News in brief - Aug. 9, 2004

Medicare fee update proposed - Tort reform on Wyoming ballot - Medicare outpatient drug benefit rule unveiled - SCHIP growth slows - Lawmakers target underage drinking

Medicare fee update proposed

The Centers for Medicare & Medicaid Services published a proposed rule July 27 that includes a 1.5% across-the-board increase in Medicare payments to physicians in 2005, plus a 5% incentive payment to primary care physicians and specialists who work in underserved areas.

The proposed rule also introduces the "Welcome to Medicare Physical," part of a program-wide effort to place more emphasis on preventive care and disease management.

It also contains expected changes to the reimbursement for oncology drugs administered in physicians' offices. CMS officials said they want to stop paying exaggerated prices for these drugs and instead start reimbursing oncologists directly for the cost of administering the medications.

Tort reform on Wyoming ballot

Wyoming voters will decide whether to allow the state to consider putting a limit on noneconomic damages awarded in medical malpractice lawsuits. The Wyoming Legislature in a July special session passed the measure to allow the question to go to Wyoming citizens, and Gov. Dave Freudenthal immediately signed it.

Wyoming is among a handful of states in which the constitution doesn't allow the Legislature to enact caps. If the ballot initiative passes in November, lawmakers then would be able to consider the idea of limiting noneconomic damages.

Physicians believe a cap would help alleviate the soaring medical liability insurance premiums they have experienced in recent years. Trial lawyers disagree that caps are the solution and say that insurance reform and fewer medical errors would help solve the problem.

Wyoming lawmakers also passed bills that would allow physicians to say they are sorry without having their sympathy used against them in a malpractice lawsuit, increase the number of University of Wyoming medical students, boost Medicaid reimbursement for obstetric services, create a medical malpractice insurance assistance account from which physicians could borrow money to help pay for tail coverage, and authorize a study on topics related to medical liability insurance.

At press time, Freudenthal had signed the "I'm sorry" bill into law, as well as the measure to boost Medicaid reimbursement rates. The other bills were still awaiting his signature.

Medicare outpatient drug benefit rule unveiled

The proposed rule detailing the Medicare drug benefit that will be available to all beneficiaries starting Jan. 1, 2006, was released late last month. After a $250 deductible, the drug benefit will cover 75% of seniors' drug costs up to $2,250 and 95% of drug costs once the beneficiary spends $3,600 out-of-pocket. Low-income seniors will receive additional subsidies to help them with the cost of drugs based on financial criteria that includes only liquid assets and real estate other than homesteads.

The rule also proposes allowing seniors to join managed care plans that would offer them access to preferred-provider organizations and would create new financial incentives for employers to encourage them to maintain their retiree drug benefits.

SCHIP growth slows

Enrollment in the State Children's Health Insurance Program dropped last year -- the first decrease since it was created in 1997, according to the Kaiser Family Foundation. But nearly all of that decline was due to reductions in three states: Maryland, New York and Texas. Most other states continued to have increased enrollment in the popular program.

Texas, which had the most significant declines, has made several changes to the program over the last year that resulted in more than 149,000 children being knocked from the rolls. Upcoming changes could result in another 100,000 being dropped. Other states with budget problems are considering similar changes that could limit enrollment in the program.

Lawmakers target underage drinking

Two U.S. senators have introduced legislation aimed at preventing the spread of underage drinking. The bill, sponsored by Sens. Mike DeWine (R, Ohio) and Chris Dodd (D, Conn.) would coordinate federal efforts to combat the problem, provide grants to prevention programs, and increase research and data collection on underage drinking. Because most children who drink obtain the alcohol from their parents or another adult, the bill would also fund a national media campaign directed at adults.