Late last week, the Medical Liability Mutual Insurance Company (MLMIC) submitted its advisory filing with the Superintendent of Insurance. The company requested an average 22.2% rate increase for the 2004-2005 policy year. If granted, such an increase would, for most high risk specialists in the downstate area, be added to the between 12.7% and 18.3% increases imposed last year. This is an extremely disturbing trend, in which many specialists in that region have experienced steep medical liability cost increases since 1999, including neurosurgeons- up 61%; internists- up 56%; general surgeons- up 53%; radiologists – up 46%; and OBGYNs- up 46%.

When set against a decreasing revenue stream due to rigorous managed care cost containment efforts and recent governmental payor actions, the ability of physicians to absorb medical liability premium cost increases of this magnitude has declined to the point that physicians are seriously re-examining their practice configurations.

The only solution to prevent a serious disruption in the health care delivery system later this year is the enactment of meaningful civil justice reform. MSSNY continues to encourage physicians to remain vigilant and proactive in their call for civil justice reform. Physicians are encouraged to:

• Make weekly phone calls to our tort reform hotline at 1-866-728-3397 to urge Governor Pataki, Senator Bruno and Speaker Silver to enact meaningful tort reform; and
• Send a letter to your local Senator and Assembly Member opposing the regressive liability bills and in support of meaningful tort reform by going to the MSSNY Grassroots Action Center at www.mssny.org; or directly at capwiz.com/mssny/issues/alert/?alertid=19559

You must make your representatives aware that this is not business as usual. The system is broken and must be fixed before serious disruptions occur!

Advocates for mental health parity stepped up their focus on mental health parity legislation and called for the Senate to pass legislation already approved by the Assembly which would require plans to provide coverage for mental health and chemical treatment which is the equivalent to that which is provided for physical health.

This week, a vigil was held to commemorate the birth date of Timothy, the twelve year old for whom the mental health parity legislation is named, who, four years ago committed suicide. It is expected that the Senate will announce its position on such legislation in the near future.

Although a majority of Republican legislators have co-sponsored the Assembly counterpart which would apply to products issued for all employers the bill’s sponsor, Senate Mental Health Committee Chair, Senator Thomas Libous, has been quoted in published reports as being supportive of a more limited approach - one which would exempt small business employers with less than fifty employees from the scope of the coverage mandate. It is possible that the Senate may consider passing its own version of the bill containing a small employer exemption and that the issue will be referred to a conference committee. Although rarely used in New York State, both leaders have indicated their support of the use of a conference committee process to resolve any differences between the versions passed in each house.

MSSNY encourages its members to reach out to their legislators by sending a letter to their legislators in support of meaningful mental health parity from the MSSNY Grassroots Action Center at www.mssny.org or directly at
capwiz.com/mssny/mail/oneclick_compose/?alertid=5787036

The Senate passed legislation (S. 5646-A) to provide comprehensive care to individuals suffering from Anorexia Nervosa, Bulimia Nervosa and binge eating disorders.

The bill would establish Comprehensive Care Centers for Eating Disorders and would mandate insurance companies to offer coverage for treatment. The centers would afford coordinated intensive treatment for eating disorder patients to include individual health and psychosocial services, inpatient medical and surgical treatment, rehabilitation and psychiatric care, residential treatment, case management, and community education including information and referral services and prevention and research actives.

The Commissioner of Health would be responsible for designating the locations of the centers. In addition, the legislation calls for the establishment of a special account for voluntary contributions to support the Eating Disorder grant program account for community education, prevention and research. The estimated cost to the state to fund this new initiative is $1million. The legislation was delivered to the Assembly and is in the Health Committee.

A significantly revised A-9 form has been developed by the Workers’ Compensation Board (WCB) and is available for use by physicians from the WCB web site at www.wcb.state.ny.us or directly at www.wcb.state.ny.us/content/main/forms/a9.pdf.

The purpose of the A-9 form is to put the patient on notice of the various situations where they may be personally responsible for paying for care rendered by the physician instead of the employer or workers’ compensation carrier. Previously the form had only noted the patient’s responsibility where the claimant fails to prosecute their workers’ compensation claim or the where it is determined that the patient’s illness or condition was not the result of a compensable workplace accident or occupational disease.

The form has now been substantially revised to advise the patient of their personal responsibility for care rendered when the patient enters into a settlement with the employer or carrier waiving their right to have future medical care (after the date of the settlement) be paid by the carrier in return for a lump sum payment. These settlements have been occurring with increasing frequency in recent years, and some physicians have expressed concern regarding the ambiguity of who is responsible to pay for care in these instances.

MSSNY has been actively involved in efforts to assure that physicians are “kept in the loop” regarding these settlements, including lobbying for the enactment of law in 2003 which assured WCB notice to an injured worker’s treating physician when such injured worker has entered into a settlement with their employer or workers’ compensation carrier. Many MSSNY physicians and staff provided comments to the Board that were incorporated into this revised A-9 form.

Assembly Bill 5796A, sponsored by Assemblyman Richard Gottfried, would allow certain patients certified pursuant to Article 33 of the Public Health Law to use marijuana to treat a serious condition that is defined as a life-threatening condition or a condition associated with or a complication of such a condition or its treatment.

The legislation also contains a provision that limits criminal, civil and professional liability. Assembly bill 5796A was amended to reflect action taken recently by the Medical Society’s House of Delegates which approved a resolution that articulated that marijuana should only be used by a patient that has a life-threatening disease. MSSNY’s HOD resolution also called for provisions limiting criminal, civil and professional liability. Following amendment of the bill to meet the HOD resolution conditions, the Medical Society issued a memo in support of the legislation. The Medical Society believes that this legislation would provide physicians, in consultation with the patient, another treatment option for those patients who are facing a life-threatening condition.

This legislation allows for an active response by physicians when all other treatments have failed. Additionally, William Valenti, MD, chair of MSSNY’s HIV and Hepatitis Advisory Panel was slated to appear on national television to discuss the limited use of marijuana for medical purposes.

Ten other states have passed legislation that allows physicians and other health care providers to prescribe marijuana. The legislation before the New York State Assembly, however, contains the most stringent provisions in the nation.

The issue of workers’ compensation reform continues to percolate in Albany. This week, the Senate Labor Committee reported two bills supported by MSSNY to enhance the ability of physicians to quickly provide needed care to injured workers and hasten payment for such care. Both bills now await consideration by the full Senate. The first measure, sponsored by Senate Labor Committee Chair Guy Velella (S.5028), would increase from $500 to $1,500 the cost of care threshold that triggers the obligation of the injured worker’s treating physician to seek authorization from the injured worker’s employer or carrier. The second measure, sponsored by Senator George Maziarz (S.2605) would require the injured worker’s health insurer to make payment for needed health care in the event that the workers’ compensation (WC) carrier controverts its responsibility to pay for such care.

To address the situation that could occur where the WC carrier is deemed to be the appropriate payor, and fee paid by the health insurer is less than the WC fee schedule, MSSNY has asked Senator Maziarz to amend his bill to assure that the workers’ compensation carrier reimburses the physician the difference. Both proposals are also contained within omnibus legislation sponsored by Senator Velella and Assemblywoman John (S.6135-A/A.9736-A). However, MSSNY has concerns with provisions in this omnibus bill that would require WC-authorized physicians to undergo required training on WCB procedures, and pay $100 per year for this training.

MSSNY continues to meet with key legislators, staff and interested constituencies to work towards enactment of a bill that enhances the ability of physicians to provide needed care to injured workers, and does not include provisions that discourage physician participation in the WC program.

Physicians may send a letter to their legislators in support of meaningful WC reform from the MSSNY Grassroots Action Center at www.mssny.org or directly at capwiz.com/mssny/issues/alert/?alertid=19600 .

If you are, or have been, a physician or physician group who practiced in the United States between August 4, 1990 and September 5, 2003, and you have not filed a timely opt out notice, you are a member of the Class in a settlement with CIGNA Corporation in the class action lawsuit known as In re Managed Care Litigation.

The components of the settlement include:

• Prospective Relief-Changes in disclosure and business practices (valued in excess of $400 million).
• Retrospective Relief (monetary payments)
• Enforcement

While MSSNY believes that the main value of the Settlement Agreement is the Prospective Relief, including the promises CIGNA has made to change its business practices going forward, the Settlement does provide a minimum of $70 million in damages to physician class members.

Question: When can I submit requests for payment?

Answer: The Settlement Administrator will send notices to class members that will include detailed instructions regarding how claims can be submitted. Recently, an appeal was filed to the CIGNA Settlement. This will likely delay the issuance of these notices by the Settlement Administrator. The notices will likely not be issued until the appeal (or appeals) is resolved.

Question: What kinds of requests for payment can be made?

Answer: Under the Settlement, class members may choose between two types of compensation.

• Category A Settlement Fund
• Claim Distribution Fund

A class member may seek compensation from EITHER the Category A Settlement Fund or the Claim Distribution Fund, but not both.

1. Category A Settlement Fund
CIGNA will pay $30 million into this fund. This category is for class members who choose not to submit documentation to obtain payment. Each member desiring to file a Category A claim may either receive the payment from the Category A Settlement Fund or direct that such amount be contributed to the medical foundation established under the settlement or to a medical foundation established by a state medical society such as the Medical, Educational and Scientific Foundation of New York, Inc. ("MES Foundation") which is established by MSSNY. The amount payable to any one individual under Category A depends upon the total number of class members who elect to claim under Category A. Any class member filing a Category A Claim will not be eligible to seek Category One, Category Two or Medical Necessity Denial Compensation. Category A proof of Claim form can be downloaded at: categoryA.pdf.

2. The Claim Distribution Fund
If a physician chooses not to submit a claim under Category A, the physician may instead seek compensation under the Claim Distribution Fund for certain claims that were denied or for which payments were reduced. The Claim Distribution Fund has three categories:

• Category One Compensation
• Category Two Compensation
• Medical Necessity Denial Compensation.

A. Category One Compensation
Category One Compensation applies to denials of or reductions in payments resulting from certain Claim Coding and Bundling Edits. Denials of or reductions in payment for Category One codes resulting from the application of other payment and benefit limitations (e.g. coordination of benefits rules, violations of pre-authorization requirements, violation of referral requirements) are not eligible for Category One Compensation.

The parties have negotiated a list of specific code combinations which qualify for Category One Compensation. The list can be viewed at Category1.pdf.

The Category One Proof of Claim form can be downloaded at: Category1a.pdf

Acceptable Documentation for Category One Compensation includes:

• A copy of the relevant CIGNA HealthCare Remittance Form showing the Category One Codes that were submitted for payment under the circumstances and within the date of service limitations;
• A copy of the HCFA 1500 form (now known as the CMS 1500) or other claim form showing the Category One Codes that were originally submitted to CIGNA HealthCare for payment under the circumstances and within the date of service limitations;
• If the physician certifies that the CIGNA HealthCare Remittance Form and the HCFA 1500 or other claim form cannot be located and are not available, the physician may submit copies of internal accounting records (such as printout of accounts receivable records or paid account records) with the Proof of Claim Form.

B. Category Two Compensation
Category Two Compensation applies to denials of or reductions in payment resulting from the application of Claim Coding and Bundling Edits other than those for which Category One Compensation applies. Category Two compensation is available for any denials of or reductions in payment of Category One codes that occurred outside the circumstances and/or date of service limitations identified in the Category One Code list.

If CIGNA denied the Proof of Claims it will automatically be sent to an external reviewer for a final determination.

The Category Two Proof of Claim Form can be downloaded at: Category2.pdf.

Documentation:
For Category Two Compensation the documentation must include:

Documentation (i) that the physician was denied payment, in whole or in part; (ii) that the physician received reduced payment, including payment for a different billing code than the one(s) billed, for one or more CPT codes or HCPCS Level II Code(s); or (iii) the physician received reduced payment based upon the application of Multiple Procedure Logic.

For purposes of the above, a copy of the relevant CIGNA HealthCare Remittance Form showing that payment was denied as submitted on the CPT Codes or HCPCS Level II Codes in question, in whole or in part, will be adequate. In the event that the physician cannot locate the CIGNA HealthCare Remittance Form, the physician may submit copies of internal accounting records (such as printouts of accounts receivable records or paid account records) if those records show for the underlying claim and specific date of service the CPT codes or HCPCS Level II codes that were submitted to CIGNA HealthCare for payment and those that remain unpaid.

Clinical Information. In most cases CIGNA requires a complete copy of the relevant medical records.

Exceptions to Clinical Information Requirement

1. The requirement that clinical notes, operative reports or other clinical information be submitted does not apply to requests for payment based on claims that:

• CIGNA HealthCare failed to recognize modifiers 50, RT, LT, FA-F9, or TA-T9, and thus denied payment for one or more CPT Codes as duplicative of other CPT Codes reported;
• HCPCS Level II "J" code was translated into an incorrect or overbroad CPT code.

For claims of the type, the physician must submit:

• A copy of the HCFA 1500 or other claim form used to submit the original claim to CIGNA HealthCare.
• Documentation showing that payment was denied, in whole or in part, for the CPT codes or HCPCS Level II Codes concerned (such as a copy of the relevant CIGNA HealthCare Remittance Form or the physician’s internal accounting records.)

2. The requirement that clinical notes, operative reports or other clinical information be submitted also does not apply to requests for payment based on the contention that CIGNA HealthCare incorrectly processed one or more modifier 51 exempt CPT Codes and/or add-on CPT Codes using Multiple Procedure Logic when those codes were exempt from multiple procedure reduction. For these claims the physician must submit a copy of the documentation showing that payment was denied, in whole or in part, for the CPT codes concerned. Such documentation may include a copy of the relevant CIGNA HealthCare Remittance Form or the physician’s internal accounting records.

C. Compensation for Erroneous Denials on Medical Necessity Grounds
Medical Necessity Denial Compensation may be sought for claims that the physician believes were improperly denied as not medically necessary or as experimental or investigational. If CIGNA denies the Proof of Claims it will automatically be sent to an external reviewer for a final decision.

The Medical Necessity Proof of Claim form can be downloaded at: mednecc.pdf

Documentation:

Documentation showing that the physician submitted claims for payment to CIGNA HealthCare for services or supplies where payment was denied for one or more CPT Codes or HCPCS Level II Codes due to CIGNA HealthCare’s determination that the medical services, procedures or supplies corresponding to such codes were either not medically necessary or were experimental or investigational. The physician may submit the relevant CIGNA HealthCare Remittance Form. If the physician cannot locate the CIGNA HealthCare Remittance form applicable to a given claim, the physician may submit copies of internal accounting records (such as printouts of accounts receivable records or paid account records) if those records show that the CPT codes or HCPCS Level II codes in question were submitted to CIGNA HealthCare for payment and remain unpaid and

A complete copy of the clinical information generated in connection with the services. Clinical operative or other medical records that relate to dates of service occurring more than 90 days before the date of service at issue in the Proof of Claim do not need to be submitted.

To preserve the ability to submit Proofs of Claims under the Claims Distribution Fund, it is strongly recommended that physicians retain billing records and medical records dating back to August 4, 1990 (or up to 90 days prior to August 4, 1990 as described above).

Legislation (S.7255) to assure greater transparency to physicians in their dealings with health plans has been introduced by Senator George Maziarz and Senate Insurance Committee Chair James Seward. The bill would assure that physicians can better defend themselves when health plans make refund demands based upon eligibility of the insured, and when the plan believes they overpaid the provider. With regard to refund requests due to eligibility, the legislation would require health plans to give specific information to health care providers, including the reason for the refund demand, as well as any information the plan may have regarding another responsible payor.

The legislation would grant a physician an additional period of time following a refund demand to submit a claim to the proper payor. With regard to coding disputes, the bill would require health plans to provide specific information to providers about each claim for which a refund is sought to permit providers the opportunity to adequately defend themselves. It would also prohibit the collection of overpayment demands unless and until a meaningful opportunity to challenge the refund demand has been given. Importantly, the legislation would prohibit extrapolation to determine overpayments except where the provider consents and several other steps are taken to assure proper notice to the provider, including disclosure of the extrapolation methodology.

The legislation would also prohibit the collection of overpayments by offsetting future payments unless the provider consents, and permit health care providers to pay back overpayments in installments. To limit overpayment requests, the legislation would also require health plans, on a periodic basis, to notify providers regarding the inappropriate use of particular billing codes. Finally, the legislation would require health plans to divulge to their contracting physicians that the health plan will notify the health care provider of specific changes to the fee schedule or changes in the payment methodology as soon as reasonably practicable; that the provider can obtain information regarding specific fees by submitting a request in writing or by electronic means; and that the provider can obtain the most recent information maintained by the health plan regarding enrollment. The bill has been referred to the Senate Insurance Committee.