June 1, 2008 Legislation






California's Department of Managed Care has reached a compromise with Kaiser and HealthNet.  The insurers will reinstate 1200 people who were dropped by the two organizations since 2004 and pay for all their care up to $15,000. Above that amount the decision will be by a neutral arbitor.  Kaiser will also pay a $300,000 fine for their actions. The patients may go for the settlement or opt out and go to court.    

Connecticut has joined California in socking to the insurance companies.  John Alden Life and Time Insurance will pay a total of almost $1 million in restitution to consumers whose medical claims were illegally rescinded.  They did the same post claims underwriting as the companies in California such as Kaiser and HealthNet have done.  The companies will not only pay restitutions and a fine but will be watched closely for further actions.  The legislature has passed a law forbidding post claim underwriting.  

On May 8, 2008 CMS issued a memo regarding hospital providers being unable to write off bad debts if those debts have been presented to collection agencies.  This was one of the loopholes open to hospitals to be able to write down debts when they turned them over to agencies.  Now the only way that can be done is if the agency returns a report to the hospital stating they are no longer working on the debtor and the accounts are therefore worthless.  The problem is that this is not a law but a memo that some hospitals will need to challenge in the future. 

The Department of Public Health will no longer issue licenses for ASCs owned by single physicians.  The ASCs need certification  by the state to bill certain insurances.  The Department's statement came after a court of appeal case (Capen v Shewry 2007) that stated the Department had no standing to license one physician facilities.  There may be legislative action to overturn the court decision.             Top


Louisiana is coming closer to protecting physicians who make tough decisions in natural disasters.  This is a rebuke to the State's Attorney General who for political reasons prosecuted Dr. Pou and the nurses for their actions in Katrina.  It would protect providers who volunteer to help and are not covered by the Good Samaritan Laws.        Top


The British NHS will be starting new "polyclinics".  There will be 150 around London and of course more throughout the country.  The new clinics will take the place of the single physician office and consist of GPs, NPs and surgeons.  The clinics may be run by private for profit organizations.  The NHS promises all change will be for the patient's benefit, changes will be clinically driven, changes will be locally led, patients and "carers" will have their say and no existing service will be withdrawn until new and better services are in place.  The BMA knows its government and states they sound good but the details rule.

The Senate will consider a Democratic bill to stop the onerous physician cuts.  Both sides want the cuts but are split as to how to pay for them.  They know it will not pass and if it does it will be vetoed.

The Senate passed a domestic spending bill with moratoria on Medicaid rulings by CMS.  This now goes back to the House who had previously passed a similar bill.  The moratoria was bipartisan and pushed by the AHA.

The Senate did pass in a veto proof vote the Iraq War expenditure bill.  Attached to the measure was a bill generated by the AHA that will stop future payments to future physician owned hospitals. The House has enough votes to allow the veto.

President Bush has signed the genetic nondiscrimination bill.  This will forbid employers and insurers to deny coverage to individuals based on their genetic makeup.  The hope is that this will allow people to have genetic testing for research and therapy without worry that the information will be used against them.

California has fined 13 hospitals in the state for unsafe practices putting patients at risk.  Each fine was $25,000. Five are in LA or Orange County.   They include Harbor View, Olive View (both UCLA), Kaiser Santa Teresa again, Stanford Lucille Packard Children's and Santa Cruz's Dominican.  

California also fined a Sacramento psychiatric facility for a death.  Sierra Vista Hospital was fined $25,000 for not paying attention to a complaining patient that eventually was found on the floor and died.  

The California optometrists and ophthalmologists have compromised over the scope of practice part of SB 1406.  The compromise allows the lesser trained optometrists to diagnose and treat glaucoma, eye infections and do topical treatments.  They will continue to be forbidden to do any injections or eye surgery.  In order to do the treatments the optometrists must complete every two years 50 hours of CME with an ophthalmologist.  

The Wall Street Journal had a letter to the editor regarding Senator Grassley and the harm this Republican is doing to the FDA and its processes.  The letter is also damning to the FDA itself and how it kowtows to political pressure.  The writer is a physician who was a former medical officer in the Office of Oncology Products at the FDA.  In the same edition there was an article regarding Pfizer's new med for combating smoking.  It has been on the market for about a year and it has had some significant side effects which are detailed in the product label.  Who is the person for removing the efficacious drug, Senator Charles Grassley?             Top


CMS has gone along with the IRS in allowing hospitals to contract with vendors to set up proprietary EMR with physicians on their medical staff.  The CMS is allowing this since it only used to transmit lab data and the physician is not allowed to change the functionality, the licenses can not be resold, transferred or assigned by a practice.

There was a recent article on physician compensation in administrative positions.  The article stressed the new Stark requirements.  This took away the need for hourly pay but the pay must be at fair market value.  This is mostly for medical directorships which more physicians are leaning toward in order to have better life balance.  The article states that two questions should be asked to determine FMV.  The first is whether a physician is needed for the service and the second is whether the physician's specialty is necessary.  If both answers are yes then one should look at physician national statistics.  If the answer to both is not yes then one may have to look at non physician national statistics or a combination of both.  In either case the hospital and physician must document not only what they do but also the time spent.          Top


DISCLAIMER: Although this article is updated periodically, it reflects the author's point of view at the time of publication. Nothing in this article constitutes legal advice. Readers should consult with their own legal counsel before acting on any of the information presented.