News in brief - Aug. 22, 2011

Organized medicine weighs in on California Medicaid lawsuit

The American Medical Association and others are urging the U.S. Supreme Court to rule in favor of California medical professionals in a lawsuit challenging state Medicaid pay reductions.

The AMA filed a joint friend-of-the-court brief on Aug. 5 with the American Dental Assn., the American Academy of Pediatrics, the American Academy of Family Physicians and several other organizations. At issue is whether Medicaid doctors and other participants have the right to sue in federal court to enforce federal Medicaid law.

The case stems from several lawsuits fighting pay cuts in California's Medicaid program, Medi-Cal. California lawmakers proposed the cuts to close annual budget deficits of $20 billion or more in recent years. Physicians, hospitals, pharmacists and other health professionals in 2008 sued to fight a 10% cut scheduled for July of that year. Two other health care organizations also sued over the reductions.

A lower court blocked the Medicaid pay reductions. California appealed to the U.S. Supreme Court. The case is expected to be heard in October.

In its brief, the AMA said without adequate payment for physicians, it is unrealistic to expect doctors to participate in the Medicaid program, thus leading to a lack of care for Medicaid recipients.

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Kansas becomes second state to return federal health exchange money

Kansas Gov. Sam Brownback is returning a $31.5 million federal grant designed to help his state set up a health insurance exchange because "there is much uncertainty surrounding the ability of the federal government to meet its already budgeted future spending obligations," he said in an Aug. 9 statement.

The governor also said he wants to free Kansas from the federal obligations attached to the grant. Brownback spokesman Samir Arif did not specify the obligations the governor is trying to avoid, but he said that all exchange options remain on the table and that any further decisions will be made in consultation with the Kansas Legislature. If Kansas does not create its own health marketplace under the health system reform law, the federal government will operate one in the state beginning in 2014.

The Dept. of Health and Human Services awarded early innovator grants to Kansas and six other states in February. The grants are directed to help states design the health information technology needed to operate a health insurance exchange.

In April, Oklahoma Gov. Mary Fallin returned the state's $54.6 million grant, also citing the desire to avoid federal obligations. In February, Fallin had touted the grant as a way for Oklahoma to design its own insurance exchange, a goal she listed as one of her top priorities in 2011. But in April she cited the rejection of the grant as a way for Oklahoma to develop its own exchange and to prevent the implementation of a federal exchange.

Kansas Medical Society Executive Director Jerry Slaughter said the society has been assisting with exchange planning, but that Brownback did not tell medical society leadership his reasons for returning the grant. However, Slaughter expects exchange planning to continue in the state.

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HHS should study health IT errors, House panel says

The House Committee on Small Business wants the Obama administration to study the benefits and cost-effectiveness of physicians adopting health information technology.

Committee Chair Rep. Renee Ellmers (R, N.C.) has asked the Dept. of Health and Human Services to study the use of electronic medical records, electronic prescribing systems and other health IT systems being implemented in physician offices and hospitals across the country. House members have concerns about the negative impacts, such as the hours of training and extra overhead costs, of adopting EMRs in physician offices. Lawmakers also cited recent press reports of technology failing to prevent fatal medical errors.

"We must do all we can to ensure a commitment to our health care system and patient," Ellmers wrote in an Aug. 11 letter to HHS Secretary Kathleen Sebelius.

Though new technologies offer great promise, Ellmers said, HHS should consider both human and technological medical error rates that can be traced to new systems.

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Groups agree to extend Medicare shared-savings demo

Ten physician groups participating in a Medicare shared-savings payment model demonstration have agreed to participate in the experiment for an additional two years, the Centers for Medicare & Medicaid Services announced on Aug. 8.

Beginning in 2005, the groups have earned incentive payments based on the quality of care and the level of cost savings the groups provided to the Medicare program. Medicare has paid $110 million in bonuses to seven of the groups, while three groups have yet to earn any incentives.

"As we work to help bring care coordination to a broader set of providers through accountable care organizations, the lessons learned by this demonstration provide great insight into how to use Medicare's payment systems to improve quality while reducing costs," said CMS Administrator Donald M. Berwick, MD.

The groups participating in the demonstration are the Billings (Mont.) Clinic; Dartmouth-Hitchcock Clinic, Bedford, N.H.; The Everett (Wash.) Clinic; Forsyth Medical Group, Winston-Salem, N.C.; Geisinger Health System, Danville, Pa.; Marshfield (Wis.) Clinic; Middlesex Health System, Middletown, Conn.; Park Nicollet Health Services, St. Louis Park, Minn.; St. John's Health System, Springfield, Mo.; and University of Michigan Faculty Group Practice, Ann Arbor.

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