News in brief - Sept. 1, 2003

Medicare plans to boost payments for pneumonia shots - Texas HMO case gets new attention - Federal tort reform shouldn't override state laws, group says - CMS issues interim HIPAA rule on Medicare paper claims - Freed-up SCHIP funds will help Medicaid, CBO says - Government announces Alzheimer's disease grants

Medicare plans to boost payments for pneumonia shots

Medicare reimbursement for pneumococcal vaccine will increase to $18.62 per dose, effective Oct. 1, the Centers for Medicare & Medicaid Services told physician groups in August.

Physicians had complained that Medicare payments for the vaccine fell short of acquisition costs by one-third last year. The new price is expected to be much closer to physicians' true acquisition cost.

The American Medical Association said the confirmation from CMS is particularly timely as physicians are now making decisions on how much of the pneumococcal and influenza vaccines to order before the start of the flu season. According to AMA Trustee Ron Davis, MD, more than 70% of the pneumonia vaccine purchases last year occurred between August and November.

"Seniors' ability to access this vaccine for pneumonia is instrumental in fighting it, and we hope that CMS' rate correction notice will help increase resistance to pneumonia through greater access to the vaccine," Dr. Davis said.

Texas HMO case gets new attention

The 5th U.S. Circuit Court of Appeals is reconsidering a Texas case regarding medical necessity decisions in light of the U.S. Supreme Court opinion in Rush v. Moran. In that case, the high court held that Rush must abide by the ruling of an independent physician review of a case in which a treating physician and health plan disagreed on what was medically necessary. The Employee Retirement Income Security Act of 1974 wasn't a shield for the health plan, the court said.

In the Texas case, Roark v. Humana, the plaintiffs argue that the health plan wrongly delayed approval of a treatment that the woman's primary care physician said was medically necessary to treat a brown recluse spider bite. Humana argues that ERISA should preempt the suit.

Texas Attorney General Greg Abbott disagreed. "Health insurance plans have no business making decisions about treatments," he said.

Federal tort reform shouldn't override state laws, group says

The National Conference of State Legislatures recently adopted a policy opposing any federal tort reform legislation that would preempt existing state laws or constitutional provisions that make tort reform unconstitutional in the state. That would include state laws that govern statutes of limitations, awarding of damages, awarding of attorney fees, drafting of pleadings and introduction of evidence.

Members of the conference concluded that liability reform is a state issue, not a federal one. The policy comes as state legislatures and Congress consider tort reform measures as a way to address the medical liability insurance crisis.

CMS issues interim HIPAA rule on Medicare paper claims

The Centers for Medicare & Medicaid Services has released an interim final rule setting out the criteria and procedures for small physician practices to apply for a waiver that allows them to continue submitting paper claims to Medicare after the Oct. 16 deadline for new electronic transactions standards. The new standards are mandated by the Health Insurance Portability and Accountability Act.

CMS receives approximately 139 million claims on paper per year, representing 14% of the total claims the program processes.

The HIPAA electronic standards were meant to encourage the medical industry to move progressively toward computerized transactions, an interpretation to which the agency closely adheres in the new rule.

Comments are being accepted through Oct. 14. The interim final rule for electronic submission of Medicare claims can be viewed online (www.cms.gov/hipaa/hipaa2).

Freed-up SCHIP funds will help Medicaid, CBO says

State governments will get some Medicaid relief due to recently passed congressional legislation that allows states to claim unused but expired funds for the State Children's Health Insurance Program. According to a report from the Congressional Budget Office, the reinfusion of $2.7 billion into SCHIP will provide a small amount of assistance for Medicaid, to the tune of about $795 million over the next 10 years, including $25 million in 2004.

CBO calculated this savings to the program based on the number of children who were expected to lose SCHIP eligibility and to fall back into Medicaid if the extra funds were not made available.

Government announces Alzheimer's disease grants

The federal government will issue more than $12 million in grants to develop innovative approaches to provide care for people with Alzheimer's disease and support for their family caregivers, according to the Dept. of Health and Human Services. The awards will support seven new demonstration programs in Connecticut, Idaho, Kentucky, Louisiana, Nebraska, Puerto Rico and Utah. Awards also will fund the continuation of projects in 32 other states. The new grants are part of the Alzheimer's Disease Demonstration Grants to States Program run by the HHS Administration on Aging. The demonstration programs focus on expanding the availability of diagnostic and support services for people with Alzheimer's disease and on improving outreach and service delivery to low-income, minority and rural families that are traditionally underserved.