The L.A. Times’ Lisa Girion reports that Governor Schwarzenegger has signed into law A.B. 1150, a measure banning health plans from paying incentives to their employees (or otherwise establishing performance goals) for cancellations of coverage or associated financial savings. “Post-claims underwriting” is the unlawful practice by which health insurance companies rescind coverage for their enrollees based on supposedly incomplete underwriting, which led the plans to issue coverage that they would otherwise have denied. Over 2,200 Californians are believed to have lost their insurance through post-claims underwriting over the past four years.
The California Department of Managed Healthcare (DMHC) has entered into settlement agreements with health plans under which they will pay fines, offer enrollees new coverage without medical underwriting, and, in certain cases, reimbursement of enrollees’ out-of-pocket costs for medical treatment after the contracts were rescinded. The plans also agreed to corrective action to make their underwriting processes more transparent, and to subject themselves to self-audits for fairness.
Recommended Action: California health plans are using a variety of tactics to deny financial responsibility for treatment rendered by providers. Providers should ensure that patients who encounter unfair treatment by their health plans are educated as to their rights, and should encourage them to assert themselves when plans improperly deny coverage.
Harry Nelson is a partner in Fenton & Nelson, LLP. Fenton & Nelson advises healthcare providers on disputes with payors, including private health plans, Medicare, and Medi-Cal. For additional information, please contact him at harry@fentonnelson.com
©Harry Nelson 2008
Categories: Patients · Plans & Payors
As a result of active enforcement by the Office of the Inspector General (OIG) and resulting media coverage, healthcare providers in California are generally far better acquainted with federal self-referral limitations (i.e. the “Stark law” and Anti-Kickback Statute) than they are with requirements of state law.
California’s Physician Outpatient Referral Act (“PORA”), Business & Professions Code Section 650 et seq., recognizes several exceptions that are roughly consistent with federal law. There, are, however, several key differences:
(1) critically, in contrast to the federal Stark law, which applies only to referrals of Medicare and Medi-Cal patients for “designated health services” to entities with which the physician has a financial relationship, PORA applies broadly to referrals of all patients, including those with private health insurance or even cash patients;
(2) the definition of “designated health services” –the relevant category for Stark purposes –varies slightly from the range of services covered by PORA;
(3) finally, as Stark has undergone successive rounds of amendment to its exceptions (Stark II, Phase III, etc.), PORA has not undergone parallel amendments.
Recommended Action: Providers should not take compliance with PORA for granted. Although state enforcement of PORA has been far less active than OIG enforcement of the Stark law, there have been some indications that the Medical Board of California and the State intend to be more active in enforcement of PORA in the future. As a result, it is essential for providers to protect themselves by verifying compliance with both state and federal law.
Harry Nelson is a partner in Fenton & Nelson, LLP. Fenton & Nelson counsels healthcare providers on compliance with federal and state regulatory and business requirements. For additional information, please contact him at harry@fentonnelson.com
©Harry Nelson 2008
Categories: Stark
Tagged: 650, PORA, Stark
Alex Berenson and Reed Abselson report in the The New York Times on the increasing use of computed tomography (CT) angiograms in recent years. The use of CT angiogram, fueled by patient demand, is expected to rise substantially, despite questionable evidence of its benefit in most cases.
The article notes that CT angiogram can identify dangerous coronary plaque deposits that indicate a pressing need for surgery. In the future, CT angiograms may improve the treatment of heart disease if scanners can identify plaques that are likely to rupture. However, many cardiologists question the diagnostic value of routine use of the technology in light of the inability to determine which plaque-narrowed arteries actually pose a threat, coupled with the cost and cancer risk from radiation.
Medicare has considered restricting access to CT angiogram, but to date has not acted. In 2007, the Centers for Medicare and Medicaid Services (CMS) proposed requiring more studies before paying for CT angiograms but backed down in response to pressure from cardiologists who support CT angiograms.
Recommended Action: Although Medicare has deferred on this issue, in light of Medicare’s growing expressions of concern over future demand for and utilization of diagnostic imaging in general and CT angiogram in particular, restriction on reimbursement is likely in the future. Cardiologists, like all providers, need to stay abreast of Medicare reimbursement policy and to balance competing considerations (beyond patient demands) when recommending diagnostic imaging tests.
Harry Nelson is a partner in Fenton & Nelson, LLP. Fento & Nelson advises cardiologists and other providers on risk management and compliance matters. For additional information, please contact him at harry@fentonnelson.com
©Harry Nelson 2008
Categories: Cardiology · Medicare
