CMA Trustee, Dr. Dev Gnanadev, updated the board on the passage of SB2, the Health Care for Working Families bill co-sponsored by CMA and California Labor Federation. The legislation is a major step in reducing the number of uninsured using a modest approach. More than one million people will obtain health care coverage at a $700 million savings to the State of California and $1.2 billion in savings to businesses currently providing health insurance. If signed by the governor, the bill requires medium and large employers to either provide health care coverage for their employees and dependents, or pay into a state-purchasing tool that would enable employees to obtain coverage. Slightly more than five percent of California's businesses will be affected and business with less than 20 employees are exempt from the bill.

Dr. Gnanadev reported the workers' compensation bill (SB228) has stirred up a lot of commotion. Recent increases of workers' compensation premiums resulted in the legislature's enactment of a frenzy of cost savings measures. Health and rehabilitation costs have been especially targeted for significant savings. The current physician fee schedule was reduced by an average of five percent. CPT codes that are currently below Medicare reimbursement rates will not be reduced. Workers' compensation will be required to develop a new fee schedule within the next two years. He stated the hardest hit will be chiropractors and surgery centers. There will be a limit to the number of times a patient can see a chiropractor or physical therapists and a reduction of the outpatient surgical facility fee schedule of 120 percent, excluding the costs of some implantable devices. The Medi-Cal fee schedule will be adopted for prescription drugs, which is a substantial reduction over current costs. The savings from this legislation will hopefully prevent premium increases and could result in premium "rollback" up to seven percent.

Dr. Gnanadev stated physicians have complained of gross underpayment for their emergency and on-call services. The law requires payers to reimburse contracting and non-contracting physicians for emergency services until the patient is stabilized. The Department of Managed Health Care (DMHC) has proposed a regulatory prohibition against balance billing members. He stated health plans are telling DMHC that physicians are gouging them. CMA is currently working to collect examples of payer underpayments to obtain DMHC support for enforcing payer obligations to pay reasonable fees for these services. He encouraged board members to submit their "Call for Examples" form for non-contracted services to CMA.

Dr. Gnanadev updated the board on the ballot initiative, the 911 Emergency and Trauma Care Act, which will be on the November 2004 ballot. CMA is part of a coalition that is placing this initiative on the ballot. The proposition would raise $500-$800 million annually, with a third of the money going to physicians. It is estimated $10 million will go to San Bernardino County. A one-time $95 check off for a contribution to the Physicians' Issues Committee (PIC) was approved by the SBCMS board to be placed on this fall's 2004 CMA dues statement. Physician contributions to the campaign would be returned many times over. CMA has pledged to contribute about $900,000 for its portion of CPEC's budget. Partners of the coalition will be paying a proportionate share. By investing in this initiative, physicians will bolster the emergency and trauma-care networks statewide, and create a stable funding source for the medical services provided by emergency and on-call physicians.

Continuing its fight for self-governance, the medical staff of Community Memorial Hospital in Ventura recently updated its lawsuit against the hospital administration. Last month, Ventura County Superior Court Judge Henry Walsh ruled that California law recognizes the medical staff as an unincorporated association and hence its right to sue the hospital. He rejected the hospital's argument that the medical staff is merely a department within the hospital and therefore cannot sue the hospital. The amended complaint continues to focus heavily on the importance of medical staff self governance in assuring quality patient care and alleges a number of instances in which the administration's interference in medical staff activities potentially compromises the quality of patient care in the hospital. Dr. Gnanadev stated that round one of this battle has been in favor of the medical staff.

CALPAC Executive Committee member, Dr. Thelma Korpman, provided the board with a copy of CALPAC's 2003 state core issues. Among the issues being dealt with are managed care reform-an effort to allow physicians to practice medicine and treat patients in the manner in which they were trained and that would use premium dollars for patient care and not administrative costs or excessive profits; MICRA-the support of continuing the quarter million dollar cap on non-economic damages; fair and equitable physician contracts-support of legislation that would allow physicians to negotiate collectively with health plans, ensure that capitation rates are actuarially sound, and prevent health plans from requiring physicians to bear the risk of pharmacy or hospital services; scope of practice-non-physician practitioners seeking to expand their scope must have the proper experience, training and education to treat patients safely and that the physicians is the final decision-maker; regulatory relief-support of efforts to review such mandates already in existence and either sunsetting or at least consolidating some of them into a single physician friendly format when physicians are distributing written materials or verbally informing patients regarding certain clinical or disease related matters; and budget-CMA believes that adequate state funding for Medi-Cal and other programs that provide health care to needy Californians must be preserved so as to continue California's obligation to provide health care to the medically indigent and working poor.

Public Health Officer Dr. Thomas Prendergast reported the West Nile virus has been seen in several surrounding counties, but it has yet to be documented in San Bernardino County. He stated it is most likely to be appearing in the county fairly soon. He noted that in places of transmission between 50-100 people are infected for every 1-2 people who get sick. Dr. Prendergast stated trauma centers need to have JACHO accreditation, based on requirements in California regulations (EMSA). Since Arrowhead Regional Medical Center (ARMC) dropped its JACHO accreditation, a waiver of the requirement has been requested. Dr. Gnanadev stated that JACHO accreditation was a redundant requirement for ARMC, as it was already accredited by HFAB (AOA) and both entities have deemed status with CMS. Significant cost savings were an additional factor.

IEHP Medical Director, Dr. Brad Gilbert, reported total membership is 267,295. Medi-Cal enrollment is 237,472 with 24,906 enrolled in the Healthy Families program. Healthy Kids enrollment for San Bernardino is 350 and Riverside is slightly over 5,000. The auto assignment percentage in August was 27 percent. The board was provided with an analysis from 1998 to 2002 of administrative cost ratio and medical loss ratio for IEHP in comparison to other health plans. He reported that due to the 5% Medi-Cal reductions, IEHP's budget was affected by $5.1 million. The IEHP Governing Board Provider Advisory Committee will meet on October 6th to see what areas of the budget can be trimmed. Two possible reductions would be to their Healthy Kids program and to the provider rates. The board voiced its concern over reducing the provider's rates. It was suggested that IEHP build up its' "kitty" so that the rates will not be reduced. Dr. Damodara Rajasekhar, the SBCMS board appointed representative to the PAC, will attend the October 6th meeting.

A written report submitted by Alliance President, Lorene Sponsler, was given to the board. The report reminded board members of the Alliance's upcoming program on Saturday, November 15, 2003 to attend the 9th Annual Lawrence Welk Musical Christmas. The cost of the trip is $60 and reservations can be given to Mrs. Ellie Dainko or Mrs. Pat Reish by October 25th.

Dr. Clifford Walters was voted in as the new SBCMS Treasurer. He takes over the position from Dr. Ruchir Sehra who relocated to San Diego County in mid-September 2003. The board approved the slate of nominations for the CMA Councils and Committees.

SBCMS President Dr. Sam Wilson updated the board on CMA's Committee on Professional Liability, which meets quarterly with physicians and liability insurance carriers. He stated the committee recently met to address the rising costs of malpractice insurance premiums, ongoing and future threats to MICRA, and possible tort reform options that could be applied to slowing increases in malpractice premiums, in addition to protecting MICRA. The committee is also working with professional liability carriers to educate physicians about the MBC and National Practitioner Data Bank reporting requirements, and will ask CMA's Board of Trustees to adopt policy that physicians should be given the opportunity to review and comment on these reports prior to their submittal to the MBC or Data Bank. Dr. Wilson reported Farmers Insurance will drop malpractice coverage in 18 states after losing $100 million this year. The implications will be horrendous because so few companies have the capacity to take the physicians who will be bare when the coverage ends.

Dr. Wilson asked for volunteers from the board to make presentations at upcoming hospital medical staff meetings. Ms. Stratton thanked all those board members that have previously volunteered to make presentations at these meetings. He also asked the board to start thinking about nominations for the 2005 Frederick K.M. Plessner Memorial Award. This award honors a CMA member physician residing and practicing in California who best exemplifies the practice and ethics of a rural practitioner. The board was reminded of the upcoming CMA Leadership Academy in La Quinta from November 13-16. It was stated several prominent speakers are always invited to present at this annual event. For those board members who have not attended, it was highly recommended to attend.

The Centers for Medicare & Medicaid Services announced it contingency for submission of paper claims. After a careful analysis of Medicare provider, submitter, and other trading partner HIPAA readiness, Medicare will continue to accept and send standard and non-standard versions and/or formats for any electronic transaction for a limited time period beyond the October 16th deadline. This contingency plan is only for limited time to maintain provider cash flow and minimize operational disruption while trading partners who are not compliant work with Medicare to achieve full compliance. Medicare has increased the reimbursement allowance for influenza vaccine (i.e. CPT code 90658) to $9.95 for the 2003-2004 immunization season. In addition, Medicare payment rates have nearly doubled for the service of administering influenza (i.e. HCPCS code G0008) vaccine for the 2003 influenza immunization season.

The board was provided with an article from the REDLANDS DAILY FACTS regarding Dr. Gnanadev's recent 2003 Inland Empire Leaders of Distinction Humanitarian Award. The board applauded his achievement.