May 4, 2017

Issue Spotlight

Anthem-Cigna merger threatens innovation, appeals court finds

The U.S. Court of Appeals for the District of Columbia has upheld a lower-court ruling blocking a proposed $54-billion mega-merger between health insurance giants Anthem and Cigna. The appeals court agreed with the trial court's ruling that this merger would harm patients because it would likely stifle competition and choice, eliminate the existing head-to-head competition between the two insurers, reduce the number of national carriers from four to three, raise premiums, and diminish  quality and innovation.

In the 2–1 ruling, the appeals court cited arguments set forth in the AMA's friend-of-the-court brief on the merger's potential impact on the quality and accessibility of patient care.

The court rejected Anthem's argument that the anti-competitive effects of the merger were outweighed by Anthem's acquired ability to lower Cigna network provider fees. Cigna's higher fees, the court found, support that company's physician  arrangements that offer high-touch, collaborative Cigna service, with its added behavioral, wellness, and lifestyle programs for less money. The court found that this Cigna product could not be offered at the lower Anthem provider fees.

First, providers may "simply choose to walk away," the court's majority said. Second, the court found, it would be "perfectly reasonable" that some providers, even if they are willing to accept less money, will simply respond by offering customers less in the way of Cigna-style high-touch collaborative service. In reaching these two conclusions, the court cited the amicus brief filed by the Litigation Center of the AMA and the State Medical Societies and the Medical Society of the District of Columbia.

Moreover, the court reasoned, even if Anthem were to succeed in obtaining some provider discounts, they would not all be passed along to consumers. The court concluded that health insurers "tend to find it more profitable to capture medical savings and increased premiums" than to pass savings along to consumers. In reaching that conclusion, the court cited an amicus brief that was filed, with the AMA's encouragement, by a group of 27 prominent law and economics professors.

"The appellate court sent a clear message to the health insurance industry:  a merger that smothers competition and choice, raises premiums and reduces quality and innovation is inherently harmful to patients and physicians," said AMA President Andrew W. Gurman, MD. "The result of 21 months of advocacy before the U.S. Department of Justice, congressional leaders, state attorneys general, insurance commissioners, and federal court, this outcome shows again that when doctors join together, the best outcome for patients and doctors can be achieved."

In addition to these efforts to protect health insurance competition by blocking the Anthem-Cigna and Aetna-Humana mergers, the AMA has developed three model bills to help oppose anti-competitive mergers at the state level. The bills are designed to bring transparency to merger review, protect physicians from retaliation by health insurers and reduce the influence that the health insurance industry has on state insurance regulators. State medical associations can introduce one or more bills in their respective legislative sessions.

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National Update

House narrowly passes ACA replacement bill despite strong concerns from physicians, patients, and other health care organizations

The House of Representatives today voted along party lines, 217–213, for H.R. 1628, the American Health Care Act (AHCA), which would result in millions of Americans losing health insurance coverage. Recent changes to the bill, allowing states to apply for waivers from critical consumer protections provided by the Affordable Care Act (ACA) and additional funding for high-risk pools tinker at the edges without remedying the fundamental failings of the bill.

The history of high-risk pools demonstrates that Americans with pre-existing conditions will be stuck in second-class coverage if they are able to attain coverage at all. Independent experts have stated that funds available for high risk pools in the AHCA are woefully inadequate. Claims that current pre-existing condition protections would be maintained are illusory.

The timing and process for Senate action on legislation to repeal and replace the ACA using the reconciliation process has yet to be determined. There is a broad consensus that the House bill will be substantially altered in the Senate. In particular, several Republican senators have expressed concerns about the size and timetable for Medicaid cuts in the House bill. Additional concerns have been voiced about Congressional Budget Office projections that 14 million Americans would lose coverage in 2018, growing to 24 million in 2026.

As the debate shifts to the Senate, the AMA has urged congressional leaders and the administration to pursue a bipartisan dialogue on alternative policies that provide patients with access to high-quality, affordable care and coverage while preserving the safety net for vulnerable populations and for people with pre-existing conditions.

Read more at AMA Wire®.

FY 2017 omnibus appropriations bill released

Congressional appropriators have reached an agreement on the fiscal year (FY) 2017 omnibus appropriations bill to fund government operations until Oct. 1. The budget for the U.S. Department of Health and Human Services would be increased $2.8 billion above last year's enacted level, including a $2 billion increase for the National Institutes of Health. In total, efforts to combat opioid abuse within the HHS budget would receive $801 million, including $500 million from the 21st Century Cures Act. The House of Representatives and Senate are expected to pass the appropriations package by May 5.  

CMS releases guidance on improvement activities

The Centers for Medicare & Medicaid Services (CMS) has released guidance on 2017 MIPS Data Validation and Auditing (this link will download a .zip file). The fact sheet provides a high-level overview of the Merit-based Incentive Payment System (MIPS) performance categories for the transition year. Accompanying the fact sheet is a spreadsheet listing validation criteria and suggested documentation for improvement activities.

The suggested documentation is not prescriptive. It provides an opportunity for practices to perform improvement activities in a way that works best for their workflows, patient populations and specialties. The AMA continues to work with CMS on reducing physician burden by promoting the need for flexibility in implementation of the Quality Payment Program.

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State Update

AMA Opioid Task Force progress report

As part of its efforts to advocate that physicians take a leadership role in reversing the nation's opioid epidemic, the AMA Opioid Task Force also is committed to measuring the efforts of physicians across several key areas identified by policymakers and public health experts as being part of a comprehensive solution:

"These are good signs of progress, but to truly reverse the nation's opioid epidemic, we all have much more work to do," said Patrice A. Harris, MD, MA, chair of the AMA Board of Trustees,  and chair of the AMA Opioid Task Force. Download the full AMA Opioid Task Force progress report on the AMA website.

Read more at AMA Wire.

New York offers free buprenorphine training

The New York State Department of Health, AIDS Institute recently announced a "Free Buprenorphine Waiver Training for Clinical Providers" in multiple locations throughout the state. The AMA and the Medical Society of the State of New York strongly support physicians becoming trained to provide buprenorphine to their patients as part of a comprehensive plan to increase treatment for patients with substance use disorders.

The upcoming trainings will be in Monticello (May 6), Plattsburgh (May 20) and Ithaca (June 3). Free buprenorphine waiver trainings also are offered throughout all five New York City boroughs. For further information, please send an email to Find more information about all upcoming MAT trainings.

"Give Me a Shot" campaign defeats anti-vaccine bills in Mississippi

Developed by the Mississippi State Medical Association, the "Give Me a Shot" campaign successfully defeated six anti-vaccine bills this year in the Mississippi legislature. Mississippi has one of the nation's strongest immunization policies and does not permit exemption from required immunizations for religious, philosophical or conscientious reasons. The defeated legislation would have changed state law to allow vaccine exemptions for these reasons, in addition to standard medical exemptions.

The "Give Me A Shot" campaign is a comprehensive grassroots advocacy campaign designed to garner public support for pro-vaccine advocacy and to provide public and government leaders with accurate, evidence-based information on the benefits of immunization and the role policy plays in protecting against preventable diseases. The campaign mobilized those who have a vested interest in children's health—parents and community members, health care providers, legislators and public officials—into a diverse pool of grassroots advocates in support of strong vaccination policies with the tools and knowledge necessary to impact change.

The campaign included educational resources for parents, talking points for legislators, social media content, media and more. Additional information can be found at and materials are available for download via Dropbox. For additional information about immunization laws in your state, contact the AMA Advocacy Resource Center.

Wisconsin seeks novel changes to Medicaid program

On April 19, the Wisconsin Department of Health Services released a Section 1115 Demonstration Waiver proposal, known as the BadgerCare Reform Demonstration Waiver, to restructure the state's Medicaid program for childless adults living at or below the poverty line. Section 1115 Demonstration Waivers allow state Medicaid programs to put aside certain federal Medicaid requirements in order to test and evaluate a new delivery model and also receive federal matching funds. The federal government must approve the waiver before it can be implemented.

Wisconsin's waiver proposal would require certain Medicaid enrollees to pay monthly premiums in addition to existing copayments and reward healthy behaviors with reduced cost sharing. The waiver would also require, as a condition of enrollment, that certain enrollees submit to drug testing. Those who test positive for drug use would be required to participate in a substance-use disorder (SUD) treatment program. Wisconsin also seeks to limit enrollment to 48 cumulative months for enrollees not working or participating in a training program.

In addition, the waiver proposal seeks to expand treatment options for all Medicaid enrollees with SUD. If approved, the program would provide full coverage for residential SUD treatment for individuals in institutes for mental diseases (IMD). Federal law currently prohibits states from receiving reimbursement for services provided by IMDs.

The Wisconsin Department of Health Services is seeking public comment on the waiver through May 19, 2017. For additional information about state Medicaid programs, contact the AMA Advocacy Resource Center.  

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Judicial Update

Iowa's highest court says error-reporting document is confidential

A trial court initially told an Iowa hospital to turn over its patient safety network (PSN) incident report and related documents to a man as part of discovery in his medical malpractice lawsuit, but the Supreme Court of Iowa has said the hospital does not have to share the protected information.

In a ruling in Willard v. State of Iowa, the high court said the Iowa Morbidity and Mortality Study Law (MMSL), which was passed to keep peer-review information and materials confidential, protects the information from being given to a patient who sued after being treated at the University of Iowa Hospitals and Clinics (UIHC).

"A PSN clearly falls within the legislative intent of 'any study for the purpose of reducing morbidity or mortality,' " the justices said. "The PSN system allows the UIHC to keep track of patient incidents and to route them to the appropriate department for resolution. The PSN system can also result in revised policies for the hospital as a whole or for use in studies, reports and presentations."

Read more at AMA Wire.

State's top court deals blow to medical liability forum shopping

A woman who lived in eastern New Mexico—an area that has few specialists to care for patients and no Level 1 or Level 2 trauma centers—chose to cross the state line for elective bariatric surgery in Lubbock, Texas. For about six years Kimberly Montaño traveled to the Texas office of Eldo Frezza, MD, for follow-up care and treatment for complications from the surgery. Ultimately, another physician diagnosed Montaño with gastrointestinal bleeding from an "eroding permanent suture" and corrected the problem.

The New Mexico woman—even though she received care in Texas from a state-employed Texas physician—filed a malpractice lawsuit against Dr. Frezza in a New Mexico court. The laws of New Mexico provide fewer protections for physicians and patients than do the laws of Texas. Dr. Frezza argued that the lawsuit should be dismissed because, as a Texas public employee, the Texas Tort Claims Act provided immunity from the lawsuit.

The Litigation Center of the AMA and State Medical Societies, along with the Texas Medical Association, the New Mexico Medical Society and others filed a friend of the court brief in the case, Montaño v. Frezza, that expressed access-to-care concerns. The brief notes, among other things, that a half dozen counties in eastern New Mexico do not have access to a cardiologist, neurologist, plastic surgeon, orthopedic surgeon, radiologist or otolaryngologist and patients must travel to West Texas for treatment.

The New Mexico Supreme Court in March agreed with Dr. Frezza and the Litigation Center brief. The court ruled that the lawsuit could not go forward in the New Mexico court system, with the majority of justices concluding that they did not see strong public policy in New Mexico that would prevent them from respecting neighboring Texas laws. The decision reversed two lower-court rulings that would have allowed the lawsuit to go forward in New Mexico.

Read more at AMA Wire.

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Other News

AMA testifies on the Health Plan Identifier in electronic transactions

When originally created under the Health Insurance Portability and Accountability Act (HIPAA), the Health Plan Identifier (HPID) was intended to improve payer identification and support proper routing of electronic health care transactions. At the time, claims were frequently misrouted, leading to significant delays in adjudication and payment.

Since the initial HIPAA legislation was drafted in 1996, the industry has achieved considerable improvements in the accuracy and efficiency of electronic transactional routing. Many industry stakeholders now believe that using the HPID in electronic transactions could lead to misrouted transactions, privacy breaches and payment interruptions—essentially breaking a system that is working. In addition, some health plans have indicated that they will be obtaining upwards of 60 HPIDs. This level of enumeration would result in confusion rather than clarity for physicians and require complex mapping of current Payer IDs to HPIDs in practices' billing systems.

The National Committee on Vital and Health Statistics (NCVHS), an advisory group to the Health and Human Services secretary, held a hearing May 3 to assess industry opinions on the value and impact of HPID implementation. The AMA recommended against usage of HPID in transactions, indicating that this change would offer minimal value to providers and could result in harmful disruptions to current well-functioning processes. The AMA continues to strongly support use of a health plan identification mechanism for health plan certification and transactional compliance enforcement. The AMA's written NCVHS testimony, as well as slides from a joint provider association presentation, are available on the AMA's webpage on administrative simplification.

New issue brief on Medicaid available

A new issue brief outlines broad AMA strategies to strengthen Medicaid in the context of the ACA expansion and more recent discussions of scaling back on Medicaid. It is based on policy established with the adoption of Council on Medical Service Report 2-A-16 and focuses on patient access to quality care, physician payment adequacy and state participation in Medicaid improvement efforts.

Recording of MACRA webinar now available

Physicians, practice staff and medical society staff can now download a recording of a webinar the AMA recently held on the Medicare Access and CHIP Reauthorization Act (MACRA) and the Quality Payment Program. Related slides are also available for download. The webinar presents an overview of the AMA's advocacy work on MACRA, as well as information physicians need to know about the Merit-based Incentive Payment System and alternative payment models. Both resources can be accessed on the AMA website.

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