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Fam Pract Manag. 2004;11(7):23

Backlog in Medicare enrollment processing continues

Physicians attempting to enroll in Medicare or make simple changes to their enrollment data, such as address changes, are facing undue delays in processing, according to the Centers for Medicare & Medicaid Services (CMS). As a result, many physicians are experiencing delayed Medicare payments as well.

The delays began last fall when CMS required all Medicare carriers to switch to a centralized enrollment database, the Provider Enrollment Chain and Ownership System (PECOS). Due to system downtime, carriers trying to access the system have faced slowdowns and many now have serious backlogs. In early 2004, CMS added additional servers and stabilized the program, and in May the agency released more than $5 million to hire extra staff to work down the backlog. Still, CMS has said it expects the delays to continue for several more months.

In a May report to CMS, the Practicing Physicians Advisory Council called on the government to pay interest to physicians whose claims are being delayed due to carriers’ inabilities to process their enrollment applications in a timely fashion. Medicare requires carriers to process 90 percent of enrollment requests within 60 days and 99 percent of requests within 120 days.

Physicians facing severe problems as a result of this situation should contact their Medicare carrier. For contact information, visit

Supreme Court limits lawsuits against HMOs

On June 21, the Supreme Court unanimously ruled that patients who experience injuries related to an HMO’s refusal to pay for treatments or services recommended by a physician cannot sue the HMO for negligence in state court. The case involved two Texas residents who filed separate state-court lawsuits against Aetna and Cigna Healthcare alleging that the companies’ refusal to pay for painkillers and a longer hospital stay made them liable for resulting injuries.

While a Texas state law allows for such lawsuits, the Employee Retirement Income Security Act of 1974 (ERISA) allows patients with employer-sponsored health insurance to file suit against HMOs only in federal court and to sue only for the cost of coverage denied. The Supreme Court ruled that the case was covered by ERISA and that ERISA preempts all similar state laws.

Justice Clarence Thomas wrote in his opinion, “Upon the denial of benefits, respondents could have paid for the treatment themselves and then sought reimbursement” under ERISA.

The health care industry has called the ruling a victory that will cut down on frivolous lawsuits and avoid further health care cost increases. But Carlton Carl, spokesperson of the Association of Trial Lawyers of America, said in the June 22 Washington Post, “Basically, this decision insulates HMOs from any responsibility for delaying or denying care that injures patients and shifts responsibility unfairly to doctors and others ... who are told what medical care they can give by the HMOs.”

In a separate opinion, Justices Ginsburg and Becker concurred with the Court’s opinion but joined “the rising judicial chorus urging that Congress and [this] Court revisit what is an unjust and increasingly tangled ERISA regime.”

Twenty states in crisis

Massachusetts has become the twentieth state to be deemed a medical liability crisis zone by the AMA. President Donald Palmisano, MD, JD, made the announcement based on data from the Massachusetts Medical Society, which found that physicians in certain high-risk specialties are reducing their scope of practice, including no longer delivering babies, due to increasing malpractice insurance premiums. Massachusetts physicians are facing double-digit increases in liability premiums for the fourth consecutive year. The average rate increase in Massachusetts for 2004 is expected to be 11.3 percent, but many specialties are facing increases of 15 percent or more.

Health care spending slows

U.S. health care spending per privately insured person increased 7.4 percent in 2003, down from 9.5 percent in 2002, signaling the first major slowdown in spending growth in nearly a decade, according to a recent study from the Center for Studying Health System Change. However, health care spending grew nearly twice as fast as the overall world economy, which increased 3.8 percent in 2003. Spending on physician services increased 5.1 percent, making it the slowest-growing category of health spending.

Paying for performance

Pay-for-performance (P4P) programs, which reward physicians financially for their performance on established quality measures, appear to be gaining momentum. Over 70 pay-for-performance programs now exist nationwide, according to data presented in June at the Rewarding Quality Summit in Phoenix. The state of Arizona is home of the nation’s first public-private P4P partnership. Its state Medicaid agency has committed to partner with private entities including employer coalitions, Medicaid managed care plans, and the state’s quality improvement organization to reward physicians for quality.

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