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Georgia's Medicaid program has come under fire from patient advocacy groups in a pair of lawsuits alleging shortfalls within the system that could jeopardize access to care for disabled beneficiaries.

In one case, a federal trial court in June ruled that the state does not have the authority to reduce the amount of Early and Periodic Screening, Diagnostic, and Treatment services prescribed by a physician to child beneficiaries.

Twelve-year-old Anna C. Moore's doctor prescribed 94 hours a week of private skilled nursing care for the child, who has severe disabilities from cerebral palsy, spinal deformities and other chronic conditions, in addition to being blind and nonverbal. In November 2006, the state Dept. of Community Health approved only 84 hours of care. Moore's mother, who had appealed similar cuts before, sued the department in December 2006.

While states may have leeway in some areas when it comes to deciding adult Medicaid coverage, a 1989 amendment to the Medicaid Act mandates that states provide EPSDT services as needed "to correct or ameliorate" any condition discovered in the course of the screen, said Joshua Norris, director of legal advocacy for the private-sector Georgia Advocacy Office, which represented Moore.

"A state Medicaid agency is permitted a right to review prescribed treatment, but it is not supposed to be using that as a means to deny necessary treatments," Norris said. "Treating physicians are the ones that get to decide this issue of medical necessity," not the state, he said.

The U.S. District Court for the Northern District of Georgia in Atlanta agreed, citing similar decisions out of the 5th and 11th U.S. Circuit Courts of Appeals.

Meanwhile, in a separate case in the Superior Court of Fulton County, three adults with disabilities and Medicaid coverage allege the Dept. of Community Health unfairly delayed their appeals of coverage denials.

Federal and state Medicaid rules require a fair and prompt hearing, as well as a final decision, within 90 days of an appeal filing, said Charles R. Bliss, director of advocacy for the Atlanta Legal Aid Society. ALAS filed the lawsuit along with the Georgia Legal Services Program.

But some patients waited as long as six months before having a hearing scheduled, while others still await a response from the state, the complaint said. Plaintiff Drew Joseph, 32, has ataxia due to a brain tumor he has had since birth. After Joseph received additional neurological injury from a fall, his neurologist wrote a letter requesting increased in-home nursing care. The state denied the request in February, and Joseph appealed. Despite three follow-up letters he sent to the department, it still had not processed his request by the time the lawsuit was filed in late June.

Appeals and access at issue

The delays have affected hundreds of patients with disabilities around the state "who are being denied necessary care, and with no way to contest the denial, they have no recourse," Bliss said. "These are serious medical issues, and we need to make sure [Medicaid patients] get access in a prompt way because their lives are at risk without it." The Dept. of Community Health declined to comment on the ongoing litigation.

In documents filed in the district court, the department argued that it is not refusing to provide EPSDT services. Rather, the state asserted that it had exercised its "rightful discretion to determine the amount, duration and scope" of the treatment. The agency is appealing the district court ruling to the 11th Circuit.

On the issue of pending appeals, department spokeswoman Matia Edwards acknowledged a backlog. "The Georgia Dept. of Community Health understands the importance of the timely review of appeal cases and recognizes the impact [the backlog] has on our member and provider communities," she said. The agency has implemented a plan to increase staff to help transmit hearing requests more expeditiously to the Office of State Administrative Hearings and adjudicate the appeals once received.

The Medical Assn. of Georgia is not involved in either case but continues to monitor them. President-elect M. Todd Williamson, MD, said the access-to-care issues are compounded by low Medicaid reimbursement rates, which continue to deter many physicians -- particularly pediatricians, ob-gyns and other specialists -- from taking new Medicaid patients.

Presidential candidates Sens. John McCain (R, Ariz.) and Barack Obama (D, Ill.) both have started to write prescriptions for health system reform with an eye toward tackling many of the nation's most serious conditions. But because these orders are incomplete, the effects they will have on doctors and their patients are difficult to predict.

The two leading candidates are "proposing some broad outlines of what they would intend to do and waiting to fill the details in later," said Sara Collins, PhD, assistant vice president for the Commonwealth Fund's Program on the Future of Health Insurance.

McCain and Obama both support better pay for doctors who meet quality standards and who coordinate care. They want more transparency in the system and widespread adoption of health information technology, and would consider allowing importation of prescription drugs to reduce prices.

But they part ways on their visions to reform the market for health insurance and to expand coverage. McCain would end the employee tax exclusion for health insurance spending, instead offering refundable tax credits to help people buy health insurance. He also would work with states to create guaranteed access plans for Americans with expensive chronic conditions and those denied health insurance coverage. Health plans could sell policies across state lines under his plan to increase insurance portability and competition.

Obama would cover all uninsured kids and more uninsured adults by expanding eligibility for Medicaid and the State Children's Health Insurance Program. He also would create a national health insurance exchange that would offer benefits similar to those in federal employee health plans, with guaranteed eligibility and subsidies for lower-income people. The exchange would take bids from private insurers to offer competing plans.

Covering more patients

The McCain and Obama plans both seek to expand health coverage to the uninsured -- potentially putting millions more paying patients in doctors' offices -- but would take different paths to get there.

McCain's guaranteed access plans would limit premiums and provide subsidies for lower-income people. Plans would likely be restricted to individual states at first, and talks with governors and legislatures might allow them to be expanded into regions, said Tom Miller, an unpaid health care adviser to the McCain campaign and a resident fellow at the American Enterprise Institute. "But that's a little bit up in the air."

The McCain plan to allow insurers to sell their plans nationwide instead of only on a state-by-state basis doesn't specify how these interstate plans would be regulated. Miller said an agreement might be reached to allow the insurer's home state to take the lead on handling consumer complaints, with the enrollee's home state as a backup. In any case, consumers will be the ultimate judges of such plans, he said. "If [health plans] don't carry out their promises they're not going to succeed."

One concern about the McCain plan is that it won't significantly reduce the number of uninsured people, according to an analysis released July 23 by the Tax Policy Center, a collaboration between the Urban Institute and Brookings Institution. The report assumes the number of uninsured Americans will increase to 59.2 million by 2013 and 66.8 million by 2018, absent any policy changes.

That analysis paints this picture: McCain's plan would decrease the uninsured number by 4.6 million by 2013. By 2018, McCain's plan would cover only 2 million people who would otherwise be uninsured because increases in health spending would outpace the value of the plan's tax credits. In contrast, the Obama plan would shrink the uninsured population by 29.6 million by 2013 and 33.9 million by 2018.

Miller disagreed with the estimate on the McCain plan, saying that the analysis overestimates the number of employers that would drop coverage. "That's not what's going to happen in the real world."

The Tax Policy Center analysts acknowledged that their estimate is "very preliminary" because it includes a number of assumptions about the funding and structure of the McCain plan that the campaign has not detailed.

Obama's national health insurance exchange would be modeled partly on Massachusetts' Commonwealth Connector Authority. The connector, in an effort to offer affordable coverage to the uninsured, defines minimum levels of benefits and sets affordability standards for participating private plans. In return, the connector subsidizes coverage based on income. Obama's exchange would take that model nationwide by creating one public, national plan with benefits similar to those offered to federal employees, said unpaid Obama campaign adviser David Cutler, PhD, a professor of economics at Harvard University. The public plan would then serve as a benchmark for private plans participating in the exchange.

Obama would fund the expansion in part by requiring employers who don't make a high enough contribution to their employees' health care to pay into the national plan. But the higher the contribution, the more likely it will increase employment costs, which could lower wages without improving coverage, according to the Tax Policy Center's analysis.

Small businesses would be exempt from the payroll contribution and would receive tax credits of up to 50% of what they spend on employees' premiums. That could make coverage more affordable for employees in small physician practices, said Robert Doherty, the American College of Physicians' senior vice president for governmental affairs and public policy.

If Obama or McCain succeed in covering millions of the uninsured, they would also need to ensure that enough physicians will be available to see them, said E. Stephen Edwards, MD, a retired pediatrician and past president of the American Academy of Pediatrics. "We're going to need a lot more physician power than we currently have."

Neither candidate's plan addresses the physician work force issue.

Dodging the Medicare pay question

McCain and Obama both call for turning Medicare and other public programs into models for rewarding physicians and hospitals for higher quality care. But neither candidate offers a strategy for reforming the sustainable growth rate formula that for several years has called for annual cuts to Medicare physician pay.

Although Congress in July reversed the latest Medicare pay cut, the measure did not adjust the sustainable growth rate formula, which means doctors will be facing a projected 21% Medicare pay cut on Jan. 1, 2010. Obama voted to override the cut. McCain did not vote, but he issued a statement criticizing the bill for slashing private Medicare plan payments to help boost physician pay.

McCain would stop Medicare and Medicaid from paying for medical errors deemed preventable, and Obama suggests such errors should be reported publicly. But advisers to both campaigns indicated that reducing physician pay for failing to meet quality goals in Medicare and other public programs was a less attractive option.

A new pay system would be much easier to implement if it focuses more on rewards than penalties, McCain adviser Miller said. Likewise, Obama adviser Cutler said most policy analysts call for rewarding doctors who perform well, instead of penalizing those who don't.

Dr. Edwards said defining quality care in any type of pay-for-performance initiative would be difficult. The process must be more meaningful than simply making sure paperwork is filled out correctly, he said.

Both candidates have been largely silent on Medicaid and SCHIP physician pay, though both want at least to cover all children eligible for the programs. Dr. Edwards said he appreciates that commitment but that it's not enough. "That doesn't mean doctors are going to be compensated fairly for the work that they do."

Two-thirds of SCHIP plans pay the same as state Medicaid programs, which generally pay physicians less than Medicare does, he said.

Boosting health information technology

Both the McCain and Obama plans call for expanding use of standardized electronic records systems and health IT to reduce medical errors, improve efficiency and improve transparency.

"You can't find a politician who doesn't support the concept of health IT," said Joseph Antos, PhD, a health care scholar at the American Enterprise Institute.

Obama would spend $50 billion over five years to speed adoption of electronic records systems. The government would assist physicians and hospitals in paying for and implementing the systems, Cutler said.

McCain also calls for wider use of health IT, but he doesn't offer a dollar figure to spend on it. The candidate believes that widespread agreement on technology standards are needed before determining how much money is necessary, Miller said. McCain also proposes allowing physicians and other health professionals to use technology to practice across state lines. Miller said that might include services as simple as remote patient monitoring or as complex as patient-doctor consultations.

Both candidates call for more public reporting of medical outcomes, quality measures and costs, but Obama would go further by requiring physicians and hospitals to report medical errors, hospital-acquired infections and disparities in care.

McCain and Obama also don't share the same vision for medical liability reform. McCain proposes limiting liability for physicians who follow evidence-based standards. Obama supports alternative methods of resolving medical lawsuits, such as the model employed at the University of Michigan Health System. That program involves investigating, admitting to, apologizing for and compensating patients for undisputable medical errors, even if a lawsuit hasn't been filed.

Obama campaign adviser Kavita Patel, MD, said the Michigan model is promising. "That is exactly the kind of cultural shift that Senator Obama ... will bring to health care," she said.

Keeping an open mind

Policy experts didn't expect McCain and Obama to fill in all the details of their health system reform prescriptions before the election. Whoever becomes president will still need to seek congressional approval to advance his ideas, with McCain likely having a tough time selling his tax credit proposal to Democrats on Capitol Hill, said the American Enterprise Institute's Antos.

Obama's plan lacks detail because he doesn't want his plan to be too prescriptive, Cutler said. "The senator believes very strongly that we need to work with people, not impose upon people."

For Obama, that tactic means not offering a take-it-or-leave-it proposition, much as the way Sen. Hillary Rodham Clinton (D, N.Y.), then first lady, was perceived as presenting health system reform in the early 1990s, Cutler said. "We're very sensitive about not wanting to give that impression."

Antos offered an alternative explanation. "They're smart. These are politicians running for office, so the last thing they want to do is to tell you want they really want to do."

Washington -- A new law in Massachusetts will standardize health plan billing codes, increase disclosure of pharmaceutical company gifts to doctors and provide more support for attracting physicians to the primary care field, among other provisions.

Senate President Therese Murray, the bill's author, said the measure is an attempt to improve health care access and slow cost increases. "This legislation, through incentives for medical and nursing students, the adoption of uniform billing and electronic health records and [increased] transparency for consumers, achieves those goals," Murray said. Massachusetts Gov. Deval Patrick signed the measure into law on Aug. 11.

The adopted bill was generally supported by the Massachusetts Medical Society, said MMS President Bruce Auerbach, MD. Initially, a provision would have eliminated the possibility of drug industry support for accredited continuing medical education, a move the society opposed. So language was amended to require drug firms simply to report annually any gift, fee, payment or subsidy worth $50 or more given to physicians or other health professionals. The MMS supported the amended language.

But the Pharmaceutical Research and Manufacturers of America objected to the gift-reporting provision. PhRMA said the provision "could chill ongoing clinical research in the state" by revealing a drugmaker's arrangements with principal investigators of clinical trials. PhRMA also opposed a provision incorporating into law the state's code of conduct for marketing to health professionals. This will make adjusting that code in response to changes in federal law and private health plan policies more difficult than updating an informally adopted code, the association said.

The law also requires all private insurers and the state's Medicaid program to begin using the same billing codes by 2012. Health plans will spend a few million dollars to implement the changes, said Marylou Buyse, MD, president and CEO of the Massachusetts Assn. of Health Plans, which also supported the bill. "We have to do a lot of work."

Originally the law would have required insurers to use only Medicare codes, which raised concerns from the health plan association. "Medicare doesn't cover all of the issues that a commercial population would have to deal with," Dr. Buyse said. For example, Medicare does not have codes for certain vaccinations.

The new slate of codes will be based on the International Classification of Diseases, the American Medical Association's Current Procedural Terminology codes, and billing codes from the Centers for Medicare & Medicaid Services.

The new law also establishes a health care work force center in the Massachusetts Dept. of Public Health to track health professional shortages and suggest policy revisions to address these trends. That process will include identifying underserved areas to target physician student loan repayment programs as well as examining the capacity of medical schools to increase the number of both primary care physicians and nurse practitioners.

Washington -- When the House last month voted in favor of implementing a trigger-lock measure, the lawmakers were not debating gun control regulations. They were dealing with Medicare's long-term financial future and a funding alarm that signals trouble for the program.

The House approved July 24 a resolution that effectively delays consideration of White House-sponsored legislation to reduce Medicare's reliance on general tax revenues in future years. If the chamber had not done that by July 30, President Bush's measure would have received a fast track to House floor consideration.

The Medicare funding trigger concept dates back to the Medicare Modernization Act of 2003. This measure dictated that an alarm would be tripped if the program's trustees predicted for two years in a row that the portion of total Medicare spending coming from general revenues will exceed 45% within six years. Spending on physician care, hospital care and other services are funded through a combination of general taxes, payroll taxes and beneficiary premiums.

The funding alarm was set off in April 2007 when the second consecutive trustees report projected Medicare would cross that 45% threshold. The law mandated the administration then send legislation to Capitol Hill at the beginning of the next year -- in this case 2008 -- to address the long-term funding issue. If congressional leaders did not bring that White House bill to the floor by the end of July 2008, any House member could force consideration of President Bush's measure and a floor vote.

That fast track has now disappeared, thanks to the House action, which does not require Senate or White House approval. A similar funding warning is still in effect in the upper chamber, but parliamentary rules there prohibit a single lawmaker from forcing a vote on Bush's bill. House aides said that Democratic lawmakers in both chambers next year will likely attempt to repeal the trigger provision outright rather than risk having the funding warning sound anew every time the Medicare trustees come out with their annual report.

House Democratic leaders defended their action to immobilize the trigger provision as a necessary response to what they perceive as a legislative gimmick aimed at slashing Medicare.

"The Medicare trigger was cooked up by Republicans behind closed doors as a political ploy to foster an unfounded panic about the strength of Medicare's finances," said Rep. Pete Stark (D, Calif.), chair of the House Ways and Means Subcommittee on Health. "We must turn off the trigger and reject Republican attempts to arbitrarily limit Medicare financing."

Stark and other Democrats argue that Medicare's trend to require an increasingly larger portion of its funding to be in the form of general tax revenues has no bearing on the program's long-term solvency. Although Democratic lawmakers support some of the Bush bill's provisions, they take issue with his proposal to ease the drain on tax dollars in part by charging wealthier seniors more for their Medicare drug benefit premiums.

Putting off the debate

But Republican leaders accused their Democratic counterparts of ignoring a real long-term financial problem for Medicare and shirking their responsibility to limit how much future generations will be expected to contribute in terms of public health spending.

"This legislative rubber stamp of the entitlement crisis status quo is regrettable, irresponsible, and unfair to our children and theirs, not to mention the seniors who rely on Medicare today," said House Minority Leader John Boehner (R, Ohio). "They will bear the consequences of the Democratic leadership's refusal to step up and do the right thing."

The decision to put the long-term Medicare funding debate on hold also postpones potential action on several proposals that had prompted concern among physician organizations.

Bush's bill, for instance, calls for Medicare to pay for doctors' services based not just on what they provide but on the quality of care. Such a pay-for-performance concept is troubling to many physicians, especially if the perceived emphasis is on cutting spending rather than improving care. The measure also proposes public quality reports for doctors as a way to drive patients toward better, more efficient care -- another concept physician organizations say can be problematic if improperly implemented.

Liability a factor in reform

But the White House bill also includes a medical liability reform proposal that has the strong support of the American Medical Association and other physician organizations. The move to block fast-track consideration of the other provisions also puts that debate on the back burner.

Any discussion of Medicare's funding future must involve a long look at medical liability reform, said Shawn Martin. He's the head lobbyist for the American Osteopathic Assn. and the chair of the Health Coalition on Liability and Access. The coalition is made up of numerous physician, hospital and insurer organizations, including the AMA.

"Comprehensive medical liability reforms have a proven track record of success at the state level of reducing health care costs and increasing patient access to quality medical care," Martin said.

"Controlling our nation's Medicare costs is one more reason America needs national medical liability reform," he said.

Boehner said the House action was payback by Democrats to the trial lawyer lobby that has traditionally backed members of their party over Republicans.

Washington -- A new effort to reduce hospital Medicare pay for preventable medical complications won't result in a significant number of rejected claims, according to federal officials. But physicians insisted the initiative needs to be reworked to account for patient risk factors and other issues largely beyond doctors' control.

The Centers for Medicare & Medicaid Services on July 31 finalized a rule that lists 10 categories of hospital-acquired conditions for which it will limit inpatient Medicare payment starting Oct. 1. The list includes two additional categories of conditions from a previously proposed list of eight and an expansion of a proposed surgical infection category. If patients develop any of these medical problems during their hospital stays, Medicare will not reimburse the hospital at the higher rate for treating these complications. It will still pay to treat the primary diagnosis and other complications. The rule does not alter payment for the physicians who provide that care.

CMS estimates the effort will reduce Medicare spending by only about $21 million per year. In contrast, the program spent about $20 billion last year on total care for patients with these problems. That's in part because patients often have complications that are not listed in the rule and thus do trigger higher Medicare payments.

CMS Acting Administrator Kerry Weems downplayed the dollars at stake and said the pay reforms have a larger goal than reducing spending.

"This is really about making hospitals and the health system just a safer place to be," Weems said. The rule also applies to private Medicare plans.

Doctors agreed that some of the listed conditions, such as a foreign object inside a surgery patient, should be prevented all of the time. But CMS should not apply the same rules to conditions that doctors cannot always prevent, such as surgical infections, said American Medical Association President-elect J. James Rohack, MD.

"To be reasonably preventable, there should be solid evidence that by following guidelines, the occurrence of an event can be reduced to zero or near zero," he said. "This is not the case for many of the now-banned conditions."

The CMS effort will actually increase spending on tests to determine whether patients have the conditions, which could negate some of the savings CMS anticipates, Dr. Rohack said. "A more effective patient safety approach would be to encourage compliance with evidence-based guidelines by health care professionals."

Conditions omitted, for now

CMS had proposed including up to 17 condition categories with 22 individual items in the final rule. Public comments critical of the rule convinced the agency to exclude many of them, officials said.

"We had a lot of robust discussion in the comments concerning the hospital-acquired conditions. We responded ... by removing some of those for reconsideration," said Jeffrey Rich, MD, director of CMS' Center for Medicare Management.

Two of the more controversial conditions CMS proposed but did not include in the rule were ventilator-associated pneumonia and Clostridium difficile-associated disease, Dr. Rich said. The conditions cost Medicare a combined $10 billion to treat last year. The AMA and other organizations objected to their inclusion because they were not "reasonably preventable," as required by the Deficit Reduction Act of 2005. That law instructed CMS to limit payment for avoidable hospital-acquired conditions.

CMS will continue to work with the Agency for Healthcare Research and Quality and the National Quality Forum to develop evidence-based guidelines in advance of including these and other omitted conditions in future Medicare no-pay rules, Dr. Rich said. "We think these are very serious infections that are important to the health care system and to the patients of the United States. So we will continue to look at these."

The rule does not address payment for errors involving physicians performing the wrong surgery or operating on the wrong patient or body part. CMS will finalize these policies by April 2009.

CMS also has plans to expand the hospital-acquired conditions payment policy outside of the inpatient setting. The agency eventually anticipates applying this rule to nursing homes, home health agencies and ambulatory care settings, said CMS Chief Medical Officer Barry Straube, MD. But a spokesman said the agency would need approval from Congress before subjecting physician practices to the same policy.

The risk factor

The rule could lead physicians and hospitals to be wary about treating higher-risk beneficiaries, doctors said. Every patient has the same risk for having a foreign object left inside him or her, but not everyone has the same risk for a pulmonary embolism, said Kevin J. Bozic, MD, an American Academy of Orthopaedic Surgeons board member. Patients who have had a previous embolism or who are morbidly obese are more likely to have one, but the CMS rule excludes payment for embolisms related to knee and hip replacements without recognizing this risk.

"You need to appropriately factor in the patient risk when determining whether a condition is reasonably avoidable," Dr. Bozic said.

Every no-pay condition must also have evidence-based prevention standards for physicians to follow, said Nancy Foster, the American Hospital Assn.'s vice president for quality and patient safety. Even straightforward-sounding complications such as falls are difficult to eliminate because there are no evidence-based guidelines to accomplish that, she said.

"It's like wishing you could cure cancer or heart disease. It won't happen just because you change the payment system," Foster said.

Hospital administrative staff will rely on physicians' notes to determine whether patients had any conditions when they were admitted, Dr. Bozic said. That means doctors will need to spend more time documenting existing infections and signs of pressure ulcers on incoming patients.

The rule should allow for a third-party review of the events that led to the condition to see if it was a truly preventable occurrence, said Bruce Auerbach, MD, a member of the American College of Emergency Physicians' Quality and Performance Committee. "It's not always as clear-cut as the rules appear to indicate."

Still, the rule could have included more conditions and increased doctors' workload even more dramatically, Dr. Auerbach said. "Overall, people are somewhat reassured by the fact that the list was not larger."