February 1998 Bulletin


Heat builds to change rule on private contracting

Private contracting will be in the spotlight on Capitol Hill. William J. Roth Jr, (R-Del.), Senate finance committee chairman, is expected to hold hearings early this year on a provision of the Balanced Budget Act that allows physicians to contract privately with Medicare beneficiaries, if they agree to leave the program for two years. Legislation to lift the restrictions on private contracts has been endorsed by 47 Senators and 170 House members. United Seniors Association filed suit in Federal District court in December to stop the private contracting law.

HCFA publishes final rule on opinions

The Health Care Financing Administration (HCFA) has published a final rule explaining how physicians can request an advisory opinion about whether the referral of a Medicare or Medicaid patient for certain health care services is prohibited under federal law. HCFA said inquiries about the rule should be made to Joanne Sinsheimer at HCFA at (410) 786-4620.

HCFA issues proposed rule on self-referral

The long-awaited proposed regulations that detail how the government will enforce the "Stark II" physician self-referral law was issued last month by HCFA. The law prohibits physicians from referring Medicare and Medicaid patients to facilities in which they or a member of their intermediate family have a financial relationship. The public comment period ends March 10, 1998. HCFA said information about the proposed rule can be obtained by contacting Joanne Sinsheimer at HCFA at (410) 786-4620.

Review finds proposed rule not adequate

A preliminary review of the proposed rule on physician self-referral indicates the concerns of the orthopaedic community about the "Stark II" law have not been adequately addressed. In 1995, the Academy told a congressional subcommittee of problems with provisions of the law on compensation arrangements, durable medical equipment and shared facilities. The preliminary review by the Academy’s Washington office found that about the only Academy concern that was addressed involves providing crutches to patients. The proposed rule would allow an exemption for crutches if they are supplied consistent with the in-office ancillary services requirements of "Stark II" and the physician does not get direct or indirect profit from furnishing the crutches.

The review found that HCFA takes a broad view of what should be considered remuneration. The proposed rule states that payment will be viewed as remuneration even if it does not result in net profits. The proposed rule creates some exceptions for compensation arrangements, but not for installment payments for sold facilities such as a physical therapy or MRI center. The proposed rule ignored the issue of shared facilities. It does allow for a several practice arrangement to use one X-ray machine in the same building as long as it is a lease arrangement, not based on volume, and meets all other requirements.

A detailed analysis of the proposed rule will be on the Academy’s home page www.aaos.org.

California lawmakers plan flood of bills on managed care

A flood of managed care reform bills is expected in the California legislature now that Gov. Pete Wilson’s Managed Health Care Task Force has issued its recommendations. About 80 bills were considered in the 1997 legislative session. Some were vetoed by the governor and others held back because Wilson said he wanted to wait for the task force’s recommendations. The task force recommended placing regulation of managed care organizations under a new state agency, but failed to decide whether that agency should be managed by a governor-appointed executive or five-member board of directors. Assemblyman Martin Gallegos, who is pushing a bill to establish a five-member oversight panel, plans to introduce a statewide ballot initiative that would ban in-house binding arbitration for health plan enrollees and also would extend liability for medical decisions to HMOs and health plan administrators.

State to give reimbursement for trauma care

Beginning this year, the state of Washington will give partial reimbursements to physicians, trauma hospitals and other clinical providers who give trauma services to residents with little or no health insurance. The bulk of the money will be distributed through medical insurance assistance programs. Each designated trauma care site also will receive a small grant to pay for extra training and equipment.

New society to focus on minority issues

Members of the J. Robert Gladden Society and the orthopaedic section of the National Medical Association are forming the Afro American Orthopaedic Society. James Hill, MD, said the society is being formed to focus attention on issues ranging from mentoring African-American medical students to the impact of residency reductions. The Gladden Society, composed of alumni of Howard University, Meharry Medical School, Moorehouse Medical School and Martin Luther King Institute, will continue to meet socially at the Academy’s Annual Meeting, said Richard Grant, MD.

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