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(See Recent Legal News)
In Wichita, Kansas Wesley Medical Center is contemplating losing its physician referrals. The Board has been discussing for about a year the revocation of hospital privileges for those physicians with competing interests. Wesley is an HCA hospital, the same parent as took the action in Idaho and is now in the process of being sued and having its medical staff split on this issue with possible removal of patients to another area hospital. Wichita has two specialty heart hospitals. This economic credentialing, if it occurred would deplete Wesley of its heart procedures and force the physicians to go exclusively to the specialty hospital with loss of ED coverage. Wesley would then need to pay to bring in other physicians who would need to compete with the established ones. They would also need to pay to defend any law suit filed by the physicians and if they lost, the damages.
In Aurora, Wisconsin, the issue of economic credentialing is also starting. The community West Allis Memorial Hospital is considering removing a cardiologist from their staff for her having an interest in the specialty heart hospital. The Allis medical staff confronted the administration on the issue. The issue surfaced when she was elected chief of cardiology at the Allis hospital. The Board overturned the election results, citing the potential conflict of interest. The medical staff is standing firm behind the physician. The staff is considering further action in the matter.
In the Buffalo, New York, area the central hospitals are losing business to the outlying medical offices with lower patient costs. The main problem was colonoscopies which used to take 8 weeks to be scheduled are now down to two weeks. The outpatient centers have transfer agreements with hospitals to send patients if the need arises. Since these are outpatient surgical centers, they do not fall under the government's moratorium on specialty hospitals, which only applies to Medicare or Medicaid patients.
A national hospital consulting group recently came out with erroneous information. The reason behind the error is suspect considering who pays them. The stated that the Medicare Reform Act states that "from December 8, 2003 to June 8, 2005 physicians may not make a referral to a specialty hospital in which they have ownership interest." Nothing in the law states this. The law states that there will be a moratorium of the building of specialty hospitals but the definition of which hospitals and in what stage of development has not yet been decided. There is NO restriction on referrals. The law only applies to the building of those hospitals that plan on billing Medicare or Medicaid patients. There is no restriction on those hospitals who do not plan on seeing those patients. Be careful what you read and who is paying the company that says it. Top
I believe the reason the AMA is losing physicians at a large clip is their inability to see the large picture. In a recent editorial they state that HCQIA should be interpreted as absolute immunity. This allows many physicians in the country who are peer reviewed no defense to lies told about them in the process. The better process is qualified immunity which will protect those panels that do peer review in a fair and truthful way. Those who utilize lies should not have immunity.
An Orthopedic physician, Dr. Robert Caulkins in Caritas, St. Elizabeth Medical Center in Cambridge, Massachusetts was summarily suspended when he arrived for surgery drunk. He had a prior history of drunken driving on three different occasions. This solution is correct and should include referral to the state for license restriction to force a rehabilitation experience. Top
In southern Illinois, the only neurosurgery department is closing shop. The two neurosurgeons at Memorial Hospital in Carbondale are leaving. They have robust practices and even more robust malpractice premiums. Their malpractice premiums haven risen over the years from $40,000 to $250,000. If he decided to stay and then leave later they would also owe tail coverage of over $500,000. If they leave now, the tail is ONLY $227,000. The president of the hospital offered to make the two neurosurgeons employees of the hospital and assume their malpractice costs, but was turned down since they still may become uninsurable in the malpractice climate of the area. The patients will need to now go to Paducah, Kentucky or St. Louis, two hours away by car.
In the St. Louis area of Illinois, the OBs are also leaving the state. In this rural section, two OBs left last year, one to California and the other to St. Louis where she on staff at the University. In all, the two counties of the area have lost about 70 physicians in the past year. Memorial Hospital in Belleville, Illinois lost 8 of 20 OBs in the past year.
The Chicago Tribune has a story about the rapid deployment of physicians, especially OBs, out of the greater Chicago area to Wisconsin and Indiana, two states with caps. The OBs in Illinois have seen their malpractice rates go from $78,880 in 2000 to $130,696 in 2003, a 43% increase. During the same time period in Wisconsin the premium has gone up only 9.4%. The same type ratio is true for general surgeons. For internists the rate has increased 45% in that time period to a cost of $35,716. In Wisconsin, the rate has DECREASED 6.8% to $5,612.
The head of Common Good a Washington based organization was in Illinois to attempt to bolster the idea of alternative courts to hear malpractice cases. The court would be of physicians and not lay people.
Across the river in Missouri, the State House has passed a malpractice tort reform bill by a vote of 88-54. The bill would cap non-economic damages at $350,000 and would also cap economic damages against ED physicians at $400,000. Every bit as important is the bill would not allow venue shopping. The governor vetoed a bill last year that was more inclusive in that it also included general business.
On the other side of Illinois, the Iowa House has passed a bill capping non-economic damages at $250,000. The Democratic response is that California has seen increases in premiums for the past 12 years. This is true but the increases are small compared to those of the states without caps and the total premiums are much less. It is expected that the Democratic governor will veto the law.
The Pennsylvania Senate has passed a bill that limits malpractice non-economic damages. The state requires this to be passed by both houses for two successive years and then become a constitutional amendment. This is a very long and arduous process that is doubtful to be successful.
The high malpractice rates in some states are a boon for others. In Colorado, half of the new physicians to enter practice in the past year have come from the "bad" states. The major problem the physicians have in relocation is the payment of tail coverage, but the one time charge is better than a life time of the sword of Damocles.
In Washington, the governor has backed reforms that do not include non-economic caps. That would require a constitutional amendment in that state. The physicians are sticking to their guns that if the legislature does not pass something that will help them with their premiums they will target the legislators in the November election to unseat them for those that will help them.
The Connecticut Governor is pushing for a cap on noneconomic damages but that cap is $750,000. The money would be limited to $250,000 from the physician, HMO and insurance company. They look at things differently in the East. The proposal still takes money out of the medical system and is still a huge cap per case.
After the Governor spoke the legislature took out all caps from the bill under consideration. In the meantime the largest malpractice insurer in the state has asked for a 80-89% premium increase. This will or should stop all OBs from doing their trade. The other physicians should also limit their procedures to get a better rate.
New Jersey physicians are learning the realities of standing up for what they believe in, they may have to eat humble pie. Last year the physicians rallied for caps in a Republican legislature. This year the legislature is solidly Democratic and no mention of caps will occur. Instead the physicians are backing an uncapped legislation that will allow judges to reduce verdicts, and will set up a $90 million slush fund to help some physicians pay part of their malpractice premium. They will have to continue to work to get the Democrats unseated and then work for the caps at a later time. Top
As was mentioned in the last newsletter, the Florida insurers are refusing to cover bariatric surgery. The rationale was that (1) the AMA considers it experimental) (2) it is risky, with a 3/1000 death rate, 20% repeat surgical procedure and 20 percent nutritional deficiency rate and (3) more people wish to have it done costing money and it is being performed by surgeons who are not well trained in the procedure.
The IRS has decided that bariatric medicine is necessary and that one may deduct treatment from their tax returns surgery, nutritional counseling and approved weight loss drugs. The person must itemize and can only be deducted as with other medical expenses. This will allow some people in Florida ( see above story) with enough money to obtain the surgery and get a tax benefit to reduce the usual cost of $25,000. The IRS did define obesity as a real disease in 2002 and does not define how much overweight a person must be to be considered obese. There is no deduction allowed for diet food or joining a gym. Under the old MSA and new HSA rules the treatment may be paid for by pretax dollars and not taxed when used for healthcare. Top
A recent article in Physician Compensation Report states that more specialists are refusing emergency room call. In a recent survey 31% of those hospitals asked said they had lost ED coverage in the past year. The hospitals also state that 18% of them had to divert patients in the past year and that in 76% of the time it was due to lack of coverage. Maybe more hospitals need to think about compensating the physicians for helping the hospitals out of their EMTALA hole. In my area all physicians who cover the ED are compensated by the hospitals. The rage is from $500 to $1500 per day depending on the specialty. Throughout the country there has been a dramatic increase in paid coverage. Now 42% of hospitals surveyed are or soon will pay for call. However, the national average for call has decreased to a range of $407-$678 from $392 to $1120 in 2002. The shortage has been the most acute in nephrology, neurosurgery and oral surgery.
The Alfred duPont Hospital for Children in Philadelphia have let go their two top cardiac surgeons. The reason is that Dr. Norwood who pioneered an operation using stents to correct a congenital condition was pressured to leave after the FDA pressured the hospital that the stents were being used without FDA approval.
The hospitals are continuing to lose outpatient business to physician controlled ambulatory surgical centers. The VHA have released a study showing how much the physicians have gained and explaining to its members that they need to begin to work cooperatively with their physician or face further loss of business.
In the March 3, 2004 Wall Street Journal is an article on the renewed spending by hospitals and how it will impact their bottom line. The gist is that the small margins that they currently enjoy will be diminished by spending mostly on computerized ordering and digital radiology units. The article states that there has been no significant upgrades at many hospitals for the past decade because of the HMO industry. Maybe, this is one of the main reason why physicians wish to flee the older community based hospital for a newer specialty hospital with new, state of the art equipment.
In an article about the Tenet sell-offs of their hospitals in southern California, the Pasadena Star-News reported that the state will not interfere with the sale. The sale of these hospitals will greatly impact the LA area. The major impetus for the sale is the seismic retrofit required in the state and the nurse ratio law. One of the legislator wants to see a bill to prevent for-profit hospitals to be put in the same niche as non-profits where they can only sell to those who will continue the community benefit. This type thinking is why business is leaving California.
Congratulations to Kaiser. They have done a yeoman's job is having a robust 3.9% operating margin. Kaiser continues to upgrade its hospitals to meet the seismic code and also get in computerized ordering and medical record systems. Of course the increased margin that allows Kaiser to do this came from a 13% increase in premiums. One of the other reasons the plan has such a high margin is a $100 million law suit it won in Colorado to be paid for work done in the past but never paid by the state.
Los Angeles' infamous King/Drew is in the news again. This time it is for the consideration of running the hospital with no medical school. The Los Angeles Board of Supervisors, never known to be smart, stated that they could use their mighty political clout to have the hospital hook up with UCLA or USC. The two universities have not expressed any interest. One of the Board believes there should be a public hearing in the community about the hospital. The supervisor in whose district the hospital sits stated there was no reason for a meeting. Could this be because she wants to be re-elected.
The Feds have put the King/Drew hospital on it's dying list. The hospital has two weeks to clean up its pharmacy problems or it will lose federal funds. This should force the Board of Supervisors to act quickly and without their usual rancor and defensive posturing.
In the People's Republic of Massachusetts the insurance companies are planning an online ranking of the state's hospitals in certain diseases. Later they plan to add physicians to the list. The main problem is the rankings may be largely based on cost and not quality. The insurers are also continuing tweaking the program due to severity of illness and numbers of cases.
In Tennessee the rural hospitals are attempting to recruit physicians. They also want to keep those recruited and have a small turn over rate. In this regard the rural hospitals are coming into the fold of rural health hospital chains who can manage the recruitment of physicians.
In a story of what may happen when the hospital and physicians work together, the Detroit Free Press tells how the Detroit Medical Center has agreed to help the physicians in their transition to private practice. The system is deferring rent for three months but due at the end of the lease. They have also agreed to continue paying the physician for several months to allow them time to have money coming in. They will also pay for malpractice insurance during that time. In return the community will continue to have physicians who would otherwise leave. Top
North Carolina is proud as punch. They disciplined all of 80 physicians in 2003 a jump of 22 from the prior year. This was because the physicians got the ability to pay more to the state for their licenses so the medical board could hire two more attorneys. They also upgraded their computers and remodeled their offices.
The Orange County Register has a story regarding the lack of physicians available to treat Medicaid patients in California. One of the main reasons for this lack is the State Department of Health Services not certifying physicians in a timely manner. The usual time according to the State is 111 days but this may extend to over a year according to physicians. Physicians must be specially approved to take care of this population. Only less than 1/3 of the state's 90,000 licensees are now taking Medicaid. There is currently a backlog of 10,500 applicants awaiting approval. Without approval the physicians have no contract and therefore will either refuse to see the patient, not charge the patient or bill the patient directly at the usual and customary rates prior to the service. The backlog is due to a combination of anti-fraud measures and budget cuts under ex-Governor Davis and now continuing that resulted in hiring freezes.
There are an additional 3000 non-physician providers also waiting for approval. On top of that there are over 27,000 physicians in a closed file that have errors in their applications and these are returned for corrections adding months to the process. The physicians also have to be separately credentialed at each different address. The CMA suggests that this is a way for the state to ration care to save money. It sounds plausible. Top
The two largest healthcare players in northern California are bickering again. CalPERS, the insurer of the state employees, wants lower rates and only wants to deal with certain Sutter hospitals. Sutter, the largest hospital chain in the area, says you play with all or you play with none. Actually Sutter had broken ranks in the last year and allowed two health plans to only contract with some and not all the hospitals.
Although not really an insurer, Safeway has won the battle in Southern California in a five month strike and lockout with it's clerks. The new agreement was essentially the same one that the union turned down five months ago. There will be a two tier pay differential and the employees will start to pay for their own healthcare with co-pays and deductibles.
The nation's HMOs have reported an aggregate $4.3 Billion increase in profits over the past year. This is a 73% increase. This was reported by the Weiss Institute.
In central Florida there has been a rift between Blue Cross and the seven Florida hospitals. Until this is settled the 40,000 people with this insurance will need to find new physicians and new hospitals. Top
The scientists who in 1998 wrote in Lancet that there was a tie between autism and the mercury in the vaccines for measles, etc. have retracted their study. The formal retraction was issued in Lancet. This should finish the debate of the never proven link between the two. Three of the original 15 authors did not sign on the formal retraction; two would not sign and on could not be contacted. The main author and one of the two who would not sign the retraction had somehow forgotten to mention to his colleagues during the study that he was on the payroll of a legal aid service looking for evidence of whether families could sue over the vaccinations. These children were part of the study. Top
I never thought I would hear logic from the People's Republic of Massachusetts but I was wrong. The Boston paper has printed a letter to the editor from a hospital CEO that is against nursing ratios. The CEO makes relevant points about the costs versus the patient benefit. It shows the fallacy of the proposed state law that wouldn't even count LVNs in the mix. It would be a shame if the legislators of the state toss out their hospitals for a union, but it is a Democratic controlled state and the legislators depend on the union money. Top
The New York Times stated in an article that shows the two sides of the Medicare reimbursement issue. Medicare states they are reducing the amount of money they are paying for some chemotherapeutic medications but increasing the amount they are paying for administration of the medication. The Medicare folk state this will actually raise the amount the oncologists get for payment. The oncologists disagree. They are planning to send their Medicare patients back to the hospital for chemotherapy since they can not afford to treat them and lose money on the drugs. The American Society of Clinical Oncologists go along with Medicare stating the payments this year are about even with last year. What they don't state is what will happen next year and thereafter. 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.