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Physicians
at Risk The 5.4% reduction in the Medicare conversion factor for 2002 has been a bitter disappointment for physicians who have enjoyed recent significant increases in the conversion factor. Very few physicians understand how this reduction occurred and quite honestly, until this year, very few cared how the conversion factor was calculated as long as it went up. Unfortunately, physicians who treat Medicare patients under traditional Medicare have become business partners in an endeavor few understand and in which, perhaps, fewer would voluntarily join. Each year, under the Balanced Budget Act, the federal government calculates a target for Medicare expenditures called the Sustainable Growth Rate. Included in these calculations are: • Increases or decreases in the number of enrollees. • Inflation • Increased Gross Domestic Product (GDP) • Increased costs due to increased benefits passed by Congress. So far so good. In 2001, the number of enrollees increased by 0.7%, inflation was about 2.3%, GDP increased by 1.7% and Congress mandated benefits that would cost an additional 0.8%. We were 5.6% ahead and should have been looking forward to a good year. Medical inflation plus growth in GDP alone should allow a 4% increase in per enrollee expenditures. In other words, if we charged 2.3% more, then we could provide 1.7% more services and Medicare goals are met. The next step in the calculation is the problem. Based upon the prior year's performance, an adjustment is made for utilization. If, in the preceding year, the costs related to utilization of existing services and/or new services exceeded the goal expenditure target, an adjustment must be made in this year's conversion factor to bring funding back into balance. And, of course, this is exactly what occurred. There were also some "unfavorable" adjustments due to overestimation of the GDP for prior years and other statutory changes, but the major cause of the decrease in reimbursement was an increase in per enrollee expenditures in 2001 which exceeded GDP plus inflation. Simply put, all physicians who treat patients under traditional Medicare are partners in the world's largest "risk" arrangement. If the cost of treating traditional Medicare enrollees increases more than "inflation plus GDP" because more services are being provided per enrollee or because of the use of new, more expensive technologies, all physicians will be paid less per service, period. It's the law. During the last few years, the increase in GDP plus medical inflation was greater than the increase in per enrollee costs and this led to an increase in the conversion factor. This year, the rate of growth of the economy was slower than the rate of increase in per enrollee costs and therefore the conversion factor went down. Under Congress' complex mechanisms for passing spending increases, Medicare costs are so important to the overall budget that there are serious impediments to increasing spending on Medicare. The final indignity is that we are too important to fix! So what can we do? First, we need to understand the current system The prudent use of resources is essential to sustain the system set up by Congress. Like it or not, until Congress changes the rules, every physician treating patients under traditional Medicare is in a "risk pool." Then we need to act politically. Is the current formula that makes every physician "at risk" for the behavior of his or her colleagues and "at risk" for new technologies where we want to be? What would the public reaction be if they understood this system of negative incentives under traditional Medicare "risk" arrangements? Few physicians understand the system, so the risk to the public is small. Even fewer members of the public understand the system and therefore the public isn't worried. Is ignorance really bliss? In summary, physicians took risk and lost. Without professional economic assistance and strong actuarial data, no organization should take upon itself a multibillion-dollar medical risk. Those who do not learn from history are doomed to repeat it.
Daniel J. Nicoll, MD
The Department of Health is starting to send physicians registered letters which warns of referral to OPMC for failure to return completed physician profile forms. MSSNY, as well as county and specialty societies have expressed to DOH numerous concerns regarding the ability of DOH's Patient Safety Centers (PSC) to respond to inquiries of physicians regarding whether the PSC had received their completed survey, or whether they had even mailed out a survey to a particular physician at a particular address. MSSNY again reminds physicians who have not yet returned their surveys to do so immediately. The DOH advised the societies recently, that they still had not received surveys from thousands of physicians. The names of physicians who have not yet completed and returned their surveys, and have not been granted an extension, will not be forwarded to OPMC. The registered letters are considered the final warning. Physicians who have returned their surveys should be aware that some partial profiles have been made publicly available at www.nydoctorprofile.com, should a physician wish to view what is on their profile. If you have any questions, call the DOH's Patient Safety Center at 1-888-338-6998.
Ruth Spector, MD, is suffering from an aggressive form of acute leukemia. Available domestic and international registries have failed to find a match. A call has therefore gone out asking all physicians, their staffs and their patients, especially those of Eastern Jewish ancestry, to register as potential bone marrow donors. For more information about Dr. Spector and her particular need, go to: www.helpruthienow.com
Expanding the preventive services available to Medicare beneficiaries, CMS, as of January 1, began covering pain management and nutrition therapy for millions of seniors. The nutrition benefits were approved by Congress in December, 2000 after a National Academy of Sciences report concluded that such coverage would likely save the government money and help patients. These benefits will initially be available to more than seven million beneficiaries with diabetes or kidney disease. Patients must first obtain a referral from their primary care physician or the specialist coordinating their care, and then the government will pay for a "registered dietitian or other nutritional professional to assess the patient's needs, provide counseling and develop a treatment plan to improve the patient's diet. Based on outcomes, benefits may be extended to other beneficiaries. Also, as of January 1, 2002, CMS established a reimbursement code allowing doctors to identify themselves as "specialists in pain management". The new code will "encourage" physicians to provide pain treatment to patients with such illnesses as arthritis and cancer. Historically, private insurers often follow Medicare's lead in coverage decisions.
A recent study was conducted over an 18 month period that evaluated children who had ingested various substances and were treated with activated charcoal in the home. These researchers from Kentucky found that activated charcoal was able to be given by parents at home to children who ingested potentially toxic substances. A published review of existing data suggests that the administration of activated charcoal in the home can reduce the delay associated with activated charcoal given in an emergency department. In contrast, another recent study published in the Journal of Emergency Medicine showed that only 3 of 15 children who were given activated charcoal in a simulated home environment actually received a therapeutic dose of 15 gm of activated charcoal. Failure occurred in these children even when the activated charcoal was mixed with regular cola as advised by the manufacturer. In addition, there is concern that none of the published studies has shed any light on the indications or contraindic- ations for the home use of activated charcoal. Although home use of activated charcoal is intuitively appealing, more information is needed before the appropriateness of its widespread use can be judged. For copies of these articles, contact the Nassau Academy of Medicine, John N. Shell Library at 516-832-2300, ext 25.
In an extraordinary mid-January legislative blitz, the Senate and Assembly approved a multi-billion dollar package of health care measures that included stabilization of the excess layer until June 30, 2003 and a major funding initiative to increase pay and recruitment of health care workers. Governor Pataki is expected to sign the bill shortly. MSSNY lobbying efforts prevented the inclusion of the final version of a move by the trial bar to repeal the contingency fee limitation and a drive to boost the cost of triplicate forms by 50%. In addition, the Society was able to derail a move that would have reduced physician reimbursement under Medicaid by $90 million for Medicare/Medicaid dual eligible patients. Funding for the health care initiatives included in the bill will come from the proceeds from the conversion of Empire Blue Cross/Blue Shield to a for-profit company as well as from a MSSNY supported increase in the cigarette tax. .
Governor Pataki made his formal presentation of the 2002-2003 budget on January 22. A significant reduction in General Fund spending was announced as a result of the events of September 11 and the current nationwide recession.
An amicus curiae brief submitted by MSSNY, the AMA and several specialty medical societies helped to persuade the US Court of Appeals for the Second Circuit to reject a legal theory that would substantially broaden liability under the Federal False Claims Act (FCA). The theory, referred to as "false implied certification" holds that if a physician submits a claim for payment to the Medicare program for a service that failed to comport with the relevant standard of medical care, then the physician is liable for fraud under the FCA for making a false "implied certification" that the medical services satisfied the accepted standard of care. The false implied certification theory was considered by the Second Circuit in United States ex rel. Patricia S. Mikes v. Marc J. Strauss, Jeffery M. Ambinder and Eliot L. Friedman. MSSNY warned that if the federal courts accepted the theory, then any physician accused of malpractice in the treatment of a Medicare Patient would also face liability for fraud under the FCA. The amici argued that the FCA is only intended to cover acts of willful fraud and not alleged errors or mistakes. In its ruling of December 19, 2001, the Second Circuit agreed with the amici that the theory would expand the FCA liability beyond the intent of Congress.
Robert S. Waldbaum, M.D., has received the Russell W. Lavengood Distinguished Service Award from the New York Section of the American Urological Association in recognition of his 31 years of service in the field of urology. Dr. Waldbaum is the director of the Division of Urology at North Shore University Hospital and clinical professor of urology at Cornell University College in Manhattan.
Hamdi H. Oruci, MD, a Life member of the Society died on December 10, 2001. Dr. Oruci was elected to membership in the Society in 1960 following graduation from the University of Palermo, Italy in 1953, an internship at Knickerbocker Hospital in New York and a residency program at Polyclinic Hospital in New York. Dr. Oruci is survived by his wife, Lee, three children and three grandchildren.
Adelaide T. Scanlon-Sheehy, MD, a Life member of the Society died on January 3, 2002. Dr. Scanlon was elected to membership in 1948 following graduation from NY Medical College in 1943, and an internship/residency program in pediatrics at NY Metropolitan Hospital. Dr. Scanlon practiced pediatrics in the Roslyn-Glen Cove area for 50 years prior to retirement. In 1983 she was the National Mothers Day Committee Mother of the Year. Dr. Scanlon is survived by her husband, Thomas Sheehy, Jr. MD. She was also the proud mother of 10 children and 33 grandchildren.
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