite their plan to remove them -- while approving other changes in the HMOs' drug coverage. The plan with the most changes is Health Net, which has 2.2 million enrollees in the state. It was allowed to delete 58 drugs from its formulary. However, the agency ordered the HMO to maintain 14 drugs, including the antidepressant Prozac and the antibiotic Levaquin. Aetna U.S. Healthcare can remove 37 drugs from its formulary, but must keep seven others, including Prozac, the antibiotic Floxin and the migraine medication Zomig. The agency, which regulates HMOs, launched an investigation into the formulary policies of the six HMOs last December after it requested all HMOs to submit information about changes to their formularies. The investigation was launched after a consumer group contacted the agency with concerns about HMO drug policies, according to the agency. The HMOs singled out for investigation had an "inordinate number of deletions" planned for their formularies, an agency spokesperson said. In January, the agency ordered the plans to postpone any changes to their drug formularies, as well as to restore any drugs deleted since October 1998. It also ordered all HMOs to submit annual lists of any proposed formulary changes. Insurers took a dim view of the agency's regulatory actions. HMOs said some of the drugs mandated to remain on their formularies have more effective alternatives, are rarely used or are used for conditions not covered by the health plan.

HMO troubles show TennCare's weakness

The 180,000-member Xantus HealthPlan, the third-largest HMO in Tennessee's health insurance program for low-income people, has gone into state receivership. Meanwhile, state officials are contemplating how to find extra money for the underfunded TennCare program. Xantus is the first plan on the brink of bankruptcy in TennCare, the state's $3.7 billion program for 1.3 million Medicaid and additional high-risk enrollees, which began in 1994. But Xantus may not be the last troubled program. Seven of 10 participating plans reported losses in 1998, and an actuarial study released in March by PricewaterhouseCoopers concluded that the program was substantially underfunded. Gov. Don Sundquist has proposed slashing benefits and eligibility to save TennCare, but as yet he hasn't endorsed a 9% reimbursement hike recommended by PricewaterhouseCoopers. The needed $65 million in state funds might be found as the Republican governor seeks new revenues to pull the state budget out of the red. Sundquist said the state faces a $365 million revenue shortfall next year. Sundquist failed to win support for proposals to tax doctors and other professionals and is now exploring enactment of the state's first income tax. But it may be too controversial to pass this year, likely leaving the fate of TennCare in the air.

Organized Medicine |An idea for alleviating overlap, increasing value

A Federation task force has called for creation of a "shared services organization" to consolidate the efforts of local, state and national medical organizations on several fronts. Members of the AMA's Federation Coordination Team say the move will help medical societies provide membership value key to recruiting and retaining physicians as members of organized medicine at every level. The shared services organization envisioned by the team would be jointly owned, operated and governed by its participating medical societies and geared toward creating economies of scale and opportunities for collaboration. The concept is similar to others in the health care industry, through which physician IPAs, practice management firms and hospitals have formed groups to enhance everything from their negotiating clout with payers to the cost of supplies. But the shared services organization, or SSO, is liable to be a tough sell in the loosely knit and sometimes fractious Federation, where any talk of collaboration among the medical organizations is stymied by a history of mistrust among the member groups. While the SSO products ultimately would be determined by its member societies, the FCT proposal outlines four areas that are ripe for collaboration: the Internet; a resource center for information on specific member segments and proposed membership products or packages designed to attract those members; consulting services; and outcomes measurement systems. The AMA Board of Trustees agreed at its April meeting to take a closer look at the proposal. The FCT estimated that the SSO needs a $5.8 million cash investment to get off the ground with the four pilot projects outlined in the proposal. It is asking the AMA to contribute $4.8 million. Other societies would participate under a formula based on their gross income.

Health & Science |AIDS in the "golden years": New challenges for doctors

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Justices to look at FDA authority over tobacco

Washington -- The Supreme Court agreed April 26 to consider whether the Food and Drug Administration can regulate tobacco and crack down on cigarette advertising and sales to minors. Public health advocates say the ruling could be the most important public health decision in 50 years.

At issue are the 1996 FDA regulations that assert the agency's jurisdiction over nicotine and tobacco products. Originally, cigarette makers challenged these rules in federal court; they made a number of arguments, including raising the constitutional issue of the right to free speech. In April 1997, U.S. District Judge William Osteen upheld the FDA's authority to regulate tobacco and enforce laws restricting sales to minors. But he threw out other restrictions, especially the ones on tobacco advertising. Last August, the 4th Circuit Court of Appeals overturned Osteen's ruling, instead finding that Congress never intended the FDA to have jurisdiction over tobacco.

Clinton administration and tobacco lawyers will now square off in oral arguments this fall. A decision is expected by summer 2000.

State societies weigh in on collective bargaining

Oak Brook, Ill. -- Just days after the AMA Board of Trustees announced it was bringing the collective bargaining issue back to the House of Delegates for further deliberation at next month's Annual Meeting, two state organizations moved the issue ahead at their annual meetings.

Members of the Illinois State Medical Society last month voted overwhelmingly to establish a bargaining unit of their own at an estimated cost of $325,000. They see establishing one or more such units as a way to retain control of medicine and to recruit and retain ISMS members.

"This is what your younger membership wants," said Sharyl Truty, MD, a graduate of the Loyola University Stritch School of Medicine who will be starting a family practice residency in Chicago.

Meanwhile, the Medical Society of the State of New York voted to investigate the option of forming its own collective bargaining unit. Delegates called on the AMA to develop such a unit for practicing physicians and one for residents and fellows.

Doctors: Y2K ready but worried about devices

Washington -- About half of Medicare providers, including physicians, hospitals, home health agencies and durable medical equipment suppliers, say their billing and medical records systems are Y2K compliant but admit they have less confidence in their medical equipment.

The survey of 5,000 Medicare providers was conducted by the Dept. of Health and Human Services' Office of the Inspector General.

Nancy-Ann DeParle, chief of the Health Care Financing Administration, said April 27 nearly all providers had met HCFA's April 5 deadline to submit Y2K-compliant claims. HCFA also said payment updates were likely to be made on schedule. It expects to make Part B payment updates Jan. 17, 2000 -- instead of the usual Jan. 1 -- but will apply updates retroactively.

Richard F. Corlin, MD, speaker of the AMA House of Delegates, told the panel that the potential failure of medical devices posed a threat to patients. AMA has waged a campaign to raise the seriousness of the Y2K issue among members, but the low response rate to an AMA Y2K readiness survey of 7,000 physicians raised the concern of Rep. Ron Klink (R, Pa.). He said physicians were not demonstrating the proper "sense of urgency."

New MedPAC members; Dr. Lewers reappointed

Washington -- Four new members were named to the Medicare Payment Advisory Commission; three current members, including AMA Trustee D. Ted Lewers, MD, were reappointed. The appointments began May 1. MedPAC advises Congress on issues affecting the Medicare program.

New members are Beatrice S. Braun, MD, board member of the American Assn. of Retired Persons; Floyd D. Loop, MD, chair and CEO at the Cleveland Clinic Foundation; Carol Raphael, president, Visiting Nurse Service of New York; and Mary K. Wakefield, PhD, professor and director of George Mason University's Center for Health Policy and Ethics.

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