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 Government Affairs Newsletter, October 2011

California Passes Bill to Allow Physical Therapists to be Employed by Physicians
Many of you who have followed our newsletter will remember Blair Filler's article about a California legislative opinion that would prevent medical practices from employing physical therapists.  The American Physical Therapy Association (APTA) has long held that physician owned physical therapy services (POPTS) is a conflict of interest. POPTS is presently illegal in South Carolina. The Governor of California recently signed into law a bill that will allow physical therapist's to be employed by medical practices at least until January 2013.  State regulators had recently determined that existing law made physician employment of physical therapists illegal. ​

HCLA Requests That Liability Reform Be Included in Deficit Reduction - from ACS
The American College of Surgeons (ACS) and the other Health Coalition on Liability and Access (HCLA) member organizations sent a letter on September 23 to the co-chairs of the Joint Select Committee on Deficit Reduction asking that comprehensive liability reform be included in the deficit reduction plan.  The letter specifically recommends inclusion of reforms similar to the ones in the following bills that the ACS has supported: H.R. 5, the HEALTH Act, which, among other provisions, would cap noneconomic damage awards and limit lawyers’ contingency fees; and H.R. 816, the Provider Shield Act, which would ensure that the recently enacted Affordable Care Act does not create new causes of action for malpractice suits. Read the HCLA letter.
States Pursue Major Medical Liability Reforms in 2011 - from AAOS
Many states enacted medical liability reforms in the 2011 session, including lowering caps on
damages, expert witness reforms, and limitations on liability for volunteer medical care.  Read about the major medical liability reform efforts of 2011 in Florida, Oklahoma, Tennessee, New York, North Carolina and Virginia.
State health insurance exchanges starting to take shape - from AMA
As implementation of the Affordable Care Act (ACA) continues to move forward, health insurance exchanges remain a focal point for both federal and state policymakers. At a minimum, exchanges should be consumer-friendly venues for patients to purchase health insurance, but they have the potential to do much more. If implemented properly, they should help to provide affordable coverage to millions of uninsured Americans and help offer patients greater choice in their health insurance purchasing options. This last point is particularly important since so many health insurance markets across the country are dominated by one or two major health insurers, to the detriment of patients and physicians.

The ACA calls for exchanges to be operational in all 50 states and the District of Columbia by Jan. 1, 2014. Twelve states—Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, North Dakota, Oregon, Vermont, Virginia, Washington and West Virginia—have enacted laws this year either establishing or calling for a study of exchanges.  Read more.
Worldwide Trends in Medical Liability - from AAOS
Defensive medicine and legal costs are believed to play a significant role in our country’s rising healthcare costs. Moreover, the current U.S. tort system is both cumbersome and expensive, while providing relief to relatively few patients who sustain injuries as the result of a medical error. Westernized countries with legal systems similar to the United States have developed less costly and more efficient systems for managing medical-legal conflicts. This article analyzes how these countries manage adverse medical outcomes and compensate patients for their injuries.
California Threatens To Go Over the Workers' Compensation Cliff
By George W. Balfour, MD - Van Nuys, CA

California is an expensive place to live.  Unfortunately, it is also a poorly reimbursed state for physicians.  California currently ranks 48th in Workers' Compensation reimbursement rates.

A concept that has been considered in many states is to reimburse doctors based on a percentage of the Medicare fee schedule. Typically the percentage is 110% - 120%. According to one study financed by our state Workers' Compensation society, even at 125% of Medicare many specialties will disappear from the Workers' Compensation system.  The problem is that W/C patients typically involve much more effort and paperwork than typical Medicare patients. In California the Division of Workers Compensation has argued for a conversion to an RBRVS schedule. This discussion has gone on for the past six to seven years and has been held up by opposing stakeholders.
The Division and other interests have insisted that any change also be revenue neutral. As presently proposed, revenue neutral means that primary care physicians and occupational medicine physicians would see a rate increase, while surgeons would see a rate decrease. California surgeons haven’t seen a rate increase in 25 years.  The new proposal would make it even harder for surgeons to cover expenses.

This proposal to change reimbursement to a percentage of Medicare and hold revenue neutral was filed as SB 923. The bill is supported by a large industrial medicine clinic chain with 30 to 50 locations, many of which are in large metropolitan areas. This medical corporation has occupational medicine doctors on salary and contracts with specialists to come into their facilities.  The specialists are paid 50% of what they generate. For the most part, the specialists are young orthopedic surgeons just getting started in practice.  The proposed change in reimbursement would allow the clinic chain to collect much more from their occupational and primary care services. The increased reimbursement would then allow the clinic chain to pay their young specialists more, because the company would earn so much more from their primary care physicians.

The problem is that the new model may work for large chain clinics, but it would be a disaster for private practice physicians who still provide the bulk of Workers’ Compensation care in California. The proposed reimbursement would not cover expenses and would ultimately cause doctors to drop out of the Workers’ Compensation system. If this happens there will be a problem with access for injured workers.

The large chain of clinics hired lobbyists to support SB 923. The bill was defeated, but came within a few votes of being passed. It is expected that the company will undoubtedly try to get the bill passed in the next legislative session.

A colleague, who attended a fundraiser for Governor Jerry Brown’s election campaign, heard Gov. Brown tell a room full of physicians that they just don’t have the votes.  He probably is right. We managed to defeat SB 923 this session, but the truth is it took a lot of effort by a handful of dedicated people. The next time it comes up the opposing forces will have more money and be more organized. So far, we have not yet gone over the Workers' Compensation cliff, but stay tuned.  We may just do it yet.