Senate Democrats yesterday blocked a Republican-backed bill (S 11) that would cap non-economic damages in malpractice lawsuits at $250,000. The 49-48 vote, largely along party lines, fell 11 votes short of the 60 required to break a Democratic filibuster and bring the measure up for a formal vote. All 49 votes for the measure were cast by Republicans, while two Republicans - Sen. Lindsey Graham (SC) and Sen. Richard Shelby (ALA) - joined 45 Democrats and one independent in voting against the measure. The House earlier this year passed a bill (HR5) similar to the Senate legislation. The House bill would cap non-economic damages in malpractice lawsuits at $250,000 and would allow punitive damages of $250,000 or twice the amount of economic damages, whichever is higher. The legislation covers lawsuits filed against physicians, HMOs, pharmaceutical companies and medical device companies.

President Bush expressed disappointment with the vote, saying in a statement, “The nation’s medical liability system is badly broken, and access to quality healthcare for Americans is endangered by frivolous and abusive lawsuits.” Dr. Donald Palmisano, president of the AMA, said, “ Today’s Senate vote...thwarted the will of the majority of the American public. A full 72% of Americans favor capping non-economic damages in medical liability cases, according to a 2003 Gallup Poll. ...Just because members of the US Senate were able to push legislation under the rug does not mean it has gone away.” Senate Majority Leader Bill Frist, MD said that the bill will be brought up again as early as this fall.

New York Democratic senators, as expected, voted against the bill. Senator Hillary Clinton’s press officials commented, “ She is sorry and distressed that the senate Republican leadership has decided to break off bipartisan negotiations, skip over the entirely normal process of considering a bill at committee level where issues and details need to be debated and fine tuned and instead planned to bring their own version of malpractice bill S.11.” According to Senator Charles Schumer ‘s office, he did not vote for debate closure because “he felt the bill was one-size-fits-all. It was detrimental to the poor and elderly and because it was preemptive to state law and it would go against New York’s strong Patient Bill of Rights.”

The proactive efforts of physician grassroots action and representation in Albany is credited for the defeat of a host of trial lawyer backed regressive medical liability proposals. Legislation (S.2994, DeFrancisco/A.6637, Weinstein) which would allow for damages for pain and suffering in wrongful death cases, was averted when MSSNY generated hundreds of physician contacts with their legislators. Bills that would establish a date of discovery statute of limitations (A.6544, Weinstien/S.2588, Paterson) and permit the application of pre-judgment interest in personal injury actions (A.6707/S.4244) were strongly opposed by MSSNY and never emerged from committee.

Throughout the year, the Trial Bar remained especially focused upon the passage of legislation (S.320, DeFransisco) which would repeal existing contingency fee limitations. Even during the closing moments of the regular session, as reported in a related article on legislation to address the Desiderio decision, the contingency fee repeal was being advanced aggressively by the Trial Bar lobby as a “concession” to the Trial Bar for its willingness to allow a “Desiderio fix” to occur. (see article below) In the end, however, physician efforts and the efforts of the members of the New Yorkers for Civil Justice Reform Coalition prevailed to prevent approval of the contingency fee repeal.

On June 26, HHS Secretary Tommy Thompson announced that the agency has approved New York’s plan to extend Medicaid benefits to uninsured working people with disabilities. Medicaid benefits will be offered to working people with disabilities who are between 16 and 64 years old, have incomes 250% or below the federal poverty level and have up to $10,000 in assets. State officials expect more than 20,000 people will enroll in the new program in the next five years. This type of Medicaid expansion was approved under the Ticket to Work and Work Incentives Improvement Act of 1999, which encourages people with disabilities to work and allows them to retain their Medicare, Medicaid and other health benefits.

Responding to the failure of the NYS budget to include appropriations for full payments to all physicians for services rendered to Medicare/Medicaid “crossover” patients, MSSNY is now spearheading a coalition of patient and medical provider organizations determined to put the program back on track.

“With 604,000 dual-eligible patients in New York State, we are facing an unprecedented danger of Medicaid patients being unable to receive proper care.

Physicians who treat Medicaid patients have long struggled to cover their overhead. However, when Medicaid payments are denied and Medicare is dropped to only 80% of normal payments, many physicians may be unable to continue their Medicaid service,” according to MSSNY President Jeffrey Ribner, MD.

“We have been striving for years for recognition of the fact that Medicare patients need a ‘medical home’ and that the alternative is treatment on an ad hoc basis in high priced emergency departments. This is another example of how Medicaid patients are shunted to the back of the line for proper medical services,” according to Dr. Ribner.
A first meeting of the coalition is scheduled for Friday, July 18, in Albany.

For further information, call Elizabeth Dears at MSSNY Governmental Affairs at 518-465-8085.

P. Jeffrey Lewis, MD, a prominent Buffalo area neurosurgeon, and Independent Health, a Western New York HMO, have reached a settlement in a physician advocacy lawsuit brought by Dr. Lewis more than three years ago.

Dr. Lewis filed the suit in response to his exclusion from Independent Health’s panel of participating physicians. Dr. Lewis claimed that Independent Health had refused to renew his participating physician contract because he had acted as a strong and persistent advocate for his patients when they were denied health insurance coverage for spine surgeries he had recommended. During the course of his advocacy, Dr. Lewis referred several patients to the New York State Attorney General’s Office to obtain state assistance in combating Independent Health’s denials. He also organized and led a group of spine surgeons who complained vigorously to Independent Health, to the Attorney General’s Office and to the Department of Health about the process used by the HMO to review requests for authorization of spine surgeries.

Dr. Lewis alleged that his exclusion from Independent Health’s panel of participating physicians was in breach of his contract with Independent Health, and that it violated a recently enacted statute (Public Health Law § 4406-d(5)) which prohibits HMOs from dropping physicians from their pool of providers because of advocacy for their patients. In his complaint, Dr. Lewis sought reinstatement as a participating physician with Independent Health.

Under the terms of the recent settlement, Dr. Lewis has been reinstated. Dr. Lewis was represented by Hodgson Russ LLP’s Business Litigation Practice Group.

In the waning hours of the regular 2003 legislative session, legislation (A.9009, Rules at the request of Grannis) was approved by both Houses of the Legislature which will continue the excess medical liability program for one year through June 30, 2004. Monies for the program were previously allocated by the budget approved in May for FY 2003-2004. The legislation also continued the Superintendent of Insurance’s rate setting authority for one year. MSSNY expressed its deep appreciation to Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno for continuing this vitally important program which is necessary to continue the quality of care provided by physicians in New York State.

As of Friday, June 20th, with the state Senate having adjourned from its regularly scheduled legislative session for the year and the Assembly in its final day of its Session, the Legislature had not approved legislation vehemently opposed by MSSNY and other health care groups which would have exposed physicians (and others) to a huge explosion in civil litigation. The legislation (S.5018-A / A.9033) would have, if enacted, authorized each and every person in the state of New York to bring a civil suit against any person suspected of committing fraud against the state or a local government.

MSSNY expressed its long-standing commitment to eliminating health care fraud, but expressed grave reservations regarding empowering millions of New Yorkers to drag thousands of physicians into court to defend themselves against charges of fraud, whether substantiated or not. Medicaid, Child Health Plus and Family Health Plus insurance programs billing and coding procedures are extremely intricate and complicated. Hospitals, nursing homes and healthcare practitioners often make unintended billing and coding errors, which are later corrected.

Moreover, the state and federal governments already have broad powers to investigate and prosecute truly fraudulent activities. The Medical Society successfully argued to the Legislature that, especially given the current overbearing tort environment, the state should not be looking to expand unneeded civil litigation, which would impose great expense on health care institutions, practitioners and, ultimately, the health care system.

Legislation passed both houses of the Legislature (S.5642, Velella/A.7211-B, John) this week to assure that an injured worker’s treating physician can remain a “Party in Interest” in the administrative processing of a workers’ compensation case. This will assure that a physician can continue to learn important details, such as whether the care the physician has requested for a patient has been authorized by the carrier, or whether the care the physician provided will be reimbursed by the carrier.

This bill would address the problem of some physicians who have experienced difficulties finding this information out because of the provisions of New York’s workers’ compensation medical record privacy laws. Importantly, this bill would also ensure notice to a patient’s treating physician when a proposed settlement has been initiated between a claimant and the carrier, so that a physician can take appropriate action to assure that their outstanding bills for care rendered can be properly adjudicated and paid. There have been instances when disputed physician bills have been not accounted for in a settlement, leaving the physician without an ability to receive payment for such care.

Public health officials in New York, California, Illinois, Ohio and Pennsylvania say that they may have to discard more doses of the smallpox vaccine than they have used. So far, those states have vaccinated 5,041 people but have prepared 15,300 doses of the vaccine; if the doses are not used within 90 days of the time that the vaccine powder is mixed with solution, they must be thrown away. The first phase of the national smallpox vaccination program, which aimed to vaccinate 500,000 healthcare workers in its first weeks, began in January. As of late last month, about 38,000 healthcare workers had received the inoculations.

This year, the legislature failed to fully restore Medicaid’s contribution for the coinsurance costs associated with the Medicaid/Medicare “dual eligible” population. As a result of this action, many physicians have contacted MSSNY regarding their options for treating and/or billing the dual eligible population. Here are some Q&A to assist you in your practice.

I understand that, effective July 1, 2003, the State Medicaid program will reimburse patient deductible costs fully but will only reimburse 20% of coinsurance costs for physician services provided to patients who are dually eligible for Medicare and Medicaid. Was the state authorized to take this action?
Yes. On August 5, 1997, President Clinton signed into law the Balanced Budget Act of 1997. This act clearly provides that States have flexibility in establishing the amount of payment for Medicare cost-sharing in their Medicaid plans. States, therefore, have the authority to limit or even to eliminate a State’s reimbursement for Medicare cost-sharing amounts. In years past, MSSNY has successfully defeated such proposals. This year, despite our efforts and the efforts of many others, the state budget only enabled us to secure Medicaid contribution for 20% of coinsurance costs associated with physician services for the dual eligible population.

Can I bill the Medicare/Medicaid “dual eligible” patient to recoup the balance of the coinsurance costs?
No. The regulations promulgated by the Centers for Medicare & Medicaid Services pursuant to the BBA of 1997 specifically preclude a provider from billing the patient for the balance of the coinsurance costs.

Can I treat a Medicare/Medicaid “dual eligible” patient as if they were a private pay patient?
Yes, but this is difficult to do. Physicians in New York can always accept a Medicaid patient as a private pay patient. However, in order to treat a Medicare/Medicaid “dual eligible” patient as a private pay patient, you must leave the Medicare program entirely- for all your Medicare patients. Medicare’s private contracting rules allow a physician to opt out of Medicare by filing an affidavit. The opt out will be for a minimum of two years. Physicians who have opted out of Medicare must also have their Medicare patients execute a contract stipulating that they know that they will be treated as a private pay patient (not a Medicare patient) and that they have an option to be treated by a physician who does accept Medicare.

If I cannot cover my costs under the new Medicaid arrangements, can I limit the number of Medicaid patients I see?
Yes. A physician may limit the number of Medicaid patients they accept since the physician-patient relationship is consensual. A physician is under no obligation to accept patients against his/her medical or business judgment. However, in limiting the number of Medicaid patients, a physician may not abandon patients with existing medical conditions and should be cognizant of possible hospital requirements to treat Medicaid patients and must be aware of any contractual requirements.

What if a physician wishes to leave the program?
A number of physicians have called MSSNY to question whether they can disenroll from the Medicaid Program. This is a decision physicians must make for themselves. However, should a physician be considering disenrollment from the State’s Medicaid Program, the physician should carefully adhere to the following procedures:

• Be sure that he/she provides at least 30 days written notice to the affected patients with ongoing medical conditions that they will need to seek treatment elsewhere. A physician may not abandon a patient. In cases of severely ill patients or patients with medical complications, it may be advisable to consult an attorney;
• Verify that disenrolling from the Program will not adversely impact his/her hospital privileges;
• Know that a physician does not have to be enrolled in Medicaid fee for service (FFS) in order to participate in Medicaid managed care (MMC) networks. Likewise, if the physician is enrolled in Medicaid FFS but voluntarily disenrolls (as long as there are not problems, i.e. sanctions, fraud investigation, etc), then the physician may continue to participate in Medicaid Managed Care networks; and
• Know that if he/she disenrolls from the Medicaid program, by sending in a letter, the effective date of the disenrollment would be the date requested; or if a certain date is not provided, then the date of the letter sent in by the physician would be used. If the letter is not dated, then the date the letter is received/date stamped by the DOH is utilized.

Is MSSNY working on getting the funding back?
MSSNY is spearheading a coalition of patient and medical provider organizations determined to put the program back on track by restoring these cuts. We will keep you apprised as developments take place. If you have additional questions, please call the Division of Socio-Medical Economics at (516) 488-6100, extension 426.

Peter A. Galvin, MD, was recently appointed chief medical officer at Peninsula Hospital Center. Dr. Galvin was most recently the associate director of Medical Affairs. He also serves as the chairman of the Outcomes Management Committee, where he is responsible for overall performance improvement, a police surgeon for the NYPD.

Kenneth F. Mattucci, MD, FACS, has been re-elected for a three year term as a governor of the American College of Surgeons. He was also awarded the distinguished alumnus award of the New York Eye & Ear Infirmary on May 15, 2003. Dr. Mattucci is the chief of the Division of Otolaryngology/Head and Neck Surgery at North Shore University Hospital, Manhasset and at St. Francis in Roslyn.