News in brief - April 14, 2003

Calif. Sen. Feinstein drops tort reform bill, for now - Oklahoma pediatricians' Medicaid lawsuit sent to mediation - Lawmakers seek to expand self-referral ban

Calif. Sen. Feinstein drops tort reform bill, for now

Sen. Dianne Feinstein (D, Calif.) is no longer moving forward with a compromise tort reform bill in the works with Senate Majority Leader Bill Frist, MD (R, Tenn.). She said she made the move because of a lack of support from the AMA and the California Medical Assn.

The compromise included a $500,000 cap on most noneconomic damages. Most Democrats oppose the $250,000 noneconomic damages cap passed by the House last month. A bill with that cap would face slim prospects in the Senate, narrowly controlled by Republicans.

AMA President-elect Donald J. Palmisano, MD, said the AMA appreciates Feinstein's good-faith efforts. He said the AMA has actuaries studying the ideas that have been put forward. The AMA wants to ensure that, if a cap other than $250,000 were to go forward, it would be a solution to the medical liability problem and not be a "solution in name only."

"We hope to have continued discussions with [Feinstein] and hope to find an effective bill that can pass the Senate," Dr. Palmisano said. "We want to be open to alternatives."

Oklahoma pediatricians' Medicaid lawsuit sent to mediation

A federal judge has ordered mediation in a case brought by the Oklahoma chapter of the American Academy of Pediatrics and by parents of children receiving care through Medicaid against the state's Medicaid program.

Meanwhile, lawyers from both sides are preparing briefs on the plaintiffs' bid to obtain class-action status in the case so that all children eligible for or enrolled in Medicaid could join the lawsuit. The OKAAP and some parents are seeking an increase in physician reimbursement rates that is large enough to encourage physicians to participate in the program and to ensure that Medicaid patients get care comparable to children covered by private insurance.

The same group sued the Oklahoma Health Care Authority, the state agency that oversees Medicaid, in 2001, asking that all eligible children be enrolled in Medicaid.

Lawmakers seek to expand self-referral ban

A bill introduced by Reps. Jerry Kleczka (D, Wis.) and Fortney "Pete" Stark (D, Calif.) aims to prevent physicians from referring patients to so-called boutique hospitals in which they have a financial interest. These facilities offer one particular area of procedures, such as heart or orthopedic services.

The congressmen said these high-volume, high-profit services skim the most lucrative business in a community, leaving full-service hospitals to rely on Medicare and less profitable services to meet their bottom lines. Investments in boutique ventures are typically marketed to doctors in a position to refer patients to the facility, they said.

Current laws championed by Stark forbid physicians from referring patients to health facilities, such as clinical laboratories or radiology centers, from which they benefit financially. An exception to the law allows referrals to "whole hospitals" that provide a wide array of medical services. The Hospital Investment Act of 2003 would address referrals to boutique hospitals by allowing referrals only if the physician's stake in the hospital was purchased on terms available to the general public at the time.

Failure to comply would carry a civil penalty of $15,000 per referral and up to $100,000 for each referral scheme, as well as exclusion from Medicare.