On Monday, August 23, 2010, members of the Triad-area physician community attended a forum with third party payer medical directors and North Carolina Insurance Commissioner Wayne Goodwin.  The event entitled “Third Party Payer Meeting: Which is it? Health Reform or Insurance Reform?” was organized by the Greater Greensboro Society of Medicine and the High Point Medical Society.  North Carolina Medical Society Executive Vice President, CEO, Robert Seligson moderated the meeting, which was attended by about 100 physicians.

Also seated at the moderator’s table were:

William F. Hopper, MD, President, Greater Greensboro Society of Medicine

Perry E. Jones, MD, President, High Point Medical Society

Henry A. Fleishman, MD, President, Rockingham County Medical Societ

Palmer Edwards, MD, President , Forsyth-Stokes-Davie County Medical Society

North Carolina’s third party payers were represented by the following Medical Directors:

Bruce Norman, MD, Aetna

Catherine Palmier, MD, UnitedHealthcare

Edward N. Hunsinger, MD,CIGNA HealthCare

Don W. Bradley, MD, Blue Cross and Blue Shield of North Carolina

The panel of insurer representatives and Commissioner Goodwin answered prepared questions regarding medical loss ratio, most favored nation clauses, physician payment models and the future of the health care industry under new reform laws as well as a number of questions from physicians in the audience.

The Office of the National Coordinator for Health Information Technology (ONC) within the U.S. Department of Health and Human Services is hosting a series of informational calls to provide an overview of, and answer questions related to, the temporary certification program for electronic health record (EHR) technology.  

Participants will hear an overview of the program and be able to ask questions.

One more call is scheduled for August 2010 (the first was held on August 18):

Wednesday, August 25, 2010, 1:00 – 2:00 p.m. EDT

Call-in Information
Phone Number: 888-324-9617
Participant Passcode: 4584230

Recordings and transcripts for each call will be made available on the ONC web site.

For more information about the temporary certification program and the final rule, please visit http://healthit.hhs.gov/certification

Subject matter experts will review basic information on both ICD-10 and 5010 and explain how they are interrelated. A question and answer session will follow the presentations.

When: Monday, September 13, 2010;
Time: 12:00 p.m. – 1:30 p.m. ET;

Target Audience: Medical coders, physician office staff, provider billing staff, health records staff, vendors, educators, system maintainers and all Medicare fee-for-service (FFS) providers.

The following topics will be discussed: ICD-10; ICD-10 implementation for services provided on and after October 1, 2013; Differences between ICD-10 and ICD-9-CM codes; ICD-10-CM basic information for all users; Tools for converting codes – General Equivalence Mappings (GEMs); Proposal to freeze ICD-9-CM and ICD-10 code updates except for new technologies and diseases; HIPAA Version 5010; Compliance dates and timelines (No contingencies); 5010 before and after ICD-10 Implementation; Readiness review for implementing HIPAA version 5010 and D.0; What you need to be doing to prepare; Medicare fee-for-service activities update; Other issues and considerations.

This toll-free teleconference will include a question and answer session. For more information and to register for this informative session, please go to

Effective October 1, 2010 Blue Cross and Blue Shield of North Carolina (BCBSNC) will make available on its provider website a feature to help physicians find information when treating out-of-area BCBSNC patients. BCBSNC says physicians will be able to access medical policies and general pre-certification/pre-authorization requirements of the Home Plan in one easy step. The insurer says it is seeking to improve access to information and to improve the overall pre-claim experience. NCMS will be monitoring the development of this tool and will bring you more details closer to the implementation date.

Near the end of July, WellPath Select (“Wellpath”) received approval from the North Carolina Department of Insurance to amend the terms of the contracts it currently holds with physicians and practices in North Carolina.  WellPath crafted the Amendment in response to new fair contracting laws passed by the General Assembly in 2009, widely known in the health care community as Senate Bill 877.  According to WellPath’s Network Management team, notices and copies of the contract Amendment were mailed out during the last couple of weeks. 

Physicians and practices with concerns or feedback about the Amendment can contact the North Carolina Medical Society by emailing cbrockett@ncmedsoc.org.

On Thursday, the Southeastern Medical Oncology Clinic in Goldsboro hosted representatives from the North Carolina Medical Society and Blue Cross and Blue Shield of North Carolina (BCBSNC) to share the practice’s oncology care delivery model and perspectives on related payment models across various payor types. After a facility tour and considerable discussion about the costs of cancer care delivery and the pricing of oncology drugs, BCBSNC indicated that they were reviewing alternative payment models to better align cancer care treatment and pharmacy costs, and collect better data on quality care and patient outcomes. BCBSNC plans to continue discussions with NC’s oncology community as the new model is developed.

Special thanks to SMOC Practice Administrator Robert “Bo” Gamble for hosting the event and for sharing his ideas about improving the quality and financing of cancer care in North Carolina.

Blue Cross and Blue Shield of North Carolina (BCBSNC) announced that it will outsource some claims data entry work and related functions as part of its ongoing effort to reduce administrative costs, resulting in annual savings of approximately $1.6 million to $2.1 million. The outsourcing will result in the elimination of 80 to 90 BCBSNC jobs over the next nine months. BCBSNC previously announced plans to reduce its current operating costs by 20 percent by 2014 to keep premiums competitive and to invest in improvements. SOURCECORP of Dallas, Texas was awarded the contract. The work being outsourced will be done by SOURCECORP employees in North Carolina and the Philippines. Data entry work for the State Health Plan will remain in North Carolina.

A lawsuit led by the American Medical Association (AMA) against UnitedHealth Group has yielded a settlement agreement and $350 million to help compensate physicians and patients for artificially low payments for out-of-network services provided over the past 15 years.  The case was originally brought to expose a price-fixing scheme used by United to underpay physicians and patients. 

The AMA has developed and released several online resources to assist physicians and practices with determining eligibility, compiling documentation, and filing claims under the settlement.  You can learn more about the case and access those settlement resources at www.ama-assn.org/go/ucrsettlement.  The “Frequently Asked Questions” and “Step-by-step Guide” are especially informative.

This is an important opportunity for you and your practice to recover payments for services that you provided to patients covered by a health plan insured or administered by UHC between March 15, 1994 and November 18, 2009.  After reviewing the AMA’s materials on the settlement, you can contact the AMA or the North Carolina Medical Society with any questions you may have.

Claim forms need to be completed and submitted by October 5, 2010 and getting your copy of the defendant’s report may take a number of weeks.   Request your copy of the report from the Settlement Claims Administrator at www.ama-assn.org/go/ucrsettlement

The North Carolina Institute of Medicine has established eight Health Reform Workgroups that will serve under an NCIOM Advisory Committee. The new effort will be led by NC Department of Health and Human Services Secretary Lanier Cansler, and NC Insurance Commissioner Wayne Goodwin.  The goal of these groups is to identify the decisions that the state must make in implementing health system reform.  This initiative will also identify potential funding opportunities that will improve health, access to care and quality of care in North Carolina.

The eight workgroups that have been established will focus on: Prevention, Safety Net, Health Professional Workforce, Health Insurance Exchange and Insurance Oversight, Medicaid, New Models of Care, Quality, and Fraud and Abuse.  Each group will meet approximately once a month for the next year.  Meetings are open to the public and NCMS staff will attend each meeting. A calendar of meeting dates and times is available by visiting the North Carolina Institute of Medicine Website at http://www.nciom.org/calendar.php.

Beginning in 2014, the federal government will be able to sidestep Congress and impose its own cost-containment policies for the Medicare program through the creation of the Independent Payment Advisory Board (IPAB).  The IPAB will consist of 15 members, appointed by the President with the consent of the Senate.  The IPAB must include physicians and other health care providers in its membership as well as representatives for consumers and the elderly.  Individuals who are directly involved in providing or managing the delivery of Medicare items and services may not constitute a majority of IPAB’s membership.  Also, IPAB members may not be engaged in any other business or be employed elsewhere, which could limit the pool of potential candidates.

By April 30^thof each year (beginning in 2013), if the Centers for Medicare & Medicaid Services (CMS) determines that per capita spending outpaces the average of the Consumer Price Index (CPI) for all urban consumers and for all urban consumers’ medical care, the IPAB will be charged with making recommendations to Congress on ways to cut Medicare expenses which could include cuts to the physician fee schedule. Beginning in 2019, the target criteria will change to be based on the nominal gross domestic product per capita, plus one percent. Spending rate reductions are currently:

• .5% in 2015
• 1% in 2016
• 1.25% in 2017
• 1.5% in 2018 and beyond

The IPAB must submit its spending reduction recommendations to Congress by January 15^thof each year.  If Congress fails to take action to approve the IPABs recommendations or pass its own legislation to reduce costs within 6 months, CMS must enact the measures the IPAB has proposed, doing so no later than August 15^th of the same year.

 There is no guarantee that IPAB recommendations will succeed in reducing growth by the required amount and there could be a significant bubble effect as cuts in one area are balanced by increased growth elsewhere.  IPAB’s ability to constrain spending may also be limited by factors beyond its control, including:

• Hospitals and hospices are “off limits” for IPAB recommendations (except changes to Medicare Advantage) until 2020.
• Clinical labs are exempt for one year.
• Changes that might raise premiums or revenues, increase beneficiary cost-sharing, restrict benefits, modify eligibility criteria, or ration healthcare are excluded.
• The growth rate reduction percentages that will be invoked are less than the expected rate by which Medicare growth will exceed CPI targets, which could lead to the implementation of short term fixes.
• Congress may, at any time, make changes to Medicare that increase spending.

The Congressional Budget Office (CBO), assuming that targets will be met, estimates Medicare spending to be reduced by $15.5 billion over five years. However, the CMS Chief Actuary has already commented that the target growth rates may be unachievable.

The creation of the Independent Payment Advisory Board is one of the more controversial provisions in the Patient Protection and Affordable Care Act and stands to impact the Medicare physician fee schedule more than any other portion of the act.

Effective November 1, 2010, Blue Cross Blue Shield of North Carolina will be implementing policy changes to specific Current Procedural Technology (CPT) codes.  The changes will affect multiple surgery reduction procedures and are consistent with BCBSNC’s multiple procedure payment policies.

The majority of codes will eliminate the multiple surgery reduction rules, and the CPT codes will no longer reduce when filed in conjunction with other procedures. The codes affected by this change are 93561, 93562, 90935, 90937, 90945, 90947, 02700, and 92975. Click here to learn more about the changes in the BCBSNC document, Multiple Surgery Reduction Changes.

These policy changes apply to all BCBSNC lines of business. To learn more about Multiple Surgical Procedure Guidelines visit the BCBSNC Medical policy Web page available online at: http://www.bcbsnc.com/content/services/medical-policy/index.htm.

Over the weekend of July 16-18, the NC Society of Otolaryngology – Head & Neck Surgery held its 2010 Annual Meeting.  In addition to three half-day CME sessions, including featured speaker, Michael Parker, MD, from the Center for Sinus & Allergy Care in New York, the Society addressed legislative and political advocacy issues as well as the recent Blue Cross Blue Shield policy on sinus surgery.  The Society also elected the following slate of officers for 2010-2011.

President–Catherine Rees, MD, Winston-Salem

President-Elect–Robert Taylor, MD, Durham

Vice President–Craig Buchman, MD, Chapel Hill

Secretary-Treasurer–Brian Gibson, MD, Charlotte

Merritt Seshul, MD, was recognized for his service as 2009-2010 NCSOHNS President and the annual Edgar C. Garrabrant award for outstanding resident presentation went to Scott Shadfar, MD, from UNC.

The American Health Benefit Exchange is a major component of insurance reform contained in the Patient Protection and Affordable Care Act (PPACA).  The main purpose of the Exchange is to help individuals and small businesses purchase insurance coverage.  The Exchange is best explained in terms of a marketplace where consumers can easily review benefit packages, compare prices, and purchase coverage.

Under the health reform law, each state is required to establish an Exchange by 2014.  See PPACA, sec. 1311(b).  States are also required to establish a Small Business Health Options Program (SHOP Exchange), in which small businesses with 100 or fewer employees can purchase coverage in the small group market.  But the PPACA permits states to establish a single Exchange as long as it provides both American Health Benefit Exchange and SHOP Exchange services.

Who Will Administer the Exchange?
The PPACA allows the state Exchange to be administered by either a governmental agency or a non-profit organization.  In North Carolina, early indications are that the state’s Department of Insurance wants to administer the Exchange, but the ultimate determination lies with the North Carolina General Assembly.

Whoever ends up operating the Exchange will have to ensure that the Exchange offers all of the following features (and many more), as set out in the PPACA:

• Certify, recertify, and decertify health plans as qualified health plans (also known as QHPs, which will be discussed in Exchanges, Part 2);
• Provide a toll-free consumer hotline to answer questions;
• Maintain a website where consumers can compare various plans with standardized information;
• Rate each plan offered on the exchange;
• Provide eligibility information for Medicaid and the Children’s Health Insurance Program (CHIP).

As with many other parts of the PPACA, many details that will affect how North Carolina’s Health Benefit Exchange will operate have yet to be determined.  Stay tuned to NCMS’s series, Focus on Health System Reform, for the latest.

Late Wednesday, the North Carolina Medical Society received assurances from state officials that an obscure and problematic provision in the Medicaid Provider Agreement would be fixed.  The provision places a physician practice in breach of its contract with Medicaid when the practice pays a billing company a percentage of collections on Medicaid claims.  After the NCMS was alerted by the NC Medical Group Managers to the dangers of this provision last week, NCMS worked with the Division of Medical Assistance and the NCHA (who both agreed with our position) to convince the Attorney General’s office that an immediate fix to the contract was necessary.

Provision Would Have Left Practices Vulnerable

Physician practices commonly recruit billing companies to manage the practice’s claims, with payment to those companies being a percentage of what the practice receives for each approved claim.  These arrangements encourage billing companies to submit clean, accurate claims that will be approved by payors like Medicaid.  The billing companies do not receive the practice’s payment from the payor; those funds are usually transferred electronically by the payor into an account accessible only by the practice.

The Attorney General’s Office tried to defend the provision by arguing that the State has never strictly enforced the provision and held no intention to begin.  NCMS responded that physician practices and billing services would feel pressure to adjust their business to avoid breach, that the provision ignores the realities of the health care industry, and that the State could always change its lax approach to contract enforcement.  Moreover, the provision would leave practices vulnerable to third-party RAC audits and create a huge disruption in N.C. Medicaid and the larger health care industry.

New Language Will Track Federal Law

The contract provision will be scaled back to align with a long-standing federal rule that prohibits practices from assigning Medicaid claims to third parties, and bars (in most cases) percentage arrangements with billing companies when the company receives the claim payment directly from Medicaid.  The new language should not affect the billing arrangements of most practices.

DMA has indicated that it will make the changes and repost a new and improved Medicaid Provider Agreement.  Stay tuned for more details on the timeline.

Mini-Seminar to Cover Legal Issues for Medicaid Providers

The North Carolina Society of Health Care Attorneys (NCSHCA) will hold a mini-seminar, “Current Legal Issues for Medicaid Providers,” on Thursday, July 29, 2010 at the Society’s headquarters, 1500 Sunday Drive, Suite 102, in Raleigh.  Participants can choose to go on-site (with lunch) or view by webinar. Presenters will be Linwood Jones and Wendell Ott.  Click here to download a registration form, which includes more information about the mini-seminar.

The 11^th Circuit Court of Appeals handed the NCMS and other state medical societies a major victory this week in a legal fight concerning unfair business practices by managed care companies. The NCMS legal team has worked diligently on behalf of physicians to address practices and policies that negatively impact their practices and patients.  Read the story that went out as a Special Bulletin to NCMS members on Thursday.

On Tuesday, July 6, 2010, the 11^th Circuit Court of Appeals handed the NCMS and other state medical societies a major victory in their fight against unfair business practices against physicians by insurance companies.

In 2002, the NC Medical Society sued in state court alleging that United’s practices – improper coding, bundling, downcoding, edits, improper use of guidelines, and poor claims resolution – breached contracts with physicians (North Carolina Medical Society v. UnitedHealth Group, Inc., et al.). United removed this case (and similar cases brought by state medical associations and physicians in several other states) to federal court in New York, asserting that the federal courts had jurisdiction over claims covered by ERISA.

At the time these state-based cases were filed, another federal case (In re Managed Care Litigation) was pending in Florida against United based on the Racketeer Influenced and Corrupt Organization Act (RICO). Our state cases were put on hold until the Florida case was resolved in 2007. Thereafter, United convinced the court to dismiss all of the state-based cases. NCMS felt these claims were too important to our membership and decided to appeal that decision. On Tuesday, July 6, 2010, the 11^th Circuit Court of Appeals ruled that our state-based cases were not precluded by the judgment in the RCIO case and remanded them to the federal district court for further proceedings.

“This is a major milestone in the corridors of justice for the NCMS,” EVP, CEO Robert W. Seligson said. “It is anticipated that if the current suits are successful, it will bring major business practice changes by United, which have been a long time in coming.”

Seligson cited diligence on the part of the NCMS, Medical Society of the State of New York, Connecticut State Medical Society and the Tennessee Medical Association as helping to address the unfair business practices.

“It is critical that steps continue to be taken to keep such practices from occurring,” Seligson said. “It will require the support of NCMS members and their colleagues to provide clear examples of these abuses so that we can seek legal relief for practices. We are committed to eliminating unfair business practices by managed care entities.”

The NCMS will keep you apprised of developments in this important case.