On March 25, 2009. CMA joined the AMA, other state medical societies, and individual physicians in filing a lawsuit in federal district court in Los Angeles against Wellpoint (which operates in California as Blue Cross of California) for the fraudulent use of the Ingenix database in determining rates for out-of-network care. 

CMA's press release announcing the lawsuit is below.

You can view the complaint here: http://www.calphys.org/assets/applets/Wellpoint_Doc.pdf  (the actual complaint starts on page 5 of the document … the initial pages related to court filing info)

Regards,
Ned

CMA Files Class Action Suit Against WellPoint
for Defrauding Patients and Physicians
Insurer Participates in Black Box Scheme to Shortchange Patients and Doctors

Sacramento – The California Medical Association and the American Medical Association have joined individual physicians and other state medical groups to file a class action lawsuit against health insurance company WellPoint, Inc. The lawsuit, filed today in Los Angeles federal court, alleges that WellPoint colluded with Ingenix, a unit of United Health Group, on a price-fixing scheme that relied on an obscure database to set artificially low reimbursement rates for out-of-network care.
“Health insurers are data manipulating to set rates artificially low, forcing patients to pay more than they bargained for when they go to a doctor of their choice,” said Dr. Dev GnanaDev, CMA president. “This undermines the patient choice that insurers promise when they tout their PPO products and under-compensates doctors for the care they provide.”
WellPoint – which operates as Blue Cross in California – is legally bound to pay the usual and customary amount for care provided to their enrollees by an out of network physician. Patients pay any additional amounts over and above what WellPoint decides to pay for those services. To determine these rates, WellPoint uses a database run by Ingenix, a company owned and operated by United Health Group, another health insurance company.  
A recent investigation by New York Attorney General Andrew Cuomo concluded that the Ingenix data is intentionally manipulated to allow health plans to scam physicians by shortchanging reimbursements on medical bills. A WellPoint executive acknowledged “conflicts of interest in the Ingenix database,” and the company agreed to pay $10 million to help fund a new database run by an independent non-profit organization to replace Ingenix. The company also agreed to quit feeding data into Ingenix and use the new system once it is up and running. The settlement with Cuomo did not seek redress for patients and doctors.

“As health care costs continue to rise, insurers appear to be scheming to find ways to shift resources to their bottom line rather than towards the health care of their enrollees. The CMA will continue fighting to obtain relief for patients and physicians who were harmed by the systemic flaws of the conflict ridden Ingenix database,” Dr. GnanaDev said.

The CMA and AMA have filed this litigation in partnership with the Medical Association of Connecticut, Georgia, North Carolina and the individual plaintiffs Dr. Stephen D. Henry and Dr. James G. Schwendig.

#-#-#

Ned Wigglesworth
Vice President - Communications
California Medical Association

IMPORTANT National Drug Code (NDC) Reporting Requirements - Reminder

As you may remember, DHCS held a roundtable in October 2006 to discuss the NDC reporting requirements mandated by the Deficit Reduction Act (DRA) of 2005. In July 2007, CMS addressed issues and concerns as part of the public comment for Section 42, CFR Part 447, Medicaid Program; Prescription Drugs; Final Rule. We are still hearing many of those concerns today in our wokshops. Those comments include operational difficulties that may exist for some hospitals, utilization data collection, emergency room considerations, inclusion of outpatient hospitals and clinics, etc. In order to assist you in responding to your member providers, click here to access the link to the final rule: http://edocket.access.gpo.gov/2007/07-3356.htm

In order to comply with the DRA, providers must bill for physician-adminstered drugs using the appropriate CPT-4, HCPCS Level II, or local HCPCS Level III codes and, in addition, must include the NDC on the claim form. Providers have been encouraged, for dates of service on or after September 1, 2008, to include the NDC code on the claim, but claims without an NDC code have still been paid. Unfortunately, we are seeing minimal voluntary submissions of NDC and now is the time for providers to practice how they are going to comply. Providers are reminded that, claims with dates of service on or after April 1, 2009 that do not meet the NDC reporting requirements to include a valid NDC with a HCPCS code, will be denied. [FPACT only] HCPCS codes X1500 and Z7610 used by the Family PACT (Planning, Access, Care and Treatment) Program do not require an NDC.

Resources
The ASC X12N Version 4010A1 Companion Guides have been updated and are available on the Medi-Cal Web site at http://files.medi-cal.ca.gov/pubsdoco/hipaa/hipaaspecs_home.asp .  These guides will enable technical staff or software vendors to update your software to include the NDC requirements.  Additionally, the September Part 2 provider bulletins (General Medicine, Obstetrics and Outpatient) include NDC information, physician-administered drug definitions, billing descriptions and examples for CMS 1500 and UB-04 paper claim forms, as well as both 837 Institutional and Professional electronic formats, and Section 340B information. These bulletins can be viewed on the Medi-Cal Web site at http://files.medi-cal.ca.gov/pubsdoco/Bulletins_menu.asp . Finally, the CMS 1500 and UB-04 claim form tutorials on the Medi-Cal Web site have been updated and can be viewed at: http://files.medi-cal.ca.gov/pubsdoco/eo/elearning.asp .

Provider Training Workshops
Additional training workshops have been scheduled in February and March 2009 to address the NDC reporting requirements. This workshop will also be held in Burlingame on 2/24 and 2/25 then again in Long Beach on 3/24 and 3/25. The dates, times and locations of these workshops and how to pre-register can be found on the Medi-Cal Web site: http://files.medi-cal.ca.gov/pubsdoco/eo/training.asp

Medi-Cal Website:
The NDC section of the Medi-Cal website (http://files.medi-cal.ca.gov/pubsdoco/ndc/ndc.asp) contains all information related to the NDC reporting requirements, including links to FAQs.

Please share this information with your membership, including a notice in your newsletters. Please note that attendance to the Sacramento, Anaheim and Pasadena provider training workshops was relatively low compared to the number of pre-registered attendees, so we appreciate your assistance in alerting providers about the pending changes. Should you have any questions or need additional information, please call the Telephone Service Center (TSC) at 1-800-541-5555 and choose the appropriate prompt or visit the Medi-Cal Web site at the address listed above.
Thank you for your participation!

Debra Dixon
Sr. Project Analyst/Provider Relations Organization
EDS, an HP company
Medi-Cal HIPAA Project
3215 Prospect Park Drive
Rancho Cordova, CA  95670
Tel: +1 916 636-1115
Fax: +1 916 638-8976
E-mail: debra.dixon@eds.com
We deliver on our commitments
so you can deliver on yours.

National Drug Code (NDC) Reporting Requirements - Reminder

The Deficit Reduction Act (DRA) mandates that all physician-administered drug claims require a National Drug Code (NDC). In order to comply with the DRA, providers must bill for these drugs using the appropriate CPT-4, HCPCS Level II, or local HCPCS Level III codes and, in addition, must include the NDC on the claim form. Providers have been encouraged, for dates of service on or after September 1, 2008, to include the NDC code on the claim, but claims without an NDC code have still been paid. An analysis of providers’ voluntary NDC submissions (for dates of service on or after September 1, 2008) indicates that physician-administered drug claims are being submitted without the NDC. Providers are reminded that, claims with dates of service on or after April 1, 2009 that do not meet the NDC reporting requirements to include a valid NDC with a HCPCS code, will be denied. [FPACT only] HCPCS codes X1500 and Z7610 used by the Family PACT (Planning, Access, Care and Treatment) Program do not require an NDC.  For more information on NDC reporting, including FAQs, please visit the NDC page on the Medi-Cal Web site at: http://files.medi-cal.ca.gov/pubsdoco/ndc/ndc.asp

Note: Only those products manufactured by companies participating in the federal Medicaid rebate program are reimbursable under Medi-Cal.  A list of manufacturers participating in the rebate program, which changes periodically, is available in the Medi-Cal part 2 manuals (General Medicine, Obstetrics and Outpatient provider manuals) under Drugs: Contract Drugs List Part 5– Authorized Manufacturer Labeler Codes (drugs cdl p5) or on the Medi-Cal Web site at: http://files.medi-cal.ca.gov/pubsdoco/DocFrame.asp?wURL=publications%2Fmasters%2Dmtp%2Fpart2%2Fdrugscdlp
5%5Fi00m00o00p00%2Edoc

Resources
The ASC X12N Version 4010A1 Companion Guides have been updated and are available on the Medi-Cal Web site at http://files.medi-cal.ca.gov/pubsdoco/hipaa/hipaaspecs_home.asp .  Additionally, the September Part 2 provider bulletins (General Medicine, Obstetrics and Outpatient) include NDC information, physician-administered drug definitions, billing descriptions and examples for CMS 1500 and UB-04 paper claim forms, as well as both 837 Institutional and Professional electronic formats, and Section 340B information. These bulletins can be viewed on the Medi-Cal Web site at http://files.medi-cal.ca.gov/pubsdoco/Bulletins_menu.asp . Finally, the CMS 1500 and UB-04 claim form tutorials on the Medi-Cal Web site have been updated and can be viewed at: http://files.medi-cal.ca.gov/pubsdoco/eo/elearning.asp .

Provider Workshops
In addition, training workshops have been scheduled in January and February 2009 to address NDC reporting. The dates, times and locations of these workshops, and how to pre-register, can be found on the Medi-Cal Web site on the NDC page: http://files.medi-cal.ca.gov/pubsdoco/ndc/articles/ndc_9992.asp .

Please share this information with your membership, including a notice in your newsletters. Should you have any questions or need additional information, please call the Telephone Service Center (TSC) at 1-800-541-5555 or visit the Medi-Cal Web site at the address listed above.
Thank you for your participation!

Debra Dixon
Sr. Project Analyst/Provider Relations Organization
EDS, an HP company
Medi-Cal HIPAA Project
3215 Prospect Park Drive
Rancho Cordova, CA  95670
Tel: +1 916 636-1115
Fax: +1 916 638-8976
E-mail: debra.dixon@eds.com
We deliver on our commitments
so you can deliver on yours.

Judge trims time in Medi-Cal 10% fee ruling

Bob Egelko, Chronicle Staff Writer
Thursday, September 4, 2008
A federal judge has scaled back her order overturning a 10 percent cut in Medi-Cal fees to thousands of doctors and other health professionals.
The ruling spares the state from tens of millions of dollars of reimbursements over seven weeks and requires repayment only for services performed on or after Aug. 18.
U.S. District Judge Christina Snyder of Los Angeles had ruled Aug. 18 that the fee reductions threatened health care for many of Medi-Cal's 6.6 million low-income patients and appeared to violate federal standards for access to high-quality medical services. She ordered state officials to reimburse health care providers dating back to July 1, when the cuts took effect.
But after lawyers for the Medi-Cal program argued that the Constitution shields states from retroactive damage awards, Snyder revised her ruling Aug. 27 to eliminate the back payments and require full fees at pre-July 1 levels only from Aug. 18 onward. The state has asked a federal appeals court to overturn the entire ruling, arguing that federal law does not entitle Medi-Cal providers or patients to challenge fee levels in court.
State lawmakers approved the fee cuts in February, effective with the start of the fiscal year July 1. The Legislature remains in a partisan deadlock over the 2008-09 budget, which has a $17.2 billion deficit.
State officials had estimated that Snyder's original injunction - which covered fees to doctors, dentists, pharmacists, adult day health centers and clinics - would cost California $500 million a year. By that estimate, her Aug. 27 ruling would save the state $65 million. Because the fee reduction also applies to the federal government's 50 percent funding of Medi-Cal, the loss to health care providers would total $130 million.
"It's a blow to providers' ability to take care of the Medi-Cal population ... and a blow to the effort to insure that poor Californians have access to health care," Ned Wigglesworth, spokesman for the California Medical Association, said Wednesday.
Noting that many doctors already shun Medi-Cal because of low fees, Wigglesworth said, "If the state continues to insist on cutting health care during times of budget problems, providers are going to be less willing to participate."
Lynn Carman, lawyer for pharmacists, patients and community organizations that challenged the cuts in Medi-Cal prescription drug fees, said he would ask the appeals court to reinstate Snyder's original ruling and require reimbursement from July 1 onward. He renewed his accusation that state officials are dragging their feet on complying with the injunction, a subject of a hearing scheduled before Snyder on Friday.
Norman Williams, spokesman for the Department of Health Care Services, said the department has told its employees and contractors to "fully comply with the order" unless the judge agrees to suspend the injunction during the state's appeal.
E-mail Bob Egelko at begelko@sfchronicle.com.

Health Care for Millions of Californians Still at Risk
Court Rules Medi-Cal Cuts Harm Access to Health Care;
Denies Preliminary Injunction on Narrow Procedural Grounds

For Immediate Release: July 30, 2008
Contact:          Ned Wigglesworth, CMA (916) 551-2873
                       
LOS ANGELES – A state court in Los Angeles today failed to stop deep cuts in reimbursement rates to health care providers in the state Medi-Cal/Denti-Cal program which took effect on July 1.  While the court found that these cuts would irreparably harm the access to health care of nearly 7 million Californians, it denied the preliminary injunction motion of health care providers on the grounds that the state court lacked the authority to enforce the federal law in state court.  The health care providers who brought the lawsuit described the decision as an enormous setback for the health and lives of the millions of Californians who rely on the state’s safety net.
 
“The court recognized the dramatic impacts the Medi-Cal cuts will have on Medi-Cal beneficiaries and the state’s health care system, but ruled on narrow procedural grounds that it could not grant relief to the millions of Californians’ whose health care will be impacted adversely by these cuts,” said Craig Cannizzo, the attorney for the coalition of health care providers who brought the suit. 

In addition to finding that “[P]etitioners have presented a substantial showing of actual harm which will likely occur as a consequence of the reimbursement reductions,” the court found that health care providers did “demonstrate the importance of equal access to health care to call residents of California, including those covered by Medi-Cal as well as the many and increasing number of uninsured California residents whose access problems are presumably even greater than those of Medi-Cal participants.”

With this motion for preliminary injunction denied, health care providers are considering all options, including filing an emergency appeal with the second district appellate court in Los Angeles.  Additional cases are pending in other courts which also are seeking to stop the Medi-Cal cuts. 

“This is a terrible blow to Medi-Cal providers across the state,” said Lynn Rolston, chief executive officer for the California Pharmacists Association.  “Some pharmacists have already begun turning away patients as they are losing $10, $20, $30 or more on nearly every prescription filled. With this lawsuit set back, I imagine that more and more pharmacists will have to make tough decisions regarding how they conduct business.  We have received reports from pharmacists all over the state who have indicated that soon they will have to turn away patients, cut hours, stop accepting new patients and is some extreme case have to close their doors altogether.  Any way you look at it, patients will suffer irreparably.”

In an emergency budget session in early 2008, the state legislature and governor agreed to a 10 percent cut to reimbursement rates for Medi-Cal providers to take effect July 1.  Health care providers filed this lawsuit in May, alleging that the state had failed to set Medi-Cal reimbursement rates at a level that ensures access to health care for Californians on Medi-Cal, in violation of state law.  A key committee of the Legislature recently recommended reducing the cuts to reimbursement rates, but that reversal won’t take effect unless and until the full Legislature and Governor pass a budget with those changes. 

 “This is the fourth court in five years to find that the state of California has put at risk the access to health care for millions of Californians by underfunding the Medi-Cal program,” Dr. Richard Frankenstein, MD, president of the California Medical Association. “We are hopeful that should the courts be unable for technical procedural reasons to grant some relief to millions of Californians who rely on Medi-Cal for their health care needs, the governor and legislature will act to do so.” 

Reaction from health care providers and patient groups

C. Duane Dauner, president and CEO of the California Hospital Association: “The decision by the court to allow the Medi-Cal payment cuts to proceed puts all Californians at risk. These cuts are likely to result in more patients seeking care in already overcrowded and overburdened emergency rooms, which will mean longer wait times and higher costs for everyone.  Patients are the real losers in this decision.”

Brian Scott, DDS, president of the California Dental Association:  “This ruling is an unfortunate setback for Denti-Cal patients in California. However, CDA remains committed to working with the legislature to assure adequate funding for the Denti-Cal program.”

Lydia Missaelides, executive director of the California Association for Adult Day Services:  “The court’s ruling is hurtful. As more adult day health care centers close due to the state’s cut to Medi-Cal reimbursements, Medi- Cal participants will end up in nursing homes, emergency rooms, or worse – die.”
Tom Porter, AARP California State Director: “AARP is extremely disappointed with this ruling. These cuts will further erode medical services, putting the health of millions of Californians at risk.  AARP strongly believes that the state budget should not be balanced on the backs of our state’s most vulnerable citizens.”

Jeffrey Luther, MD, president of the California Academy of Family Physicians:  “Family physicians see daily how our patients are suffering the effects of the Medi-Cal cuts.  We will continue working closely with our elected leaders to find a better way forward. For now, patients unable to find physicians to care for them are delaying much needed care or turning to already overcrowded emergency rooms where care is considerably more expensive.”

#-#-#

Contacts
California Medical Association – Ned Wigglesworth (916) 551-2873
California Hospital Association – Jan Emerson (916) 804-0663
California Pharmacist Association – Lynn Rolston (916) 425-0010
California Dental Association – Regina Collins (916) 554-5317
California Association for Adult Day Services – Lydia Missaelides (916) 552-7402
CAL-ACEP – Elena Guzman   (916) 212-5130
California Association of Public Hospitals and Health Systems – Amy Weitz (510) 874-7113
California Academy of Family Physicians – Catherine Direen (415) 595-7050
California Optometric Association – Tim Hart (916) 216-1394