Since 2000, nine medical liability insurers have left the Ohio market. However, Womer Benjamin said the five major carriers remaining in Ohio and two new carriers recently entering the market, including OHA Insurance Solutions, Inc., are positive signs. Despite the improvement, Womer Benjamin said doctors continue to face higher medical liability insurance rates, which impacts physician behavior and decisions to close their practices.

Womer Benjamin also released results of a 2004 survey of Ohio doctors showing liability rates are leading physicians to close their practices, retire early or limit high-risk services. Of the 1,359 respondents, 40 percent have retired or will retire within the next three years as a result of increasing rates, and 66 percent have turned down or referred high-risk procedure patients elsewhere. In 2004, rates increased for 96 percent of respondents with the average increase at 39 percent over 2003 prices. According to the study, patients are directly impacted because nearly 75 percent of doctors order more tests to better defend their decisions, doctors cut staff in response to medical liability insurance increases, and they need to see a larger number of patients to remain financially viable, resulting in longer waits and less time with each patient. Find complete survey results and Womer Benjamin’s testimony at www.ohioinsurance.gov/agent/medmal.htm. (Rick Sites, ricks@ohanet.org) 

The Bush administration has indicated a willingness to work with the governors on changes to the Medicaid program, but will continue efforts to reduce federal aid. It will also look to the National Governor’s Association for a full proposal instead of just ideas for future discussion. Despite their opposition to reductions in federal Medicaid spending, the governors recognize the need for compromise and will continue working with the administration on the issue. To learn more about Ohio’s Medicaid program, visit www.ohanet.org/medicaid/. (Jonathan Archey, jonathana@ohanet.org)

Wednesday, March 2, 2005
OHA Voices Concerns on Medicaid Payment Recalibration
OHA continues to work with the Ohio Department of Job and Family Services (ODJFS) on a rule filed last month that would adjust Medicaid payments to hospitals based on the relative resources used by each diagnostic category in comparison to the statewide average resource use for an admission. At a public hearing last week, OHA and 10 hospital representatives, speaking for 33 facilities, presented testimony opposing the proposed amendments, voicing concern that the database used to recalibrate the weights was incomplete, resulting in an underestimated fiscal impact.

At the February OHA Finance Committee meeting, ODJFS representatives agreed to work with members of the hospital community to resolve data integrity issues, but philosophical differences over the effects of recalibration remain an issue. ODJFS resubmitted its Rule Summary and Fiscal Analysis on Feb. 17, acknowledging the arguments of the hospital community, but will move forward with the rule through a hearing before the Joint Committee on Agency Rule Review (JCARR) scheduled for March 7. OHA has also expressed concern about the rule to members of JCARR. The rule, which amends Ohio Administrative Code §5101:3-2-07.3, would take effect April 1, 2005. (Berna Bell, bernab@ohanet.org)

OIG Issues Opinions on Hospital, Physician Gainsharing Arrangements
The U.S. Department of Health and Human Services Office of Inspector General (OIG) this week issued two advisory opinions stating it would not impose sanctions on certain gainsharing arrangements proposed by hospitals to pay physician groups shares of the cost savings achieved by specific changes in the groups’ cardiology and cardiac surgery practices. The OIG warns that the arrangements implicate the civil monetary penalties and anti-kickback laws; however, the OIG decided not to impose sanctions because of the protections built into each of the gainsharing arrangements. Though the opinion applies only to the particular hospitals in question, these are the fifth and sixth such opinions posted this year, signaling a warming to gainsharing by the OIG. The OIG analyzed the arrangements under the anti-kickback statute and the prohibition against paying a physician to reduce or limit services to his or her patients. It is important to note the OIG did not opine whether the arrangements would be permissible under the Stark physician self-referral laws. (Mary Gallagher, maryg@ohanet.org)

Thursday, March 3, 2005
OHA Opposes Tax on Certain Hospital Liability Insurance Premiums
Language in the recently-released biennial budget, House Bill 66, proposes to levy a 5-percent tax on the annual gross premiums paid by hospitals that purchase liability insurance coverage from carriers not licensed in Ohio, including out-of-state captives, excess and surplus or other nonadmitted carriers. Under current law, hospitals and other large employers with risk managers are exempt from the tax. By eliminating the exception, hospitals will be forced to pay thousands of dollars in taxes to the state for their liability insurance, exacerbating the already acute medical malpractice insurance crisis. Most hospitals buy several layers of liability insurance coverage and some of it is either not offered or not affordable from an Ohio-licensed carrier. For example, current Ohio insurance laws do not permit captives to be formed in Ohio. OHA will be working with member hospitals to analyze costs and impact and expressing Ohio hospitals’ opposition to the legislature. (Bridget Gargan, bridgetg@ohanet.org)

Hospitals to Congress: Protect Medicaid, Make Limited-Service Moratorium Permanent
To fend off proposed federal cuts to Medicaid, hospital leaders from across the country canvassed Capitol Hill yesterday as part of the latest American Hospital Association (AHA) Advocacy Day. More than 150 advocates warned members of Congress that federal Medicaid reductions would exacerbate already dire State Medicaid budget shortfalls, and could result in the loss of health care access and coverage for millions of seniors, children, and working adults. The White House and some lawmakers have proposed slashing Medicaid spending by $40 billion to $60 billion through FY 2015, but the cuts are opposed by many groups, including OHA, AHA, and the National Governors Association.

Also during meetings with members of Ohio’s congressional delegation yesterday, OHA continued to emphasize the need for Congress to make permanent the existing moratorium on physician referrals to limited-service hospitals in which the physician has an ownership interest. The current moratorium, passed in 2003 as part of the Medicare Modernization Act (MMA), will expire this June unless Congress intervenes. For more information on the AHA’s Advocacy Day and other federal efforts, visit http://www.aha.org. (Jonathan Archey, jonathana@ohanet.org)