October 2001 Bulletin

In Brief

Connecticut

A Connecticut state court has classified a physicians’ lawsuit against Anthem Blue Cross-Blue Shield of Connecticut as a class action. The lawsuit was started with a filing by less than a dozen orthopaedic surgeons; there are more than 7,000 physicians in the state. The court certified three of the doctors’ claims. These included not providing physicians with consistent medical utilization/quality management and administration of covered services where financial incentives and performance bonuses were paid to health professionals and to Anthem staff to make utilization decisions. Also, not maintaining accurate books and records, resulting in improper payments to physicians based on claim codes submitted; and not providing senior personnel to work with physicians.

Illinois

Illinois Gov. George Ryan signed a bill providing closer regulation of the corporate practices of insurance companies and managed care organizations. Prompted by disclosures of financial mismanagement at an Illinois-based HMO, the new law bars privately owned HMOs from transferring funds to other businesses owned by the same firm that owns the HMO. It also requires privately owned HMOs to have outside board members to approve expenditures.

Maine

The Attorney General of Maine invalidated a drive to enact universal health insurance. Supporters must now collect more than 60,000 signatures by next summer to ensure a spot on the November 2002 ballot. The rejected universal health care question, if passed, would have deprived every lawmaker of their taxpayer-funded health insurance if they failed to enact universal health care coverage. The Attorney General said the question was unconstitutional because it would only punish lawmakers rather than propose a constructive law.

Maryland

The Maryland insurance commissioner fined five health insurers $1.4 million for not paying claims on time and other violations. Aetna U.S. Healthcare of the Mid-Atlantic was fined $250,000 and $600,000 in two separate actions; United Healthcare was fined $300,000; Magellan Behavioral Health, $150,000; Dental Benefit Providers, $75,000; and CIGNA Dental Health of Maryland, $25,000.

Massachusetts

The Massachusetts Medical Society’s Physician Practice Environment Index declined 7.2 percent in 2000, "painting an alarming picture of the environment in which physician practices are struggling to survive," the society said. It was the seventh straight year the index has declined. The index measures the supply of physicians and patient access to care, financial condition of the practice and physicians’ work environment. The inflation-adjusted New England median physician income declined from $140,000 in 1991 to $120,000 in 2000. The percentage of Massachusetts physicians over age 55 increased from 30 percent in 1992 to 33.4 percent in 2000. The cost of maintaining a practice based on an index of 100 in 1994 rose to 160.9 in 2000. The mean hours of patient care activities went from 49.5 hours in 1992 to 52.8 hours in 2000.

New Jersey

New Jersey Acting Gov. Donald DiFrancesco signed a law allowing patients to sue an HMO if the patient sustained harm because of an HMO delay or refusal to pay for care. To gain an immediate right to sue, patients must show that the HMO’s decision has placed them at risk of death, the loss of an organ or limb, serious or permanent impairment or the worsening of a serious or life-threatening disease. The law applies to 3.1 million New Jersey residents in state-regulated health insurance plans. The law does not cover 2.7 million residents who are covered by employer provided plans that are regulated by ERISA.

New York

The New York Medical Society and individual physicians sued six HMOs. The suits contend the HMOs harmed enrolled patients and physicians by alleged continual denial of medically necessary health care, by "capricious" reductions in reimbursement claims, by the use of computer programs which deny claims based on arbitrary guidelines and by breaching the terms of contracts between doctors and HMOs. Named in the suits were Aetna, Cigna, Empire Blue Cross-Blue Shield, Excellus, Oxford and United Healthcare. The suit is similar to actions filed by physicians in New Jersey and Connecticut.

North Carolina

The North Carolina state House approved managed care legislation that would give consumers the ability to sue their health insurers in state court and would establish an independent system to settle disputes between insurers and their members. The state Senate approved a similar bill in April. The House bill will go to a conference committee to reconcile differences in the House and Senate versions and then to the governor who pledged to work for a patients’ bill of rights when he was campaigning for the office.

Ohio

Ohio Gov. Bob Taft signed a bill requiring insurers to pay claims within 30 days or 45 days if the insurer needs additional documentation.

Texas

For the first time since Texas passed a law in 1999 allowing physicians to collaboratively negotiate with insurers, the Texas Attorney General gave final approval to 11 physicians to negotiate for better fees and contract terms with Blue Cross/Blue Shield of Texas. The approval is being watched closely as a test of the first physician negotiating law in the country.

West Virginia

Members of the West Virginia governor’s work group on medical malpractice are exploring ways to provide physicians relief from high malpractice insurance costs. One idea is to pool medical malpractice insurance for all physicians practicing in the state. Gov. Bob Wise asked the state insurance commission to prepare a request for proposals to have one insurance firm provide coverage for up to 3,500 doctors in the state. The panel has been looking at why malpractice insurance premiums are soaring and why the number of insurance companies offering coverage in West Virginia is declining.


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