BILL WOULD TOUGHEN STATE REGULATORS' HAND WITH INSURERS OVER DOCTORS' PAY Los Angeles Times - July 15: Sacramento - California doctors won a victory against health insurers in Sacramento on Monday when the Assembly approved a bill to toughen the state's power to fine insurers for failing to pay medical bills. But the measure now goes to Gov. Arnold Schwarzenegger, who is coming under pressure from HMOs and his own regulators to issue a veto. At issue is whether the state needs extra legal powers to penalize health maintenance organizations and their kin, preferred provider organizations, that are found to regularly underpay their bills to doctors, radiologists, anesthesiologists and other specialists. Physician underpayment is widespread nationally, the American Medical Assn. contended in a study released last month. Doctors' costs for collecting money from insurers adds an estimated $200 million to the nation's annual healthcare tab. Assemblyman Jared Huffman (D-San Rafael) said his bill was needed to put "teeth into our state's healthcare watchdog," the Department of Managed Health Care. "We have a wimpy watchdog," he said. "Time and time again, health insurance companies have unlawfully denied treatment, rescinded policies and underpaid providers to make more money," Huffman said. "Insurers will continue these practices until there is no longer an economic incentive to do so." Huffman's proposal, AB 1155, passed the state Assembly on Monday on a 45-24 vote and cleared the Senate late last year on a 24-11 tally. California Medical Assn. President Dr. Richard Frankenstein said the bill, if signed into law, could force HMOs to pay more than symbolic fines if they are found to have failed to reimburse doctors for tens of thousands of claims. Under the current penalty scheme, regulators often appear fearful of taking on large insurers such as Blue Cross, he said. HMOs call Huffman's bill unnecessary and potentially expensive. Laws and regulations already on the books provide the California Department of Managed Health Care with plenty of tools for making sure that medical bills get paid, they contend. What's more, they say, doctors and hospitals are free to sue for their money. Some bills submitted by doctors who are not part of a particular HMO's network, "can be extremely high," said Michael Paiva, a director of governmental relations for Anthem Blue Cross. The company, formerly known as Blue Cross of California, is a unit of Indianapolis-based Anthem. Prompt and full payment of the costs of medical treatment already is required under state law, said Sherrie Lowenstein, an attorney for the Department of Managed Health Care, in a letter of opposition to the Huffman bill. The measure would remove some of the department's discretion to concentrate investigative and management resources on the most serious alleged HMO violations and could threaten to turn the agency into "a bill collector for providers, who already have the ability to pursue claims against a health plan under the terms of their contracts," she said. Under its current authority, the Department of Managed Health Care "has been extremely effective in representing the interests of healthcare providers, recovering more than $5 million to date in additional payments," spokeswoman Lynne Randolph said. Huffman concedes that his bill, which has been under discussion at the Legislature for almost two years, faces uncertainty in the governor's office because of opposition from Schwarzenegger's own regulators and the powerful HMO industry. Efforts to "start a dialogue with the administration" have not been successful, he said. "My calls are not returned." The governor, for now, has not made up his mind on the bill, Schwarzenegger spokeswoman Rachel Cameron said. Back to top   MASSACHUSETTS MIRACLE LOSING ITS SHINE The Boston Globe - July 15: Governor Deval Patrick's proposal to ask businesses, insurers, and hospitals to kick in about $100 million to close a gap in funding for the state's landmark health insurance law is threatening to fracture the fragile coalition whose support was instrumental in passing the measure. Business and insurance industry leaders are opposed to Patrick's plan, saying it is unfair to ask them to pay more, especially during an economic downturn. But consumer groups praised the proposal, saying patients were asked to pay more when copayments and deductibles for subsidized health plans were increased earlier this year. Now, they say, it is time for others to step up and pay their share. Meanwhile, a new poll indicated there is broad public support for asking businesses and insurers to pay more to keep afloat the state's health insurance law, which seeks to cover almost all residents. But a lobbyist with the state's largest business group said Patrick's proposal is likely to undermine key support for the two-year-old law, which passed only after more than a year of sensitive negotiations and compromises involving hospitals, insurers, employers, and consumer groups. "It was a real delicate balance that was achieved two years ago to bring everybody on board," said Rick Lord, president and chief executive of Associated Industries of Massachusetts, an association of business groups with 7,000 members. "This jeopardizes the support of the business community, and that's one of the reasons reform has been so successful so far," he said. "Any reform that has been tried anywhere else when the business community opposed it, reform has not been successful." The law requires most employers to offer health coverage or to pay an annual penalty of $295 per worker. But a crucial compromise was struck to win the business community's support: companies would be in compliance even if a minority of their workers were covered. Employers with more than 10 workers had the option of paying at least 33 percent of workers' premiums within their first 90 days of employment or having at least 25 percent of their workers covered by an employer plan. Patrick's proposal would raise $33 million in additional penalties by requiring employers to meet both requirements. Lord said the proposal would hit retailers especially hard, because many of them face such high turnover that they do not typically offer health insurance to full-timers until after 90 days. The governor announced the plan Sunday as part of a supplemental budget request, which must be voted on by the Legislature. In a letter to legislators, Patrick described the proposal as modest and as "companion contributions to those already made by consumers." House Speaker Salvatore F. DiMasi promised yesterday there will be a "full examination" of the proposal Patrick's plan would raise another $33 million from an assessment on insurance companies' reserve accounts. But Dr. Marylou Buyse, president and chief executive of the Massachusetts Association of Health Plans, said that the money is needed by the companies to cover catastrophic health costs in the event of a flu pandemic or a terrorist attack. "This is taxing healthcare to pay for healthcare and is not solving the basic problem, which is healthcare costs too much," said Buyse, whose group represents most of the state's health insurers. The state's largest private health insurer, Blue Cross Blue Shield of Massachusetts, hasn't taken any position on the proposal. A spokesman said the governor needs to release more details before the company could assess the full impact. The state's hospitals are supporting the request for more money $28 million from hospitals with a caveat. Hospitals are willing to pay more to make near-universal healthcare work, said Lynn Nicholas, chief executive of the Massachusetts Hospital Association, but she tied the organization's support to the defeat of an unrelated measure pending in the Senate. That bill would set minimum nurse staffing requirements and require hospitals to hire more nurses. The cost of Patrick's plan "pales in comparison to the prospect of having government- mandated nurse staffing ratios, which could cost in excess of $200 million a year," Nicholas said. Most of the extra money from hospitals would go to a pool that covers hospital costs of residents who remain uninsured. Currently, the hospitals contribute $160 million to that fund. Consumer groups are enthusiastically supporting Patrick's plan. "Consumers have already stepped up to the plate," said the Rev. Hurmon Hamilton, president of the Greater Boston Interfaith Organization, a consortium of religious and civic groups. "I would strongly urge the business community, insurance, and hospitals . . . to come forth and do their part." Patrick also wants to plug the funding gap by shifting $35 million from the Medical Security Trust Fund, which is used to pay health insurance for the unemployed. Consumer groups were skeptical of that part of his plan. "Unemployment is going up as the economy worsens, and we want to make sure there is enough money left to pay unemployment to people who are entitled to the money," said Brian Rosman, research director for Health Care for All. Asking businesses and insurers to pay more toward healthcare is popular. A poll being released today by the Harvard School of Public Health and the Blue Cross Blue Shield of Massachusetts Foundation found that nearly three-quarters of those surveyed supported requiring businesses with more than 10 employees to pay more toward the system. And 61 percent said they favored requiring insurers to contribute more to a fund that would subsidize coverage. The poll of 1,015 Massachusetts adults was conducted June 10 to 23. Back to top   MEDICARE'S BIAS New York Times - July 15: The intense struggle in Congress last week over a relatively modest Medicare reform bill has underscored a disturbing truth: many of the private plans that participate in the huge government-sponsored health insurance program for older Americans have become a far too costly drain on Medicare's overstretched budget. Private health plans were promoted in the 1980s and 1990s in the belief that they could reduce costs and improve care through better management. And for a while they did. But policy changes that were championed by the Bush administration and a Republican-controlled Congress led to exactly the opposite outcome. These private plans that now cover a fifth of the total Medicare population receive large subsidies to deliver services that traditional Medicare provides more cheaply and more efficiently by paying hospitals and doctors directly. Congress was right for reasons of equity and of fiscal sanity to pass a bill that would at least begin to remove some of the subsidies. There is no doubt that the traditional Medicare program had many inefficiencies. There were high hopes that H.M.O.'s, which are private plans that have their own networks of doctors and manage their patients' care, could do better. The initial results appeared promising, and even today the H.M.O.'s operate more efficiently. But the idea that private plans could save the program money started to unravel with the 1997 Balanced Budget Act, which encouraged more loosely managed private plans to participate. In some parts of the country, it increased payments to draw in more private plans. Companies rushed in and then found they couldn't prosper under tight restrictions on cost increases. Many plans dropped out, disrupting coverage for more than two million beneficiaries. That set the stage for the 2003 Medicare Modernization Act, which dumped hefty new subsidies on private plans to encourage them to rejoin. Medicare now pays the private plans, on average, 13 percent more than the same services would cost through traditional Medicare. The subsidies have fueled explosive growth in the least-efficient plans, fee-for-service plans, which do little or nothing to justify their 17 percent overpayment. This is outrageous. Instead of paying private plans less than traditional Medicare, in the belief that they could find innovative ways to cut costs and improve care, we are now paying them significantly more. The only explanation is Republicans' ideological compulsion to provide a private option. Private plans can be a good deal for beneficiaries because they are required to use most of their subsidies to reduce premiums or add benefits. Eliminating the subsidies would likely force the plans to charge more or offer less. But as it stands now, the beneficiaries in traditional Medicare are paying higher premiums to subsidize benefits for the minority in private plans, and the taxpayers are chipping in to boot. The Democrats in Congress, and the Republicans who dared to join them, deserve thanks for removing part of the subsidy. President Bush should drop his veto threat and adopt the principle that Medicare should pay the same amount for all beneficiaries. That is the only way to ensure real competition between the private plans and traditional Medicare, treat all beneficiaries fairly and begin to fix Medicare's fiscal problems. Back to top   LOW HEALTH INSURANCE CAPS LEAVE PATIENTS STRANDED Associated Press - July 13: Low health insurance caps leave patients financially pinched when high medical bills hit Mary Wusterbarth thought her toddler was struggling with an ear infection when she seemed sluggish. Instead, a virus had attacked the little girl's heart, damaging it beyond repair. Brea needed a transplant. Within three weeks of a 2007 doctor visit, the 20-month-old had exhausted the $1 million lifetime maximum on her health insurance. Her parents have scrambled ever since for ways to cover thousands of dollars in monthly medical costs. "We have no idea what kind of financial future we have," said Wusterbarth, of Wake Forest, N.C. "The medical bills come almost daily. There's never an end." Insurers set lifetime limits to keep rates low on some policies, but holders are learning that individual caps that seemed large quickly max out as health care costs soar. Several patient advocacy groups are prodding insurers to raise the caps, which generally don't adjust for inflation. Congress also is considering two bills that would do that. Only 1 percent of employer-offered group plans the largest health insurance segment had caps as low as $1 million last year, according to a survey by The Henry J. Kaiser Family Foundation. But 22 percent had caps of less than $2 million, and some want to see all these relatively low maximums eliminated. Insurers, however, say most health coverage already offers either a comfortable maximum of several million dollars or unlimited coverage. They note that more government regulation could lead to higher coverage costs, and low lifetime caps help them offer a greater variety of coverages. "I think the discussion needs to move into why do some health care services cost hundreds of thousands of dollars and what can we do to address those issues," said Robert Zirkelbach of America's Health Insurance Plans, a trade association representing nearly 1,300 insurers. Kelly and Tom Treinen used to think the $1 million individual cap that came with the insurance they had for seven years offered plenty of protection. In fact, they chose that plan, which Kelly received through her job as an elementary school principal, over a higher-priced option through Tom's business. That one offered a $5 million cap. Then doctors diagnosed their teenage son, Michael, with an aggressive form of leukemia in May 2007. His treatment called for 10 doses of a chemotherapy drug that cost $10,000 per dose. A 56-day stay in an intensive care unit cost about $400,000. Michael reached his $1 million lifetime maximum in less than a year. The Noblesville, Ind., family had to issue a public plea for help after a hospital told them it needed either $600,000 in certified insurance or a $500,000 deposit to continue preparing for a critical bone marrow transplant. The Treinens raised $865,000 in six days. Money came from all over the United States and as far away as Germany. But Michael's cancer had stopped responding to chemotherapy, and he died May 25 before he could receive the transplant. The family had no idea how fast costs were piling up. Some initial bills didn't arrive until months after treatment started. Then they would receive multiple mailings for each treatment, each listing a different amount the hospital cost, the insurance discount, the amount they owed. "When you're dealing with constant care of your child, you're not going home with a calculator and adding up to see where you're at," Kelly Treinen said. Insurance can shield patients from the true cost of health care, said Jerry Flanagan, health care policy director for California-based Consumer Watchdog. He noted that most people have no idea how quickly $1 million "can evaporate," unless they've been seriously ill before. "You can eat through a million-dollar lifetime cap in two or three surgeries," he said. Low lifetime maximums are found more often in small-employer group plans, Flanagan said, noting that those businesses generally have less insurance buying power. He said employers often give their workers a choice on plans or premiums but not on lifetime maximums. The Kaiser Family Foundation study says a greater percentage of employer-offered group plans are providing lifetime caps of at least $2 million, and the percentage that offers caps below $2 million has declined slightly. But medical costs for employer-sponsored health plans should increase 9.9 and 9.6 percent this year and next, according to PricewaterhouseCoopers Health Research Institute. "The nature of caps is that over time it becomes easier and easier to hit (them) because the cost of health care services keeps going up," said Mike Thompson, a health care and employee benefits expert with the firm. A coverage cap of $1 million in the 1970s would have had to grow to more than $10 million today to keep pace with rising costs, said Glenn Mones of the National Hemophilia Foundation. U.S. Rep. Anna Eshoo, D-Calif., unsuccessfully pitched a bill on lifetime caps in 1996. She will try again this summer because she sees better odds with a Democrat majority in the House of Representatives. Sen. Byron Dorgan, D-N.D., introduced a similar bill in March in the Senate. Back to top   CALIFORNIA ASSEMBLY APPROVES BILL THAT WOULD GIVE STATE MORE AUTHORITY TO PENALIZE INSURERS WHO DO NOT PAY BILLS Kaiser Daily Health Policy Report - July 15: The California Assembly on Monday voted 45-24 to approve a bill (AB 1155) that would increase the state's power to fine health insurers who do not pay or underpay medical bills, the Los Angeles Times reports. Bill sponsor Assembly member Jared Huffman (D) said, "Time and time again, health insurance companies have unlawfully denied treatment, rescinded policies and underpaid providers to make more money," adding, "Insurers will continue these practices until there is no longer an economic incentive to do so." California Medical Association President Richard Frankenstein said that the bill could force HMOs to pay more than symbolic fines if the state Department of Managed Health Care determines that they have failed to reimburse claims submitted by physicians. He added that under the current penalty system, regulators often appear fearful of challenging large insurers. Sherrie Lowenstein, an attorney for the department, said that the bill would lessen the ability of DMHC to focus on the most serious cases of alleged HMO violations and could turn the agency into "a bill collector for providers, who already have the ability to pursue claims against a health plan under the terms of their contracts." Department spokesperson Lynne Randolph said the department "has been extremely effective in representing the interests of health care providers, recovering more than $5 million to date in additional payments." HMOs also have said the bill is unnecessary because state laws and regulations already in place give the department the tools it needs to ensure medical bills are paid. In addition, Michael Paiva, a director of governmental relations for Anthem Blue Cross, said some bills submitted by some providers who are not part of an HMO's network "can be extremely high." The state Senate voted 24-11 to approve the bill last year. The measure now goes to Gov. Arnold Schwarzenegger (R), "who is coming under pressure from HMOs and his own regulators to issue a veto," the Times reports. According to Schwarzenegger spokesperson Rachel Cameron, the governor has not taken a stance on the legislation (Lifsher, Los Angeles Times, 7/15). Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. ) 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved. Back to top   IT'S COME TO THIS: CHILDREN ON LIPITOR The Sacramento Bee - July 11: Washington - One pill makes you larger and one pill makes you small. And the ones that mother gives you soon will control your cholesterol. Childhood long ago ceased to involve idyllic hours chasing small animals through the field or even careening around the neighborhood on a bicycle. But do we really need to liven it up with Lipitor? To the cocktail of drugs young children already are taking, the American Academy of Pediatrics is now recommending that some kids as young as 8 might benefit from cholesterol-reducing medication. The reasons are too familiar: Our kids are growing too fat (just like their parents), eating lots of the wrong foods (just like their parents), getting insufficient exercise (just like their parents), and showing the warning signs of serious future health problems high cholesterol levels that are precursors to heart attacks (just like they are for their parents). So, after detecting an unnerving jump in cholesterol levels among the young, the pediatrics profession is suggesting that some kids with high cholesterol and a family history of early heart disease should "be considered" as candidates to take the drugs now prescribed mostly to those who are in middle age or older. Screening for cholesterol levels, according to recommendations listed in the journal Pediatrics, should begin for some children when they are as young as 2. Can cholesterol-drug commercials on the Disney Channel be far behind? There's no wonder the medical profession is concerned about overweight kids who are developing life-threatening health conditions. The pediatric profession long ago recommended that children 2 and older eat less sugary food; consume whole-grain breads instead of processed, white baked goods; and drink skim or low-fat milk. The children's doctors say kids should get "60 minutes of moderate to vigorous play or physical activity daily." And by vigorous, they don't mean thumbing to victory in a video game or racing to get a snack during a television commercial. "It's appalling what we've let happen to our children," says Kelly Brownell, director of the Rudd Center for Food Policy and Obesity at Yale University. "And the fact that the children have such high cholesterol levels is a sign of the environment we have created for them." Another part of what Brownell calls our "environment" is the reliance on medication as the answer to the poor conditions we've created for ourselves. "As a culture, we're very prone to creating unhealthy environments and then trying to use medicine to mop up the damage." The epidemic of obesity among children is real, and already it is leading to the onset of serious and expensive to treat diseases such as diabetes at ever-younger ages. But like another serious problem much in the news lately sky-high energy prices this is one that is largely of our own making. We've allowed the food industry to market directly to kids, overwhelming them with a tsunami of sugary inducements in cereal ads alone. We've allowed vending machines full of junk food in the schools. We've somehow made the social activity of sitting around eating pizza while watching a sporting event as acceptable as playing the sport itself. As schools have come under increasing pressure to teach and test more, physical education programs and even recess for elementary-school kids often have been cut. Just as we have a decades-long history of all the wrong habits when it comes to energy consumption, we've got a decades-long history of saying we want to be fit, while conscientiously ignoring most of the good advice that's been out there for years. "The fact that young kids may need statin drugs now is a sign of how bad we've made it," Brownell says. "If anything, this study should have sounded the loudest possible alarm bell that something needs to be done to provide better conditions for our children." When the U.S. surgeon general first reported that smoking cigarettes was a killer habit and hardly the glamorous lifestyle choice portrayed in television and the movies people began to quit in droves. Eventually, tobacco use became a social taboo. Schools and parents go to great lengths now to keep kids from smoking. After all, there's no prescription drug that can cure lung cancer. How loudly does the siren about our children's unhealthy eating habits have to sound before we get the message that the response has to come from us and not the pharmaceutical industry? Back to top   OBAMA SUGGESTS TAX CREDIT FOR BUSINESS HEALTHCARE Associated Press - July 13: Barack Obama on Sunday proposed up to a 50-percent tax credit for small businesses providing health insurance to their employees, a program he hopes has special appeal to Hispanics and other minority groups struggling for a toehold in the U.S. economy. The idea had been championed by Sen. Hillary Rodham Clinton of New York, whom Obama vanquished in the battle for the Democratic presidential nomination. "We know that small businesses are the engines of economic prosperity in our communities, especially in Latino communities," Obama said in an address to several thousand Hispanics attending the annual convention of the National Council of La Raza. "My plan won't impose any new burdens on small businesses. Instead, we'll help them not just create new jobs, but good jobs jobs with health care, jobs that stay right here in America, the kinds of jobs we need in our communities," the Illinois senator said. While the precise cost and details of the program were not immediately available, a campaign statement said the "credit would be fully available to small firms, and would be phased out for medium-sized firms. It would also be phased out for small firms with high-income employees." The speech is the latest in a series of efforts by Obama to reach out to Latino voters, a constituency over which he and his Republican rival, John McCain, are battling. "Make no mistake about it: The Latino community holds this election in your hands," Obama said to cheers. "I am here today to make you this promise: I will be a president who stands with you and fights for you and walks with you every single step of the way." Obama was scheduled to conduct interviews with three Spanish-language media outlets, including Telemundo, later in the day. Last week, both candidates addressed some 700 Hispanics attending the National Association of Latino Elected and Appointed Officials conference. They agreed to revamp immigration, an issue McCain has made a hallmark but Obama has accused McCain of abandoning after major immigration legislation fell apart last year. Both McCain and Obama support an eventual path to citizenship for millions of immigrants in the country illegally, although McCain, a senator from the border state of Arizona, has shifted his emphasis to securing the U.S. border before turning his focus back to overhauling immigration laws. For his part, McCain has a new television ad, titled "God's Children," in which he lauds the military service of Hispanics. Latinos are expected to impact the voting in such battleground states as Nevada, Colorado and New Mexico and in others with large numbers of Spanish-speaking voters. A recent AP-Yahoo News poll showed Obama leading McCain among Hispanics, 47 percent to 22 percent, with 26 percent undecided. Yet President Bush captured about 40 percent of the Hispanic vote in 2004, the most ever for a GOP presidential candidate. Democrat John Kerry won 53 percent, down from the 62 percent former Vice President Al Gore received in 2000. "Right now, I think we're doing well in the polls, but I tend not to trust polls," Obama told reporters on Saturday. "I think we've got to work hard, and any opportunity that I have to tell that story about the work I did as a community organizer, as a state legislator, as well as a U.S. senator, on behalf of issues and causes that are important to the Latino community, I want to seize that opportunity. I'm not as well known in that community as I'd like to be, but my assessment is that we're doing pretty well there right now." While in California, Obama also attended fundraisers in San Diego and Newport Beach. In San Diego, he was introduced by Los Angeles Mayor Antonio Villaraigosa, a top Hispanic official. In Newport Beach, he told the weekend evening crowd, "I'm still looking for my mimosa." When a woman offered him a sip of hers, Obama imbibed, told her it tasted "nice" but declared to laughter, "I'm more of a Bloody Mary guy." In addition, Obama made an address via satellite to the American Federation of Teachers convention in Chicago in which he reiterated his education views. The union has endorsed him. Back to top   LONG-TERM FIX IS ELUSIVE IN MEDICARE PAYMENTS New York Times - July 13: Washington - Congress has voted to block a cut in Medicare payments to doctors but has done nothing to solve the fundamental problem that caused the cut, and the issue will come back to haunt the next president and the next Congress, lawmakers and health policy experts say. Democrats and Republicans agree that the formula for paying doctors is broken, but fixing it would be phenomenally expensive, they say. So Congress provides temporary relief from year to year, the same way it takes care of the Alternative Minimum Tax, which snares more middle-income families every year. Older Americans are directly affected because they pay higher premiums when Medicare spends more on doctors. Senator Edward M. Kennedy of Massachusetts made a surprise return to the Senate last week and helped Democrats pass a bill to rescind a 10.6 percent cut in Medicare payments to doctors. The White House says President Bush will veto the bill because it would also reduce subsidies paid to insurance companies that care for some Medicare beneficiaries. Democratic leaders believe they have the two-thirds majority needed to override a veto. The bill was passed 355 to 59 in the House, and the crucial vote in the Senate was 69 to 30. The bill would give doctors an 18-month reprieve. But it leaves in place the current system of paying doctors, based on a fee schedule that sets payment rates for 7,000 different services. The physician payment mechanism is hands down the most broken part of Medicare, said Gail R. Wilensky, who was administrator of the Medicare agency under the first President Bush. We desperately need a new way to reimburse doctors. I fear that the need for fundamental change will be kicked down the road once the latest crisis has passed. Senator John D. Rockefeller IV, Democrat of West Virginia, agreed. We must find a long-term solution, he said. Mr. Rockefeller and other lawmakers are pleading with physicians groups to come forward with a comprehensive proposal. But that could be difficult because any new formula would almost surely produce winners and losers among doctors. Dr. Thomas R. Russell, executive director of the American College of Surgeons, said, We absolutely want to work with Congress to get this fixed in the next 18 months. Doctors who are responsible for the rapid growth in certain areas, like testing and imaging procedures, need to bring those expenses under control, Dr. Russell said. But radiologists say it is unfair to hold them accountable for all the growth in imaging services because the services are usually ordered by other doctors, like orthopedic surgeons and internists. Senator Debbie Stabenow, Democrat of Michigan, called the current formula severely flawed. She said it cut payments to doctors about 5 percent in 2002 and would have caused cuts every year since then if Congress had not intervened. Senator John Cornyn, Republican of Texas, said, Congress needs to step up with a permanent solution, not the kind of shameful temporary patches and fixes that require physicians to come hat in hand to Congress every 6 or 12 or 18 months. The fee schedule places a limit on payment for each service, from a routine office visit to brain surgery, but does not limit the volume or quantity of services. Medicare officials set payment rates each year, using a complex formula that sets overall goals for spending on doctors services. When actual spending exceeds the goals, payments to doctors are supposed to be reduced. If Congress steps in to block a cut in one year, Medicare recoups the money by making deeper cuts in future years. Under the bill passed by Congress last week, doctors would face a cut of more than 20 percent in 2010. The purpose of the formula is to control the growth of Medicare spending for doctors services. But individual doctors are not rewarded or penalized for their own performance. Medicare provides the same annual update to doctors, regardless of whether they control costs and keep their patients healthy or provide poor care and perform unnecessary tests. The Medicare formula, established by Congress in 1997, links spending on doctors to growth of the economy, measured by the gross domestic product. This formula works when the economy is booming, doctors say, but people need their services just as much in a recession. The formula does not distinguish between appropriate and inappropriate increases in services billed to Medicare. Nor does it reflect the fact that many services can be done with new technology in doctors offices, rather than at hospitals. Dr. Wilensky said that instead of paying for little bitty units of service, Medicare should provide a bundled payment to a doctor or group of doctors who care for patients with chronic illnesses like diabetes and congestive heart failure. Back to top   CALIF. PHARMACIES WIN COURT ORDER TO HALT 10 PERCENT CUT FOR MEDI-CAL Rx DRUGS Business Wire - July 12: Sacramento, Calif. - Late Friday, pharmacy providers were notified that a three judge panel of the Ninth Circuit Court of Appeals had acted to halt the ten percent payment cuts for prescription drugs dispensed under the Medi-Cal Program. The action was made in response to an emergency appeal in the case, Independent Living Center of Southern California, et.al. v. Shewry, to challenge a lower court ruling that the plaintiffs did not have standing to sue under the Supremacy Clause of the U.S. Constitution. The Ninth Circuit panel reversed the ruling, issued an order to stop the ten percent Medi-Cal cuts for prescription drugs until at least August 11, 2008 and sent the case back to the Federal District Court in Los Angeles for further consideration of the plaintiffs motion for a preliminary injunction. This outstanding victory shows the strength of a united profession working together to ensure patient safety and care. The lawsuit is one of three supported by a coalition of pharmacy interests, including the California Pharmacists Association, the National Community Pharmacists Associations and the National Association of Chain Drug Stores. Several independent community pharmacies have also contributed to the lawsuit. The California Pharmacists Association, which represents pharmacists in the state of California, applauds the Court of Appeals for making this crucial decision, said Lynn Rolston, chief executive officer of the California Pharmacists Association. This is a victory for pharmacy and patients alike. Patients have experienced significant problems in getting lifesaving prescription medicines since the cuts went into effect on July 1 and the Courts action will prevent additional patient harm. The judgment is only temporary and unfortunately doesnt apply to any other provider, continued Rolston. We want to acknowledge and congratulate lead attorney Lynn Carman and his associate Stanley Friedman for a job extremely well done and thank the many plaintiffs in this case for their efforts, including CPhA member Jerry Shapiro. We are pleased that the concerns of pharmacy were heard, said Steve Anderson, president and CEO of the National Association of Chain Drug Stores, whose organization is a member of the Coalition for Community Pharmacy Action (CCPA). Maintaining pharmacy access is important not only to Medi-Cal beneficiaries health and safety, but also to the Medicaid programs overall ability to constrain healthcare costs, including those related to preventable emergency room visits and catastrophic care. At this time, it is not known if the State will appeal the action by the Court of Appeals. As this case makes its way back to District Court, other legal actions are still proceeding. A preliminary injunction hearing in a lawsuit filed by the California Medical Association, CPhA and other provider groups is scheduled for July 25 and will be key in putting a more permanent hold on the cuts for all providers, including pharmacy. It is expected that Electronic Data Systems, which processes prescription claims for the Medi-Cal program, will not have a fix in place immediately for the on-line electronic billing system used for prescription claims. Pharmacies may continue to see payment information that shows below cost reimbursement and may have to re-bill claims once the fix is in place.   WOULD MCCAIN PLAN HURT EMPLOYER HEALTH COVERAGE? Associated Press - July 6: Washington - There's a great unknown about Sen. John McCain's health plan: How many employers would drop insurance coverage for their workers because of his tax policies? The Republican presidential nominee-in-waiting has proposed that everyone buying health insurance get a refundable tax credit, $2,500 for individuals and $5,000 for families. At the same time, he would treat employer contributions toward health insurance like income, meaning workers would have to pay income, but not payroll, taxes on it. McCain's Democratic rival, Barack Obama, says the plan would "shred" the employer-based system that provides health insurance to about 158 million workers. Most health analysts won't go that far, but both liberals and conservatives say McCain's approach would strengthen the individual and small-group insurance market. And by strengthening that market, it will pull in workers now covered through their jobs. A SHIFT: The workers most inclined to make that transition will be younger, healthier ones who most likely will be able to buy a policy on the individual market for less than their tax credit, said Paul Fronstin, a senior research associate at the Employee Benefit Research Institute, which studies employee benefits. To the degree that happens, the employer-based market will become less healthy as sicker, older workers stay with their employer-based coverage while more of the healthier workers move to the individual market. "What you'll see happening is average cost in the employer-market will go up and average cost in the individual market will go down," Fronstin said. "You'll start to get into a cycle where people at the margin start to leave employer coverage for individual coverage. At some point, employers will start to ask: Why am I doing this if my workers don't value it anymore? If I don't need to do this to be competitive in the labor market, why should I do it?" NO RAPID CHANGE SEEN: Joseph Antos, who studies health care policy at the American Enterprise Institute, a conservative think tank, said it's predictable that McCain's proposal would move more people into the individual market because some workers could simply get a better deal there. Not only are the premiums typically cheaper for younger, healthier workers, but any difference between the tax credit and the premiums can be redirected into a health savings account. "This stuff about shredding the employer market, that's just campaign rhetoric in the sense that nothing changes real quickly in this country," Antos said. "We're not going to see employers drop coverage en masse, and the reason is health insurance benefits remain an important tool for attracting good employees and retaining good employees." BARGAINING TOOL: Employers began offering health insurance as a benefit during World War II, when a labor shortage increased competition for workers. Wage controls limited employers' ability to offer higher salaries, so they offered benefits like insurance, pensions and longer vacations. Health benefits were not a major expense initially, but they have become a significant part of payroll as health care costs have spiraled upward. Dan Crippen, an adviser who helped McCain craft his health plan, rejects contentions that there would be any kind of rapid transition from the employer-based system. He said the benefit of the plan is that it would give people who change jobs frequently a policy they can take with them. "We've talked to a lot of employers who have no interest in giving up their insurance now no matter what the system would be," Crippen said. "Frankly with the demographics coming into all of this, the retirement of my generation, our country is going to be hard up for workers and employers are going to once again be needing to attract workers, just like the onset of the employer-based system in World War II." Back to top   PROPOSED CALIF. BUDGET CUTS AFFECTING MOST VULNERABLE Contra Costa Times - July 3: In the end, Nick Robinson just couldn't afford the Bay Area. And with pending state budget cuts threatening the foster care counselor's programs and salary, he decided to pack his belongings and leave Walnut Creek for Boston. "There's no way anyone can manage on this type of salary," the 23-year-old said from his apartment, days before he left. Robinson started at $9.35 an hour and received 20-cent-a-year cost of living increases working at Concord's Youth Homes Inc., an emergency shelter for homeless youths. "These kids need many things, including people who will be there for them," said Robinson, who landed his counseling job after spending years in the county's foster care system battling his own drug addiction. After identifying an estimated $15.2 billion shortfall in May, Gov. Arnold Schwarzenegger proposed cutting $9 billion statewide, resulting in a 10 percent reduction for Contra Costa's foster care system. He plans to fill the $8 billion gap with new revenue, mostly by borrowing against lottery revenue. The proposed cuts could mean a loss of $262 million annually in direct state and federal assistance to Contra Costa, according to a Health Access California. The cuts would affect the county's most vulnerable residents who saw almost $52 million sliced from the budget earlier this year. That initial cut chopped clothing allowances for Contra Costa foster youths. The program had provided $125 to $225 annually for foster youths to buy clothes. "As a counselor, it's really heartbreaking to see these kids get petty, little clothing allowances," Robinson said. "We wind up taking them to thrift stores." Earlier cuts have limited living spaces for foster youths. The county is short of facilities that take in youngsters with severe mental illness, Robinson said. "So many have already shut down because they can't afford it," Robinson said. Payments to families and group homes would be reduced from $530 a month to $477 a month, according to Health Access. Amy Fedele is just hoping to keep her ailing grandmother out of a nursing home. Her 76-year-old grandmother, Margaret Fedele, diagnosed with Lewy body disease in 2006, needs round-the-clock care. Shortly after the diagnosis a disease that can lead to dementia Fedele was briefly in a nursing home. "She was going downhill. Every day she was in there, she said, 'I want out. I want to go home,'" Amy said. "(If she returns) she's going to pass away earlier than expected." Amy, her aunt and in-home support services caregivers have enabled the family to keep Margaret out of nursing homes. However, the state plans to take $22 million from Contra Costa's in-home support services, affecting 1,500 disabled and senior residents. The hourly wages of more than 6,500 caregivers would fall from $12 to $8.60 an hour, according to Health Access. After a doctor's visit Tuesday, Margaret was sent to the emergency room. Although health care faces sizable cuts, education was not spared. Concord resident Erin Dillon, 16, learned a few weeks ago that her Advanced Placement biology class at Ygnacio Valley High School had been canceled due to low enrollment. A lack of funding $70 million cut from Contra Costa school budgets has districts requiring larger class sizes. "I was really emotional," said Erin, a straight-A student who just finished her sophomore year. She wants to attend Stanford University and become a marine biologist researching intertidal regions. "I really need this class to go to college and be competitive." Her father, Mark Dillon, has written to the district and presented the problem to the school board. "I see this as a case of No Child Getting Ahead," Dillon said, riffing off the federal No Child Left Behind program. "We have a very driven student ... and she's frustrated." And then there's Marla Campos, a single mother in Antioch who has been searching for child care for her children, 5 and 7. Back to top   COURT DECLARES CONTINGENT COMMISSIONS NOT ILLEGAL Associated Press - July 7: Washington - The National Association of Professional Insurance Agents is hailing a ruling by the 1st Appellate Division of the New York Supreme Court which declares that contingent commission agreements are not illegal. This is a resounding victory for Main Street insurance agents across the nation and the American Free Enterprise System, said PIA National President-elect Kenneth R. Auerbach, Esq. It is also a vindication of the actions taken by PIA to turn back the attacks on a compensation system that has always been legal and ethical, despite Eliot Spitzers incorrect assertions to the contrary. The courts action throwing out all claims relating to contingent commission agreements came June 19, 2008 in a case that stemmed from a May 2006 fraud and bid-rigging suit originally filed against Liberty Mutual by former New York Attorney General Eliot Spitzer. While other insurers and mega-brokers faced investigations of similar allegations since 2004 and opted to settle with Spitzer and other state authorities, Liberty Mutual vowed to fight the allegations in court. Some of the settlements banned the payment of contingent commissions, while others mandated the use of a disclosure form that was legally flawed and would place agents at risk of errors and omissions claims. Contingent commission agreements between brokers and insurers are not illegal, and, in the absence of a special relationship between the parties, defendant(s) had no duty to disclose the existence of the contingent commission agreement, the court said in its ruling. Several other court decisions in 2007 also found to be baseless allegations that carriers contingency compensation programs constituted a conflict of interest and are illegal. This marks the end of the Spitzer era, Auerbach said. Common sense is finally beginning to prevail. The court has stated unequivocally that being compensated with commission, contingent or otherwise, is neither illegal nor unethical and has thrown out as baseless all claims to the contrary. We are hopeful that the certainty of this ruling will serve to deter any further attempts by ambitious and misguided state Attorneys General from targeting the legal compensation of those who never engaged in wrongdoing. Auerbach added that PIA appreciates the fact that Liberty Mutual decided not to enter into a settlement as other carriers did, opting instead to fight in court. PIA agents are grateful to Liberty Mutual for remaining steadfast, being our allies in support of common sense and fighting for what is right. On September 19, 2006 PIA filed an amicus brief with the United States District Court for the District of New Jersey, in opposition to one of the proposed settlements. In its brief, PIA noted that the settlement attempted to create a remedy for alleged wrongdoing and then impose it on those who were not involved in any wrongdoing retail Main Street insurance agents. The PIA filing also noted that several of the original settlements reached in 2004 were subsequently amended by state attorneys general to liberalize earlier prohibitions against contingency earnings while such changes were not made for Main Street agents, who had never been accused of any wrongdoing. PIA provided the most comprehensive legal briefs on behalf of independent insurance agents in the that case, speaking to the legally incorrect disclosure form being imposed on agents by the settlement actions, as well as the litany of unfair and adversely disparate treatments PIA agencies were being subjected to by being denied due process through the misuse of the settlement process, which was conducted in secret and from which independent insurance agents were excluded. In light of all of these court rulings, we believe it is time for state attorneys general to revisit settlement agreements that impose these adverse effects indiscriminately on all producers, specifically those who never had anything to with alleged wrongdoing, and give them back their rightful earnings, said PIA National Senior Vice President Patricia A. Borowski. These rulings represent vindication of PIAs position, Borowski said. PIA National included and argued these same (and now prevailing) fundamentals of insurance law in our amicus filing. We have been proven correct. Back to top   WELLPOINT SETTLES WITH CALIF. HOSPITALS OVER RESCISSIONS Los Angeles Times - July 8: Anthem Blue Cross parent WellPoint Inc. agreed Monday to pay $11.8 million to settle claims from about 480 California hospitals that it failed to cover the bills of patients it dropped after they were treated a controversial practice known as rescission. The hospitals sued after scores of their patients contended in their own lawsuits that Blue Cross had illegally dropped them. The patients said Blue Cross had improperly investigated their medical histories after they submitted expensive bills in an effort to use purported preexisting conditions as an excuse for canceling their policies. The hospitals, including most private and public facilities in California, say they provided emergency and authorized care to patients who were, at the time of treatment, Blue Cross members in good standing. Only later, they contended, did Blue Cross drop the patients and renege on its obligation to pay their bills. Pending final approval from Los Angeles County Superior Court Judge Peter Lichtman, the settlement will allow the hospitals to be reimbursed for disputed bills, said Daron Tooch, a lawyer for Hooper, Lundy & Bookman Inc., the Los Angeles firm representing the hospitals. As a condition of the deal, the hospitals agreed to stop trying to collect payments for the disputed bills from patients. Anthem Blue Cross still faces separate class-action suits from the state's physicians over bills from patients the company canceled after they treated them. It also faces a class-action suit filed on behalf of more than 6,000 patients dropped by the company since 2001. The company had reached a tentative settlement with lawyers on behalf of patients more than a year ago. But that deal unraveled when the hospitals and physicians objected that it failed to address providers' medical bills and their efforts to collect from patients. "You really had to get the hospitals involved to get them to release their claims against the patients," said Tooch, the hospitals' lawyer. "That's why the patients benefit more from this settlement than the prior one." Settlement talks on behalf of the patients and physicians are ongoing. Blue Cross also faces regulatory action. The state Department of Managed Health Care announced a $1-million fine against Blue Cross after it concluded last year that its rescission practices were systemically unfair and illegal. Since then, a California appellate court decision on a rescission case prompted the department to reconsider its case, officials said. "That decision strengthened the hands of patients," said Daniel Zingale, a healthcare advisor to Gov. Arnold Schwarzenegger. "What's important about that decision is it made clear that it's against the law to take someone's health insurance away from them when they acted in good faith." Now, Zingale said, the penalty could be stiffer for Blue Cross as much as $200,000 per violation on about 1,700 disputed rescissions. Blue Cross, along with competitor Blue Shield, have failed to come to terms with the department over rescissions. The department is seeking deals that would lead to the restoration of coverage for rescinded patients. Health Net, Kaiser and PacifiCare all have reached negotiated settlements that the department said would lead to such reinstatements. Department director Cindy Ehnes said, "Anthem Blue Cross and Blue Shield have not agreed to reissue health coverage, so we will be going back through each of their approximately 2,170 rescission cases to pursue individual fines in each case." Anthem Blue Cross President Leslie Margolin said the company had been trying to reach a deal with the department for months. She said she had a meeting with senior members of the governor's office staff to go over the company's proposal, including the immediate coverage for seven individuals the department previously demanded it reinstate, as well as third-party reviews of other cases. "We have been in discussions with the department regarding a fine and have expressed willingness to settle on terms comparable to all other industry agreements," Margolin said. Back to top   DOCTORS PRESS SENATE TO UNDO MEDICARE CUTS New York Times - July 3: Washington - Congress returns to work this week with Medicare high on the agenda and Senate Republicans under pressure after a barrage of radio and television advertisements blamed them for a 10.6 percent cut in payments to doctors who care for millions of older Americans. The advertisements, by the American Medical Association, urge Senate Republicans to reverse themselves and help pass legislation to fend off the cut. How to pay doctors through the federal health insurance program is an issue that lawmakers are forced to confront every year because of what is widely agreed to be an outdated reimbursement formula. But the dispute, which showcases the continued potency of health care issues, has reached a new level of urgency this year. Some doctors are reassessing their participation in the program and powerful interests on all sides are in a lobbying frenzy. Just before the Fourth of July recess, the House passed a bill to prevent the Medicare pay cut by a vote of 355 to 59. In the Senate, Republicans blocked efforts to take up the bill, so the cut took effect on July 1, as required by the formula. But the Bush administration has delayed processing of new claims to give Congress time to come up with a compromise. Senator Harry Reid of Nevada, the majority leader, said he planned to force another vote this week, and Democrats pressed their case over the weekend in their national radio address. Democrats need just one more vote to pass the bill, and they hope to win over Republicans who were hit by advertisements over the recess. The advertisements assert that Republicans have been protecting powerful insurance companies at the expense of Medicare patients access to doctors. The commercials were aimed at 10 Republican senators, including seven up for election this fall. But President Bush has vowed to veto the bill, so the fight and the uncertainty could continue for weeks. Mr. Bush and many Republicans oppose the bill because it would finance an increase in doctors fees by reducing federal payments to insurance companies that offer private Medicare Advantage plans as an alternative to the traditional government-run Medicare program. Insurance companies and the White House argue that the bill would hurt beneficiaries who rely on private Medicare plans. Americas Health Insurance Plans, a trade group, ran television advertisements last week, urging Congress to stop cuts to Medicare Advantage. Medicare is just one issue on which Congress is stalled. The Senate has yet to finish work on a bipartisan bill to help homeowners facing foreclosure. Lawmakers are also struggling with legislation to regulate electronic surveillance and deal with soaring gasoline prices. But the Medicare issue has been a sticking point for years. The question is how to rein in the rapidly rising cost of the federal health program. Members of both parties say they want to change the formula, which defines a sustainable growth rate for spending on doctors. But Congress is nowhere near agreement. The pending bill offers a short-term fix. It would reverse the 10.6 percent cut and increase Medicare payments to doctors by 1.1 percent in January. Under the current formula, doctors would still face cuts of more than 5 percent a year from 2010 to 2012. Despite the presidents veto threat, many House Republicans bolted and voted for the bill, putting added pressure on their colleagues in the Senate. As the maneuvering goes on in Washington, doctors around the country have begun to reassess their participation in Medicare. Dr. David D. Richardson, 40, an ophthalmologist in Los Angeles County, closed his practice last week to all but emergency patients and those needing surgery. I love practicing medicine, Dr. Richardson said, but I would lose more money by keeping my office open than by pulling it back to a skeleton crew. Just like a physician in the emergency room, I try to reduce the hemorrhaging. In Topeka, Kan., Dr. Kent E. Palmberg, senior vice president and chief medical officer of the Stormont-Vail HealthCare system, said its 70 primary care doctors were no longer accepting new Medicare patients as of July 1 because of the draconian cut in Medicare reimbursement. Dr. Gerald E. Harmon, a family doctor in Pawleys Island, S.C., said he decided last week that he would not take new Medicare patients until further notice. This is not what we enjoy doing, says a notice in his waiting room. It is what we must do to maintain financial viability. Dr. Harmon said that Democrats had been more helpful on Medicare legislation, but that the two parties shared responsibility for the impasse. Rome is burning, and Nero is fiddling away, trying to get re-elected, Dr. Harmon said. Back to top   STATE IS WRONG TO CUT MEDI-CAL REIMBURSEMENTS San Jose Mercury News - July 6: California's health care safety net has been shredded over the past decade, with 70 hospital and emergency room closures and growing numbers of doctors and institutions unwilling or unable to care for the poor. Even so, Tuesday's 10 percent cut in reimbursement rates for Medi-Cal providers marks a new low. California already has one of the worst reimbursement rates in the nation. The Legislature can't allow this to stand. If it does, even fewer doctors will treat Medi-Cal patients, and more ERs may be forced to close, diminishing health care for everyone. Given the budget deficit, it won't be easy to restore the $1.3 billion the 10 percent supposedly saves the state. But it's a false saving. It will just shift more costs to county hospitals, employers, businesses and individuals, and the toll ultimately will be far more than $1.3 billion. For starters, the cuts mean California will be throwing away about $500 million in federal matching funds. Those fortunate enough to have insurance can expect premiums to increase significantly to help cover the corresponding costs as hospitals that care for the poor and uninsured hike prices to pay for the additional burden. It's not as if the state can wave a magic wand and expect low-income people to stop getting sick or having accidents. A poll by the Alameda-Contra Costa Medical Association of 1,000 doctors in private practice found that nearly two-thirds who treat Medi-Cal patients say they will cut back or stop seeing them if reimbursement is cut. Who can blame them? Most practices have huge fixed costs, including insurance. Most young doctors have huge loans to pay off. As fewer doctors accept Medi-Cal, more families will wait until problems are extreme and then go to ERs - the least efficient and most costly method of providing health care. According to the New America Foundation, California taxpayers face a "hidden tax" of $1,200 a year in higher costs to help cover this cost. The Legislature should be taking its cue from Congress. In a bipartisan effort supported by more than 120 Republicans in the House, Congress last week fought off President Bush's effort to limit federal payments for Medicare and Medicaid. That saved California's public hospitals $500 million. If the governor's cut stands, it screams that California doesn't value a healthy workforce, doesn't care whether there are enough primary-care physicians and is willing to see more ERs close because they can't pay their bills. This cut in reimbursement is a broken promise to doctors and hospitals, who should be compensated fairly for treating California's most vulnerable residents. And it illustrates how far the state's priorities are out of whack with community needs. Back to top   ALARM GROWS ON KIDS' DENTAL HEALTH The Sacramento Bee - July 6: As a pediatric dentist, Dr. James Musser sees many cautionary tales. In his 26 years of practice in Sacramento County, Musser has on occasion placed stainless steel crowns on all of a young patient's rotted baby teeth. Sometimes these tiny teeth are so decayed they are unsalvageable, and he must remove them all. "Parents think they get a free ride on the first set," Musser said. "But baby teeth can decay and abscess, and the child can go through severe pain." Musser sees some of the most serious cases in the county because he is one of the few pediatric specialists able to administer the general anesthesia that many of the patients referred to him require during treatment. Tooth decay is children's worst chronic health problem, a "hidden epidemic," according to the Dental Health Foundation's 2006 "California Smile Survey." And dental health officials say the problem will only get worse with a 10 percent cut to Medi-Cal that took effect statewide Tuesday as part of the state's effort to deal with the state budget deficit. In Sacramento, Yolo, Amador, El Dorado and Placer counties, about 65 percent of children living in poverty do not have adequate access to dental care, according to the Sacramento District Dental Foundation. Statewide studies have shown that poor access is the result of lack of insurance and a limited number of dentists providing care for uninsured or underinsured patients. Across California, children have more dental problems than children in most other states, according to the Smile Survey. More than half of all California children have experienced tooth decay by kindergarten. Almost one in five have extensive decay, the study shows. As with many other health conditions, poor and minority children have a disproportionately high number of cavities and poor oral health. Latino children have the highest risk for dental problems, according to the survey. Among Latinos, 72 percent have experienced decay and 26 percent had cavities on seven or more teeth. "All things are not equal," said Gayle Mathe, manager of policy development for the California Dental Association. "Eighty percent of disease is in 25 percent of children." Untreated tooth decay can lead to infections in other parts of the body, such as children's ears and sinuses, as pathogens spread from their teeth. Dental problems also cause children to miss many days of school, according to the Dental Health Foundation. And dental disease is infectious: Cavity-causing bacteria can be passed from person to person, according to experts. Dental diseases can be greatly reduced through good prevention practice such as regular dental visits, experts say, but those are precisely the practices that are sacrificed first when treatment is beyond the means of low-income parents. Smiles for Kids provides dental screening and treatment to children in Sacramento, Yolo, Amador, El Dorado and Placer county whose families don't qualify for Medi-Cal or other public assistance, or who are waiting for other coverage to kick in. A program of the Sacramento District Dental Society, Smiles for Kids relies on grants, donations from the public and health care providers who donate their time. "With all the Medi-Cal and Denti-Cal cuts, it's entirely possible we'll need to treat more kids," said Erin Jones, Smiles for Kids coordinator. "It'll have an impact on the number of kids that don't have options." Lack of dental insurance or not being able to afford dental care was the main reason parents gave to the Smile Survey for not taking their children to the dentist. About 23 percent of parents reported having no insurance, 42 percent had some sort of government coverage, leaving about 35 percent with private insurance. Those who rely on Medi-Cal will face more difficulties in the future getting their children the dental care they need. Denti-Cal, as the dental portion of Medi-Cal is known, covers 6.6 million adults and children in California. It uses only 2 percent of the entire Medi-Cal budget, according to the Dental Health Foundation. The budget cuts to Medi-Cal mean Denti-Cal providers will also take a 10 percent cut in reimbursements. Even before the cuts, Denti-Cal reimbursed well under 40 percent of what dentists are generally paid, said Musser. He says he fears that the budget cuts will result in fewer and fewer dentists accepting such patients. About 4,000 of the state's 34,000 active dentists provide 97 percent of all services to Denti-Cal patients, according to the Dental Health Foundation. "I can see real shock waves going out," said Musser. "How can I say it won't affect the patients I see?" Back to top   KAISER PERMANENTE INTRODUCES CHECK-IN KIOSKS Business Wire - Jun. 25: Pasadena, Calif. - Kaiser Permanente deployed its first KP Self-Service Kiosk to optimize the patient check-in and payment experience in an innovative project that will include over 60 medical clinics in Southern California. This is one of the largest pilot kiosk projects undertaken by any U.S. healthcare organization, and it is another example of Kaiser Permanentes market-leading efforts in electronic integration. During the kick-off event at Kaiser Permanentes Rancho Cucamonga Medical Office Building (MOB), officials demonstrated how the easy-to-navigate touch-screen kiosks will improve service to customers. Dr. Benjamin Chu, president of Kaiser Permanente Southern California, said, Individuals will be able to swipe their standard-issue member card in the kiosk to check-in for their appointments, thereby avoiding long lines, especially during peak hours of operation. This will also allow staff more time to serve patients who have questions or complex service issues. We are creating a front office of the future today. It is part of our continuing efforts to make our services more convenient and easy for our loyal members. Members will have the option of making non-dues payments with their credit and debit cards, updating their personal contact information, and using the way-finding feature (which provides a printout with walking directions from the kiosk to the appointment room). The kiosks are also designed to serve a multi-lingual population in languages such as English, Spanish, Chinese, and Vietnamese. This is great, said patient Nikki Williams, who gave the new kiosk a try. I was a little apprehensive at first, but it is easy to use. I think it will save me time and frustration. Nikkis comments were consistent with the views of the majority of members who used a demonstration prototype months ago. A survey of those test users showed that 80% felt the kiosk was faster than checking-in with a receptionist, and 96% said that they would most likely or very likely use the kiosk which has built-in privacy protection features in the future. The kiosks are a component of Kaiser Permanentes HealthConnect, a comprehensive electronic health information system that includes one of the most advanced electronic health records available. Over 90 pilot kiosks will be deployed on a rolling basis by the end of 2008 at over 60 other Kaiser Permanente MOBs spread out across Southern California. Additional kiosk functionality features are planned to an already remarkable device, which received the 2008 Best Hardware/Enclosure Design Award at the KioskCom Self Service Expo held in Las Vegas in April. There are tentative plans to expand the use of kiosks to Kaiser Permanente medical offices nationwide. Back to top   MONEY, ADS GIVE HEALTHCARE TOP POLITICAL BILLING Associated Press  July 8: Health care is returning as a campaign issue, with special interest and advocacy groups preparing to spend at least $60 million to push politicians to embrace universal access to medical coverage. The efforts, one by a coalition of labor and liberal groups and another by AARP, also include direct appeals to the presidential contenders and congressional candidates to change a system in which millions of people are without coverage. A coalition of labor unions and Democratic-leaning organizations called Health Care for America Now on Tuesday was announcing a $40 million campaign to promote affordable health care coverage for all. The group is spending $1.5 million on a national cable ad, and print and Web advertising. It also plans to spend $25 million on advertising through the end of the year. The effort will concentrate on key congressional districts in 45 states, where the coalition also plans to deploy 100 organizers. A top goal is to encourage lawmakers to devise a plan that would offer consumers the choice of retaining their current private coverage, choosing a new insurance plan or joining a government-run plan. The options are designed to address one of the insurance industry's central criticisms of President Clinton's failed plan. "We've got to make the plan that we put forward reasonable to people who don't have health insurance and desperately need it, but also not threatening to people who do have fairly decent health care and would gladly support health care change as long as it doesn't undermine what they've got," said Roger Hickey, co-director of the liberal Campaign for America's Future, part of the Health Care for America Now coalition. Still, sharp disagreements are certain to surface. The insurance industry's proposal for expanded health care puts more emphasis on private plans than on public ones. And the coalition's ad, which is to air Tuesday on cable, makes clear that the old battle lines remain. "We can't trust insurance companies to fix the health care mess," the ad states. The AARP-led group is airing an ad on national cable and in markets in key states calling on the presidential candidates Democrat Barack Obama and Republican John McCain to keep discussing health care and financial security. The seniors' advocacy group, acting on behalf of a coalition called Divided We Fail, plans to spend more than $20 million through Labor Day to push for bipartisan solutions to health care and Social Security. McCain would provide refundable tax credits of $2,500 for individuals and $5,000 for families that buy health insurance, but would not require universal coverage. Obama would require coverage for children, not adults, and would aim for universal coverage by requiring employers to share the cost of insuring their employees. "We felt we needed more than policy ideas, but the political will to actually get something done," said Nancy LeaMond, an AARP executive vice president. To that end, the AARP is working with partners from across the ideological spectrum the Business Roundtable, the National Federation of Independent Business and the Service Employees International Union. They are asking candidates to sign pledges that state: "I am committed to working with my colleagues across the aisle to develop and implement policies that provide all Americans with access to quality, affordable health care and lifetime financial security." To the membership of Health Care for America Now, bipartisanship is less important than adherence to its principles, which also include greater regulation of health insurance companies, costs based on a family's ability to pay and cost controls without sacrificing quality. "The whole goal is to create a mandate next year for the president and Congress to enact health care reform that meets our principles," said Richard Kirsch, the coalition's campaign manager and a health care advocate who has worked on reform legislation in New York. Health Care for America Now members include such unions as the SEIU, the AFL-CIO, and the American Federation of State, County and Municipal Employees, and Democratic-leaning organizations such as the Center for American Progress, MoveOn.org, and the Campaign for America's Future. Many of the groups have endorsed Obama or have members advising his team. Neither coalition plans to become involved in the presidential contest, though Kirsch made clear that Obama's plan meets Health Care for America Now's principles and McCain's does not. Back to top   CALIF. DOCTOR GETS 10 YEARS IN 'RENT-A-PATIENT' SCAM Associated Press - July 7: A Southern California doctor was sentenced to 10 years in federal prison Monday for billing health insurance companies more than $9 million in unnecessary surgical procedures, prosecutors said. William Hampton, 53, of Cypress was also ordered to pay nearly $2.5 million in restitution to defrauded health insurance companies by U.S. District Judge Audrey Collins, who called his actions a "crime of greed." Hampton was convicted last November of health care fraud. He performed more than 400 unnecessary procedures at several medical clinics and submitted fraudulent bills to insurance companies, said U.S. attorney's spokesman Thom Mrozek. Surgery center marketers recruited the patients who were paid up to $1,200 for undergoing "sweaty palm surgery," a procedure that treats excessive hand perspiration, Mrozek said. A jury acquitted Hampton on a separate fraud count and deadlocked on nine other charges, which prosecutors later dismissed. Defense attorney Donald Etra said his client will appeal the sentence. He said prosecutors alleged a massive fraud but only proved that health insurance companies lost about $7,250. "It's baffling that he can get sentenced on facts that the jury didn't find," Etra said. "The government did not prove its case." Dr. Mamdouh Bahna, another surgeon involved in the scheme, pleaded guilty to health care fraud last year and was sentenced to nearly five years in prison.   STUDY: CALIF. HMOS RAKED IN $4B IN PROFITS Associated Press - Jun. 23: Some executives at California health insurance providers paid themselves handsomely while their companies were raking in more than $4.3 billion in profits in the last year. In addition, HMOs spent $6 billion on administrative costs, which include hefty CEO salaries, according to a report by the California Medical Association, which said the money could have gone toward driving down premiums or better protecting the insured. The annual report, which draws on expenditures reported to the state Department of Managed Health Care, will be released Tuesday. It found that annual salaries topped $1 million for chief executive officers at providers like Aetna, Inc., CIGNA Corp., Health Net, Inc., UnitedHealth Group and WellPoint Health Networks, Inc. The medical association is sponsoring a bill to require health plans to spend at least 85 percent of their annual income from the insured on health care. "This report really underscores what we have been saying all along, which is there's massive waste in the insurance industry," said Sen. Sheila Kuehl, D-Santa Monica, who authored the bill. "Californians are literally going into bankruptcy because of rising insurance premiums and having their benefits gutted simultaneously," she said. The report found that if the bill were already in place, nearly $1.1 billion dollars would have gone back to providing health care. Of major providers, Indianapolis-based Anthem Blue Cross' 4.1 million members see the smallest proportion of their premiums returned, with 79 percent of revenue used toward medical care. "One of the worst ratios is Anthem Blue Cross," said CMA President Richard Frankenstein. "They sent more than $1 billion back to Indiana last year and I don't think that's where Californians want to see their premium dollars go." Anthem Blue Cross said in a statement that as a for-profit business, it also pays more taxes than the nonprofit HMOs included in the study, which accounts for some of the difference in administrative costs. "Anthem Blue Cross continually strives to reduce its administrative costs while also delivering innovative products to its members," the statement said. The report highlighted four major providers who already put more than 90 percent of revenue directly toward medical care: L.A. Care Health Plan (97.1 percent), CIGNA HealthCare of California (94.3 percent), Inland Empire Health Plan (93.1 percent) and Kaiser Foundation Health Plan (90.6 percent). "We're a not-for-profit so there aren't any shareholders who get dividends or bonuses, so any net revenue is invested right back into facilities, services, and keeping our rates affordable," Kaiser spokeswoman Kathleen McKenna said. Back to top   MEDICAL CARE'S STATE OF DENIAL San Francisco Chronicle - Jun. 23: Doctors are supposed to prescribe tests and treatments that are medically necessary for their patients. Health insurers are expected to cover that care, while keeping inappropriate expenses in check. But what happens when that process breaks down and sick patients are left to fight for medical care? Each year, thousands of Californians find themselves at odds with their health insurers over whether they, as patients, should get the treatment their doctors prescribed. Peter Isgro of Santa Cruz is among them. His insurer, Anthem Blue Cross, stopped paying for certain chemotherapy drugs after his cancer progressed, a decision that has been upheld in two appeals. Isgro said he feels like the insurance company is second-guessing his doctor. "If your doctor wants to give you something and they can deny it, that's wrong," he said. Anthem Blue Cross said it follows strict protocols, relying on medical evidence in determining what is necessary and appropriate to cover. "Even in a dire situation, it is ethically appropriate to withhold treatment if it's not effective," said Dr. Michael Belman, medical director of Anthem Blue Cross, who was not speaking specifically about Isgro's case. Belman said doctors do not always recommend the best treatments, and cost is never a primary consideration. Consumer advocates, however, see the situation differently. Health insurers "are going back to the old strategies of the '90s, when they interrupted care on the front end by denying or delaying treatment offered by a doctor," said Jerry Flanagan, health advocate for Consumer Watchdog, a Santa Monica group. According to him, insurers hope patients will give up or settle for less, either way saving them money, a contention the companies dispute. Patients now have a number of resources to turn to if they believe they received an unfair denial. Last year, the state's HMO Help Center received nearly 90,000 calls from consumers asking for help in resolving their health plan woes. About 7,000 Californians have taken advantage of third-party medical reviews since 2001, when the state Department of Managed Health Care started offering them. Last year, the department resolved 1,716 independent medical review, or IMR, cases. The Department of Insurance, which regulates a smaller number of plans, received 35,280 complaints and resolved 262 IMRs in 2007. About 40 percent of all IMR decisions are settled in favor of the patient, according to the Department of Managed Health Care. The majority of treatment disputes address whether the proposed therapy is "medically necessary" or if it is considered to be "experimental" or "investigational." Even treatments approved by the U.S. Food and Drug Administration can be deemed experimental if they are typically used in a different fashion or there is simply not enough evidence to support the use. Physicians often feel caught in the middle. "Do I stop treating them while the insurer determines they have eligibility? Even if they get authorization, they say that doesn't guarantee payment," said Dr. Michael Sherman, an oncologist who has offices in Walnut Creek and San Ramon. Sherman said he is forced to provide unreimbursed treatments to patients in those situations. Dr. Alan Sokolow, chief medical officer for Blue Shield of California, said insurers try to strike a balance. "We think that is our job to help patients and providers apply the benefit package the patient has, the dollars they put for insurance coverage and health care, in the most appropriate and effective way," he said, adding that patients should appeal if they disagree. When appeals don't work, patients can sue their health plan. But that can be a difficult proposition, given that it can be tough to get a lawyer to take such a case, and most plans require their members to agree to binding arbitration. In the end, patients usually want to get the treatment rather than endure a lengthy legal process. Joanna Smith, a patient advocate who runs Healthcare Liaison Inc. in Berkeley, said persistence and doing research to back up the case give patients a better chance of success. "I always say to people appeal, appeal, appeal," she said. "And then appeal again." Back to top   IT'S 'BUYER BEWARE' IN INDIVIDUAL HEALTH INSURANCE MARKET The Sacramento Bee - Jun. 22: More than 2 million Californians purchase their own medical coverage a number that's growing as fewer employers offer group coverage. Thwarted in their efforts to overhaul the state's health care system, consumer advocates are now concentrating their efforts instead on tightening regulation of that market. Unlike the heavily regulated group insurance market, advocates say the individual insurance market is rife with "junk insurance" policies that provide minimum benefits, such as hospital-only coverage, and don't set limits on out-of-pocket expenses. Advocates say it's often impossible to determine what a plan does or doesn't cover, and some consumers like Mary McCurnin and Ron Bednar of Rancho Cordova find out too late after they run up thousands of dollars in medical costs. Sen. Darrell Steinberg's Senate Bill 1522, which is sponsored by the consumer advocacy coalition Health Access California, would standardize the individual insurance market and limit out-of-pocket expenses. Health plans would be split into five tiers to allow consumers to compare prices and better understand what they were buying. "Consumers have the right to basic information about what they're buying," said Steinberg, D-Sacramento. "This bill is all about transparency, about ensuring that so-called junk insurance is no longer a part of the market." SB 1522 is one of more than a dozen Democratic bills targeting the insurance industry that are moving through the Legislature. Other bills would block insurers from canceling policies of patients needing costly care and would require insurers to spend at least 85 percent of their earnings on medical care. Several of the bills were part of Gov. Arnold Schwarzenegger's health care expansion proposal, which died last year in the Senate. That in