George Clooney learned a few basics about treating accident victims while playing a physician on "ER." Then he got a crash course in HIPAA when he became an accident victim in real life.

Employees of the Palisades Medical Center in North Bergen, N.J., were suspended for a month without pay when the hospital discovered they had violated Clooney's privacy during his stay there. The star was treated at Palisades after his motorcycle collided with another vehicle on Sept. 21.

The hospital did not respond to repeated requests from AMNews for information on the suspensions. But reports indicated that Palisades investigated nearly 40 employees who were suspected of violating Clooney's privacy in ways that include snooping at his electronic medical files, peeking inside his room, and leaking information, including Clooney's emergency contact information, to the media.

Jeanne Otersen, director of Health Professionals and Allied Employees, which represents 700 Palisades employees, confirmed that 27 were suspended, seven of whom were union-represented nurses and clinical technicians.

Clooney, who had a broken rib, scrapes and bruises, said he did not know about the privacy breaches until he was contacted for comment when news broke of the suspensions.

"And while I very much believe in a patient's right to privacy, I would hope that this could be settled without suspending medical workers," said Clooney in a statement released by his publicist.

Health care attorneys said regardless of how forgiving the star might be, the hospital took the right course of action.

[...]

For years, there has been talk about reimporting drugs from Canada to cut pharmaceutical costs. But now, the conversation has turned to reimporting patients from Canada to cut procedure costs.

Richard Baker, a Vancouver native and a public critic of Canada's single-payer health care system, started his business, Timely Medical Alternatives, in 2003 to negotiate rates with American doctors and hospitals so fellow Canadians could avoid long queues. But earlier this year Baker expanded his business to match Americans with U.S. doctors and hospitals, a subsidiary he calls North American Surgery. Baker said uninsured Americans were calling him, looking for the same discounted deals he got for Canadians.

Technically, U.S. patients don't have to go to Canada and come back, like with reimported drugs -- but the effect is the same.

Baker negotiates rates with U.S. hospitals, similar to the discounted rates insurers negotiate. He adds a percentage onto that rate for his own fee, collects the money from the patients, then pays the hospital cash up front before the patient is treated. In most cases, the negotiated rate is a package deal that includes facility fees as well as payment to all the surgeons and ancillary staff, and the hospital distributes the lump sum appropriately.

[...]

Getting a passport in preparation for surgery isn't on the minds of most patients. But the medical tourism industry is betting that it will be soon, as a small but growing group of companies work to create a medical travel system that is so well-oiled, they brag that scheduling surgery abroad will be easier than booking a vacation.

Firms are offering perks from full-service bookings that include recuperation time at four- and five-star hotels, money-back guarantees and even liability insurance -- like the kind someone would buy for a rental car -- to lessen the trepidation for patients considering overseas care.

The companies aren't just waiting for that comfort level to rise, either. They are courting large employers and health plans by promising to find the best foreign hospitals they claim rival U.S. facilities in quality measures, all while saving them up to 80% in health care costs so they will offer employees and members incentives for seeking care abroad.

And the medical travel companies themselves are being courted by countries and overseas hospitals eager to take American patients. For example, the director of medical services for the Singapore Tourism Board said 555,000 tourists had received medical treatment in that country last year. Singapore would like to bring that number to 1 million per year by 2012.

Wockhardt Hospitals in India has posted a series of videos on YouTube targeted to specific procedures and specific countries patients might be coming from. Hospitals also are organizing tours for medical travel companies, hoping to be included in their networks.

[...]

Like all physicians, orthopedic surgeon Frank B. Kelly, MD, depends on steady cash flow to keep his office running. But Dr. Kelly, who directs the seven-doctor Forsyth Street Ambulatory Surgery Center in Macon, Ga., finds himself constantly battling private insurance companies to get payment for patient claims.

Even though Georgia law requires reimbursement within 15 days, Dr. Kelly says payment can take as long as six months. His financial situation gets so bad that he sometimes delays purchasing new equipment and sweats the months liability premiums come due. "You don't make plans for capital expenditures unless you have the money in hand," he says. "You cannot depend on being paid by an insurance company."

By 2007, all 50 states had some form of law penalizing health insurers for late payments. Yet the problem persists, physicians say.

Insurers have found loopholes to get around the deadlines and are using federal law to slip out of state laws, doctors say.

Rep. Charles B. Gonzalez (D, Texas) was so upset by reports of delayed payment from physicians in his San Antonio district that he held an August hearing on the issue.

"Would they accept the same timeline for payment of premiums as they would of claims?" asked Gonzalez, who chairs the House Small Business Committee's panel on regulation, health care and trade. "They don't carry you for three, four, six months. You'd probably get canceled."

What is needed, says the American Medical Association, is a tough federal law penalizing insurance companies that delay payment.

Market dominance a factor

One reason insurers can ignore prompt-payment laws is that they dominate the market in most communities, says Cecil B. Wilson, MD, immediate past chair of the AMA Board of Trustees. It gives them tremendous negotiating power and prevents physicians from addressing unfair payment practices. The situation, called an oligopsony, occurs when only a few buyers operate in a market with many sellers.

AMA's 2007 update to "Competition in Health Insurance: A Comprehensive Study of U.S. Markets" found that in 299 of 313 metropolitan statistical areas a single insurance company commanded at least 30% of the market. One insurer had 70% or more of the market in 74 areas, while in 15 areas a company had at least 90%.

55% of U.S. employees work for companies that self insure, making the plans exempt from state insurance laws.

The U.S. Justice Dept. has placed conditions on only two of 400 approved mergers in the health insurance industry in the past 10 years, according to the AMA report. The physician community has fought back against insurers' practices.

State medical societies and individual physicians brought lawsuits against 10 companies. The cases were consolidated and filed as a single class-action lawsuit in 2000. The action, In Re: Managed Care, claimed that the plans unfairly denied or delayed physician payments. The resulting settlements by seven companies amounted to more than $1.53 billion, about $384 million of which was direct payments to physicians. About $1.1 billion in savings for doctors is expected to be generated by changed business practices agreed to by insurers. The remainder goes toward compliance and enforcement and to two foundations to improve health care quality.

But the settlements eventually will expire, Dr. Wilson said, and there are no guarantees that the companies will stick to the terms of the agreements. The Cigna settlement expired Sept. 4.

Physician complaints about delayed payment also resulted in state legislatures taking action in recent years. Some states, such as Alaska, Idaho, Rhode Island and West Virginia, enacted their first prompt-payment laws. Others shortened the time for paying claims under existing laws. New Jersey, for example, trimmed the deadline from 60 days to 30 days for electronic claims. Some states, such as Alabama, passed laws defining clean claims.

States have imposed at least $76 million in fines in the past 10 years against insurance companies for failure to comply with prompt-pay laws, according to the AMA.

Improved performance claimed

Insurers, however, say they are improving their performance. Aetna offers online submission of claims so physicians can receive payment more quickly than with paper claims, said spokeswoman Roni Grossman. In turn, the company does not have to spend as much time handling paper claims, further speeding the claims process, she said. Humana pays 90% of its claims within 14 days, said company spokesman Jeffrey Blunt.

Cigna HealthCare has improved its record enough to become the top-rated insurer overall by Athenahealth Inc., a company that provides physician billing, practice management and electronic medical record services, said Cigna spokesman Joe Mondy. The insurer placed third in terms of payment speed. The company boosted the accuracy of its payments and expanded its ability to receive claims electronically, Mondy said.

States have fined insurers $76 million in the past 10 years for violating prompt-pay laws.

Athenahealth's PayerView survey shows that insurance companies in general are getting better at paying claims in a timely way. Average days in accounts receivable among national insurers decreased from 36.2 days in 2005 to 34.4 days in 2006, found the survey of 8,500 physicians and medical professionals.

Yet that still exceeds the time limits of many state laws. At least 21 states require that paper and electronic claims be paid within 30 days, according to 2006 data from HealthPro Consulting Inc., a New York-based firm that offers reimbursement and coding services to physicians. Only one state -- South Carolina with its limit of 60 days for all claims -- allows insurers to go beyond 45 days to pay a claim, HealthPro found.

Regional insurers are more likely to have slower payment than national companies. For example, 2006 Athenahealth data show that 11 private regional plans had claims in accounts receivable more than 45 days on average.

Physicians charge that one of the most common practices leading to long lag times is insurers' refusal to pay claims they say aren't "clean." They also ask patients to send unnecessary information before they'll pay, doctors alleged.

For example, Dr. Kelly said, an insurance company denied a claim for procedures performed on both of a patient's knees during one office visit, arguing that the claims were duplicative. Insurers also have asked his patients to provide accident information, even though it's already provided on a claim form, or information about pre-existing conditions. Health plans often won't send a copy of the request, so Dr. Kelly's staff can't help patients get the information. His office administrator, Melissa Zediker, relates the example of a claim for hand surgery. It included the surgeon's name and license number, but the insurer denied payment because the claim didn't state the doctor's degree.

"Most of it is really ridiculous -- standard form letters in their system that they shoot off and hope the provider doesn't address," she explained. "A lot of these claims get paid down the road, but they hold the funds 30 to 90 days longer than if it went through with a 'clean' claim," she said.

Doctors say another problem is that many health plans are not subject to state prompt-pay laws. The federal Employee Retirement Income Security Act exempts companies that self-insure from state insurance laws. About 55% of workers have such coverage, according to the 2007 Kaiser Family Foundation Employee Health Benefits Survey. The percentage rises with firm size: 77% of workers at businesses employing more than 200 people are in self-insured plans.

"There's really no effective mechanism for overseeing self-insured health plans except through the [U.S.] Dept. of Labor," explained National Assn. of Insurance Commissioners President-elect and Kansas Insurance Commissioner Sandy Praeger. As of now, though, there is no federal prompt-pay law for the Labor Dept. to enforce.

Federal action

A federal law would fill the loopholes, explained the AMA's Dr. Wilson. He outlined the elements of a proposal when testifying to the House Small Business Committee's health panel in August:

• A strong federal standard. The AMA's policy is to support legislation that requires payment within 30 days for clean paper claims and 14 days for clean electronic claims.
• Stiffer fines than those in state laws to deter bad behavior. Interest should be assessed on the amount of payment outstanding and increase with the claim's delinquency. Physicians' attorney's fees and costs also should be provided when they win a claims dispute with an insurer.
• State law protections. Stronger state laws should be protected, and state requirements not covered by a federal standard should not be preempted.
• Application of state laws. Any federal law should clarify that state prompt-payment laws apply to all nongovernment health plans, denying insurers the argument that ERISA preempts state law.
• Time limits for notification. Federal law should set a statutorily defined time limit for insurers to notify physicians that additional information is needed to process a claim. The notice should specify all problems with the claim and give an opportunity to provide the information needed. Insurers also should be required to pay any portion of a claim that is complete and uncontested.

Federal action would be a "wake-up call" to insurance companies, Rep. Gonzalez said. "You would have companies who would definitely know it has gotten Congress' attention."

Praeger cautioned against Congress approving a complicated law. Lawmakers should relax ERISA's state preemption in regard to prompt payment, she said.

Will Congress pass a prompt-pay bill in the near future? There is definitely interest, Gonzalez said. "I think we would have tremendous support. It's just a matter of getting people organized." He does not intend to introduce a prompt-pay measure for consideration on its own. Instead, he will build a consensus for legislation and look for a bill to attach it to in an effort to get it passed in the busy last few months of this year.

The AMA will continue working with Congress to pass a bill, Dr. Wilson said. The Association will investigate and publicize insurance company practices so state insurance commissioners can enforce existing laws, he added.

Washington -- Physician organizations expressed dismay and vowed to press forward after the House on Oct. 18 failed to override President Bush's veto of a children's health care bill.

The American Medical Association will continue to work with lawmakers from both sides of the aisle to pass legislation reauthorizing the State Children's Health Insurance Program, said Board of Trustees Chair Edward L. Langston, MD.

"The number of uninsured kids has increased by nearly 1 million over the past two years, and action must be taken to reverse this growing trend," he said. SCHIP expired Sept. 30, but Congress extended funding until Nov. 16.

The American College of Physicians is urging lawmakers to pass another bill with levels of funding and coverage comparable to the vetoed version. "The current SCHIP formula clearly does not go far enough," said David C. Dale, MD, the college's president. "Until SCHIP is reauthorized, millions of children will be at risk of being denied basic health care needs."

But both parties are reluctant to change their opposing stances on program funding and eligibility.

Democratic leaders' strategy is to amend the bill slightly to attract the Republican votes needed to achieve a veto-proof majority.

House Speaker Nancy Pelosi (D, Calif.) and other Democrats said they would not support a measure that covers fewer children than the five-year, $60 billion Children's Health Insurance Program Reauthorization Act of 2007 would have covered. Bush vetoed the bill on Oct. 3.

"The president and his allies in Congress may have stopped the SCHIP bill today, but we still will not allow that to deter us from our goal, which is to insure 10 million children in America," Pelosi said. SCHIP covers about 6 million children and 600,000 adults.

Majority Whip Jim Clyburn (D, S.C.) said it's a moral imperative to cover the children of America's working families. "Make no mistake, the president will see this legislation on his desk again in short order."

The House fell 13 votes short of the two-thirds majority needed to override the veto. Despite the shortfall, Democrats claimed victory because they were 11 votes closer to a veto-proof majority than they were when the House passed the bill 265-159 on Sept. 25. The Senate passed the measure with enough votes to override a veto on Sept. 27.

Minority Leader John Boehner (R, Ohio), who -- with other Republicans -- predicted that the veto override would fail, wrote a letter to Pelosi on Oct. 19 requesting meetings to craft a more bipartisan SCHIP measure. None of the 151 Republicans who voted against the SCHIP bill on Sept. 25 supported the veto override, despite an extensive public campaign by bill supporters. "Republicans want to renew SCHIP, as do Democrats here in this chamber, yet there has been no opportunity to work together," Boehner said.

On Oct. 18, House and Senate Republicans introduced their SCHIP bill, the More Children, More Choices Act. The measure's sponsors said it also would cover 10 million children with the help of $1,400-per-child tax credits. The bill's text was not available at press time.

Pelosi said she opposes using tax credits to increase SCHIP funding. The Democrats' bill called for a 61-cent increase in the federal cigarette tax, which is 39 cents. Bush and many Republicans are against raising the tax.

If the Democrats can't get enough votes and decide not to negotiate a new bill with Republicans, they could try to pass a one-year program reauthorization. The idea would be to extend the program beyond the November 2008 elections, with the hope that a president more open to the Democrats' vision will be voted into office.

Jim King, MD, president of the American Academy of Family Physicians, said he was disappointed that the override failed but that a drawn-out battle over SCHIP wasn't appealing. It's time for full reauthorization, he said. "I'm hoping that [Democrats have] got their point, they've got their political capital from this vote, and now they'll go back and both parties will arrive at something that's positive for the citizens of this country."

Adopting a short-term funding resolution could be the "worst possible outcome for states," said Martha A. Roherty, director of the National Assn. of State Medicaid Directors. That's because it would make it more difficult for states to sign contracts with private health plans that provide the benefits and would make program administration more difficult. It also would limit states' ability to start any expansions or innovations.

Republicans: Focus on low-income kids

The Democrats' bill would limit SCHIP eligibility to enrollees earning 300% of poverty or less, transition adults to Medicaid, restrict coverage of parents, and bar immigrants, legal or otherwise, from the program.

Republicans, however, remain opposed to the Democrats' eligibility provisions. They said even limiting the program to children from families at or below 300% of poverty (about $62,000 a year for a family of four) would cause SCHIP to siphon off enrollees from private insurance plans, an effect known as crowd out.

Rep. Steve King (R, Iowa) said the measure represents excessive government intrusion into the private health system. "This is the cornerstone of socialized medicine."

Jay Berkelhamer, MD, president of the American Academy of Pediatrics, said those who spoke against SCHIP should know that the program already is focused on low-income children. Ninety-nine percent of SCHIP enrollees are in families earning 300% or poverty or less, and 91% are from families earning 200% of poverty or less, said an October analysis by the Center for Children and Families at Georgetown University.

The Democratic bill eventually would allow eligibility expansions beyond 300% of poverty if a state's percentage of low-income children with health coverage reached the average percentage of the top 10 states.

Republicans would like tighter eligibility. Many, including President Bush, want guarantees that SCHIP will cover 95% of children in families earning 200% of poverty or less before allowing an eligibility increase to 250% of poverty. No state has enrolled more than 92% of children in families earning 200% or less of poverty.