News in brief - March 8, 2004

Missouri panel passes liability bill - Wyoming voters back tort reform - Judge again refuses to allow 5% Medi-Cal cut - Calif. physician group settles in antitrust case - Uninsured discounts OK, HHS says - Drug reimportation on the rise

Missouri panel passes liability bill

The Missouri House of Representatives Judiciary Committee in February passed a tort reform bill that includes a $400,000 cap on noneconomic damages. The bill also calls for medical malpractice cases to be tried in the counties in which the alleged incidents occurred and affidavits of merit signed by a physician in "substantially the same profession and specialty as the defendant" be filed within 90 days of the lawsuit.

Missouri is one of 19 states listed by the American Medical Association as being in a liability crisis.

At press time, the full House had not set a date for a vote. The Missouri Senate has a tort reform bill pending.

Wyoming voters back tort reform

More than 70% of Wyoming voters support medical liability reform, according to a poll commissioned by the Wyoming Medical Society and the Wyoming Hospital Assn.

Respondents asked to rank the seriousness of five health care issues listed the cost of liability insurance second only to the cost of prescriptions.

Wyoming is one of the states the AMA says is in a liability crisis.

Wyoming Gov. Dave Freudenthal in late October 2003 called for a state constitutional change to allow noneconomic damage caps so that debate over the issue could "venture beyond the hypothetical." Two-thirds of the Legislature must pass an amendment for voters to be able to consider it in the November election.

Judge again refuses to allow 5% Medi-Cal cut

A court ruling that stopped California from making a 5% cut in the Medi-Cal reimbursement rate will stand, a federal judge in California ruled in February. The California Dept. of Health Services asked U.S. District Judge David F. Levi to lift a preliminary injunction he issued last year, but the judge said the state did not give him any new evidence that would make him reconsider.

The California Medical Assn. and others last year sued the state. The groups argued that the cut, which was supposed to take effect Jan. 1, violated the Social Security Act because the reductions would hurt access to care for patients in the state's Medicaid-type program.

Calif. physician group settles in antitrust case

California Pacific Medical Group, which does business as Brown & Toland Medical Group, in February settled Federal Trade Commission charges that it allegedly fixed prices and terms that doctors would accept to treat patients enrolled in a preferred provider organization.

The 1,500-member multispecialty IPA based in San Francisco agreed to a proposed consent agreement that prohibits it from negotiating with payers on behalf of physicians, refusing to deal with payers and setting terms for physicians to deal with payers unless the physicians are clinically or financially integrated. The proposed agreement also calls for some contracts to be terminated.

The agreement applies to the PPO and not to Brown & Toland's network of physicians that contracts with HMOs. A settlement is not an admission of guilt.

Uninsured discounts OK, HHS says

Responding to a query from the American Hospital Assn., the Dept of Health and Human Services has published guidelines clarifying that hospitals can offer discounted rates to uninsured patients. "Hospitals can provide discounts to uninsured and underinsured patients who cannot afford their hospital bills and to Medicare beneficiaries who cannot afford their Medicare cost-sharing obligations," wrote HHS Secretary Tommy Thompson in a letter to the AHA. "Nothing in the Medicare program rules or regulations prohibit such discounts." Patient advocates have long complained that because of hospitals' price structures, which are often inflated to deal with deep discounts offered to managed care, the uninsured end up paying much more than anyone else for the same services.

"The administration has acknowledged what the hospital field has long known: Existing federal rules are 'scattered' and lead to confusion," said AHA President Dick Davidson. "The guidance finally puts us on the road toward clarity."

Drug reimportation on the rise

American patients bought $1.1 billion in prescription drugs from Canada in 2003. That is more than double the previous year, according to a study by pharmaceutical sales tracking firm IMS Health, Fairfield, Conn. That is still only a small proportion of the total $216.4 billion spent on prescription drugs in the United States last year. An IMS Health spokesman said that the trend may be falling off as the Food and Drug Administration cracks down on Internet pharmacies sending the drugs over the border. But more and more state governments have been ramping up efforts to facilitate the reimportation of drugs from Canada. Meeting in Washington, D.C., recently, several governors expressed a desire to expand already launched reimportation.