2010 March/April by SCCMA

MARCH/APRIL 2010 | Volume 16 | Number 2

Protect Your Assets and Your Future With the recent downturn in the economy and the impact on personal assets, many members are reassessing their need for Long Term Care insurance. With so many options to choose from, where do you turn for assistance?

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BULLETIN THE

Official magazine of the Santa Clara County Medical Association and the Monterey County Medical Society

The CMA Board of Trustees, on March 19, 2010, voted to take the following position on the health reform reconciliation bill. The trustees voted: That CMA adopt the following position on the federal health care reform bill (HR 3590 and HR 4278) at this point in time as amended: More on page 8

SCCMA Town Hall Meeting..........................................................................5 From the Editor’s Desk.................................................................................6 Joseph S. Andresen, MD

Message From the SCCMA President..........................................................7 Howard Sutkin, MD, FACS

CMA Health Care Reform Position and Timeline Implementation..........8 Is the Health Care Law Unconstitutional?................................................14 Health Care Reform Must Fix Access Problems.......................................16 Anmol S. Mahal, MD

EMTALA − The Cornerstone of Real Health Reform................................17 Just minutes after President Obama signed the health care legislation into law, 13 state attorneys general, led by Bill McCollum of Florida, filed a federal lawsuit challenging the law’s constitutionality. More on page 14

James G. Hinsdale, MD, FACS

HIPAA Risks and Responsibilities for Medical Service Providers...........20 Frank Lacombe

Coding Q’s...................................................................................................23 Sandie Becker, CMC

Welcome New Members − In Memoriam.................................................25 President Signs Bill Reversing Medicare Cuts, Extending Payment Rates Through May 31......................................................................................27 From a one-room schoolhouse in the hills of Kentucky to a residency program in obstetrics and gynecology at Santa Clara County Hospital, Leon P. Fox made the grade.

Discount Ticket Flyer..................................................................................28 Leon Parrish Fox: Man of the Century......................................................29 Michael A. Shea, MD

Classified Ads..............................................................................................36

More on page 29 PAGE 3 | THE BULLETIN | MARCH / APRIL 2010

The Santa Clara County Medical Association Officers

AMA Trustee - SCCMA

Councilors

President Howard Sutkin, MD President-Elect Thomas Dailey, MD VP-Community Health Cindy Russell, MD VP-External Affairs William Lewis, MD VP-Member Services Judith Dethlefs, MD VP-Professional Conduct Jim Crotty, MD Secretary Sameer Awsare, MD Treasurer Martin L. Fishman, MD

James G. Hinsdale, MD

El Camino Hospital of Los Gatos: Rives Chalmers, MD El Camino Hospital: Open Good Samaritan Hospital: Eleanor Martinez, MD Kaiser Foundation Hospital - San Jose: Efren Rosas, MD Kaiser Permanente Hospital: Allison Schwanda, MD O’Connor Hospital: Jay Raju, MD Regional Med. Center of San Jose: Emiro Burbano, MD Saint Louise Regional Hospital: John Saranto, MD Stanford Hospital & Clinics: Peter Cassini, MD Santa Clara Valley Medical Center: Patrick Kearns, MD

Tanya W. Spirtos, MD (Alternate)

SCCMA/CMA Delegation Chair Tanya W. Spirtos, MD (District VII)

CMA Trustees - SCCMA Martin L. Fishman, MD (District VII) Susan R. Hansen, MD (Solo/Small Group Physician) James G. Hinsdale, MD (President-Elect) Randal Pham, MD (Ethnic Member Organization Societies)

Chief Executive Officer

Tanya W. Spirtos, MD (District VII)

William C. Parrish, Jr.

BULLETIN THE

Official magazine of the Santa Clara County Medical Association and the Monterey County Medical Society

Printed in U.S.A.

THE MONTEREY COUNTY MEDICAL SOCIETY OFFICERS

Editor

Joseph S. Andresen, MD

Managing Editor Pam Jensen

Opinions expressed by authors are their own, and not necessarily those of The Bulletin or the Santa Clara County Medical Association and the Monterey County Medical Society. Acceptance of advertising in The Bulletin in no way constitutes approval or endorsement by the Santa Clara County Medical Association or the Monterey County Medical Society of products or services advertised. Address all editorial communication, reprint requests, and advertising to: Pam Jensen, Managing Editor 700 Empey Way San Jose, CA 95128 408/998-8850, ext. 3012 Fax: 408/289-1064 pjensen@sccma.org

President William Khieu, MD, MBA Secretary Eliot Light, MD Treasurer John Clark, MD

CHIEF EXECUTIVE OFFICER William C. Parrish, Jr.

DIRECTORS Valerie Barnes, MD Ronald Fuerstner, MD David Holley, MD R. Kurt Lofgren, MD James Ramseur, Jr., MD Scott Schneiderman, DO

CMA TRUSTEE – MCMS

Valerie Barnes, MD

Santa Clar a County Medical Association

TOWN HALL MEETING Tuesday, May 4, 2010 presents:

Ja mes Hinsda le , M D CM A President-Elect Santa Clara County Medical Association Headquarters 700 Empey Way, San Jose – 2nd Floor Conference Rooms

All SCCMA/MCMS physician, resident, student, and Alliance members are invited (Non-members are welcome too!)

Topics Include:

CMA Advocacy in Current Legislature Session (Corporate Bar of Medicine and MICRA) Synopsis of Health Care Reform – Milestones in Past Year In the Aftermath of the Health Reform Bill, Is Organized Medicine Relevant? Current Strategy for Ongoing Reforms Likely CMA Backing of Important Legislative Candidates Update on CMA Governance: Issues for Mode of Practice; Foundations; Demographic Changes 6:00 pm – hors d’oeuvres & libation 6:30 pm – honored guest speaker: james hinsdale, md, cma president-elect 7:30 pm – town hall/annual business/council meeting To reserve a seat, please fax back your RSVP ASAP to Jean Cassetta at 408-289-1064 Name(s):

Questions:

FROM THE EDITOR’S DESK

HEALTH CARE REFORM BECOMES LAW By Joseph Andresen, MD “You are placing a financial lash upon the backs of the people whose backs are breaking under a load of debts and taxes.” – Rep. Thomas Jenkins of Ohio “It is axiomatic ... that control follows money when the government steps in.” – AMA President-Elect Dr. Norman A. Welch Are these two quotes about H.R. 3590, the Patient Protection and Affordable Care Act signed into law by President Obama on March 23, 2010? With all the recent attention and partisan debate swirling around Washington, D.C. over the past year, you might well conclude these comments refer to health care reform. But you would be wrong. Both represent the controversy surrounding landmark legislation made earlier in our nation’s history. The first quote was made in reference to the passage of the Social Security Act of 1935 and the second was made in the 1964 U.S. House Hearings during the debate on Medicare. Both illustrate that uncertainty and change breed strong passions both for and against new laws and only the passage of time gives respite to these divisions. So what does this new law mean for you and me as physicians and, most importantly, our patients? First, to separate the simple facts from speculation, this law is first and foremost health insurance reform, as opposed to health care delivery reform. It builds on the current private- and employer-based insurance system. It dictates an individual mandate

for health insurance coverage, rather than an employer mandate. It expands coverage from the current level of 83% insured to 95% of all Americans. This is estimated to be 32 million citizens. This is accomplished through employer small business tax credits, state-based exchanges, subsidies to lower-income individuals to purchase private insurance, and expansion of Medicaid eligibility. Insurance companies offering health insurance will no longer be able to deny eligibility based on preexisting conditions, terminate policies because of illness, or limit lifetime benefits. Specific preventative services will be covered without deductibles. Insurance companies will have to demonstrate a minimum 85% medical loss ratio or offer rebates to its customers. Medicare drug benefits will improve with closure of the “donut hole.” Medicare Advantage private insurance HMO programs will no longer receive 12% higher reimbursement offered over fee-for-service rates. This will be the majority of savings to Medicare to keep it solvent beyond 2017. The majority of these changes will be phased in now through 2014. How will health care reform affect our lives as physicians? There is both good news and bad news at this moment. Unfortunately, for the second time in as many months, Congress failed to prevent a 21% cut in Medicare physician rates from taking effect. Senator Tom Coburn, MD (R, Okla.), blocked consent, saying the nearly $10 billion measure should be offset. The bill would have delayed the 21% Medicare pay cut from PAGE 6 | THE BULLETIN | MARCH / APRIL 2010

Joseph Andresen, MD is the editor of The Bulletin. He is board certified in anesthesiology and is currently practicing in the Santa Clara valley area. April 1 until May 1. This is an untenable situation for all physicians who care for our elderly. Hearing from inside sources, I am confident that this impasse will be overcome and that Medicare physician reimbursement will be reinstated at present levels, maintaining access to care. This is a cornerstone of health care reform. After Congress takes action, the good news is that Medicare reimbursement will immediately increase 10% for primary care providers and surgeons who practice in rural areas through provisions in the health care reform law. The other major concern is the expansion of Medicaid without adequate funding. Unlike the House bill, H.R. 3200, that proposed a federal takeover of Medicaid with funding matching Medicare reimbursement, the current health care reform law does not go as far. Dr. Anmol Mahal, past president of the CMA, very cogently addresses this shortcoming in his editorial letter included in this issue. Additional areas of CMA concerns include failure of repeal of the Medicare SGR payment formula, lack of updates for California Medicare geographic payment Continued on page 18

MESSAGE FROM THE SCCMA PRESIDENT

HEALTH CARE REFORM BECOMES LAW By Howard Sutkin, MD, FACS President, Santa Clara County Medical Association Well, they’ve done it. After all the wrangling, Democrat vs. Republican, liberal vs. conservative, idealist vs. pragmatist—Speaker Pelosi and gang passed less-than-universally-popular comprehensive health care. I have come to the conclusion that many of those politicians that may lose their political positions in the upcoming election in November must have felt this is so important, that it is bigger than themselves. So, now the fun begins. Legal challenges are coming from many states. Is requiring health care coverage a constitutional power which the federal government has? Whatever your opinion is, the Constitution is subject to interpretation. It looks like the Supreme Court will have to weigh-in on this. And who is to say the justices won’t feel that the benefits of insured Americans don’t outweigh the concept of strict interpretation of the Founding Fathers limiting federal powers? In the mean time, Medicare will be scaled back and Medicaid will be scaled up. Not a great formula for us doctors, however, what happens next is up to us. By pure economics, the supply and demand on physicians is about to become a lot more intense, with the addition of millions of additional insured. So I ask you, what are you going to do about it?

mountains of bureaucracy, and obstruction to efficiency. It is freedom which is our salvation and knowledge which is our power. If health care is a new right — for all Americans to enjoy — I would suggest to all physicians, members and nonmembers alike, that your medical license has just gotten a lot more valuable. If we allow ourselves to be abused, we certainly will be taken advantage of. On the other hand, if we study the problem of the incoming surge of the insured, it might be a good thing, maybe a great thing. The key is to draw lines in the sand about how we are enthusiastically ready to help and, just as important, where we will not participate in abusive treatment. We can, and I think will, prevail all the stronger. In the end, the nation can become healthier with emphasis on preventative medicine, weight control, and efficient delivery of health care. I, for one, look forward to a day when all Americans are insured and when all physicians are treated fairly. Naturally, I don’t have to highlight that we cannot achieve individually, in isolation, because that is obvious.

I would offer the following concept. No one can force you or me to work. We don’t have to continue, faced with improper pay, poor conditions, PAGE 7 | THE BULLETIN | MARCH / APRIL 2010

Howard Sutkin, MD is the 20082010 President of the Santa Clara County Medical Association. He is board certified in plastic and reconstructive surgery and is currently practicing in the Los Gatos/San Jose area.

Bulletin featured article

CMA health care reform position and timeline implementation Senate Health Reform Bill: HR 3590 Patient Protection and Affordable Care Act HR 4278 Budget Reconciliation Bill: Affordable Health Care for America The CMA Board of Trustees, on March 19, 2010, voted to take the following position on the health reform reconciliation bill. The trustees voted: That CMA adopt the following position on the federal health care reform bill (HR 3590 and HR 4278) at this point in time as amended: That CMA support the following provisions in the federal health care reform legislation: 1. Expansion of health care coverage for California’s uninsured. 2. Continuation of current coverage for the insured, including Health Savings Accounts. 3. 3.2 million Californians to be covered by private health plans. 4. Catastrophic-only coverage option for those under 30 years old. 5. Option to extend parent’s coverage to children under age 26. 6. A STATE-based health insurance exchange that provides competition and a choice of plans and doctors. 7. Allows patients to privately contract with the physicians of their choice. 8. Provisions to make health insurance more affordable for low-income families. 9. Tax credits for small businesses to purchase health insurance. 10. Reforms on the for-profit insurance industry, which include an 85% medical loss ratio, requirements to have adequate provider networks, prohibitions on denying coverage for preexisting conditions, and prohibitions on dropping coverage once a patient becomes ill. 11. Investments in primary care, including the Medicare 50% payment increase for primary care physicians (10% per year

for five years), establishment of medical homes, and funding to train more primary care physicians. 12. 10% bonus payment per year for general surgeons in rural areas. 13. Additional 5% bonus payment for physicians practicing in underserved areas. 14. Medicaid rate increase to Medicare levels for primary care physicians. 15. Medicaid expansion that is 90-100% federally financed reducing state burden. 16. Medical Home and Accountable Care Organization payment increases. 17. Pathway for physicians to achieve antitrust relief through Accountable Care Organizations. 18. Investments in prevention and wellness programs. 19. Investments in the physician training and workforce programs. 20. Requirements for insurers to adopt uniform rules for physician billing issues. That CMA oppose the following: 1. The failure to repeal the current Medicare SGR payment formula. 2. The failure to include a Medicaid rate increase for all services and physician specialties. 3. The failure to update California’s Medicare geographic payment localities. 4. The Independent Medicare Payment Advisory Board (IPAB). 5. The lack of private contracting for seniors in the Medicare program. 6. Widespread implementation of quality reporting programs that are flawed and untested. 7. Allowing nurse practitioners to run medical homes within their state scope of practice laws. PAGE 8 | THE BULLETIN | MARCH / APRIL 2010

8. A ban on future physician-owned hospitals. 9. Payment reductions for advanced imaging services. 10. Fraud and abuse initiatives that could be burdensome for physicians. That CMA continue to work to achieve separate legislation that will: 1. Repeal the current Medicare SGR payment formula. 2. Increase the Medicaid payment rates for all services and physicians. 3. Update the California payment localities (GPCI); consistent with CMA policy. 4. Allow Medicare patients to privately contract with physicians. 5. Improve quality reporting programs consistent with CMA policy. 6. Eliminate the IPAB. 7. Further expand coverage to uninsured Californians, consistent with CMA policy.

BRIEF LEGISLATIVE SUMMARY (03/19/10) The bill covers 80% of California’s uninsured and 95% of the nation’s uninsured through tax credits and a Medicaid expansion. California has at least 6.5 million uninsured 1.4 million of whom are undocumented or new legal immigrants who will not be covered by this bill. Of the 5.1 million uninsured Californians who are eligible, 1.7 million will be enrolled in Medicaid and 3.2 million uninsured will be able to choose private health plans in or out of the Health Insurance Exchange. The Medicaid expansion will be 100% federally financed initially, phasing down to 90% in 2020 and later years. The legislation includes a primary care provider

rate increase to Medicare levels for E&M services and immunizations. The exchange will be state-based, not national. Two-thirds of the uninsured covered by this bill will enroll in private health plans. Everyone will have the system available to members of Congress. And patients may continue to privately contract with the physician of their choice. There are significant initiatives to end for-profit insurance company abuses. Last year alone, the insurance industry took more than $700 billion in profit and overhead out of the health care system. The bill requires insurers to direct 85% of revenue to direct patient care rather than overhead and profit. They must have adequate provider networks. And there is a requirement to reduce physician billing hassles through administrative streamlining and simplification. Insurers will be prohibited from denying coverage to those with preexisting conditions and from rescinding coverage when a patient becomes ill. The final version includes a 50% rate increase for primary care physicians over five years; a 50% rate increase for general surgeons practicing in rural areas over five years; a 5% rate increase for physicians practicing in shortage areas; bonuses for physicians running medical homes and bonuses for physicians who coordinate care. The quality reporting programs are all voluntary for four years with a 0.5% bonus. The proposed Accountable Care Organizations provide a pathway to anti-trust relief, which would allow physicians who collaborate to have stronger negotiating power with health plans within Medicare and the private sector. There are cuts for advanced imaging services, although they were reduced from the original bill, and a ban on future physician-owned hospitals. The Medicare Advantage plans will be cut by $130 billion, but there are bonuses for plans who meet quality standards. The direct contracting provision for medical groups was not included in the final bill. The bill includes substantial funding for prevention, wellness, and public health programs. It also makes significant investments in physician training and workforce programs.

Unfortunately, the bill does not include the California GPCI fix, which would have updated our Medicare payment locality borders. It was pulled from the bill with all of the other single-state favors (ala the Ben Nelson Nebraska Cornhusker Medicaid deal). We have commitments from our House leaders to include the GPCI fix in the Medicare SGR bill later this year. And while the House passed legislation to repeal the Medicare SGR, the Senate has yet to adopt a permanent solution and send it to the President for signature. Organized medicine will have to keep working to get the final repeal this year. Recently, the AMA has been involved in high-level negotiations with the White House, and the House and Senate Democratic leaders over the Medicare SGR issues. They are hoping to announce an agreement this year. The most threatening part of the bill is the establishment of an Independent Medicare Payment Advisory Board (IPAB) appointed by the President. It takes away Congress’s accountability to physicians and seniors in the Medicare program. The IPAB is mandated to recommend Medicare reforms and make cuts if Medicare spending exceeds general health care spending. However, as long as the SGR is in effect, physicians will not be subject to IPAB cuts. But physicians face cuts – either from the SGR or the IPAB. The Parliamentarian ruled all changes to the IPAB out of order, so our leaders were not able to adopt reforms in the final reconciliation bill. However, because of the interplay with the increased Medicare Advantage cuts in the final reconciliation bill, the amount of cuts the IPAB must produce has been reduced by one-third to $14 billion over 10 years. Our House Democratic leaders, Speaker Pelosi, Chairman Stark, and Chairman Waxman, all fought the IPAB, but it has been a major priority for the President and the Senate. These leaders have vowed to enact subsequent legislation to eliminate or seriously weaken the IPAB before it takes effect in 2013. Moreover, pharma did not realize until recently that they were under the IPAB and they are out to kill it in future legislation as well.

PAGE 9 | THE BULLETIN | MARCH / APRIL 2010

Finally, there are grants to states (that have not been able to enact MICRA), to test alternative medical liability reforms. Further liability relief for California physicians was not forthcoming because we enjoy the strongest law in the country. Our major objective was to protect MICRA and ensure it was not undermined. The bill is financed with a combination of Medicare cuts and taxes. All Medicare providers, except physicians, face significant cuts - health plans, pharma, medical devices, hospitals, home health, and nursing homes. There are new fees on the health plans, pharma, and device manufacturers. Starting in 2018, there will be a “Cadillac” tax on health plans offering high-end benefits and an increase in the Medicare tax on high income earners and some net capital gains investment income. The non-partisan Congressional Budget Office (CBO) estimates the bill will cost $940 billion and will reduce the deficit by $138 billion in the first ten years and $1.2 trillion in the second decade.

DETAILED LEGISLATIVE SUMMARY (03/19/10) COVERAGE Individual Mandate – penalties up to 10% of income for those who do not purchase insurance. No Employer Mandate but substantial fees on employers who do not provide coverage. Immediate temporary high-risk pool with subsidized premiums for low-income uninsured with preexisting conditions who have been denied health care coverage. Currently Insured: If you like your insurance, you can keep it. Grandfathers all existing coverage, including Health Savings Accounts. Uninsured: Covers 80% of California’s 6.5 million uninsured. Does not cover 1.4 million undocumented or new legal immigrants. Covers 2.3 million (incomes between 133% FPL-400% of FPL; $28,665 and $88,200 for a family of four) through private insurance. Covers another 1 million who have incomes above 400% of FPL through private insurance.

CMA Health Care Reform Position and Timeline Implementation, from page 9 Allows parents to continue coverage for children up to age 26. Establishes catastrophic-only coverage for the young – under age 39.

Board of Governors with four physician representatives. Prohibits use of practice guidelines for coverage, payment or policy recommendations. Limits on data use.

Accountable Care Organizations In 2012, CMS required to establish a program to allow groups of physicians who report on quality and coordinate care to share in the savings achieved in their region.

Covers 1.7 million Californians (incomes up to 133% of FPL $28,665) in Medi-Cal. 100% federal financing forever.

MEDICARE

Tax credits for small employers to cover 637,700 California small business employees.

Medicare physician participation fee eliminated

Tax credits to assist low-income families afford premiums based on sliding fee scale linked to income.

Provides a 50% bonus for primary care physicians for 5 years 2011-2015.

EXCHANGE

(10% annual bonus)

Requires manufacturers to provide a 50% discount to seniors for brand-name drugs and biologics.

General Surgery Bonus

Closes the “donut hole” for drug coverage.

Provides a 50% bonus for general surgeons practicing in rural areas 2011-2015.

Establishes a single, uniform exceptions and appeals process.

(10% annual bonus)

Independent Medicare Payment Advisory Board (IPAB)

State-based exchange modeled after the Federal Employees Health Plan. The Exchange is a large purchasing pool that offers a choice of health plans and benefits. No Public Plan in the Exchange. Four essential plan benefit categories: Bronze, Silver, Gold and Platinum with different cost-sharing requirements. Allows co-ops. INSURANCE INDUSTRY REFORMS Requires health plans to spend 85% of revenue on direct patient care vs. profit and overhead. Requires adequate provider networks. Requires plans to publicly disclose information on claims payment policies, enrollment, denials, rating practices, out of network cost-sharing, and enrollee rights. Prohibits plans from denying coverage for preexisting conditions. Prohibits plans from rescinding coverage when a patient becomes ill. Prohibits plans from setting annual or lifetime limits on benefits. Modified community rating limits variation only on age, geographic area, tobacco use, and family size. Allows HHS to review health plan premium increases if the state insurance commissioner does not have the authority. Prevention and Wellness National strategy to promote with funding. Comparative Effectiveness Research Establishes independent, non-profit CER institute to support clinical research on comparative clinical effectiveness.

Fraud and Abuse: Multiple initiatives to curb fraud and abuse

Primary Care Bonus

Additional 5% bonus for physicians practicing in underserved areas. Medicare Advantage Health Plans: Phasesin fiscal neutrality for Medicare FFS and MA. Sets MA payment based on average of bids from MA plans in each market area. Establishes a quality bonus for care coordination, care management, and quality. $130+ billion cut. Payment for Imaging Services Increases utilization rate assumption for advanced imaging equipment from 50%65% and up to 75% in 2014 which reduces the reimbursement rates for imaging services. Hospital Programs Reduces payments to hospitals by $155 billion through DSH program. Demonstration programs to explore bundled payments for post-acute services.

Establishes path to anti-trust relief. Future Ban on Physician-Owned Hospitals: Effective December 31, 2010 Medicare Part D Prescription Drug Program

Appointed by the President to reduce Medicare payment updates for physicians and other providers. IPAB mandated to reduce payments if Medicare spending exceeds health care spending. If the current SGR is in effect, physicians would not receive IPAB cuts. IPAB must take into consideration system-wide costs, patient access, utilization and quality of care by region, types of services, and providers. Congress would only have 30 days to overturn recommendations with a supermajority 2/3 vote. Changes to the IPAB were ruled out of order by the Parliamentarian for the Budget Reconciliation bill. However, the cuts the IPAB is required to make were reduced by one-third.

Demonstration program to prevent readmissions.

Speaker Pelosi, Chairman Stark, and Chairman Waxman are all strongly opposed to the IPAB and have all vowed to revisit it in subsequent legislation.

Medical Homes

Geographic Payment Issues

Establishes a demonstration program for primary care medical homes for patients with multiple chronic conditions. Physicians could be eligible for shared savings if achieve quality outcomes, patient satisfaction, and cost savings. NPs and PAs may lead medical homes, but only if state scope of practice laws allow it. California law prohibits.

There is no update to California’s Medicare payment locality borders (California GPCI fix).

PAGE 10 | THE BULLETIN | MARCH / APRIL 2010

It was removed from the bill with all the other single-state benefits. House Democratic leaders have committed to include it in the SGR bill later this year. New practice expense floor for “frontier states” - $6 billion for five rural states. New practice expense study for rural states; results implemented 2012.

(CMA successful in delaying implementation with a study for three years. Implementation dependent on the outcome of the study. Some California counties could benefit by 1%+; others could receive -8%. Impact unknown.)

measures remains with the AMA’s Quality Consortium which is comprised of all medical specialty societies.

transfer standard within specified period of time.

Requires Secretary to update outcomes measures for physicians and hospitals on acute and chronic diseases.

Value Index Modifier modifies physician payment based on level of spending. Physicians who spend less than national average paid a higher rate. Physicians who spend more than the national average paid a lower rate. CMA amendments ensure that rate is adjusted for geographic practice expense and socioeconomic status of the patients. Based on a MedPAC study, all California counties except Los Angeles spend well below the national average. Los Angeles is close to the national average and if other socioeconomic factors taken into consideration, such as income status of the patient population, Los Angeles will list below average.

Authorizes grants to states (that have not been able to enact MICRA) to test alternatives.

Requires public reporting of Medicare physician and private payer information related to PQRI and other factors such as care coordination, resource use, and patient satisfaction. Data would meet certain safeguards (valid, risk-adjusted) and physicians would have prior opportunity to review the data. Requires appropriate attribution methodology, timely feedback, and accurate systems that can provide reliable data. AMA and CMA worked to include multiple amendments to protect physician information and ensure that it is accurate based on the CCHRI experience in California.

Authorizes GAO to study whether practice guidelines and other payment incentive programs in the bill would result in new causes of action.

Physician Utilization

Graduate Medical Education Redistributes current unused residency slots for primary care and general surgery. Allows for training in outpatient settings.

Budget reconciliation bill also taxes net investment income and capital gains from certain sources. Currently, the Medicare tax does not apply to investment income. The Medicare tax on investment income does not apply if modified adjusted gross income is less than $250,000 in the case of a joint return, or $200,000 for a single return. Net investment income is interest, dividends, royalties, rents, gross income from a trade or business involving passive activities, and net gain from disposition of property (other than property held in a trade or business). Net investment income is reduced by properly allocable deductions to such income.

5% penalty for outliers eliminated. Continues the current program to provide confidential feedback to physicians comparing their utilization and resources use to their peers. Public reporting of aggregate information only. Quality Reporting Continues the current Medicare PQRI quality reporting program. Provides bonuses for physicians 2011-2013. Participation could be made mandatory by HHS Secretary in 2014 with penalties for nonparticipation. Quality Improvement

Allows teaching health centers to expand primary care residency programs. Health Care Workforce Authorizes the National Health Care Workforce Commission to examine barriers to primary care careers, authorizes state grants, increased funding for NHSC scholarship and loan repayment program; easing of access to loans for primary care providers, funding for health professions and diversity programs; other support for pediatrics, mental health, and public health.

Establishes CMS Innovation Center to test pilot models that improve quality and slow Medicare cost growth rate.

OTHER PROVISIONS

Provides funding for development of national strategy and priorities for performance improvement and dissemination of quality measures and best practices. The development of quality

Requires the Secretary to adopt a single set of rules for electronic transactions for eligibility verification, claims status, claims remittance/payment, claims attachments, and a rule to establish an electronic funds

Administrative Simplification for Physician Billing in Private Sector

Medical Liability Reform

REVENUE SOURCES Cosmetic Surgery Tax Removed Cadillac tax on plans that offer high-end health benefits in effect 2018 Increased the dollar threshold to $10,200 for single coverage and $27,500 for family coverage. Dollar thresholds indexed to inflation. Increase in the Medicare tax on higher income earners.

Fees on health plans, pharma, and medical device manufacturers Cuts to Medicare – Health plans, Hospitals, Pharma, Nursing Homes, Home Health CBO projects deficit reduction over 20 years. $138 billion in first 10 years; $1 trillion in second decade. Slows rate of health care spending growth from 6%/ yr to 5%/yr.

Health Reform Implementation Timeline HR 3590: The Patient Protection and Affordable Care Act

Following is a brief summary that outlines the implementation timeline and effective dates of the major provisions in the health care reform legislation of interest to physicians.

2010

COVERAGE • Immediate temporary high-risk pool with subsidized premiums for uninsured with preexisting conditions who have been denied health care coverage. PAGE 11 | THE BULLETIN | MARCH / APRIL 2010

• Temporary reinsurance program for employers providing health insurance coverage to retirees over age 55 who are not eligible for Medicare. • Allows parents to continue coverage for children up to age 26.

CMA Health Care Reform Implementation Timeline, from page 11 • Establishes catastrophic-only coverage for those up to 30 years of age. • Tax credits for small business employee insurance coverage starts to phase-in. • Requires group and individual health plans to cover certain preventive services without cost-sharing. INSURANCE INDUSTRY REFORMS • Health plans required to report medical loss ratios. In 2011, plans that do not dedicate 85% of revenue to direct patient care must provide a rebate to enrollees. • Health plans must have adequate provider networks. • No insurance denial for pre-existing conditions for children. • Prohibits plans from rescinding coverage when a patient gets sick. • Prohibits lifetime or annual limits on benefits. • Health plans must implement operating rules for certain electronic transactions within specified time periods. ACCESS TO CARE AND PHYSICIAN PAYMENT • Medicare 5% payment increase for mental health psychotherapy services. • Practice expense change increases physician payments in rural states 20102012. Mandates a national study on physician practice expenses. California physicians held harmless from this provision 2010-2012. • Starts to increases utilization rate assumption for advanced imaging equipment from 50%-65% and up to 75% in 2014 which reduces the reimbursement rates for advanced imaging services. MEDICARE PRESCRIPTION DRUG PROGRAM • Closes the donut hole for seniors. COMPARATIVE EFFECTIVENESS RESEARCH (CER) • Establishes independent, non-profit CER institute to support clinical research on comparative effectiveness. Board of Governors with four physician representatives. Prohibits use of research for coverage, payment or policy recommendations.

2011 REVENUE • Some revenue provisions, including the fees on health plans, pharmaceutical and device manufacturers and the Medicare tax start to phase in 2011-2014. • Medicare payment cuts to health plans, pharma, medical device manufacturers, hospitals, home health and nursing homes begin. MEDICARE • Primary Care Bonus: 10% bonus payments for internists, geriatricians, family physicians and pediatricians for 5 years (2011-2015) for whom primary care services (HCPCS codes 99201-99215; 99304-99340; and 99341-99350) account for at least 60% of Medicare allowed charges over a designated period of time. The bonus would be paid on a monthly or quarterly basis for each service that qualifies for payment. • Rural General Surgeons Bonus: 10% bonus payment for general surgeons practicing in health professional shortage areas for 5 years (2011-2015). • Medicare Advantage Health Plans: Starts to phase-in fiscal neutrality for Medicare Fee-for-Service and Medicare Advantage (MA). Sets MA payment based on average of bids from MA plans in each market area. Establishes a quality bonus for care coordination, care management and quality. $130+ billion cut. • Medical Homes: Establishes a demonstration program for primary care medical homes for patients with multiple chronic conditions. Physicians eligible for shared savings bonus payment. Nurse Practitioners and Physician Assistants may lead medical homes but only if state scope of practice laws allow it. CA law prohibits. • Future Ban on Physician-Owned Hospitals. New exceptions for existing physician-owned hospitals effective 18 months after enactment. To qualify for an exception, the physician-ownership agreement must be in place by December 31, 2010 • Physician Utilization: 5% penalty for physician utilization outliers eliminated. PAGE 12 | THE BULLETIN | MARCH / APRIL 2010

Continues the current program to provide confidential feedback to physicians comparing their utilization and resources use to their peers. • Quality Reporting: Continues the current Medicare PQRI quality reporting program. Provides 0.5%-1% bonuses for physicians 2011-2013. Participation mandatory in 2014 with penalties for nonparticipation. • ICD-9 to ICD-10 Crosswalk: Secretary required to hold stakeholder meetings. • Coverage for wellness and preventive services and eliminates some coinsurance. • Fraud and Abuse: Multiple initiatives to curb fraud and abuse start to phase-in. • Graduate Medical Education changes start to phase-in: • Redistributes current unused residency slots for primary care and general surgery. • Allows for training in outpatient settings. • Allows teaching health centers to expand primary care residency programs. • Health Care Workforce Augmentation starts to phase-in: Authorizes the National Health Care Workforce Commission to examine barriers to primary care careers, authorizes state grants, increased funding for NHSC scholarship and loan repayment program; easing of access to loans for primary care providers, funding for health professions and diversity programs; other support for pediatrics, mental health and public health. MEDICAID • Coverage for preventive services and eliminates cost-sharing.

2012 MEDICARE • Practice Expense study finished and implemented on a budget-neutral basis. ACCOUNTABLE CARE ORGANIZATIONS (ACO) • CMS is required to establish a program to allow groups of physicians who report on quality and coordinate care to

share in the savings (particularly from preventing unnecessary ER visits or hospitalizations) achieved in their region. ACOs can be small groups of loosely affiliated physicians or large organized groups. ACOs do not have to involve a hospital. Because ACOs will be groups of physicians who are clinically and financially integrated, it establishes a path to anti-trust relief in the private sector. MEDICAL LIABILITY • GAO report due on whether the new practice guidelines and payments policies in the health care reform bill would create causes of action against physicians.

2013 MEDICARE • Quality Reporting: Requires public reporting of Medicare physician and private payer performance information related to quality (PQRI) and other factors such as care coordination, resource use and patient satisfaction. Data would meet certain safeguards (valid, risk-adjusted) and physicians would have prior opportunity to review the data. Requires appropriate attribution methodology, timely feedback and accurate systems that can provide reliable data. AMA and CMA worked to include multiple amendments to protect physician information and ensure that it is accurate based on the CCHRI experience in California. Further protections need to be addressed in clean-up legislation. • Administrative Simplification requires health plans to certify that their information systems comply with standards. New operating rules for eligibility and health plan claim status transactions take effect.

2014 COVERAGE • Individual Mandate for uninsured to purchase health insurance begins. Penalties up to 10% of income for those who do not purchase insurance. • Tax credits and cost-sharing subsidies begin to make insurance affordable. • No Employer Mandate but substantial fees on large employers who do not provide coverage.

2015

EXCHANGE • State-based Health Insurance Exchanges established to provide the uninsured with a choice of private health plans, benefit packages and doctors. Health plans must offer at least the essential health benefits package. • Uninsured Coverage through Health Insurance Exchange: • Covers 2.3 million Californians (incomes between 133% FPL-400% of FPL; $28,665 and $88,200 for a family of four) through private insurance with tax credits and subsidies. • Covers 1 million who have incomes above 400% of FPL through private insurance. • Tax credits for small employers to cover 637,700 California small business employees. • Tax credits to help low-income families afford premiums based on sliding fee scale linked to income. MEDICAID • Covers 1.7 million Californians (incomes up to 133% of FPL; $28,665) in MediCal. 100% federal financing in 2014 phased down to 90% in 2020. Enhanced federal match in expansion states. • Provides an increase in Medicaid reimbursement rates for primary care physicians (internists, family physicians and pediatricians) up to Medicare levels for E&M services and immunizations in 2013 and 2014. INSURANCE INDUSTRY REFORMS • Prohibition on insurers denying coverage to adults with pre-existing conditions. • Modified community rating limits variation only on age, geographic area, tobacco use and family size. • Requires premium risk adjustment in individual and small group markets. • Requires insurers to limit waiting periods for coverage to 90 days. • Administrative Simplification operating rules for electronic funds transfers (EFT) and health care payment and remittance advice takes effect. Physicians also required to comply with the EFT standards for Medicare payments.

PAGE 13 | THE BULLETIN | MARCH / APRIL 2010

MEDICARE • Independent Medicare Payment Advisory Board (IPAB) takes effect. Independent Board appointed by the President to reduce Medicare payments if Medicare spending exceeds general health care spending. The Board not elected or accountable to physicians and seniors. IPAB must take into consideration system-wide costs, patient access, utilization and quality of care by region, types of services and providers. Congress would only have 30 days to overturn recommendations with a supermajority 2/3 vote. Hospitals not included in the IPAB considerations until 2019. Changes to the IPAB were not eligible for the Budget Reconciliation bill. Many California House Democratic leaders who oppose the IPAB, have vowed to address it in subsequent legislation. • Value Index Modifier: Modifies physician payment based on level of spending and quality reporting. Physicians who spend less than national average paid a higher rate. Physicians who spend more than the national average paid a lower rate. CMA amendments ensure that rate is adjusted for geographic practice expense and socioeconomic status of the patients. AMA and CMA also won amendments to protect the quality reporting information. Further clean-up legislation will be necessary.

2016 • Multi-state compacts to allow insurers to sell policies across state lines implemented. Implementation regulations due by 2013. • Additional Administrative Simplification rules take effect. Operating rules for claims, enrollment/disenrollment and health claims attachment standards.

2018 • Implements Cadillac tax on health plans offering high-end benefits.

CBO Score • CBO Projects deficit reduction over 20 years. $138 billion in first 10 yrs; $1 trillion in second decade. Slows rate of health care spending growth from 6%/yr to 5%/yr.

HEALTH CARE REFORM

Is the Health Care Law Unconstitutional? Source: http://roomfordebate.blogs.nytimes.com/2010/03/28/is-the-health-care-law-unconstitutional/ Just minutes after President Obama signed the health care legislation into law, 13 state attorneys general, led by Bill McCollum of Florida, filed a federal lawsuit challenging the law’s constitutionality. Virginia’s attorney general, Kenneth Cuccinelli, filed a similar suit the same day. Both complaints charge that Congress has no power under the Constitution’s Commerce Clause to require that all Americans buy health insurance or pay a penalty. Do the opponents have a strong case that the individual mandate is unconstitutional? How likely are the courts to strike down any part of the health legislation?

A Tax Like Any Other Jack M. Balkin is Knight Professor of Constitutional Law and the First Amendment at Yale Law School. His latest book, with Reva B. Siegel, is “The Constitution in 2020.” He participated in a discussion on this issue in the University of Pennsylvania Law Review. The individual mandate, which amends the Internal Revenue Code, is not actually a mandate at all. It is a tax. It gives people a choice: they can buy health insurance or they can pay a tax roughly equal to the cost of health insurance, which is used to subsidize the government’s health care program and families who wish to purchase health insurance. What the opponents are really claiming is that it is unconstitutional to make Americans pay taxes.

People are exempt from the tax if they get health insurance through their employer or through Medicare, are poor, are dependents, are in the military, live overseas, or have a religious objection. The new law keeps insurance companies from denying A rally against the health care legislation in Royal Oak, Michigan, coverage because of on March 22. preexisting conditions or The Supreme Court has never from imposing lifetime upheld a “tax” penalizing private citizens caps on coverage. The individual mandate who refuse to enter into a contract with a makes these popular aspects of health care private company. reform possible. The individual mandate goes far beyond these previous acts. Congress has never before mandated that a citizen enter Exceeding Congress’s Authority into an economic transaction with a private Randy Barnett is the Carmack Waterhouse company, so there can be no judicial Professor of Legal Theory at Georgetown Law precedent for such a law. Telling someone Center and author of “Restoring the Lost how they must do something is one thing; Constitution: The Presumption of Liberty.” commanding that they must do something The smart money is always on is entirely different. the Supreme Court upholding an act Imagine if Congress ordered the of Congress. And the smart money is majority of American households without right until the day it is wrong — as when a firearm to buy a handgun from a private constitutional law professors confidently company, and punished their failure to do predicted the court would uphold the Gun so with an escalating monetary fine, which Free School Zones Act in 1995 and the it labeled a “tax.” Would the supporters Violence Against Women Act in 2000. of the health insurance mandate feel the The professoriate was shocked same about the constitutionality of such a when both laws were held unconstitutional measure? because they exceeded Congress’s power under the Commerce Clause.

PAGE 14 | THE BULLETIN | MARCH / APRIL 2010

The 10th Amendment Question Abbe R. Gluck is an associate professor at Columbia Law School, where she focuses on legislation, health law, and federalism. She previously served as the Special Counsel and Senior Adviser to the New Jersey Attorney General. I agree with the many scholars who have ably rebutted the claim made by the state attorneys general that Congress lacks the power, under Article I of the Constitution, to require individuals to purchase health insurance or face a tax. Congress unquestionably has the power to tax for the general welfare and regulate activity that affects interstate commerce, and it should be beyond dispute that health care (as well as the failure to have it) affects the national economy. Any state that does not want to expand Medicaid can simply drop the program entirely. But there is another refutable point in the lawsuit that has not received as much attention, and which I’d like to focus on — namely, the argument that the 10th Amendment prevents the federal government from forcing states to expand their Medicaid programs. This argument is based on the so-called “anti-commandeering” principle, which the Supreme Court has said prohibits the federal government from compelling state officers to carry out federal programs that affect state sovereignty. The suit also appears to be claiming that the legislation imposes coercive conditions on the states’ receipt of federal funds.

Going Off the Rails David B. Rivkin and Lee A. Casey are partners at Baker & Hostetler LLP. They are

counsel in the suit, Florida, et al., v. United States Department of Health and Human Service. They argued against the individual mandate in the University of Pennsylvania Law Review. The recently passed health care law is an unprecedented expansion of federal power at the expense of the states and the American people. Its provisions go far beyond any legitimate exercise of constitutional authority vested in Congress. If Congress can legislate this broadly, then there is no limit to federal power in every aspect of life. This is true of the law’s imposition of vast new regulatory and administrative costs and burdens on the states, and of a health insurance mandate on individuals. The requirement that all Americans obtain health insurance coverage is a central component of the new law. The mandate applies regardless of whether an individual is engaged in any conduct or activity that Congress can regulate under the Commerce Clause, or any of its other constitutional sources of legislative power. The mandate is, in fact, a quintessential “police power” exercise — a law requiring or forbidding individual action enacted simply because lawmakers consider the measure to be in the public interest.

A Permissible Exercise of Power James F. Blumstein is University Professor of Constitutional Law and Health Law & Policy at Vanderbilt Law School. The states’ constitutional challenges to health reform are serious and should not be treated dismissively. But given the expansion of federal power since 1937, one should review the states’ PAGE 15 | THE BULLETIN | MARCH / APRIL 2010

claims with some healthy skepticism. For the states to succeed in having the law declared unconstitutional, the Supreme Court would have to modify significantly existing analysis and doctrine surrounding the Commerce Clause. The Supreme Court would have to modify the Commerce Clause doctrine significantly to find the health law unconstitutional. It is fair, however, to ask whether the required purchase of insurance is a regulation of commerce. Previous cases have all involved negative prohibitions on private conduct, such as restrictions on growing wheat for home consumption and on growing and using marijuana for medical purposes. Is the affirmative mandate substantially different from a negative prohibition? In the abstract, perhaps, but Congress can enact legislation that is necessary and proper for implementing permissible legislation. A cornerstone of health reform is the requirement that insurance companies accept persons with preexisting medical conditions (“guaranteed issue”). But standing alone, this principle would create a death spiral for insurance because those with preexisting conditions are expensive to cover (they are likely to cost more than the premiums they contribute) and are more likely to seek coverage because they know they need health care.

health care reform

Health Care Reform Must Fix Access Problems By Anmol Singh Mahal, MD, January 6, 2009

visiting overcrowded emergency rooms more frequently.

reform and ensure that patients can get access to doctors when they need it.

Anmol Singh Mahal is a gastroenterologist and internal medicine specialist who practices in Fremont. He is a past president of the California Medical Association.

According to a 2006 California Healthcare Foundation study, 31% of Medi-Cal recipients reported going to the emergency room at some point in the past 12 months, twice the rate of average Californians.

Both health reform bills – the one passed by the House on November 7 and the one approved by the Senate on December 24 – must better fund Medicaid in order to make expanding it viable. Congressional leaders are currently working to merge the two, which have big differences, into one final product.

Here’s a simple way to determine whether your health plan is working: Can you see a doctor right away, when you get sick or injured? Sadly, for many Californians served by Medi-Cal, the answer is no. And that should be alarming to anyone who wants Congress to pass meaningful health care reform. That’s because a key element of legislation being reconciled by congressional leaders is expanding eligibility for Medicaid, known as MediCal in California. This could add up to 2 million patients to a program that already serves 6.5 million poor Californians. But that makes no more sense than building a house on a sloping, cracked foundation. Here’s what we know: Health care works best when patients can see doctors easily and regularly. Primary care physicians can help guide their patients to healthy lifestyles and address problems as they begin to emerge. This not only makes the best medical sense, it makes the best fiscal sense. That doesn’t happen when patients can’t see their doctors, however. And Medi-Cal, unfortunately, illustrates the effects. People get sicker and end up

Why does this happen? Because the Medi-Cal system is so poorly funded, only about one-third of the state’s physicians participate. That means MediCal patients have a tough time finding a doctor. Some have to wait months to get an appointment, and others have to drive an hour or more. Like many doctors, I believe in universal access to health care. So the idea of expanding Medi-Cal to cover many of California’s uninsured is not a bad one – as long as the program works. But for many, Medi-Cal doesn’t work, and pouring more people into the program without fixing it will only make matters worse. Everyone understands the need to rein-in rising health care costs, especially in these tough economic times. Done right, though, health care reform will save the nation hundreds of billions of dollars by preventing unhealthy conditions, such as obesity. (Obesity-related diseases alone cost the nation $147 billion a year, according to the U.S. Centers for Disease Control and Prevention.) The point is, there is no way to reap the tremendous long-term savings universal access to health care can provide, if Congress doesn’t appropriately fund PAGE 16 | THE BULLETIN | MARCH / APRIL 2010

The House bill acknowledges the dangerous threat posed by inadequate reimbursement rates to access and makes an effort to raise payments to reasonable levels. The Senate legislation, though, is entirely unacceptable and would jeopardize access to care for senior citizens and millions of poor and unemployed who would be under the false illusion they have reliable health coverage. It makes no changes in low Medicaid reimbursement rates for physicians and allows deep cuts in doctors’ Medicare payments in coming years. If we want health reform to be effective – to provide access to doctors when patients need it – then we must sufficiently fund the system. That’s the lesson of Medi-Cal. It’s time to learn from it.

health care reform

EMTALA — The Cornerstone of Real Health Reform By James G. Hinsdale, MD, FACS Dr. Hinsdale is a trauma surgeon in Santa Clara County and President-elect of the California Medical Association. After more than a year of health care reform debates, here’s one acronym that may be more important than all the others and may still not be widely understood — EMTALA. It stands for the Emergency Medical Treatment and Active Labor Act. Those who care for emergency patients know it quite well. EMTALA was enacted in 1986 as part of the Consolidated Omnibus Act. It is a federal statute, primarily affecting hospitals, and is also known as the “antidumping” law. It is administered by the Centers for Medicare & Medicaid Services (CMS) and has undergone many changes in the past 24 years. Most Americans know they can’t be refused access to their local ER. EMTALA is the reason. It directs every hospital to provide a screening exam for anyone who arrives and orders ambulance services to get people there. It requires that every hospital must “stabilize” the patient. If the hospital does not have the services to do so, it must transfer the patient to a facility with such services. Furthermore, facilities capable of this “higher level of care,” such as trauma centers, must accept such patients if requested. EMTALA was enacted in 1986 during the presidency of Ronald Reagan. The most common version of the case that raised national awareness and sparked reform involved an indigent woman in labor

who was transferred out of a hospital ER to a facility well down the road. She then gave birth to a “bad baby” (malpractice language for a neurologically-impaired infant). The house of medicine was appalled and shamed. Physicians rose up to change the systems, with the ER doctors leading the charge. Not all physicians embraced EMTALA, but, arguably, most did. Over time, EMTALA truly improved access to care. It required that no one would be allowed to die or be put in jeopardy in our ERs because of insurance or money. Of course, there was no funding for all of the uncompensated care that accrued. Emergency rooms began to do much more than “emergency care” and became neighborhood walk-in clinics. Just about everyone in the county understood this. Toward the end of George W. Bush’s presidency, a reporter at a news conference asked: “Mr. President, if the proposed health reforms don’t go through, what will happen? Where will patients go?” Mr. Bush shrugged his shoulders and answered as any American might: “What? They’ll go to the emergency room.” By now, all of the many ramifications of EMTALA are known. The regulatory power and might of the government has enforced and refined EMTALA substantially. An entire culture has evolved around its interpretation and administration. Law schools offer courses for students and super-specialists in EMTALA law. Hospitals live in

PAGE 17 | THE BULLETIN | MARCH / APRIL 2010

mortal fear of $50,000 fines that can be assessed and hire their own lawyers and administrators to counter false claims. Cost shifting has become a universal practice. Hospitals charge more to their other paying sources, to balance the losses of the indigent care they are mandated to provide for free in their ERs. All the insurance plans do the same. Additionally, specialists providing back-up care to ERs either resigned from hospital staffs or had to be paid to be available and provide back-up call for patients during their entire hospital stay. Such payments are routine throughout all of California for scarce specialties such as general surgery, neurosurgery, orthopedic surgery, plastic surgery, and cardiology. Another major consequence of EMTALA is gaming by the insurance industry. Essentially, they will sign up hundreds and thousands of patients for whom they do not have adequate networks

EMTALA — The Cornerstone of Real Health Reform, from page 17 of physicians. They then dump them on the ERs, which are forced to care for them by EMTALA rules. Major conflicts evolve when on-call physicians do not have contracts with patients’ health plans. California’s remedy for this was to prohibit such on-call physicians from sending their bills to the patients they were compelled to care for. This enables the insurance industry to use EMTALA to extract profits from the system.

health care reform — everyone involved could make all kinds of claims and counterclaims knowing full well that EMTALA’s unfunded mandate guaranteed access to care. Until the true costs of EMTALA are understood and factored into proposals for reform, the health care system in America will continue to resemble a botched computer program. More consultants are hired. More hacks and work-arounds are written. More costs accrue. But no one bothers to deal with the core issues.

And finally, there is gaming by some individuals. The gang-banger that I recently treated for multiple gunshot wounds knows where to go for top-flight service when the bullets fly and the blood flows. He expects to be treated — and is. He expects not to pay — and doesn’t. And the group of younger Americans — ages 20 – 35, sometimes described as “the invincibles” — resists buying insurance because they can’t imagine ever needing much health care. But if they do, there is always the ER, thanks to EMTALA.

So, what’s the point? I argue that EMTALA has always been the single, most pivotal “reform” that our medical system

EMTALA was always the massive invisible elephant in the room in recent health care reform battles. Politicians who were gung-ho for reform, religious leaders who declared that health care is a “right,” unions and advocacy groups who demanded universal coverage, perhaps even some opponents of various aspects of

As a surgeon who provides a monumental amount of EMTALA care, I appreciate the fact that I get to do what is my life’s work — practicing medicine — in some of the most difficult and challenging moments in a family’s life. These are real emergencies, where everything hangs in the balance. The thank yous that my

has provided. It was promulgated 26 years ago and relentlessly refined along the way. The house of medicine has never been recognized for proposing EMTALA. Nor has it crowed about it, because it is an obvious aspect of the values that exist in every doctor and every other health care worker—nothing more. What doctor, nurse, or attendant would deny care to those in need?

fellow professionals and I receive from our patients keep us going. But the cost of that care is enormously high. And it gets shifted by insurance interests and other insiders to a shrinking pool of payers. The pool will never expand if the economy remains slack and if EMTALA isn’t factored in, clearly and explicitly, as a cost to be shared by all. And that, as they say, is my bottom line: everyone has to chip in and pay something. Mitt Romney picked up this idea and ran with it, with prodding from many local groups in Massachusetts, including the Greater Boston Interfaith Organization, an affiliate of the Industrial Areas Foundation. Everyone means everyone—the middle class and further down. Until we know the real costs and pay a fair share, we won’t all “own” the very real crisis that will continue to plague our nation in the area of health care. Only then will we be committed to solutions that are real and lasting. After years of rhetoric and posturing, it seems odd to say that we need to take the time to do a lot of new thinking. Part of that new thinking will involve educating all Americans on the benefits, costs, and consequences of EMTALA. DrHinsdale@aol.com

Message from the Editor’s Desk, from page 6 localities, and creation of the Independent Medicare Payment Advisory Board (IPAB). How do physicians feel about health care reform? In late January 2010, 97% of CMA members polled supported either incremental or fundamental health care reform over no change. Members were evenly split (44% to 44%) on whether they favor or opposed the health care legislation being debated in Congress at the time. A follow-up to this poll would be informative, now that health care reform has been signed into law.

As a physician, I treat uninsured patients on a daily basis and have seen the consequences of delayed care, sometimes fatal, due to fear of financial ruin. As a parent with a daughter unable to obtain family health insurance coverage due to a pre-existing condition, I have experienced the worry and fear that so many live with. For all of these reasons, I have been a strong proponent of health care reform. Now that this legislation has become law, it will be up to us to see that necessary changes follow the path of continuous quality improvements of preserving quality and access to physician care in the years to come.

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practice management

HIPAA Risks and Responsibilities for Medical Service Providers By Frank Lacombe The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is complex and broad in scope, incorporating sweeping new changes with each succeeding round of legislation. The result is that many of the medical service providers who bear the brunt of HIPAA liability have only a vague understanding of

The requirements for complying with the Data Portability wing principally apply to vendors of medical software. Their primary purpose is to enforce standards that facilitate the efficient exchange of electronic medical data with other medical entities, insurance companies, or government programs such as Medicare, in order to reduce costs. They have nothing to do with patient privacy and security.

All of the civil and criminal penalties that apply to medical practices relate to responsibilities described under HIPAA’s Patient Confidentiality wing. These requirements are set forth in several pieces of legislation, including the following: •

The Health Insurance Portability and Accountability Act of 1996

•

The HIPAA Privacy Rule of 2002

•

The HIPAA Security Rule of 2003

HIPAA is administered by the U.S. Department of Health and Human Services (HHS).

what the law requires of them. The purpose of this article is to help physicians and other “covered entities” as defined under HIPAA to identify their specific responsibilities under the law. For the purpose of clarifying medical practitioners’ responsibilities, it helps to picture HIPAA regulations as comprising two broad wings, as shown here:

By contrast, the requirements for complying with HIPAA’s Patient Confidentiality wing apply to all “covered entities” as defined under HIPAA: health care providers, health plans, and health care clearinghouses. Their primary purpose is to protect patient information against unauthorized access and disclosure. All of the HIPAA provisions related to privacy and security are defined in these requirements. Within HHS, the Office for Civil Rights (OCR) oversees privacy and security issues and is responsible for investigating complaints and enforcing the HIPAA Privacy and Security Rules. The Privacy and Security Rules were initially designed to allay citizen concerns about the sharing of medical information through EDI. Since then, the sharp increase in identity theft, with a large percentage of such crimes targeting electronic data, has increased the sense of urgency surrounding the Privacy and Security Rules. One indication of the OCR’s increased sense of urgency is the 6000% increase in penalties that went into effect in February 2009 — from $25,000 to $1.5 million in civil fines, not including criminal penalties of up to $250,000 and 10 years in prison.

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Even though the harshest penalties are reserved for those who knowingly misuse patient information, the investigation process is costly and intrusive. No medical practitioner welcomes the adverse publicity that inevitably accompanies a HIPAA Privacy Rules investigation.

Significant Changes to HIPAA Under the HITECH Act The Health Information Technology for Economic and Clinical Health (HITECH) Act, which was enacted in 2009 and took full effect in February 2010, has added additional privacy and security safeguards to existing HIPAA regulations. The safeguards include new rules regarding, among other things, notifying patients of data breaches, marketing restrictions, the sale and disclosure of protected health information, and the use of electronic health records. The HITECH Act has also dramatically increased the obligations of business associates, making them directly accountable under HIPAA. As a result, physicians must ensure that they have updated agreements with all of their business associates, including entities such as Regional Health Information Organizations (RHIOs), that were not considered business associates under the prior regulations. Under the new rules, business associates are also subject to the same civil and criminal penalties that physicians, hospitals, and other HIPAAcovered entities face for violations. Previously, business associates that failed to protect patient information were liable to the covered entities via their service contracts, but they did not face governmental penalties.

IT Security Is Not Enough HIPAA Privacy and Security Rules involve protecting electronic patient information against unauthorized access or disclosure. It is therefore not surprising that many of the doctors and office managers

who are personally liable for compliance problems in their practices misconstrue HIPAA compliance as an IT issue that can be adequately addressed by in-house or outsourced IT service providers. A recent sampling of 24 medical office managers revealed that most believed having a network firewall, anti-virus software, and HIPAA-compliant software made their offices HIPAA compliant. Firewalls reduce the surface of attacks and anti-virus software prevents computers from getting infected. Although firewalls and anti-virus software are components of HIPAA-compliant network security, they are insufficient to prevent patient information leakage, for which covered entities are liable under HIPAA. Bear in mind that HIPAA compliance for medical software related to data portability does nothing to address patient privacy and security, which is where physicians are at risk. Even when network security is in absolute compliance with HIPAA standards, network security comprises only one of the six elements that must be up to government specifications in order for a covered entity to be considered in full compliance with the HIPAA Privacy and Security Rules. HIPAA Privacy and Security Rules will become even more far-reaching during the coming months, as the HIPAArelated provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) go into effect starting in 2010. Moreover, ARRA provides new funding for HIPAA enforcement and audits. Covered entities that until now have ignored HIPAA will find it increasingly perilous to continue doing so.

Protecting the Medical Practice Against HIPAA Violations It takes only a letter to HHS/ OCR or an email to OCRMail@hhs.gov to initiate a HIPAA investigation. The PAGE 21 | THE BULLETIN | MARCH / APRIL 2010

CMA ON-Call Resources for HIPAA and HITECH To help physicians understand their responsibilities under HIPAA and the HITECH Act, CMA has updated ON-Call to include the most up-to-date information. ON-Call, CMA’s online library of medical, legal, and regulatory information for physicians, contains all of the information available in CMA’s seven-volume California Physician’s Legal Handbook (CPLH) and more. The newly updated ONCall documents are #1600, “HIPAA Overview & Enforcement;” #1602, “Business Associate Agreements;” #1603, “HIPAA ACT SMART: Introduction to the HIPAA Privacy Rules;” #1607, “HIPAA Security Rule;” #1132, “Electronic Medical Records;” and #1144, “Security Breach of Health Information.” All of these documents can be found under the heading “Medical Records: HIPAA.” CMA ON-Call is available free to members at http://www.cmanet. org/member. Nonmembers can purchase ON-Call documents for $2/ page in the CMA bookstore. The 2010 edition of California Physician’s Legal Handbook can also be purchased in the bookstore. sole requirement is the belief that patient privacy—of the complainant or someone else—was violated. Demonstrating due diligence in protecting patient information will reduce the chances of receiving a complaint. In the event that a complaint is filed, evidence of due diligence will minimize audit overhead and cost. Here are some things you can do right away to mitigate your risk:

Continued on page 22

HIPAA Risks and Responsibilities for Medical Service Providers, from page 21 1. Take preemptive steps to prevent the leakage of electronic patient information. Patient information leakage can certainly occur through “back doors” created by hackers to steal information, but the truth is that the greatest risk factors are internal: employees who either accidentally or intentionally misuse, or allow others to misuse, patient information. 2. Assess your operation for HIPAA compliance. A thorough assessment will almost always identify compliance issues that need remediation, though you will be pleasantly surprised to learn that most of the remedies are no more painful than modifying an office procedure to comply with HIPAA standards. 3. Provide HIPAA training to your staff.

No matter how health care evolves, one thing is certain: more and more medical information will be available in electronic form to facilitate patient care and payments. Inevitably, this will lead to more frequent and sophisticated attempts by identity thieves to steal patient information directly or to buy it from dishonest employees. Successful security breaches will inevitably lead to embarrassing headlines, intrusive investigations, expensive litigation and, in some cases, ruinous civil and criminal penalties. Prudent medical practitioners, along with other covered entities under HIPAA, will protect themselves against such losses by carefully complying with the Patient Privacy and Security Rules begun under HIPAA and now expanding under

PAGE 22 | THE BULLETIN | MARCH / APRIL 2010

HIPAA Compliance Comprises 1. Physical Safeguards 2. Network Security 3. Administrative Safeguards 4. Organizational Safeguards 5. Documentation, Policies and Procedures 6. Technical Safeguards ARRA. Attention to HIPAA in advance of an investigation lets patients and customers know that the confidentiality of their confidential information is being taken seriously, giving medical service providers the peace of mind that comes from proactive risk management.

coding and reimbursement

coding q’s Q: If I see a Medicare patient in my office who is referred to me by their primary physician, and my records indicate that I had seen this patient 2 years and 10 months ago for a different diagnosis, can I bill a new patient visit since Medicare no longer accepts the consultation codes? A: No. Because Medicare now requires physicians to bill consults using the new or established patient E/M codes (99201-99215), the guidelines for billing new vs. established patient apply. CPT’s description states: “Solely for the purposes of distinguishing between new and established patients, professional services are those face-to-face services rendered by a physician and reported by a specific CPT code(s). A new patient is one who has not received any professional services from the physician or another physician of the same specialty who belongs to the same group practice, within the past three years.”

Q: What is the rule regarding billing patients seen on-call for our on-call group? Can these patients be billed as new patients? A: Per CPT guidelines, “In the instance where a physician is on-call for or covering for another physician, the patient’s encounter will be classified as it would have been by the physician who is not available.”

Q: What is the new AI modifier and how do we bill with it? A: The AI (that’s “eye” not one) modifier is used for initial in-patient services only. When you are the admitting physician who is overseeing the care of your patient, you would append the modifier on the initial visit code. This is to simply notify Medicare that you are the attending physician overseeing care of the patient. All other physicians who perform an initial evaluation on this patient should bill only the E&M code for the complexity level performed.

Q: What diagnosis do I use for lab work done when a Medicare patient comes in for the Welcome to Medicare exam?

For coding questions and reimbursement issues, contact Sandie @ 408/9988850 or MCMS 831/455-1008 or email sandie@ sccma.org.

include any clinical laboratory test, but the provider may want to make referrals for such a test as part of the IPPE. Note: For complete information on providing and billing for the IPPE, you may go to SCCMA’s website at http:// www.sccma-mcms.org, click on the Reimbursement tab from the Home page and then Downloads. You’ll find the IPPE Guide PDF under the Medicare heading.

A: Effective for dates of service on or after January 1, 2009, Medicare provides coverage of The Initial Preventive Physical Examination (IPPE), also known as the “Welcome to Medicare Exam,” for all newly-enrolled beneficiaries who receive the IPPE within the first 12 months after the effective date of their Medicare Part B coverage. There are several components to providing the IPPE exam including acquiring patient history, physical examination, counseling, and education on various topics including end-of-life planning, etc. However, the IPPE does not

Would you like to receive updated coding & reimbursement news by email? If so, please call the SCCMA/MCMS office to provide your email address at: 408/998-8850 ext. 3007 or email: sandie@sccma. org. You may also visit our website at: www.sccma-mcms.org. PAGE 23 | THE BULLETIN | MARCH / APRIL 2010

An Invitation To All SCCMA Members, Alliance Members & Guests The Santa Clara County Medical Association Invites You to Attend the...

2010 Annual Awards Banquet

Tuesday, June 8, 2010 6:30 pm Social 7:00 pm Dinner & Program The Fairmont Hotel, San Jose

Honoring Howard Sutkin, MD, President 2008-10 Thomas M. Dailey, MD, President 2010-11

Award Honorees Melvin Britton, MD; Gary Steinberg, MD; David Levin, MD; James G. Hinsdale, MD; Leo A. Strutner, MD; Judge Lawrence F. Terry Please mark June 8 on your calendar now. Formal invitations will be mailed in April. All members are asked to please consider hosting a medical student or resident. PAGE 24 | THE BULLETIN | MARCH / APRIL 2010

MEMBER NEWS & HAPPENINGS

Welcome 66 New SCCMA Members! Name Jill Ackerman Amy Adams Najla Ahmadzia Sameer Arora Audrey Arzamendi Elisa Avik Rika Bajra Norman Banks Nancy Barnett Steven Bates John Beuerle Nancy Bong C. Amanda Chen Bryan Cho Sarah DeHaan Lydia Delaney-Sathy Jasmine Dhaliwal Andreea Doaga Hung Ecklund Elena Ermakova Lakshmi Priya Esturi Jennifer Falk David Feldman Rosemary Garcia Paras Ghafouri Daryani Anita Gilliam Michael Gynn Ricardo Hamilton Amy Heneghan Bryan Hwang Heather Iezza Justin Jaghab Lyth Kaileh Aradhana Kar Manika Kaushal Mai-Tram Le Ian Lee Julie Letsinger Richard Liniger

Specialty City OPH D US US US US FP PMR PD PS EM PD IM PD D PD R US GER FP OBG FP US FP EM US US D *GS US PD R PD US US *IM FP FP US D AN

Sunnyvale Palo Alto Santa Clara Santa Clara Santa Clara Santa Clara Los Altos Palo Alto Santa Clara Palo Alto San Jose Palo Alto Sunnyvale Mtn View Santa Clara Mtn View Santa Clara Sunnyvale Sunnyvale Santa Clara Santa Clara Palo Alto San Jose Santa Clara Santa Clara Palo Alto San Jose Santa Clara Palo Alto Mtn View Palo Alto Santa Clara Santa Clara Cupertino San Jose Mtn View Santa Clara Palo Alto Mtn View

Name Jamila Martin Clarence Miao Hanmantha Rao Mole Jennifer Morales Reba Mukerjee-Scheufele Richard Newell Donna Nguyen Minal Patel Abhinand Peddada John Phillip Erik Price Andrew Rozelle Michael Sathy Yelena Shaanova Peter Simpson Rosendo So-Rosillo Melissa Stenberg Philip Strong Marina Tostado Veko Vahamaki Valli Vujjeni Maggie Williams Derrick Wong Kelly Yeh Shahrzad Zarghamee Hyunsoo Zhu Anne Ziffer

Specialty City AI PD AN US IM FP EM US US RO US CD IM RHU IM ORS IM GE HEM FP *IM IM IM OBG INF FP HEM US NEP PD OPH

Mtn View Palo Alto Santa Clara Palo Alto Mtn View San Jose Santa Clara Santa Clara Los Gatos Santa Clara Palo Alto Palo Alto Mtn View Santa Clara Mtn View Mtn View Palo Alto Sunnyvale Mtn View Mtn View San Jose Palo Alto Mtn View Santa Clara Mtn View Santa Clara Sunnyvale

*Board Certified; US -- Unspecified; [ ] Not Practicing

PAGE 25 | THE BULLETIN | MARCH / APRIL 2010

MEMBER NEWS & HAPPENINGS

Welcome 8 New MCMS Members! Name Laurel Grimm Mark Isaacson Paige Moore Jon Page Barron Mark Palmer

Specialty City

Name

Specialty City

US *AN US *OPH CRS GS

Joseph Rheim Steve Sun David Wright

D EM *IM ID

Salinas Monterey Salinas Salinas Salinas

Monterey Salinas Carmel

*Board Certified; US -- Unspecified; [ ] Not Practicing

In Memoriam David S. Burton, MD *Orthopaedic Surgery 2/28/38 – 11/19/09 SCCMA member since 1977

George Kirn, MD *Pediatrics 1/1/23 – 1/17/10 SCCMA member since 1957

Gene M. Phillips, MD *Family Practice 1/33 – 11/28/09 SCCMA member since 1968

Hernan H. Casanovas, MD Internal Medicine Addiction Medicine 10/25/38 – 3/10 SCCMA member since 2000

Gary J. Mastman, MD *Ophthalmology 1/1/30 – 10/09 SCCMA member since 1962

Eugene C. Sandberg, MD *Obstetrics & Gynecology 1/4/24 – 2/13/10 SCCMA member since 1960

Gilbert A. Dedinsky, MD General Surgery 3/24/23 – 1/30/10 SCCMA member since 1958

Richard L. Mercer, MD *Orthopaedic Surgery 1/38 – 3/25/10 SCCMA member since 1966 SCCMA Past President, 1985-86

Clarence J. Styblo, MD *General Surgery 1/9/19 – 10/09 SCCMA member since 1960

Ralph L. Gibson, MD *Psychiatry 1/18/37 – 2/15/10 SCCMA member since 1968

John D. Milburn, III, MD *Obstetrics & Gynecology 4/21/21 – 9/09 SCCMA member since 1959

PAGE 26 | THE BULLETIN | MARCH / APRIL 2010

Frank R. Williams, MD General Practice 1/1/28 – 3/09 SCCMA member since 1964

NEWS ALERT

President Signs Bill Reversing Medicare Cuts, Extending Payment Rates through May 31 The President signed H.R. 4851, the Continuing Extension Act of 2010, retroactively reversing the 21.3% Medicare physician payment cut that took effect on April 1 and extending 2009 payment rates through May 31.

the cut before physician payments were affected. Although the payment hold technically expired on April 14, California’s Medicare contractor Palmetto informed CMA that it did not pay any claims under the reduced fee schedule.

While this is welcome news to senior citizens and the physicians who treat them, it is only a stopgap measure. CMA will focus its advocacy efforts in coming weeks on repealing the flawed sustainable growth rate (SGR) formula, which threatens dramatic physician payment cuts year after year. Congressional leadership is aiming to tackle the larger SGR reform issue in May.

Palmetto will immediately begin releasing claims for April dates of service. Claims will be processed one to two days at a time, starting with the oldest claims until all claims that exceed the 14 day payment floor hold are released.

As you may know, the Centers for Medicare & Medicaid Services (CMS) had instructed contractors to hold physician claims for 10 business days to minimize administrative complications and cash flow disruptions and allow Congress time to retroactively stop

Thank you to all physicians who contacted their members of Congress on this issue. California Senators Feinstein and Boxer voted for the bill, as did all California Democrats in the House of Representatives. All California Republicans voted no, except for Representatives Brian Bilbray (San Diego), Elton Gallegly (Ventura) and George Radanovich (Fresno), who abstained.

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We also offer FREE coupons for Roaring Camp Railroads worth $2 off adult and child train fares. Please call phone number below for details. SANTA CLARA COUNTY: If you purchase 4 or more tickets, SCCMA will deliver to your office for a $5 delivery fee on Fridays only. Tickets must be pre-paid via credit card prior to delivery, or remit payment upon delivery with exact cash. (NO CHECKS) To order, call Membership at 408/998-8850 ext. 3008. Thank you! MONTEREY COUNTY: Tickets are delivered via certified mail for an additional fee of $5 per order. MCMS is not liable for tickets once they have been mailed. Tickets must be pre-paid via credit card prior to delivery. Tickets may also be picked up at our office at 700 Empey Way, San Jose, CA 95128. For pick-up orders, we also accept exact cash. (NO CHECKS) To order, call Membership at 831/455-1008 ext. 3008. Thank you!

PAGE 28 | THE BULLETIN | MARCH / APRIL 2010

special tribute biography

LEON PARRISH FOX, md MAN OF THE CENTURY By Michael A. Shea, MD

Preface From a one-room schoolhouse in the hills of Kentucky to a residency program in obstetrics and gynecology at Santa Clara County Hospital, Leon P. Fox made the grade. After a four-and-ahalf-year tour of duty in the Navy, serving as a medical officer on a troop transport ship in World War II, Leon began an illustrious career in the politics, practice, and education of medicine. He served as a delegate for the American Medical Association and the California Medical Association. He acted as a diplomat and treasurer for a national medical organization, the American College of Obstetrics and Gynecology. He served as chief of staff at Santa Clara County Hospital (changed to Santa Clara Valley Medical Center in 1967), O’Connor Hospital, and San Jose Hospital. He helped found the Shufelt Gynecologic Society of Santa Clara Valley and became chairman and director of the ob/gyn residency program at the Santa Clara County Hospital from 1959 to 1970. He researched, wrote, and published 20 articles in his specialty. He practiced medicine in San Jose for over 30 years and delivered over 10,000 babies in his lifetime. Elaborating on these remarkable achievements will form the major portion of the following biographical article. In conclusion, I would like to describe one of my favorite stories. It’s about the man, rather than the doctor.

During the years 1970 to 1980, it was my privilege to assist Leon in many gynecological surgical cases at San Jose Hospital. Following each case, we would return to the physicians’ locker room in order to change from scrub suits to street clothes. After the first few times, I noticed that Leon was always the first one to change and the first one out of the locker room. I decided to change this order and started racing back from surgery to dress as fast as I could. He was totally unaware of this little game. Flying through my combination lock, I would fling open the locker door. Scrubs would go flying in the general direction of the laundry bag while I grabbed for shirt, slacks, coat, and shoes. I changed as fast as I could, but the result was always the same. He continued to be first out the door. I never could catch him. I don’t know many who could.

The Early Years The ring of a phone will focus your attention like no other sound I know. This particular call happened in the spring of 1967. The voice of the caller was slow and deliberate, as he made me an offer I did not refuse. It was the position of first-year resident in the obstetric and gynecologic program at Santa Clara Valley Medical Center located in San

PAGE 29 | THE BULLETIN | MARCH / APRIL 2010

Jose, California. The person making the offer was the chairman of the residency program, Dr. Leon Fox. The rest of this story is about the man on the other end of the phone, Leon Parrish Fox. It began November 21, 1911. Leon was born to Milton and Hallie Fox in a small village named Trapp in the southeast section of Clark County, Kentucky. It is a rural area covered with nobs (low-lying hills) and thick groves of maple, poplar, and pine trees. It lies about 25 miles southeast of Lexington, Kentucky. Leon was the oldest of five siblings. The other children were Elkin, born July 20, 1914; Marie and Milton junior (twins), born January 20, 1917; and Joyce, born April 17, 1933. The family lived

Leon Parrish Fox, Man of the Century, from page 29 in a house next door to their father’s general store. They all had their turns in working at dad’s store during their younger years. Local politicians frequented the store and many civic matters were decided by these men under the watchful eye of papa Milton. Leon’s interest in politics, no doubt, had its origin here and contributed to his activities and achievements in later life. Kindergarten through high school took place across the street from the Fox family home in a one-room schoolhouse. Leon, who was always known as the smart-but-quiet-one, was just three years of age when he started school and 16 years when he graduated. One incident in high school that stood out in Leon’s memory was when he fell out of a swing and broke his arm. His father took him into town, which was about ten miles away, to see the local physician, Dr. Ishmael. He set the fracture and Leon’s father became curious, asking a lot of questions. Dr. Ishmael got down the medical books and showed him how he treated the break. Then, they drove around the corner to the radiologist who took an x-ray and told them it looked real good. On the way home, his dad said, “You know, if I were you Leon, I’d be a doctor.”1

Education Taking his father’s advice, he started his pre-med education in 1927 at Kentucky Wesleyan College. This was a methodist college in Winchester, Kentucky, which was close to home. A small pre-med society at school impressed Leon and nourished his growing interest in medicine. Since this was a twoyear school, it was on to the University of Kentucky in Lexington to complete his undergraduate studies. He graduated in 1931 with a bachelor-of-arts degree. Medical school was the next step and it was to be the University of Louisville Medical School in Louisville, Kentucky. Graduation came in 1934 and plans for internship were already under way. Although Leon’s mother wanted her boy to intern in Kentucky, the ultimate decision was Santa Clara County Hospital in San Jose, California. So in June of 1934, Leon and two of his fellow MDs, Jim Mayo and Bob Douds, fired up a 1929 Plymouth and made California- or-bust their motto. Each was going to a different location in California, where all became successful physicians. June 26, 1934, Leon Fox walked in the door at Santa Clara Hospital, dressed in a white linen suit and white buck shoes. In true southern gentlemanly style, he asked the secretary who could help him with his bags? It did not take long for him to find out that interns handled their own bags and almost everything else in the hospital. Twenty dollars a month, meals, and laundry comprised the internship benefits. Interns in those days lived at the hospital and

shared their quarters. Leon had three roommates: Jack Fogleman, Ezra Evans, and Jack Boden. Six-week rotations through various divisions of medicine made up the year. These included: surgery, internal medicine, obstetrics, pediatrics, along with other subspecialties such as anesthesia, pathology, orthopedics, and tuberculosis. The latter was a large part of medical care and treatment in the 1930s and 1940s. A significant number of Dr. Fox’s peers became infected with tuberculosis, although he himself never became ill. Obstetrics and gynecology began to interest Leon at this time. He asked the chief of the county hospital, Dr. D. Wilson, if he could enter the residency program for OB/GYN at the hospital. Dr. Wilson told him he was too young to be an OB/GYN man. He said “go grow yourself a mustache, put on a pair of glasses, and if you can get Dr. Shufelt to take you for a year, I’ll let you start your residency.”2 And that is exactly what he did.

Dr. A. Shufelt Dr. Alson Anderson Shufelt, or “Shuey” as he was known as to most of his peers, was the first obstetrician gynecologist to establish a permanent practice in the Santa Clara Valley. He was born in Reno, Nevada on July 17, 1891. At age seven, his mother died in childbirth and he later resolved to be an OB/GYN and dedicate his life to improving the care of women in obstetrics. After living with his grandparents in Minnesota, he returned to Reno to rejoin his father who had remarried. He attended U.C. Berkeley for college and received an M.D. degree after four years at the University of California in San Francisco. His internship and OB/ GYN residency were also at UCSF. In 1922, Dr. Shufelt began a solo practice at Sixth and Santa Clara Streets in San Jose. During his 28 years of practice, he acted as the first chairman of the obstetric department at county hospital, serving for several years and teaching many of the residents himself. He was known for his kindness and generosity of time, as many residents and patients attested to during those years. He was a meticulous surgeon who taught his students, including Leon, the lessons of careful anatomical dissection when performing hysterectomies and cesarean sections. He was always a credit to his profession, to his community, and a wonderful role model for young aspiring doctors.

Residency Leon began a one year preceptorship with Dr. Shufelt in 1935 and developed much of his surgical skills under the guidance of Shuey. In 1936, mustache in place and preceptorship

PAGE 30 | THE BULLETIN | MARCH / APRIL 2010

completed, Leon became the first OB/GYN resident at Santa Clara Hospital. He was given credit for the year with Dr. Shufelt, which allowed him to complete the residency in just two more years. Dr. Shufelt was one of his principle teachers along with Dr. Les Magoon, who would be a future associate of Leon’s. A residency program in obstetrics in 1936 would still be familiar to present day residents. The day would begin with hospital rounds, where both postpartum and post-operative patients would be seen by a team of doctors made up of an intern, resident, and, sometimes, an attending staff physician (a doctor in private practice who donated his time and expertise to teaching). The rest of the day would consist of surgery, seeing patients in outpatient clinic, educational seminars, deliveries, and, hopefully, lunch somewhere in-between. Night call generally came every third day and would routinely be interrupted by phone calls, emergency room visits, or deliveries. Endurance became a necessary quality in every resident and Leon developed more than his share.

or land-based hospitals in the Pacific region. Capacity was 200 soldiers, one physician, and a small number of corp men. Their job was to take care of the wounded men and keep them stable until they could reach more advanced care facilities. The most traumatic experience recorded by Dr. Fox was having to amputate a young soldier’s leg in order to save his life. The operation was successful. There was occasional R&R for all aboard, when the ship would visit Brisbane, Australia. It was there that Leon was able to see his brother, Sgt. Milton B. Fox, who was in the Army. They were able to spend their first Christmas together in 12 years.

In 1938, Leon received his certificate of completion in the OB/GYN residency program. He began private practice the same year in the St. Claire building in downtown San Jose. There were only three other doctors in that building at the time. They were Drs. Hal Williams, Tony Bonnani, and George Waters. Leon was the only OB/GYN physician among them.

Thirty-six months of sea duty comprised most of Dr. Fox’s active duty in the Navy. This included first wave participation in 12 invasions. Among these were the battles of Leyte, Luzon, Iwo Jima, and Okinawa. He received two letters of commendation for his naval service. After the war was over, Dr. Fox was promoted to lieutenant commander and transferred to Mare Island in San Pablo Bay, 25 miles northeast of San Francisco. The naval shipyard covered most of the island, where 1,598 ships were either repaired or built during World War II. Responsibilities for the lieutenant commander were mainly OB/GYN-related. January 1946 marked Leon’s discharge from the service and his return to his family and private practice in San Jose.

Cleo

The Shufelt Society

It was during the residency program that another very important person would come into Leon’s life. Her name was Cleo Odem. She was the sixth child of Anderson and Nancy Odem. She was born October 1, 1917 in Sheridan, Oregon. Her mother died when she was a child and her older sister, Edna Mae, raised both Cleo and her sister Marjorie. The family lived and attended school in Oregon. Cleo went on to nursing school at St. Joseph’s Hospital in San Francisco from 1934 to 1937. She and Leon met while Cleo was taking some of her training at the Santa Clara County Hospital. They fell in love and eloped to Reno, where they were wed on September 11, 1937. The marriage resulted in six children: two boys and four girls. All were born in San Jose.

Shortly after reopening his practice at a new location on 14th and Santa Clara Streets in San Jose, Dr. Fox turned his attention to one of his passions, medical education. It was in 1946 that Dr. Fox founded the Shufelt Gynecologic Society of Santa Clara Valley. The name was chosen to honor Dr. Alson Shufelt, who acted as the society’s first president. The organization consisted of local OB/GYN physicians who met monthly for dinner and an educational lecture given by speakers with expertise in their particular field of medicine. In addition, there was an annual twoday fall seminar sponsored by the society. It centered primarily on OB/GYN subjects with guest speakers from all across the United States. This local society became very successful largely because of the energy and enthusiasm for medical education that characterized Dr. Fox. He served as president from 1957 to 1959. The Shufelt Society endured for 59 years, with the last meeting held in 2005. Dr. Wakako Nomura, an OB/GYN physician at Kaiser Hospital in Santa Clara, was the last president.

World War II December 7, 1941 resulted in a change of plans for nearly 80% of practicing physicians in San Jose. July 1942 found Dr. Fox in the medical corp of the United States Navy. He was commissioned as a full lieutenant. His assignment was the U.S.S. Humphreys (APD-12), a troop transport ship, designated to the Pacific Theater of Operations. It would function as a medical facility, bringing wounded soldiers from island invasion forces to hospital ships

County Residency One of the most significant and respected accomplishments attributed to Dr. Fox was the OB/GYN

PAGE 31 | THE BULLETIN | MARCH / APRIL 2010

Leon Parrish Fox, Man of the Century, from page 31 residency program at the Santa Clara County Hospital. Although he was not the original chairman of the department, he assumed the chairmanship and directorship in 1959. Prior to that time, Dr. Shufelt, followed by Dr. James Muir, acted as chairman of the department. Under Dr. Fox’s watch, 29 doctors received their OB/GYN certificates from 1959 to 1970. The three-year residency was fully accredited by the American College of OB/ GYN and was considered one of the finest private programs in the country. Twenty-one out of the 29 graduated residents remained in the Santa Clara Valley for their practice. Encouraged by Dr. Fox, almost all of them became attending staff at the valley program, donating their time and talents in resident teaching. Leon cared deeply for his residents and always made certain there was adequate experience, diversity of pathology, and quality supervision in order for the graduate to be fully prepared for private practice. Stanford Medical School assumed the program in 1970, and for the next seven years Stanford residents maintained the county residency. In 1977, the program again went private when Dr. Theodore Fainstat became chairman and director. Under his guidance and leadership, the residency remains to this day an example of quality medical education. Dr. Fox was also somewhat of a pioneer when it came to women in medicine. He firmly believed they could participate on an equal basis with men in the obstetric and gynecologic field. This philosophy was in evidence when he encouraged and accepted Dr. Suzanne Regul into the residency program in 1965. She was the first female resident since the founding of the program and this was at a time when there were very few women in obstetrical residencies. He was also involved in nursing training by serving on the advisory boards of three nursing schools: San Jose City College, San Jose State University, and San Jose Hospital. Students rotated through his office on 15th Street, fulfilling part of their training requirements for office nursing duties and skills.

The Party When the residency program at the county hospital passed to the Department of OB/GYN at Stanford University Medical School in 1970, it was a major changing of the guard. Before this actually took place, Dr. Fox felt so strongly about his attending staff that he ensured them all associate or assistant clinical instructor status with Stanford Medical School. He was watching out for his own. As a result of the major change in the residency program, the county graduates decided to honor Leon with a dinner and award ceremony at Zorba the Greek, a local restaurant. Dr. Fred

Schlichting was in charge of the festivities. The most vivid memory of the evening was when all the physicians watched a scantily-clad miss emerge from a giant three-tiered cake, followed by an apparent San Jose police officer proclaiming loudly that he was there to arrest the young lady for indecent exposure and the rest of the guests were to remain seated while names, addresses, and phone numbers were taken. Ten seconds of panic were eased when the prank was revealed by the perpetrator and master of ceremonies, Dr. Fred Schlichting. The remainder of the evening went without incident, but the occasion is still keenly remembered by all who were there.

National OB/GYN Societies The American Board of Obstetrics and Gynecology was founded in 1930. Its purpose was to evaluate and certify those physicians who had completed an OB/GYN residency. This certification was accomplished by giving a written examination to a candidate during his residency and an oral examination two to three years into his practice. Dr. Fox completed his boards just after returning from the war. The American College of Obstetrics and Gynecology (ACOG) had its origin on September 5, 1951. The purpose of this national organization was to establish and maintain the highest standards for OB/GYN care in educational and clinical practice. The organization also promoted research and publications in the field of obstetrics and gynecology. Leon was accepted as a Founding Fellow in ACOG in 1951. From 1969 to 1972, he served as vice-chairman of District VIII (west coast), and in 1976, he was elected treasurer of ACOG, which at the time represented more than 20,000 physicians across the United States. He held this position until 1982. Leon published 20 papers from 1956 to 1985. They appeared in various medical journals such as the American Journal of Obstetrics and Gynecology, Western Journal of Medicine, Trans Pacific Coast Obstetrical Gynecological Society, and California Medicine. These papers were written about clinical disorders in OB/ GYN. Each paper required many hours of research, reading, and writing before it would be presented to a journal for publication. He felt the work to prepare an article would increase his knowledge of the subject. It was a very effective method of continuing medical education.

Private Practice In 1956, Leon and associate Les Magoon were joined in practice by Dr. Bert Johnson, fresh from his residency at

PAGE 32 | THE BULLETIN | MARCH / APRIL 2010

Northwestern University in Chicago. He stayed for about two years and then moved over to the Good Samaritan Hospital area near Los Gatos. Bert would later serve as vice-chairman of the OB/ GYN residency program at County Hospital. He was very active in teaching the residents, especially in gyn surgery. Dr. Merlin Johnson, following his discharge from the Navy, came on board in 1957 and remained with Dr. Fox until 1977, when he moved his practice to the Good Samaritan Hospital area. Leon and Les Magoon built a new office building in 1958 at 303 North 15th Street. This location was just three blocks from San Jose Hospital. The convenience of this short distance was one of the reasons that inpatient care (deliveries and surgeries) was ultimately limited to San Jose Hospital. The only other hospital that he had used was O’Connor Hospital, which was several miles away. The new building had four physician offices, with two exam rooms for each doctor and two separate reception rooms. A fifth doctor’s office and exam room were added later. Leon and Dr. Magoon occupied one half of the building and leased the other half to two independent doctors. The building was somewhat unique in that all exam rooms had their own adjoining bathrooms and change rooms. This is very seldom seen in today’s medical offices. Dr. Magoon retired in 1959 and it was not until 1970 that another physician joined Drs. Fox and Johnson. The third partner was Michael A. Shea, MD, who remained in practice at this location until 1980. Dr. Shea was in the last group of three residents to graduate from the Valley Medical Center while Dr. Fox was in charge of the program. The other two were Robert C. Allin, MD, who practiced in Honolulu, Hawaii, and David L. Garrison MD, who practiced in St. Joseph, Missouri. Private practice for Dr. Fox was very successful and busy. When asked, after his retirement, how many babies he had delivered in his career, his answer was about 10,000. He could have been even more specific, as he had written down all the names and dates of every mother he had delivered, even in his training years. Queried about his most challenging cases, he recalls two. The first was a lady with twins who had severe polyhydramnios (excess fluid in the sac around the baby). She went into labor and, because of the large amount of fluid in the uterus, she started having heart failure. He placed a plastic catheter into the sac and drained off eight gallons of fluid. The mother survived, but the premature twins who were very small did not live. The second case Dr. Fox remembered vividly was one referred to him by a local OB physician. The patient was a hospital nurse having her first baby. She was in active labor, but the baby was in a breech position. When Dr. Fox arrived, the baby’s trunk was delivered, but the head was locked in the birth canal. After much difficulty, the delivery was completed, but the infant did suffer spinal cord injuries with residual defects. These cases stood out in Dr. Fox’s

mind not only because of the complications, but because of the outcomes. However, there were hundreds and hundreds of other complicated pregnancies where, because of his knowledge and skill, good outcomes were the result. He had a large referral source from many of the family practitioners in the area. Even other obstetricians would ask for consultation for their more difficult cases. He was also known as a very accomplished gyn surgeon. He paid particular attention to anatomical details in his abdominal and vaginal hysterectomies. This attention to details no doubt began with his preceptorship with Dr. Shufelt. Although hard work was his trademark, Dr. Fox always reserved two weeks in July for a vacation. One of his favorite destinations was a cabin near Vida, Oregon. There, he enjoyed fly-fishing on the McKenzie River. It was there that Leon and his family could spend quiet days together, away from the pressures and time constraints of private practice.

Organization Memberships The following list of medical and civic affiliations, with positions held, is presented here in order to appreciate what incredible accomplishments he achieved during his lifetime. These are even more remarkable when viewed in the context of a large private practice. Hospitals

O’Connor Hospital - active 1938 to 1970 Chief of Staff 1946 to 1948

San Jose Hospital - active 1938 to 1985 Chief of Staff 1960

Santa Clara Valley Medical Center - active 1938 to 1985 Chief of Staff 1953 to 1956

Professional Organizations

Santa Clara County Medical Society - 1937 to 1985 President 1957

California Medical Association - 1937 to 1985 Delegate 1946

American Medical Association - 1937 to 1985 Delegate 1966

American Association for Maternal and Child Health President 1972

California Association for Maternal and Child Health President 1971

American College of Surgeons Fellow 1941

PAGE 33 | THE BULLETIN | MARCH / APRIL 2010

Leon Parrish Fox, Man of the Century, from page 33

Shufelt Gynecological Society of Santa Clara Valley Founder 1946 President 1957 to 1959

Peninsula Gynecological Society President 1954

American College of Obstetrics and Gynecology Founding Fellow 1957 District VIII, Vice Chairman 1969 to 1972 District VIII, Representative to the committee on nominations 1971 to 1972 Committee on Health Care Delivery 1973 to 1976 Treasurer 1976 to 1982

Pacific Coast OB/GYN Society - 1956 to 1985 President 1980 to 1981

San Francisco Gyn Society - 1956 to 1985 President 1966 to 1967

American Board of OB/GYN Diplomat 1948

San Jose City College of Nursing Advisory Board

San Jose State University of Nursing Advisory Board

San Jose Hospital of Nursing Advisory Board

The aforementioned position of chief of staff at the three hospitals is no ordinary task. It is the highest elected position for a physician in a governing role at a given hospital. The chief of staff is responsible for verifying credentials of applicants to the hospital medical staff, ensuring quality of care for patients, initiating any disciplinary actions that may be necessary, and carrying out all the other rules and regulations that apply to the medical staff. He conducts monthly executive council meetings made up of all the various department chairmen. Quarterly meetings of the entire physician membership of the hospital are also the responsibility of the chief of staff. These duties required many hours away from the office and were all done gratuitously.

Santa Clara County Tuberculosis Association

Santa Clara County Chapter of American Cancer Society President 1961

Santa Clara County Chapter of American Heart Society President 1956

San Jose Chapter American Red Cross Blood Bank Director 1948 New York Academy of Sciences - 1964

Public Health League of California Councilor 1964 to 1970

California Political Medical Action Committee Director 1968 to 1972

Institute for Medical Research Vice President 1976

Civic City of San Jose Advisory Board of Health - 1946 to 1951 San Jose Rotary Club - 1941 to 1985 San Francisco Common Wealth Club

Little Learners One of the organizations is not on the above list, but needs recognition, as it was one of Dr. Fox’s favorites. It was called the Little Learners. This home-based club was formed in 1933 by ten San Jose physicians of varying specialties. When Leon joined in 1938, there were 30 members. This eclectic group would meet monthly at one of the members’ homes and the medical subject would be presented by one of the members. Food and drink were also enjoyed by all. In 1985, Leon hosted, what was to be, his last Little Learners meeting. One participant remembers Leon opening a special thirty-year-old bottle of Chateau Lafite Rothschild, saying that this was a special wine for a special time. Dr. Donald Threlfall, one of the original founders, penned a memorable editorial in the 1972 book on the history of the Little Learners. He may well have had Leon in mind when he wrote, “it fascinates me to rub shoulders and be associated with men who are so respected on so many levels: not just county, but state, national and world, all from this little group.”3

Man of the Century

Boys City Boys Club Director 1958 President 1965 Calvary Methodist Church Board of Trustees

A man of the century award only comes along every 100 years or so. On May 14, 1976, this unusual honor was conferred upon Leon Fox by the Santa Clara Valley Medical Center on its centennial anniversary celebration. The event was held at the San Jose Hyatt House and included in the 250 attendees were all the

PAGE 34 | THE BULLETIN | MARCH / APRIL 2010

former residents who had graduated from the OB/GYN residency program under Dr. Fox. Cited as some of the reasons for the award were his 40 years of dedicated service to that hospital, his OB/GYN chairmanship from 1959 to 1970, and his being chief of staff from 1953 to 1956. The selection was a carefully kept secret and it did surprise Dr. Fox. Upon receipt of the plaque, he remarked that it left him speechless, added a thank you, and promptly sat down. This was typical Leon Fox. The man who had done so much for his patients and peers throughout his lifetime would rarely talk about himself.

Obstetric Department at Valley Medical Center. It is a fitting tribute to the man and his life. “Dr. Fox generously gave of his knowledge, skills, and services throughout his lifetime. We will dearly miss his presence, but we all have a bit of his wisdom to cherish and keep forever.”4

End Notes 1. “Oral interview: Leon P. Fox MD,” Santa Clara County Medical Association, 3 Nov. 1985:1 2. “Oral interview: Leon P. Fox MD.” 13

The Final Days In December of 1984, Dr. Fox began to experience some worrisome symptoms, suggesting a possible brain tumor. A CT scan confirmed a lesion in the brain and a needle biopsy revealed cancer. Surgery was ruled out and he was treated with external radiation and chemotherapy. The prognosis was not good, but he continued to work in the office during 1985. He passed away quietly April 29, 1986 in his home on South 16th Street, where he had lived for 39 years. The most poignant and meaningful memorial came from the physicians, nurses, and staff of the

3. “Donald R. Threlfall, The Little Learners (San Jose: Santa Clara County Medical Society, 1973) 14 4. “Leon P. Fox, S.J. Physician, “San Jose Mercury News 1 May 1986: 8

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Available to share with prominent aesthetic dermatologist. This upscale office has seven exam rooms, a lab, two large PAGE 36 | THE BULLETIN | MARCH / APRIL 2010

MEDICAL SUITES • GILROY

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VOLUNTEER OPPORTUNITies MAKING A DIFFERENCE AT ROTACARE Rotacare in Mtn View is one of nine clinics in the Bay Area serving uninsured patients. We have urgent need for more physicians and mid-level providers to provide care for adults and children. The clinic is held in the basement of YMCA building adjacent to El Camino Hospital in Mtn View. It is fully staffed with nurses, educators, translators, pharmacists, and other support staff. Malpractice insurance is covered by Rotacare. Hours of operation are Mon, Wed, Thurs evenings. Providers usually work 2.5 hours monthly, or according to availability. Specialists can see patients at Rotacare or arrange to PAGE 37 | THE BULLETIN | MARCH / APRIL 2010

Rental Agent Pajaro Dunes Company 1-800-564-1771 have patients referred to their office. Our volunteers have found this a rewarding experience and a way to make a difference in our own community. For further information, please call Lila Steiner at 650/988-7948 or email Lila_Steiner@ elcaminohospital.org.

VOLUNTEER PHYSICIANS NEEDED TO PARTICIPATE IN SECOND OPINION TUMOR PANELS For 36 years, thesecondopinion has been providing free second opinions in an informal small group setting to California’s adults diagnosed with cancer. We are recruiting pathologists, radiologists, medical oncologists and radiation oncologists, and surgeons specializing in urology, gynecologic oncology, breast cancer, head and neck oncology, and thoracic oncology. Multidisciplinary physician panels meet with three patients at each session. Materials are provided for review in advance, then discussed with patients and family members in attendance. Malpractice insurance is provided if needed. A valuable and rewarding experience! For more information on how you can volunteer, call 415/775-9956 or email: mail@thesecondopinion.org. Located at 1200 Gough Street, Suite 500, San Francisco.

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