News in brief - Sept. 3, 2007

Texas settlement will increase doctors' Medicaid pay

Texas physicians will get a 25% boost in Medicaid pay, thanks to a judge's approval of a recent settlement in a dispute over alleged program deficiencies. The fee increases were expected to take effect Sept. 1.

The July ruling in the U.S. District Court for the Eastern District of Texas resolves a 14-year class-action lawsuit alleging the state did not meet federal requirements for ensuring access to early periodic screening, diagnosis and treatment services among children receiving Medicaid. Several families sued the state in 1993, saying not enough doctors were available due to unreasonably low Medicaid pay.

The Legislature in May approved the estimated $700 million in state funds needed to implement the fee increase and other program changes.

Texas Medical Assn. officials said they will work with the state to implement the settlement provisions in Frew v. Hawkins and preserve patient care. The TMA was not involved in the lawsuit, but assisted both sides in negotiations. The American Medical Association/State Medical Societies Litigation Center contributed to the families' legal expenses.

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Tennessee targets "doctor shopping"

Thousands of Tennessee physicians received letters from state Medicaid fraud investigators informing them of a new law to combat "doctor shopping" by patients.

The letters, sent in July, advise doctors that it is a felony for Medicaid patients to visit multiple doctors with the intent of deceiving them to acquire prescriptions for controlled substances. Under the statute, signed by Gov. Phil Bredesen in June, patients must disclose to doctors any such prescriptions they received within a 30-day period and from whom. The law carries a minimum penalty of two years in jail.

The Tennessee Medical Assn. did not take a position on the law, but officials said they hope it will help get rid of abuse.

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Doctor-owned HMO loses Medicare contract

The Centers for Medicare & Medicaid Services cancelled its Medicare Advantage contract with SunCoast Physicians Health Plan, a physician-owned HMO in South Florida.

SunCoast reported that a Florida court had ordered it into receivership after the judge determined that the plan failed to maintain a sufficient level of reserve funding. CMS did not reference the court decision but said that it would be terminating the plan's participation in Medicare.

The roughly 600 beneficiaries of SunCoast will be switched to another Medicare Advantage plan in the area, Humana Gold Plus, the agency announced. As an alternative, they could choose to enroll in traditional Medicare.

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Medicare pharmacy bill introduced

The leaders of the Senate Finance Committee introduced legislation Aug. 2 that would require Medicare drug plans to pay pharmacies more quickly.

The legislation from Sens. Max Baucus (D, Mont.) and Charles Grassley (R, Iowa) would require plans to reimburse pharmacies within 14 days for electronic claims and within 30 days for paper claims. Community pharmacists have complained that plans often take longer to send payments, putting many facilities in financial difficulties with their drug suppliers. The pharmacy benefit managers that administer Medicare Part D said that a 30-day turnaround is standard for the industry and warned that shortening it would lead to increased costs to the system.

In addition to establishing the time limits, the legislation would prohibit plans from engaging in "co-branding" by issuing a beneficiary card with the name or logo of a particular pharmacy on it.

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HHS public health official resigns

John O. Agwunobi, MD, MPH, the Dept. of Health and Human Services assistant secretary of health and the highest ranking officer in the U.S. Public Health Service Commissioned Corps, announced that he will leave the department next month to take a position with Wal-Mart.

Dr. Agwunobi, a pediatrician by training, will oversee Wal-Mart's health and wellness business unit, which includes pharmacies, vision centers and health care clinics. Before joining HHS in 2005, he was Florida's secretary of health for nearly four years.

HHS Secretary Michael Leavitt expressed regret at the announcement and praised the assistant secretary for helping to prepare the nation for a potential influenza pandemic. He also singled out Dr. Agwunobi's work in leading the modernization of the commissioned corps, one of the nation's seven uniformed services.

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