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Policy News

From the July/August 1999 ACP-ASIM Observer, copyright 1999 by the American College of Physicians-American Society of Internal Medicine.

College supports patient rights legislation

ACP-ASIM is supporting legislation that would expand patient rights and protections under managed care plans.

The College cited the Consensus Managed Care Improvement Act of 1999, sponsored by Reps. Charles Norwood (R-Ga.) and Tom Coburn, MD, (R-Okla.), which calls for the following measures:

  • internal and external grievance and appeals procedures;
  • direct access to specialty care when clinically indicated;
  • recourse in the courts when a patient is harmed because of an arbitrary denial of care;
  • a point-of-service option that permits access to out-of-network providers;
  • a prudent layperson standard that governs determinations of emergency care;
  • continuity of care for patients with chronic conditions whose physicians are dropped from a plan;
  • provisions to make standards applicable to both ERISA and non-ERISA plans;
  • a ban on "gag rules" that restrict physician-patient communications; and
  • disclosure on benefits, restrictions, utilization review requirements and other information to aid patients when making choices about plans.

The College has suggested that the measure add language defining medical necessity as a benefit that is "consistent with generally accepted principles of professional medical practice" for both initial determinations and subsequent appeals. This language is needed "to prevent insurers from arbitrarily denying needed care," ACP-ASIM Associate Executive Vice President Alan R. Nelson, FACP, explained in a letter to the bill's sponsors.

The bill also has received support from the AMA and other medical specialty societies.

ACP-ASIM calls for changes in Medicare decision-making

The College is calling for changes in how Medicare carriers make local decisions that affect internists and their patients.

ACP-ASIM suggested the changes in a statement submitted to the House Ways and Means Health Subcommittee. HCFA recently reported that approximately 90% of all decisions that affect patient coverage are made at the carrier level and that carriers get broad latitude from HCFA in making those decisions.

The College issued the following recommendations to ensure that beneficiaries receive all medically necessary services provided under appropriate clinical conditions:

  • Carriers should provide a 60-day public comment period for all proposed policy changes, instead of the current 40-day period.
  • HCFA should provide best-practice guidelines to medical directors of carriers so they can incorporate them into the carrier advisory committee process.
  • Carriers need to assess the financial/cost-benefit impact of the local medical-review policies.

Self-referral rules still need revisions

The proposed Stark II physician self-referral regulations contain problems that have not yet been addressed and need to be revised before final implementation, the College explained in a May 13 statement submitted to the House Ways and Means Health Subcommittee.

The College said that the Stark II proposed rule is "confusing, does not provide appropriate relief within its regulatory jurisdiction [and] does not consider changes in the current health care delivery environment." Ultimately, the College said, the proposed rule will create unintended access and quality-of-care problems for Medicare and Medicaid beneficiaries seeking "designated health services" such as clinical laboratory services, radiation therapy services and outpatient prescription drugs.

ACP-ASIM is recommending that HCFA modify the Stark II rule before implementing it. Specifically, the College has said that HCFA should use its administrative authority to create a shared facilities exception, eliminate the prohibition on referrals based on compensation arrangements and create an exception for durable medical equipment provided in the physician's office.

HCFA redefines PROs' role in fraud and abuse

ACP-ASIM and other medical organizations have successfully lobbied HCFA to change a proposed system for rewarding peer review organizations (PROs) that identify Medicare errors in hospital payments.

An earlier HCFA proposal had called for PROs to share directly in any monetary recoveries that resulted from their review of hospital claims. The College likened this approach to the financial equivalent of a "bounty system."

Following complaints by ACP-ASIM and other medical groups, HCFA removed the proposal and substituted an "award fee" system. The new system will reward PROs based on how successful they are in reducing overall hospital payment errors and will not share monetary recoveries directly with PROs. In addition, the financial reward that PROs receive will be limited to no more than 5% of the overall budget for preventing hospital payment errors.

HCFA also eliminated a measure requiring PROs that suspect fraud or other criminal activities to report such suspicions to law-enforcement agencies such as the Federal Bureau of Investigation or the Internal Revenue Service. PROs will still be required to report such activities to the Office of Inspector General.

In a statement, the College said that this "satisfies ACP-ASIM's concern that PROs retain their positive, educational role in the physician community."

The changes are part of the PRO Sixth Scope of Work, a document that specifies how PROs and HCFA work together. The Sixth Scope of Work will be implemented by a third of all state PROs by Aug. 1, followed by another third Nov. 1 and the final third Feb. 1, 2000.

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