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late-breaking news from your medical association volume XX / no. 4 APRIL 2013

local 2013 San Mateo County Community Health Needs Assessment This newly released report provides insight into current conditions and trends on various health indicators and identifies areas for improvement in San Mateo County. You can obtain an executive summary and complete report at

UCSF Signs Doctors in Stanford Territory UCSF Medical Center has tentatively agreed to affiliate with the 803 doctors in the IPA Medical Group of Santa Clara County (SCCIPA). This group would compete directly with Stanford, and form the basis for a region-wide ACO. UCSF plans to form a Bay Area-wide ACO. UCSF already has a key partnership with San Ramon’s 3,800-doctor Hill Physicians Medical Group. Hill has also added doctors in San Francisco and San Mateo counties. UCSF will become a minority equity partner in Pacific Partners Management Services, Inc. (PPMSI), the management services organization that provides business and contracting service to the SCCIPA doctors.

Primary Care Physicians: File Your Self-Attestation Form to Receive Medicaid Payment Increase PCPs who treat Medicaid patients could be eligible for a payment increase as part of the Affordable Care Act (ACA). State Medicaid programs are required to pay for select primary care services and vaccine administration at rates equal to Medicare for 2013 and 2014. California is expected to implement the increase this summer. To receive the payment increase, each qualifying physician must complete and file a self-attestation with the California Department of Health Services program. The state may develop a web-based tool to allow online attestation, but details are still forthcoming. Stay tuned for more details.

state Southern California’s Pacific Health Services Shuts Down Four Hospitals After years of entanglements with state and federal authorities, Pacific Health Services is suspending operations and closing its remaining four Southern California Hospitals. Last month it shut down it fifth facility. Pacific has been hemorrhaging money. The announcement from Pacific came just a couple of weeks after it was fined $7 million by state regulators for bouncing paychecks to hospital employees and not providing accurate accounting of their wages. The California Labor Commission also determined that Pacific had been making deductions from employee paychecks for healthcare insurance but not paying the premiums to its carriers. About 1,900 employees will be laid off.

Blue Shield Follows Blue Cross’s Lead Effective May 15, Blue Shield will require its physicians to notify patients in writing using a form provided by the payor when referring a patient to an out-of-network provider. The policy does not apply to emergencies.

state (continued) CalPERS Deals Blow to Blue Shield CalPERS has picked four new HMO plans for five-year health insurance contracts starting in 2014. The giant pension fund voted to split up Blue Shield’s statewide HMO contract and offer additional plans from Anthem Blue Cross, UnitedHealth, Sharp Health Plan, and Health Net, alongside Blue Shield.

Legislation Proposed to Expand Residencies with User Fee An Assembly committee has approved a plan to provide a major boost to California’s physician training residency programs by generating $100 million a year with a $5 per-covered-life fee to be imposed on health care insurers. The new bill is one of several legislative efforts to address the provider shortage in California. AB 1176 would expand the number of resident physicians in California by an estimated 1,000.

Retail Clinics Five years ago, retail clinics were just a blip in California and elsewhere. Nationally, the number of visits to retail clinics have gained five-fold since 2007. In Southern California, UCLA Healthcare recently announced an arrangement for patient referrals and record sharing with CVS’s MinuteClinics. Safeway recently announced plans to build retail clinics at more than 100 of its stores in Northern and Central California. Although such clinics may provide a convenience for patients who often struggle to gain quick urgent care appointments with their primary care physician, what are the implications for primary are delivery?

national FDA Will Not Approve Generic OxyContin This month the FDA announced that it will not approve any generic versions of the original OxyContin formulation, as the benefits no longer outweigh its risks. The original formulation approved in 1995 was abused, often following manipulation intended to defeat its extended release properties. The FDA approved updated labeling for reformulated oxycodone hydrochloride controlled-release tablets (OxyContin, Purdue Pharma).

Global mHealth App Services to Reach $26 Billion by 2017 Within the next four years, the mobile eHealth services market will begin the commercialization phase and reach $26 billion worldwide as smartphone apps enable the mHealth industry to monetize these services. Forty-two percent of the estimated 97,000 mHealth applications currently available in app stores adhere to the paid business model. Currently, the top mHealth publishers generate more than three million free and 300,000 paid downloads in the U.S. on Apple’s iOS platform. Consumers have been taking advantage of smartphones for some time, but now a significant number (15 percent) of mHealth applications are primarily designed for healthcare professionals, such as CME, remote monitoring, and health care management applications.

Washington State’s Death With Dignity Law Washington’s Death with Dignity Act allows adult state residents with six months (180 days) or less to live to request lethal doses of medication from physicians. During calendar year 2011, 103 participants requested such medication. Prescriptions were written by 80 different physicians. Of the 103 participants, 94 individuals have died, of which 70 died after ingesting the medication. Nineteen individuals died without ingesting the medication. Of the remaining five who died, ingestion status is unknown. No documentation has been received that death occurred in the remaining nine individuals. Of the 94 participants who died in 2011, 94 percent were white, non-Hispanic; 75 percent had some college education; and 78 percent had cancer. Of the 70 participants who died after ingesting the medication, 93 percent died at home.

When Doctors Learn the Cost of Tests and Labs Fewer Tests are Ordered A recent study published in JAMA Internal Medicine, authored by Dr. Leonard Feldman of Johns Hopkins, found that when doctors are told the price of diagnostic laboratory tests as the tests are ordered, the doctors respond by informing consumers


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and either ordering fewer tests or shopping around for cheaper alternatives. For generations, doctors have been shielded from these costs. Hospitals keep patients and doctors in the dark on the cost of medical services, which contributes to the soaring cost of healthcare in the U.S. With those costs poised to consume about 20 percent of the national economy, Dr. Feldman believes that doctors will have to become more cost-savvy.

Hospitals Profit When Surgeries Go Wrong JAMA reports on a study in last week’s edition that found hospitals profit from their own mistakes because insurers pay them for the longer stays and extra care that patients need to treat surgical complications that could have been prevented. The study is the first to quantify how complications impact a hospital’s bottom line and illustrate the challenge of pushing hospitals to improve outcomes when the current system still rewards more care over better care.

Amgen Pays $25M for Kickback Allegations Amgen has been accused of paying kickbacks to increase sales of its anemia drug Aranesp. The Justice Department said Amgen paid kickbacks to Omnicare Inc and PharMerica Corp, which sells drugs to long-term care providers such as nursing homes and hospitals, and Kindred Healthcare, which runs long-term acute care hospitals and nursing and rehabilitation centers.

Recent Slowdown in Health Spending Growth Mostly Tied to the Economy A new Kaiser Family Foundation analysis of how the economy affects the nation’s health spending concluded that the record slow growth rate of recent years stems largely from economic factors beyond the health system, with the economy explaining 77 percent of the slowdown, and more rapid growth expected in coming years if the economy strengthens as expected. Government statistics show that health spending grew by 3.9 percent each year from 2009 to 2011, the slowest growth since the government began tracking it in 1960. The slow growth in heath spending continued into 2012. The study, “Assessing the Effects of the Economy on the Recent Slowdown in Health Spending,” can be obtained at

Tax-Exempt Hospitals Spend Little on “Community Benefit” Says Report New research suggests that tax-exempt hospitals spend only a very small fraction of their operating expenses on improving community health. In 2009, of the mean 7.5 percent of operating expenses set aside for community benefits by tax-exempt hospitals, an average of 5 percent of that very small slice was used to improve health in the community. The majority of fiscal community benefit resources—85 percent—were used for charity care and other care-related services, while the remaining 10 percent was used for education, research, and community group contributions. The article appeared in the NEJM on April 18.

Gallup Report Shows Smoking Worst Health Habit of People on Medicaid The Gallup-Healthways Well-Being Index, which tracks well-being in the U.S. and provides solutions for a healthier world, recently conducted a survey of health habits in adults by their primary health insurance source. Thirty-six percent of adults whose primary health insurance source is Medicaid said they smoke, more than double the 15% of employer- or union-insured adults who smoke. Smoking amongst the uninsured was also alarmingly high, with 34%, followed by 19% of those covered by military or veterans’ benefits and 18% of those with “other” forms of insurance. The lowest percentage of smokers was found in Medicare patients, with 13%.

medicare EHR Prepayment Audits After the OIG made some strong recommendations last year about how CMS should improve its oversight of EHR Incentive Payments, CMS instituted in January the pre-payment audit program to conduct audits to monitor meaningful use payments. The HIT Initiatives Group are conducting both random and targeted audits checks before physicians actually receive payments.

New Medicare Date May Impact Some Physicians Effective May 1, Medicare is going live with the referring/ordering edits that will result in claims denials unless the referring/ ordering physician or other health care provider is enrolled in Medicare (or has a valid opt-out affidavit on file with their local APRIL 2013




medicare (continued) Medicare contractor. It is the billing provider’s claim that is at risk of being denied. This requirement was originally scheduled to go into effect in 2010, but CMS delayed the implementation to give physicians more time to enroll or opt-out. The impacted services are imaging, clinical laboratory services, DMEPOS and home health services. Not impacted are referrals to physician specialists or Part D or B drugs.

Medicare Private Contracting Bill, H.R. 1310, Introduced in Congress The Medicare Patient Empowerment Act, introduced in Congress last month,would allow patients and physicians, without penalty, to enter into arrangements known as “private contracts” for services covered by Medicare. The bill stipulates that Medicare pay its fair share of the services and allow patients, who voluntarily agree, to pay the rest.

Transition to Noridian from Palmetto to Occur in August 2013. Despite appeals filed by Palmetto, CMS says the transition to Noridian will take place in August. CMS has made a strong commitment to avoid the problems experienced by California physicians in the last transition.

malpractice Oregon Alternative Liability Reforms Signed Into Law The Oregon legislature passed a bill to establish an early discussion and resolution (EDC) process within the Oregon Patient Safety Commission. This voluntary process is intended to facilitate open communication about all outcomes of care, including serious events, between the provider, health care facility, and the patient. The bill was the result of negotiations between the Oregon Medical Association, the Oregon trial bar, and Oregon Governor John Kitzhaber, a physician. 4

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April 2013 Newsletter