Users Guide to Affordable Care Act (Obamacare and IPAB)

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#76

Jun. 26, 2012 - 3:00 PM EST

The Independent Payment Advisory Board (IPAB) provision of the Affordable Care Act (ACA), Section 10320, deserves special scrutiny. This provision is the one that opens the door to rationing. It does so by appointing a board that does not report either to Congress or to the public. The IPAB is essentially a protected bureaucracy that will have the power to rule that selected diagnostic tests and treatments do not qualify for coverage under the ACA. It amounts to a covert rationing scheme that will hogtie the hands of treating physicians while also tying the hands of sick and injured patients. In California we see an equivalent in the use of so-called Utilization Review (UR) by doctors retained by insurance companies or their surrogates. These doctors do not speak to or examine the patients for whom they issue denials of care. The IPAB is the ACA equivalent of California's UR. The difference is that the UR people are doctors: the onerous requirement to be a  bona fide physician will not be imposed on the IPAB's unelected elite. Doctors should be worried. Patients should be worried. Insurance companies should be grateful. The increased number of patients the ACA creates will be offset somewhat by allowing denials of selected diagnostic tests and treatment. Congress shouldn't be worried. Congress was smart enough to exempt itself from the ACA from the very start. Watch for this item when SCOTUS rules on the ACA.

Robert L. Weinmann, MD, Editor, http://www.politicsofhealthcare.com/

The point is we're being distracted with dissertations on The Commerce Clause, issues of penalty versus taxation, even some psychoanalysis of Chief Justice Roberts, everything but how access to health care is being reconstructed and even restricted.  Here are some of the issues:

1) ACA makes no restriction on how high insurance premiums can be raised,

2) The IPAB provision derived from Section 10320 of the ACA allows entire treatment protocols to  be disqualified from coverage to maximize cost savings. Physicians and their patients will need to fight if they want to have anything significant to say about this process.

3) Doctors will be advised to see more patients faster to make up in volume for reduced remuneration to accommodate the  huge anticipated increases in eligible recipients. Physicians will have to learn to stand their ground when it comes to deciding length of hospital stays and time allotted to patients.

4) Patients who can afford it may use the coverage that's allowed under ACA and step outside the system for whatever ACA doesn't cover,

5) The IPAB will become the Controller of health care because it will make the rules and regulations that decide what qualifies as allowable care under the ACA.  The IPAB is a federalized version of California's Utilization Review in Workers' Compensation. Decision-making authority will be in the hands of unelected politicians appointed to the IPAB by other politicians. As the Romans used to say, Cave Canem (Beware of the Dog).

PRELIMINARY WARNING RE THE AFFORDABLE CARE ACT

AFFORDABLE HEALTHCARE OR OBAMACARE, officially known as the Affordable Care Act (ACA) of 2010, is about to be ruled on by SCOTUS.
One item that physicians with difficult, challenging, and unusual patients need to worry about is how the ruling will challenge their ability to take care of complicated patients who have proved refractory to standard therapies, or who have failed conventional treatment protocols. These physicians and their patients could well have their hands tied unless Section 10320 is modified or eliminated. Section 10320 allows for the appointment of an Independent Payment Advisory Board (IPAB), a tribunal of persons who need not necessarily be physicians. This panel will determine what the ACA will cover. The IPAB will not report to the people or to Congress. Ensconced in legislative fiat, it is poised to ration care by finding various procedures and protocols outside the mandate of coverage. In California where we watch the misuse of Utilization Review in Workers Compensation, we see how it works: treatments with lower success rates or that aren't buttressed by what authorities consider sufficient Evidence Based Medicine are disallowed no matter how carefully a specific treatment or study may be indicated on an indivdual basis and even though the patient may have failed everything else. Injured workers in California are deprived of indicated care by this method on a daily basis. So may it be with other patients covered by the ACA unless Section 10320 is altered or repealed. Watch for our follow-up on this issue.

AB 1687 (FONG) DESERVES PASSAGE INTO LAW

SB 923 (DELEON) DESERVES DEFEAT   

UTILIZATION REVIEW particularly by companies owned, controlled, or supported by insurance companies has been recognized for escalations of cost associated with wrongful denials of treatment. Here's how it works:
1) Josephine Sheetrock gets injured on the job and receives authorized initial treatment from a Primary Treating Physician (PTP) who in turn belongs to a Medical Provider Network (MPN) with which her employer and insurance company have a contract to provide care for injured workers (IWs);
2) Josephine Sheetrock's treatment does not resolve the clinical problem so the PTP seeks authorization for specialty consultation;
3) The PTP's request for authorization for specialty consultation and/or diagnostic tests is denied;
4) An authorization denial letter couched in the language of formal Utilization Review is sent to the PTP (it tells the doc to peddle his papers elsewhere);
5) The formal language is derived from the American Medical Association's Guides to the Evaluation of Permanent Impairment, from the American College of Occupational and  Environmental Medicine (ACOEM), and from the current Medical Treatment Utilization Schedule (MTUS), all usually correctly quoted while being wrongly applied;
6) The PTP can file an appeal. It the PTP files appeals too often or too successfully, the PTP risks being dropped from the MPN;
7) The consequence is that formal appeals are often perfunctory, not made at all, and are often unsuccessful (Josephine Sheetrock goes without treatment and is obliged to "go legal," i.e., to retain an attorney who specializes in workers compensation).

*** HMOs, other managed care organizations, and Knox-Keene Plans use similar mechanisms to delay or deny care. Money that should be allocated to patient care is retained by insurance companies, cooperative Utilization Review companies, and for enhanced executive compensation. 

*** AB 1687 (Fong) which applies to workers comp should be passed into law. It will help level the playing field by requiring full disclosure for denied care and by increasing access by injured workers  to lawyers who specialize in workers compensation;

*** SB 923 (Deleon) which also applies to workers comp should be defeated because it will deprive PTPs and their patients from access to specialty care. 

References

See our postings for 1 June 2012, 21 May 2012, and previous postings re workers compensation in http://www.politicsofhealthcare.com

Totalcapitol.com

California Progress Report

San Francisco Chronicle, 8/29/08 ("How to practice medicine without a license")

These articles include reviews of previous attempts to require California state licensure for UR doctors and are available on line, e.g., concerning AB 2968 (Lieber),  AB 933 (Fong), and AB 584 (Fong).

AB 1687 (Fong) cleared the California legislature 47 to 24. This bill takes aim at the so-called "authorization" process that insurance companies use to chew up, spit out, and ultimately deny care to injured workers.  Our previous blogs explain the bill in greater detail. Suffice to say at this point that proponents assert that injured workers who've been denied care by this arcane method which is allowed to use out-of-state doctors who are not licensed to practice medicine in California should be entitled to retain lawyers to review wrongful denials of care (see references, below). Opponents say that the bill carries an incentive to appeal even properly denied treatment requests. This author regards this assertion as an admssion that opponents already know that some denials are improper.

Supporters of the bill include the California Society of Industrial Medicine and Surgery (CSIMS), California Labor Federation (CLF), California Applicants' Attorneys Association (CAAA), and the Union of American Physicians and Dentists (UAPD). Pro-insurance interests that oppose the bill include the California Association of Joint Powers Authorities, the California Coalition on Workers' Compensation, and the Association of California Insurance Companies (ACIC).

Previously, this column has criticized AB 1687 on the grounds that it's not strong enough and will still allow non-California licensed doctors to do utilization review for workers injured in California and to overrule treatment decisions by fully licensed doctors who've also completed a state mandated pain management course (the non-licensed out-of-state doctors are exempt from this requirement). All the same, AB 1687 is a step in the right direction and could conceivably deliver a kick into the gnashing teeth of insurance companies whose mantra seems to be "profits before patients."

Other references by this author

"Wrongful utilization review perpetrated by inappropriate use of the ACOEM Guidelines," California Society of Industrial Medicine Bulletin, #4, Fall, 2006.

"How to practice medicine without a license," San Francisco Chronicle, 8/29/08.

"Utilization Review as a gift to insurance companies," Totalcapitol.com, 3/11/12.

EVIDENCE BASED MEDICINE (EBM) is the new mantra in health care. In its own way, AB 1687 (Fong) is a call for application of  EBM which is supposed to be the basis for Utilization Review (UR) in workers' compensation in California, for management-based authorizations in the nation's HMOs and PPOs, in Medicare, in Medicaid, and for managed care decisions everywhere and anywhere. All the same, proponents of EBM are aware of  high levels of sophisticated hypocrisy that engulf the EBM concept and that may ultimately contribute to its demise.

In California the most recent example revolves about AB 1687 (Fong) which would authorize attorney fees when injured workers who have been awarded future medical care successfully appeal UR decisions that deny prescribed care. AB 1687 has recently been studied in Assembly Appropriations.

Julie Salley-Gray, consultant to the committee, said, according to workcompcentral (WCC, see references below), that the bill will have minimal fiscal impact because challenges to UR denials are relatively infrequent. She is on record as having said that only 6% to 20% of UR requests are denied -- we are advised that her figures come from the California Professional Firefighters  (CPF) who are the sponsors of AB 1687 and who, in turn, got the information from the Division of Workers Compensation (DWC).

Workcompcentral stated in its release of 5/21/12 that the lobbyist for CPF did not return calls asking who in DWC provided this information. Previously, when Politicsofhealthcare.com sought information from this source, we also found that CPF did not return calls or e-mail.  However, workcompcentral also said that Carroll Wills, Communication Director for CPF, attributed the information to Rosa Moran, Administrative Director for DWC. The quote from Moran, however, was not exactly one that imbued readers with confidence, e.g., "I can't speak to when the data was generated, we got the figure from the AD (administative director) this spring and understand it to be current."

This level of response appears casual and not consistent with the high levels of data that insurance companies and their utilization review cohorts exert on doctors to support the medications they prescribe, the diagnostic tests they ask for, and the treatments and surgeries they recommend.

Workcompcentral also queried DWC spokesman Peter Melton whose reply by e-mail to WCC said that DWC does not keep track of UR statistics. Now we appear to gone from debatable EBM statistics to none at all. How is that possible? Reference is then made to a CHSWC lien report that said that treatment authorizations were "in dispute in 70% of liens surveyed." We are also told that the reasons for treatment denials were unknown in 20% of cases. We are then informed that Erika Monterozza, spokeswoman for the Department of Industrial Relations (DIR), stated that she couldn't confirm or deny whether DWC provided the information or not. We do not know if anybody asked whether or not any of the data reported turned out to be incorrect or distorted.

Mark Rakich, consultant to the Assembly Insurance Committee, was reported to have stated that the fiscal effects of the bill would include "potentially minor increases of workers' compensation insurance due to the added costs  associated with the relatively few challenges to the relatively few denials."  The trouble is we no longer can tell whether or not the number of challenges is "relatively few" or not.

What we do know is that Gov. Schwarzenegger squandered some of his panache with the new PDRS in 2005 which slashed PD benefits. Treating doctors also know that injured workers are often left stranded and that their PTPs (primary treating physicians) are left holding the malpractice bag when recommened and prescribed procedures and treatments are denied by UR companies which claim to rely on ACOEM or MTUS protocols which in turn claim to be based on EBM.

At this point Mark Gerlach, consultant to the California Applicants' Attorneys Association, hit the nail on the head when he stated that it is important to know the sources for the data in support of the 6% to 20% denial rate that was included in the Appropriations Committee Bill analysis.

Conclusion

Stakeholders, patients most of all, need to know in clear and concise language how EBM is used to authorize, delay, or deny treatment. Stakeholders also need to know if and how DIR and DWC use this information and to what extent its use has become an industry tool that insurance companies and their compliant utilization review companies wield to reduce healthcare expenditures at the expense of injured workers.

In response to queries about how EBM and AB 1687 intertwine, here's our answer: AB 1687 is a step in the right direction because its implementation will enhance impartial application of EBM.

YES, re AB 1687 (Fong): it gives injured workers a fair chance!

According to the California Professional Firefighters (CPF) website this bill to make limited reforms in workers' compensation utilization review (UR) procedures will require that "communications about a delay, modification or denial of workers comp treatment would be required to include prominently displayed alternatives for the injured worker's next steps. In addition, if a related medical treatment dispute arises, and enforcement of a future medical award is required for continuing an injured worker's medical treatment, this bill allows the Workers Compensation Appeals Board to award reasonably-incurred attorney's fees in instances where an injured worker prevails in validating the medical award." We feel this bill is a step in the right direction so we recommend a yes vote.

Previously, we've crticized the bill because we felt it didn't go far enough since it doesn't require that doctors who do UR in California be licensed in California. As matters stand now, doctors with only Texas licenses may do UR in California whereas doctors with only California licenses cannot do UR in Texas. The California policy caters to insurance companies that use non-California doctors to issue UR denials -- that saves money for the insurance companies since they don't pay for treatment that has been denied by UR.

The overall loss to California in terms of fees and taxes is about $10,000,000 per year, a total of $30,000,000 when we take into account that Schwarzenegger vetoed this legislation twice and Brown, once. Protection of the insurance industry seems to be an area where Schwarzenegger and Brown agree.

Now comes Paul Fong with AB 1687 which would not require licensure in California but which would call for reasonable explanations of denial of care and that these denials of care be in clear and concise language.

Existing law requires that workers injured in the course of employment get indicated medical treatment and that they get compensated. Unreasonable denials of care are supposed to be subject to penalties and attorney fees. The trouble is that this requirement is commonly pushed aside while the two-year disability limit runs out. The current review process is not equitable because the degree to which UR doctors especially unlicensed ones are independent is questionable. In our view, the current system has already run roughshod over the workers' comp reforms embodied in SB 899, which many now feel was a shoddily written and hastily approved backroom agreement.

It's time to try again: it's time to give AB 1687 (Fong) a chance. If that doesn't work, we'll see about running a new licensure bill unless Fong and CPF decide to include such an amendment in AB 1687.

References

"How to practice medicine without a license," Robert L. Weinmann, San Francisco Chronicle, 8/29/08

"Utilization Review as a gift to insurance companies," TotalCapitol.com, posted by Bob Weinmann, 3/11/12

"Committee Passes Bill Authorizing Attorney Fees in UR Disputes," by Greg Jones, Western Bureau Chief, workcompcentral, 4/19/12

"Bills Target UR Denial," by Greg Jones, Western Bureau Chief, 3/20/12, workcompcentral, 3/20/12

"UR Data in Bill Analysis Highlights Need for Good Data," by Greg Jones, Western Bureau Chief, workcompcentral, 5/21/2012

HOW SB 923 WILL PROTECT INJURED WORKERS OUT OF THE HEALTHCARE THEY ALREADY HAVE

THE INJURED WORKERS WHO WILL BE HARMED MOST IF SB 923 (De Leon) becomes law are those whose jobs predispose them to serious injuries, e.g., construction workers and farmers, telephone repair workers, restaurant workers, freight handlers, even health care personnel (one health care worker was killed on the job in 2011) and other maintenance workers. SB 923 should bite the dust this year just as it did last year.

Ostensibly, the reason for SB 923 is to enable use of the Medicare RBRVS to pay for physicians' services to injured workers. The idea is to reduce payment to specialists so that payment to primary treating physicians (PTPs) can be increased. The proposed mechanism is to replace the current Office Medical Fee Schedule (OMFS) with the Medicare RBRVS.

But there's a catch. While SB 923 will reduce payment to specialists, it will not necessarily increase pay to the PTPs. In fact, the bill as currently written does not guarantee this outcome. In a personal letter by this writer to Daniel Crowley, Chairman and CEO of US HealthWorks, 6/24/2011, it was pointed out that SB 923 will cause specialists to withdraw from providing services to injured workers. Speaking to one of the committees that heard the bill last year, Stuart Bussey, MD, JD, president of the Union of American Physicians and Dentists, Local 206 of the American Federation of State, County and Municipal Employees (AFSCME, AFL-CIO) acknowledged that SB 923 might give PTPs a temporary "boost." Bussey also said that it would leave him, as a PTP, "holding the bag" for malpractice when he couldn't get specialists in timely fashion for seriously injured workers. Eventually, the UAPD went "neutral" or "watch" on the bill. The bill failed when a consortium of opponents teamed up to oppose it, an unlikely coalition led by the California Society of Industrial Medicine and Surgery (CSIMS).

Opposition to SB 923 also included the California Medical Association,  the California Orthopedic Association, the California Chiropractic Association, the California Neurology Society, the Interfaith Community of Los Angeles, the League of United Latin American Citizens, Voters Injured at Work, Latino Comp, La Raza Roundtable, and numerous individuals including injured workers who understood that the bill would protect them out of the healthcare protection they already had.

The Other Catch is how SB 923 is sponsored and how US Health Works gets paid. When USHW gets paid for providing care to injured workers, a portion of the money goes to the non-physician management company and to the investors who own the USHW clinics. Not all the money that the Medicare RBRVS conversion raises would go to the PTPs. Payment for management services is paid by the physicians, the PTPs. SB 923 as written doesn't preclude USHW from increasing its management fees to the PTPs. Once the doctors' group has received this  pay increase thanks to passage of SB 923 the next step will be to share it with the management group. Some pundits think that this factor is the real reason USHW executives are pushing for passage of SB 923.

Does the OMFS pay too much? The OMFS was set up in  1975 as a market-based mechanism (the Medicare RBRVS is not). Specialists are paid 5% less for specialty procedures now than they were in 1986. By contrast, the Evaluation and Management codes (E & M codes) for PTPs have been increased three times since 1986.

Unpredicted consequences of SB 923 are likely to include loss of Medical Provider Networks (MPNs) when the MPNs lose enough specialists such that they no longer meet the standards of the Labor Code pursuant to the reforms implemented during the Schwarzenegger years since 2004 and passage into law of SB 899. Some states such as Hawaii and Texas had to revise their Medicare-based fee schedules to bring the specialists back in -- thereby defeating the very purpose of having voted in the Medicare RBRVS. The anticipated reductions in pay to the specialists would be from 20 to 48% under SB 923 -- at that rate many specialists would be obliged to quit the program. Robbing Peter to pay Paul is not sound economic policy.

Conclusion: SB 923 qualifies for our "bite the dust" recommendation. The OMFS is already low cost. Updating it is recommended. Getting rid of it would endanger the provision of care to injured workers.