2 N D M A C H E C K U P

President’s Message

Organized Medicine – What Has It Done For You Lately?

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NDMA CHECKUP

CheckupThe mission of the North Dakota Medical Association is to promote the health and well-being of the citizens of North Dakota and to provide leadership to the medical community.

StaffBruce Levi, Executive DirectorDean Haas, General CounselLeann Tschider, Director of

Membership & Office ManagerAnnette Weigel, Secretary

Shelly Duppong, Designer & Production Manager with Clearwater Communications

Robert A Thompson MD, PresidentKimberly T Krohn MD, Vice President

A. Michael Booth MD, Secretary TreasurerSteven P Strinden MD, Speaker of the HouseShari L Orser MD, Immediate Past President

Gaylord J Kavlie MD, AMA DelegateRobert W Beattie MD, AMA Alternate Delegate

Councillors:Joseph E Adducci MDThomas F Arnold MDSteven D Berndt MD

William D Canham MDDebra A Geier MD

Linda L Getz Kleiman MDYvonne L Gomez MDCatherine E Houle MDSteven R Mattson MDRupkumar Nagala MDFadel Nammour MDJeremiah J Penn MDShelly A Seifert MDRory D Trottier MD

Derek C Wayman MD

Rosemarie Kuntz, MBA, CMPE, NDMGMA President

SUBMISSIONS: The NDMA Checkup welcomes manuscript, photog-raphy and art submissions. However, the right to edit or deny publishing submissions is reserved. Submissions are returned only upon request. Letters to the Editor with name, address and phone number of the author are welcome. All letters are subject to editing.

ADVERTISING: NDMA accepts one-quarter, half page and full page ads. Contact our office for advertising rates.

Copyright 2009 North Dakota Medical Association. All rights reserved.

NDMA Checkup is printed on recycled paper.

The NDMA Checkup is published quarterly by the North Dakota Medical Association, 1622 E. Interstate Avenue, P.O. Box 1198, Bismarck, ND 58502-1198, (701) 223-9475, Fax (701) 223-9476, e-mail: staff@ndmed.com

North Dakota Medical AssociationONTENTS J U N E 2 0 0 9

d e p a r t m e n t s

61st ND Legislative AssemblyMedicaid Rebase a Reality

Just What the Doctor Didn’t Order: Why Wills Alone Won’t Work For Most Physicians

ND Legislative Assembly Enacts Health Information Technology Bill

Understanding the Health Care Understanding the Health Care Provisions of the Stimulus Provisions of the Stimulus PackagePackage

Will You Be Ready For Will You Be Ready For HITECH Health Care?HITECH Health Care?

Minor Consent for Prenatal Care Minor Consent for Prenatal Care and SB 2394 and SB 2394

The Recovery Audit Contractor The Recovery Audit Contractor (RAC) is Here(RAC) is Here

MMIC Risk ManagementManaging Medication Risks

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J U N E 2 0 0 9 3

MessagePRESIDENT’SRobert Thompson, MD, MBA

The Telltale Signs of The Telltale Signs of Health Care Reform...Health Care Reform...

Finally on the Horizon?Finally on the Horizon?

The planets are aligning for health care reform. As described in my prior editorials, the so-called

American health care system, which is really more of a patchwork than a true system, is unsustainable. The telltale signs of true reform are finally appearing and the country is ready for change. During the early 1990’s, similar things were said. So, why do I think that this time it is inevitable? Let me list these telltale signs and you can make up your own mind.

The first sign of change was the economic collapse, which became plainly evident last fall. Economists say that the weakening started in 2007 and that the economy simply ran out of steam. The collapse of the housing market, the rising numbers of unemployed, the increase in bankruptcies, and the collapse of signature American icon businesses have all led to a citizenry that is frankly spooked. Did you know that health care expenses account for roughly 50% of personal bankruptcies? Frankly, the American public wants health care reform and they want it to be sweeping and meaningful.

The second sign of change was the election in November and the collapse of an effective political oppo-sition to the President and his party during this legislative cycle. The ability to drive through change and create leg-islation has never been more probable, especially with a charismatic president with high approval ratings.

The third sign is the recent summit at the Obama White House of the major health care players – the American Medical Association, the American Hospital Association, the American Health Insurance Plans, the Pharmaceutical Manufacturer’s Association, the Advanced Medical Technology Association, the Service Employees International Union, and others – all vowing to work towards solutions that will save 2 trillion dollars over ten years!

The Obama administration, in their words, is trying to

“build momentum behind a comprehensive overhaul this year.” President Obama has described this volun-tary effort as an “unprecedented commitment” by the organizations to “put aside their differences and work toward fixing the healthcare system.” The letter draft-ed by the health industry attendees stated, “We, as stakeholder representatives, are committed to doing our part to make reform a reality in order to make the system more affordable and effective for patients and purchasers...” These are very powerful words.

The fourth sign of the potential for real change is the willingness of key congressional members to begin to engage in a meaningful dialogue regarding sweeping reform. Their goal is in alignment with the White House, which aims to produce meaning-ful health care legislation by fall for consideration and passage. On April 29, 2009, the Senate Finance Committee released a report for public comment called Transforming the American Health Care Delivery System: Proposals to Improve Patient Care and Reduce Health Care Costs. On May 11, a sec-ond options paper was released on expanding health care coverage: Expanding Health Care Coverage: Proposals to Provide Affordable Coverage to All Americans. On May 18, the final of three papers was released relating to the financing of health care reform: Financing Comprehensive Health Care Reform: Proposed Health System Savings and Revenue Options. If you are at all interested in health care policy and reform, I would strongly recommend looking through these documents, which will give you an idea what some of the legislation might look like. (See http://finance.senate.gov/sitepages/baucus.htm).

As opposed to the early 1990’s and the efforts by the Clinton administration to overhaul the health

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care system, I do not foresee that the entrenched vested interests will be able to derail the momentum that is build-ing. Remember the Harry and Louise ads on television? I doubt you will see something as effective this time.

The fifth sign relates to the competitiveness of American business. Many corporations and small businesses are say-ing that they cannot compete against their counterparts in Europe and Canada. Many businesses hope that health care reform, especially in these difficult times, will allow them to regain a competitive edge.

The sixth sign is the statement by Medicare Board of Trustees (May 12, 2009) that Medicare Part A will run out of money two years earlier than predicted (2017 instead of 2019). For that matter, all of the entitlement programs

are projected to be grossly under-funded, and the longer the tough decisions are delayed, the worse the prob-lem becomes. Kathryn Sebelius, the Health and Human Services Secretary, makes the point that we can’t fix Medicare without fixing the whole health care system.

This process will be interesting to watch. Since we are talking about reforming approximately one seventh of this country’s economy, the public needs to be brought along. Mike Murphy, a Republican political consultant and advi-sor, talks about the “sacrifice gap” in American politics. His point is that while politicians talk about solutions, they do not spell out what sacrifices need to be made. If true health care reform is to occur, there will be sacrifice from everyone involved, including the public.

Will there be sweeping reform this year? I think so. I believe the signs are there. David Brooks, writing in the New York Times in May, thinks there will only be a medium-sized bill. His point is that there will be extended coverage, but very little to trim costs. He states, “there are deep structural forces … that have driven the explosion in health care costs.” In days past, I would have agreed with him; however, this is a unique legislative cycle and President Obama’s only real chance to “double down” on a massive effort. We shall see.

At this point in our history, we stand on the precipice of uncertainty. The theme of my presidency has been leadership and I still believe that for physicians to play a meaningful role in shaping the destiny of our profession, it is a crucial time to become involved. These are indeed interesting times.

Above: Dr. Thompson and Dr. Biron Baker participate in a Healthcare Reform Roundtable held by Sen. Kent Conrad and Rep. Earl Pomeroy. Left: NDMA Vice President Dr. Kimberly Krohn and Dr. Thompson pause on the steps of the U.S. Capitol between meetings with our Congressional Delegation.

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NDMA Priorities Addressed

NDMA came to the 2009 session with a member-ship-driven agenda developed by the Commission on Legislation, chaired by Dale Klein of Mandan, approved by the NDMA House of Delegates led by House Speaker Steve Strinden of Fargo in September 2008, and refined by both the Council chaired by NDMA Vice President Kimberly Krohn and the Commission on Legislation prior to the start of the session. The process included a joint meeting of the Council and Commission in late January to take positions in response to other introduced measures.

The NDMA legislative agenda for 2009 included pro-posed efforts to enhance North Dakota’s practice envi-ronment for physicians and to improve the health of the public. The following pages review major health care accomplishments achieved by legislators in the 2009 session, categorized by general NDMA policy goals.

The 2009 North Dakota Legislative Assembly met for 79 legislative days, adjourning sine die during

the late hours of May 4. The session was punctuated by stops and starts caused by statewide flooding and will be remembered for heated debate complicated by the need to allocate federal stimulus dollars and strong views on both sides relating to the implementation of Measure 3. Legislative highlights include the funding of many priori-ties articulated at the start of the session by Governor John Hoeven and legislative leaders on both sides of the aisle, including $400 million in tax relief, additional K-12 and higher education funding, major infrastructure enhance-ments for transportation and water, including immediate aid to local governments for flood recovery, and fund-ing for seniors, children, people with disabilities and the Medicaid program. The approved state budget sets aside a reserve of more than $700 million.

NDMA lobbyists tracked and participated in delibera-tions on over 100 bills and resolutions during the session, and were present every day of the session. Many of our member physicians actively participated in the session by providing testimony, contacting legislators or participating in the NDMA Doctor of the Day Program. “Thank you” to all these physicians.

A special thanks to physicians who participated in the NDMA Doctor of the Day program during the 61st ND Legislative Assembly: Mohammed Abrar, Robert Beattie, Gary Betting, Joel Blanchard, James Brosseau, Brad Buell, Angela Dornacker, Linda Getz-Kleiman, Ernest Godfread, Keith Happel, Jeff Hostetter, Paul Jondahl, Ted Kleiman, Dale Klein, Donald Kosiak, Kimberly Krohn, Craig Lambrecht, Tom Magill, Sarah McCullough, RJ Moen, Ben Muscha, Robert Ostmo, Rick Paulson, Jackie Quisno, Suman Regmi, Sarah Schatz, Tom Strinden, Wade Talley, Guy Tangedahl, Robert Thompson, Karin Willis, Dennis Wolf, and Joshua Wynne.

61ST NORTH DAKOTA LEGISLATIVE ASSEMBLY61ST NORTH DAKOTA LEGISLATIVE ASSEMBLY

New legislation includes rebase of Medicaid physician payments

• Support additional state medical liability reforms – protect existing reforms.

NDMA with the help of many legislators including Rep. Kim Koppelman, who carried the bill on the House floor in opposition, worked to defeat legislation in HB 1390 that would have repealed our state’s $500,000 cap on non-economic damages in medical liability actions. Dr. Kurt Kooyer was instrumental in providing testimony to the House Judiciary Committee about his experiences in Mississippi which led him to North Dakota.

Also defeated was SB 2326 which would have made inappropriate changes in laws relating to judgment dis-bursements in medical liability actions.

NDMA’s proactive effort in HB 1302 as introduced by Rep. Larry Klemin, amends section 28-01-46 (which requires the plaintiff to serve the defendant an affidavit containing an expert opinion within three months of com-mencing a medical liability action) to address the result of an opinion by the North Dakota Supreme Court in Scheer v. Altru that resulted in an indefinite time for filing a motion for serving the affidavit at a later time. The bill requires that the motion for extension be made within the three-month period after commencing a medical liability action.

We appreciate the testimony of Bismarck attorney Tracy Kolb in support of HB 1302, and in opposition to HB 1390 and SB 2326.

• Support Medicaid payment increases for physicians and hospitals; support expanded coverage for uninsured and underinsured people, including children.

Major funding was provided in HB 1012 for rebasing physician, hospital and ambulance Medicaid payments, including $40 million in additional state and federal dollars for rebasing physician payments, based on the methodology developed by the Department of Human Services with the assistance of NDMA during the interim between legislative sessions. The Governor proposed to rebase physician Medicaid pay-ments at 25% of the amount it would take to bring payments to 100% of actual cost, based on this methodology. The House pro-posed to reduce that amount to 20% of the amount it would take to bring payments to 100% of cost. The Senate raised it to 75% of the amount to bring payments to 100% of cost, or about 89% of cost based on the methodology. After a conference committee resolved to hold the 75% rebase amount, both the House and Senate passed the bill. The legislation includes a second-year of the biennium inflator of 6% and, overall, is a 52.8% increase in the appropriation for physician services over the previous biennium, accord-ing to DHS.

Many legislators including Sen. Ralph Kilzer, the only physician in the legislature, were instrumental in advocat-ing for the 75% physician rebase amount. In addition to majority and minority leadership in both chambers, others taking a particularly active role in committee on the physi-cian rebase issue were Sens. Tom Fischer, John Warner, Karen Krebsbach and Tim Mathern and Reps. Chet Pollert, Jon Nelson, Mary Ekstrom and Ken Svedjan. HB 1012 also provides funding for these items, among many others:

- Funding for medically needy to reflect income levels of 83 percent of the federal poverty level as proposed by the Governor.- $400,000 general funds for one-time funding to the Rolla hospital.- $300,000 for outreach for Healthy Steps (SCHIP); SCHIP program eligibility set and funded at 160% (net) of the poverty level.- $3,013,143 for medical assistance for developmental disability providers serving severely medically fragile and behaviorally challenged individuals in addition to $1,186,857 added by the House.

Governor John Hoeven greets a medical careers high school class during the legislative session. The class of Bismarck CHS and BHS students spent the day taking blood pressures and talking with legislators. Students are (l-r) Allison Weigel, Kirstie Fueller and Nicole Andrews.

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in conference committee by Reps. Bob Skarphol, Robin Weisz and Richard Holman and Sens. Judy Lee, Larry Robinson and Dick Dever for addressing HIT funding including state match leverage for federal stimulus fund-ing. In conference committee, substantial amendments were made to the bill that provide the potential for over $88 million in loans and grants for HIT infrastructure and interoperability initiatives using $13 million in state funds from the profits and earnings of the Bank of North Dakota and federal stimulus dollars which may become available. The bill also establishes an HIT office for development of plans and standards under the auspice of the ND Information Technology Department.

• Support ways to enhance patient decision-making. For the third session, NDMA advocated for addressing the need to allow a minor to consent for confidential prenatal care. This time legislation in SB 2394 introduced by Sen. Karen Krebsbach was enacted to allow a physician to rely on the consent of a minor for pregnancy testing, pain management related to pregnancy, and prenatal care under certain circumstances. Drs. Shari Orser and Jerry Obritsch testified in support of the bill. A separate article explain-ing the legislation is found on page 27.

NDMA supported SB 2195 introduced by Sen. Ralph Kilzer which provides a process for resolving conflicts arising from differences between an anatomical gift dec-laration and advance directive by a prospective donor clarifies patient intent in conflicts between anatomical gifts and a health care directive. NDMA also supported SB 2237 introduced by Sen. Tom Fiebiger which cre-ates a voluntary registry for health care directives in the Secretary of State’s office, which will make those direc-tives accessible by entering a file number and password on an Internet website. A health care provider relying on health care directives on the registry will be immune from liability with respect to good-faith decisions made as a result.

• Support public health initiatives. NDMA was involved in supporting many public health initiatives, including the passage of legislation introduced by Sen. Dave Oehlke prohibiting the sale or distribution of bottle rockets by fireworks retailers as proposed by the ND Society of Eye Physicians and Surgeons. Following testimony by Dr. Darrell Williams, a successful, yet very close, vote in the House was garnered with assis-tance by many legislators including Reps. Don Vigessa, Louis Pinkerton, and George Keiser. Other bills include SB 2004, the appropriations bill for the Department of

• Support the independent medical judgment of phy-sicians in medical practice.

NDMA supported the passage of legislation in HB 1561 introduced by Rep. Jasper Schneider providing a pre-sumption in favor of the treating physician in Workforce Safety & Insurance (WSI) matters. Under the legislation, if WSI does not give an injured employee’s treating doc-tor’s opinion controlling weight, the WSI must establish that the treating doctor’s opinion is not well-supported by medically acceptable clinical and laboratory diagnostic techniques or is inconsistent with the other substantial evidence in the injured employee’s record based on vari-ous factors.

NDMA also assisted the efforts of the ND Psychiatric Society in supporting HB 1385 introduced by Rep. Robin Weisz prohibiting the ND Department of Human Services from prior authorizing certain categories of drugs includ-ing antipsychotics, anti depressants, anticonvulsants, anti-retrovirals for HIV, antineoplastic agents for cancer, and stimulant medication for ADD-ADHD.

• Support funding increases in the UNDSMHS bud-get and strategies to meet future health care needs. Rep. Bob Martinson and Sen. Ray Holmberg spearheaded a conference committee effort in SB 2003 to provide $5.4 million in funds from the permanent oil trust fund for a new facility for the Bismarck Center for Family Medicine. Other UNDSMHS budget initiatives and enhance-ments include a base level general fund appropriation of $34,027,701 with enhancements of $7,087,700 for a total general fund appropriation of $41,115,401 for the 2009-11 biennium, and an electronic medical records system for UNDSMHS.

Also enacted was legislation supported by NDMA responding to the performance audit of the UND School of Medicine & Health Sciences, including the purpose of the Medical School, duties of the UNDSMHS Advisory Council and the UNDSMHS loan fund. The Legislative Assembly enacted the following new UNDSMHS state-ment of purpose: “The primary purpose of the UND School of Medicine and Health Sciences is to educate physicians and other health professionals and to enhance the quality of life in North Dakota. Other purposes include the discovery of knowledge that benefits the peo-ple of this state and enhances the quality of their lives.”

• Support efforts to encourage strategies and plans for health information technology. NDMA supported SB 2332 introduced by Sen. Judy Lee, in ensuring the passage of the bill in the House prior to substantial work

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Health, which provides funding for tobacco prevention, the medical loan repayment program, Women’s Way, sui-cide prevention, Russell-Silver Syndrome grants, newborn hearing screening, colorectal cancer screenings, stroke registry and prevention, and tobacco prevention and con-trol and other programs.

SB 2344 revises the state’s criminal laws relating to breastfeeding and addresses workplace breastfeeding poli-cies. Led by the advocacy of Dr. Joan Connell, the bill states: “If the woman acts in a discreet and modest man-ner, a woman may breastfeed her child in any location, public or private, where the woman and child are other-wise authorized to be.”

SB 2168 introduced by Sen. Judy Lee revises the state’s coroner laws, including the expansion of eligibility for serving as a coroner to all individuals who meet the quali-fications, training and continuing education requirements determined by the State Forensic Examiner. Dr. John Baird was instrumental in developing the legislation and moving it through the legislative process.

SB 2174 introduced by Sen. Joan Heckaman creates an autism spectrum disorder task force that will develop a state autism spectrum disorder plan and present the plan to the governor and the legislative council before July 1, 2010.

SB 2412 introduced by Sen. Ray Holmberg appropri-ates general funds for a grant to the ND Fetal Alcohol Syndrome Center.

SB 2333 creates a regional public health network. SB 2048 was enacted mandating hospital participation

in the state’s trauma system. The bill implements a rec-ommendation of the American College of Surgeons as a result of its evaluation of North Dakota’s trauma system last April. Dr. Steve Hamar led the effort in advocating for the bill. The bill provides that, effective January 1, 2011,

a hospital that offers emergency services to the public must meet trauma center designa-tion standards and participate in the trauma system. The bill also requires the State Health Council to adopt rules that allow provisional trauma designation status for a hospital that is partially compliant with trauma designation standards. When issuing a provisional trauma designation, the State Health Council is required to allow a reasonable amount of time, determined by the Department, for a hospital to fully meet all trauma designation standards.

Funding for Measure 3 – a CDC-based tobacco prevention and control program for North Dakota – became very controversial during the session and the bill introduced

to implement Measure 3, SB 2063, was defeated in the House. The legislation adopted in the waning hours of the session in HB 1015 appropriated almost $13 million for the program, and added provisions requiring that any moneys in the water development trust fund can be spent only pursuant to legislative appropriations and requiring the tobacco prevention and control executive commit-tee to submit a biennial budget to OMB as required by other state agencies. The bill also requires the executive committee to report to the Legislative Council’s Budget Section quarterly on the implementation of the compre-hensive tobacco prevention and control plan and outcomes achieved, for the 2009-10 interim, and includes language ensuring that the executive committee is a state agency.

NDMA was also involved in the successful efforts to adopt the Uniform Emergency Volunteer Health Practitioners Act in HB 1073.

Many public health issues did not survive the session. For example, the legislature defeated proposals for prima-ry seat belt enforcement, a prohibition of wireless commu-nications while operating a motor vehicle, restrictions on minors while driving, an expansion of the state’s smoke-free workplace law to bars and hotel and motel rooms, and a prohibition on smoking in vehicles when an individual aged sixteen or younger is present in the vehicle.

• Support physician scope of practice and oppose inappropriate challenges to that scope of practice. Many bills were introduced this session looking to expand scope of practice for allied health professionals. NDMA successfully opposed, along with the ND Psychiatric Society, HB 1488 which would have allowed psycholo-gists to prescribe psychotropic medications. While the issue of access to psychiatric care is of concern to many, several legislators stepped up and argued on the House

floor that expanding psychologist scope of practice was not the answer, including Reps. Todd Porter, Louise Potter and Robin Weisz.

NDMA monitored other legislation and sought amend-ments to address concerns, including SB 2158 which allows advanced registered nurse practitioners to be Medicaid primary care providers, HB 1145 relating to the scope of practice of psychologists (proposed substance abuse scope expansion removed), and SB 2164 which allows optometrists to dispense therapeutic contact lenses and drug samples (with assurances of no expansion of cur-rent scope of practice).

• Monitor and take action as necessary on other legis-lation important to physicians: NDMA monitored and/or sought amendments on various bills to protect physician and patient interests, including the following:

WSI Independent Medical Exams – NDMA supported legislation SB 2341 introduced by Sen. David O’Connell which requires WSI to make reasonable efforts to designate a doctor licensed in North Dakota to conduct the indepen-dent medical examination before designating a doctor from another state. Under the bill, WSI must make a reasonable effort to designate a duly qualified doctor licensed in the state in which the employee resides to conduct the exami-nation before designating a duly qualified doctor licensed in another state or shall make a reasonable effort to desig-nate a duly qualified doctor licensed in a state other than the employee’s state of residence if the examination is conducted at a site within 275 miles from the employee’s residence.

Insurance Coverage for Alcohol-Related Injuries – NDMA fully supported HB 1204 introduced by Rep. George Keiser eliminating North Dakota’s alcohol exclu-sion statute, ensuring health insurance coverage for injuries resulting while intoxicated or under the influence of any narcotic.

Medical Peer Review Changes – SB 2403 introduced at the request of the North Dakota Healthcare Association was enacted to revise the medical peer review law to allow health care organizations such as NDHA to ensure confi-dentiality of information used to improve and evaluate the quality of care.

Regulation of Internet Pharmacies – NDMA participated in discussions with Attorney General Wayne Stenehjem in crafting SB 2218 introduced by Sen. Judy Lee which criminalizes the dispensing of controlled substances and other drugs made without a “valid prescription,” which would require an in-person medical evaluation with certain exceptions. The bill is designed to regulate the inappropri-

ate dispensing by Internet pharmacies and others. NDMA testified to the committee on its participation in expressing physician views regarding the drafting of the bill, particu-larly the need for assurance that the in-person examination requirement does not result in any unintended consequences for legitimate prescribing in the state. At the request of NDMA and NDHA, the House amended the bill to remove a general prohibition on the use of prescription drug dispens-ing machines.

BCBSND Rate Filing Process – NDMA opposed SB 2306 relating to the BCBSND effort to change the Insurance Department rate filing process. The bill was defeated.

Hospitals as Primary Stroke Centers – HB 1339 requires the Department of Health to designate qualified hospitals as primary stroke centers based on criteria established by the Department. Dr. Shiraz Hyder was instrumental in advocat-ing for the bill with the American Heart Association. The bill also establishes a Stroke System of Care Task Force to encourage and ensure the establishment of an effective stroke system of care and the bill requires that Task Force to provide recommendations in that regard to the Department by April 1, 2010. The bill requires the Department to adopt a nationally recognized standardized stroke-triage assessment tool, and states that it does not constitute a medical practice guideline and may not be used to restrict the authority of a hospital to provide services and recognizes that “all patients should be treated individually based on each patient’s needs and circumstances.” Funding for this initiative in the amount of $472,700 was provided in the Health Department budget.

Traumatic Brain Injury Registry – SB 2198 introduced by Sen. Tim Mathern requires physicians to report the diagnosis of any traumatic brain injury to the Department of Health as part of the Department’s creation of a traumatic brain injury registry. The bill provides various avenues for providing ser-vices to individuals with traumatic brain injuries and their families.

Forensic Medical Exams – SB 2216 introduced by Sen. Stanley Lyson expands funding by the Attorney General for an acute forensic medical examination to include pre-liminary medical screenings that precede an acute forensic medical examination, including a child forensic medical examination.

WSI Structure – HB 1464 was introduced by Rep. Nancy Johnson to restructure WSI under the Governor, making the Board advisory in nature consistent with the Initiated Measure passed last fall. The bill revises the powers and duties of the WSI Board of Directors and requires the Board to provide annual, formal recommendations to the Governor regarding setting premium levels and providing premium dividend distributions, legislation that affects WSI, and the fund’s investment allocation.

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convenience. Dr. Brown also has a $2,500,000 life insurance policy payable to his estate. He has $500,000 in his pen-sion, $500,000 in stocks, and an office building interest of $500,000 (building is owned by his partnership with a total value of $2,500,000). Dr. Brown paid 50% total tax dur-ing his working years for federal and state tax obligations. Dr. Brown’s will directs that $1,000,000 go to his favorite charity, and the remainder be distributed outright amongst his 3 children in equal shares. Hence each child will inherit $1,500,000. What is wrong with this plan?

II. GOALS OF ESTATE PLANNINGEstate planning is a global concept involving much more

than the mere transfer of assets at death. It involves 1) planning for mental or physical incapacity while living, 2) transferring assets both during life and at death in a manner consistent with your personal values and philosophy, and 3) protection of beneficiaries of your estate from ex-spouses, lawsuits, creditors, other “predators,” and even themselves. A will is about assets, whereas an estate plan is about people and passing on your legacy. A will is not effective until death; an estate plan begins now. With a properly construct-ed estate plan, you can plan for incapacity and determine the amount, manner and timing of distribution of your assets to your beneficiaries both during life and after death.

The most neglected aspect of estate planning is failure to protect your own assets and those passed to your descen-dants. It is easier to protect assets you pass on to your descendants than your own assets. A complete discussion of asset protection is beyond the scope of this article. Suffice it to say that it is relatively easy to protect assets passed to your descendants from their creditors, ex-spouses, lawsuits, and other “predators.” Given the divorce rate over 50% and our highly litigious society, such scenarios are likely. This is not an attempt to avoid legitimate creditors, but is an attempt to preserve your beneficiaries’ assets for their benefit. Reduction of estate taxes, for those with a taxable estate, is only one aspect of estate planning, albeit very important. There are a plethora of legal vehicles and strate-gies to achieve all of the above. In essence, a well crafted estate plan is not a form and is not simply about money and saving taxes; it is an ongoing process implemented with the estate planning attorney as the quarterback, and may require the assistance of your accountant, insurance professional, or financial advisor in order to pass on your legacy on your terms.

I. INTRODUCTIONPhysicians have worked too hard and have sacrificed too

much to throw it all away with an inadequate estate plan. After undergraduate college, four years of medical school, a grueling residency lasting anywhere from three to eight years, and often a fellowship, physicians enter practice with high debt and have to play catch-up to their college peers, who have already been in the workforce for years and have begun accumulating assets. People working 50 or even 60 hours a week in other occupations feel abused by their employers, even when paid overtime, and if such work is self-imposed, are considered workaholics. Contrast this with resident physi-cians who have been mandated to decrease their workload to a “mere” 80-hour workweek. Physicians accumulate sig-nificant assets over the course of their career and have high liability, and special protections and strategies are needed to pass on and preserve those assets while minimizing the estate tax bite. While a simple will may be adequate for Joe the plumber, it is likely not adequate for you.

Scenario: Dr. Brown is an ENT surgeon with assets worth $5,500,000. He came from humble beginnings and has worked his way up. He was still actively practicing but sud-denly died from a heart attack and his will is being probated (a court process that determines who gets what and makes sure his debts are paid). His wife died last year in a car acci-dent and also had a will leaving everything outright to her husband, including a $1,000,000 life insurance policy, on the advice of their attorney. Dr. Brown has three adult children, Sam, Bill, and Martha. Sam is an architect and married with two children. Bill is a special needs child and lives in a group home. Martha is single and financially irresponsible. Dr. Brown’s home is worth $500,000. Dr. Brown was depressed after his wife died and had Sam’s name put on the house for

Just What the Doctor Didn’t Order: Why Wills Alone Don’t Work For Most Physicians

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been over a year and the assets have not been distributed because of a slip and fall judgment against Dr. Brown’s partnership resulting in a lien on the office building. Furthermore, Dr. Brown did not have an adequate exit plan from the partnership in the event of death or disability, so no funds are available to buy him out. Since his dad’s death, Sam’s wife has been thinking of divorce. She visits a divorce lawyer, who advises her not to file for divorce until Sam receives his inheritance and deposits the monies in their joint account. Meanwhile, Medicaid has gotten wind

of Bill’s windfall inheritance, and has cut him off. Martha has never been real respon-sible financially, and just can’t wait “to get the big check.”

B. IncapacityA will does

not provide for incapacity. If you become unable to make financial, personal and busi-ness decisions, who will do this?

It is not automatic that your spouse will assume these func-tions. If no one is legally designated to act on your behalf, court intervention is required. This can consume thousands of dollars, take months, and cause unnecessary emotional strain. A durable power of attorney (DPOA), which legally gives another person the authority to make financial and personal decisions and sign for you after incapacity, is a good head start. A DPOA may not be recognized by cer-tain financial or business entities, who may require yearly updates, which cannot be done if you are already incapaci-tated. A living trust avoids this problem for assets titled in the name of the trust, whereby the trustee or successor trustee is essentially stepping into your shoes and signing as if they were you, not merely as your agent as is the case with a DPOA.

Scenario: Dr. Brown named his wife as executor of his estate. He failed to name additional replacement executors, and failed to have his will updated after his wife’s death. Sam feels he is the most responsible person to be execu-tor, but Martha is contesting this with the probate court as she feels the whole process is taking way too long, and she “wants her money now.” In the meantime, estate bills are piling up with no one with authority to sign checks.

III. PITFALLS OF A WILLIt is generally true that only one of three people have a

will; physicians in my experience do better. While a will alone may be an adequate estate planning device for the worker with a small or average estate, it is inadequate for most physicians. The reason for this is not what a will does, but what a will does not do. For many people, including phy-sicians, it is not possible to achieve the goals of estate plan-ning listed above with only a will.

A. ProbateProbate is a court

process that ensures all your final debts are paid and your assets are distributed, whether or not you have a will. A common miscon-ception is that a will avoids probate. A will does not avoid pro-bate! Probate can be an expensive and lengthy process, and is a mat-ter of public record. Probate can take over a year to distribute assets while attorney fees are piling up, and can con-sume 2-3% or more of a complex estate. Probate is essen-tially a voluntary lawsuit you file against yourself, with your own money, and if your will is contested, will be decided by an unknown judge, without you having any opportunity to defend yourself or explain your intent. A will is not dif-ficult to contest since it is not legally binding until after your death. Accusations can be made by any beneficiary, and many years may have passed and any witnesses may be dead or incompetent to testify themselves.

The only way to avoid probate is to place assets in joint ownership, in a living or revocable trust, or transfer them via beneficiary designations such as occurs in pensions, life insurance, or annuities. A trust is a separate legal entity whereby the owner of assets transfers legal title to a trustee that holds property for the benefit of the grantor (creator) of the trust or his or her heirs. A living trust is a trust set up during the grantor’s lifetime, and is synonymous with a revo-cable trust. A living trust, unlike a will, becomes a legally valid document the moment it is executed, and requires reti-tling of assets and other formalities that will act as proof of the grantor’s competence. Upon death, assets are transferred almost immediately without having a judge sign off.

Scenario: Dr. Brown’s probate is not going well. It has

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controls. Many physicians will benefit from an irrevocable life insurance trust (ILIT) which will keep such policies out of their estates altogether. The laws governing pension plans and IRAs are very complex, and scrupulous attention to detail is necessary in order to rollover pension plans into IRAs, and to “stretch” out IRA distributions over the lifetime of your children without triggering an inadvertent distribu-tion of the plan with the IRS demanding immediate payment of income tax. If the rules are not followed, the IRS may require the pension or IRA to be distributed within 5 years of death or based on the oldest beneficiary’s life expectancy if multiple beneficiaries are listed. A well coordinated estate plan must consider joint ownership and beneficiary designa-tions on life insurance and pensions with provisions placed in a will or living trust.

Scenario: Dr. Brown’s $2.5 million life insurance was pay-able to his estate, and was assessed 45% estate taxes, leav-ing only $1,375,000 for his children. He could have easily put the insurance policy in an ILIT, which would have kept it completely out of his estate, with no estate taxes owed. He remembers his insurance salesman telling him insurance was not taxed, but this was only a half truth. Insurance does not incur income taxes, but it does incur estate taxes if part of the estate, as in Dr. Brown’s case.

E. Estate TaxesA will does not necessarily save or eliminate, and may

increase estate taxes. A brief review of estate tax law is necessary to put this in perspective. An estate, from the IRS point of view, includes all assets - bank accounts, homes, life insurance, pensions, mutual fund and brokerage accounts, business interests, real estate, etc. A taxable estate under current law is an estate with total assets over $3,500,000 in 2009, $0 in 2010 (estate tax is repealed), and back down to $1,000,000 in 2011 and beyond. The estate tax rate is 45% in 2009, 0% in 2010, and 55% in 2011. The amount that is excluded from any estate tax is referred to in IRS speak as the applicable exclusion. This can be thought of as a “get out of estate tax free card” issued by the IRS to every taxpayer. However, you either use it or lose it; it is not transferable, even to a spouse. There are proponents in Washington who wish to raise or lower or keep stable the applicable exclusion or even make it portable between spouses. Congress may well change the law this year. Stay tuned. Since life insur-ance and pensions are included in the definition of one’s estate, and if the applicable exclusion does indeed decrease to $1,000,000 in 2011 as is the current law, most physicians will possess taxable estates.

In a taxable estate, the applicable exclusion is wasted where a will leaves everything to the surviving spouse. This is the worst result, since this problem can easily be avoided by the first spouse to die leaving up to the applicable exclu-

C. Joint OwnershipA will does not provide for the distribution of jointly

owned property. On death, jointly owned property passes immediately to the survivor. Joint ownership, while initially having sex-appeal, has its problems. There is double liability exposure to judgments, debts, and divorce. There may be gift tax implications, inadvertent disinheritance of heirs, or passing of property to unintended heirs. Most importantly, joint ownership overrides both wills and trusts. Many people don’t know this. The most common example is a jointly owned home. This may not be a problem for a stable long-term marriage. However, many older adults who have lost a spouse and jointly title their home with one of their nearby children for convenience, will inadvertently disinherit their other children.

Scenario: Dr. Brown’s home was jointly titled with Sam just prior to his death. At death, Sam now assumes full title to the home as his dad’s interest extinguished upon his death. This overrides the will transferring the home in equal shares to Sam, Bill, and Martha. Sam’s divorce proceed-ing was deliberately delayed by his wife’s lawyer until the inheritance was distributed. It was argued the home was now a marital asset as it was acquired during the marriage, and 50% of the equity in the home was given to Sam’s now ex-wife by the divorce judge. The home had to be sold in a down market at a loss to pay off Sam’s ex-wife. This now leaves $5,000,000 in the estate, with $1,000,000 going to charity and $4,000,000 to be split 3 ways among Sam, Bill, and Martha, or $1,333,333 each. Sam’s ex-wife now gets half of Sam’s $1.3 million. Bill and Martha now will inherit only $1.3 million instead of $1.5 million. Martha is upset because Sam got a larger portion of the inheritance than she.

D. Beneficiary DesignationsA will does not direct distribution of assets at death requir-

ing beneficiary designations such as life insurance, annui-ties, qualified pensions, and IRAs. Beneficiary designations override a will and are very difficult to challenge legally. They must be taken into account when drafting a will so that all of your assets, both those inside and outside of a will, are transferred according to your wishes. Failure to update such designations due to changing circumstances, such as remarriage, may result in assets going to your ex-spouse, or even to your second spouse, and eventually to your second spouse’s children, thus disinheriting your own biological children.

Physicians are likely to have higher insurance levels and pensions than most people, and therefore such policies have a greater likelihood of putting their estates over the limit and incurring estate tax, or resulting in their assets not being dis-tributed according to their wishes if it is assumed their will

13

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sion amount in a bypass trust, with language mandating that income and principle be available for health, education, maintenance, and support of the surviving spouse.

In taxable estates, assets should be equalized to take full advantage of the applicable exclusion by setting up bypass trusts for the surviving spouse. It should be understood that not leaving everything outright to your spouse will not dis-inherit the spouse. There are legal ways to leave everything FOR your spouse, rather than TO your spouse, thereby tak-ing advantage of your applicable exclusion. Language can be inserted in the controlling documents such that the assets will only be available to the surviving spouse until his or her death, and then and only then can other beneficiaries (i.e. children) be entitled to distributions. This should mitigate any concerns among physicians that their surviving spouse will die in poverty.

There are a variety of techniques using trusts whereby the estate of a married couple can be reduced, taking full advantage of each spouse’s applicable exclusion, and where all assets are still available for both spouses while living and then for the surviving spouse until his or her death. Trusts are used for probate avoidance, estate tax reduction, asset protec-tion, and management of assets. While a trust set up during lifetime avoids probate, a trust set up in a will, called a testa-mentary trust, is subject to probate. Types of trusts that will provide for a spouse and simultaneously save estate taxes are marital trusts, qualified terminable interest in property trusts (QTIPs), bypass trusts, and irrevocable life insurance trusts (ILITs).

A grantor trust is a special type of irrevocable trust where the grantor, the one who funds the trust, is personally responsible for paying income taxes on trust income, rather than using the trust assets to pay income. Examples include grantor retained annuity trusts (GRATs), grantor retained income trusts (GRITs), grantor retained unitrusts (GRUTs), and qualified personal residence trusts (QPRTs). This has a

two-fold beneficial effect: 1) highly appreciated assets will grow outside of your estate unburdened by income taxes, and 2) payment of income taxes from the grantor’s estate further reduces the grantor’s taxable estate upon death of the grantor.

Scenario: Dr. Brown will pay estate taxes of 45% on anything above the applicable exclusion in his year of death, which is $3,500,000 in 2009. His estate is valued at $5,500,000. Dr. Brown will take a $1,000,000 deduction for the portion going to charity. Therefore he will pay taxes on the remaining $1,000,000 or $450,000 tax. Dr. Brown should have equalized his assets with his wife, and she could have utilized a bypass trust for her husband’s benefit until he died, then to the children. This would have resulted in no estate taxes for either of them. There is a technique, where assets are unequally distributed between spouses, for the wealthier spouse to place approximately half the assets in a living QTIP (qualified terminable interest in property) trust where the wealthier spouse maintains control, but the assets are available to the other spouse and included in the other spouse’s estate. This too would have been an option for the Browns. An ILIT would also have worked. The Browns could have utilized numerous techniques to completely eliminate estate taxes. In 2011, if the applicable exclusion remains at $1 million, the estate tax bite for Dr. Brown would have been 55% of $3.5 million ($5.5 million –$2 million [$1 million exclusion + $1 million charitable donation]) or $1,925,000!

Other techniques include family limited partnerships (FLPs, which take advantage of lack of marketability and minority discounts), lifetime gifting (currently $13,000 annu-ally to an unlimited number of persons without incurring gift tax), and charitable gifting. FLPs are beyond the scope of this article.

Lifetime gifting, if over the $1,000,000 applicable lifetime gift tax exclusion, will incur payment of gift tax at a 45% rate, but gift taxes are tax-exclusive, meaning that gift taxes paid are not included in the gift, whereas estate taxes are

tax-inclusive, i.e. paid from money included in the estate. What this means is the tax rate is effectively lower than the stated rate when making a gift as opposed to distribution of the same amount from an estate. For example, assuming the $1,000,000 lifetime gift tax exclusion has been exhausted, an additional gift of $1,000,000, incurs a gift tax of $450,000; hence a total of $1,450,000 is required by the donor to make the $1,000,000 gift. However, in a taxable estate, for amounts transferred above the applicable estate tax exclusion, it would require $1,818,181 to distribute that same $1,000,000, since 45% estate tax on $1,818,181 is $818,181. The differ-ence in tax paid is $368,181. Hence at a 45% gift and estate tax rate, the effective gift tax ultimately paid is 31% of the total amount required to pay the gift, even though the rates are ostensibly identical. Lifetime gifting therefore has a tax advantage over transferring assets at death, as well as the opportunity for the donor to mentor and teach the recipient how to handle money, and to cut off any recipient deemed incompetent or irresponsible in financial affairs. A downfall of gifting is running out of money before you die. However, gifting of assets does not cause a step-up in basis (basis is the value you originally paid for an asset) at death, whereas assets passing at death carry with them a step-up in basis (i.e. the new stepped up basis will be the value at time of death, not the original cost of the asset), meaning there will be high-er capital gains taxes on assets subsequently sold if received through gifting rather than from an estate. This will likely not override the potential taxes saved through gifting, but this may not be true if capital gains tax rates are increased.

Scenario: Lifetime gifting and a family limited partnership would also have worked for the Browns.

There are a number of vehicles that can be utilized for charitable gifting, such as charitable remainder and lead trusts, which are very favorable to the taxpayer. Estate plan-ning for taxable estates, using the techniques above, is best done by an attorney concentrating in this highly complex area, as formalities must be adhered to and the laws are con-stantly changing.

F. Protection of BeneficiariesA will does not protect beneficiaries from creditors, ex-

spouses, lawsuits or bankruptcy if outright distributions of assets are made to the beneficiaries. This is true of most wills. Wills can be drafted such that beneficiaries receive their interests in trust, with carefully drafted language with strong creditor protections in place. Living trusts can also be drafted so that at death there is a division into subtrusts with creditor protection for the beneficiaries. As a matter of public policy, beneficiary assets placed in trust cannot be protected from the following creditors: 1) IRS, 2) court order for child support, and 3) court ordered alimony. Such assets, however, are considered sole and separate property and not part of the marital estate if proper safeguards are followed. Furthermore,

assets placed in trust for beneficiaries can have language consistent with a special needs trust, so such assets would not cut the beneficiary off from Medicaid or SSI (supple-mental security income). Keep in mind that the stronger the language conferring protection from creditors or potential creditors, the more restrictions placed upon distributions to the beneficiary.

Scenario: Dr. Brown could have simply directed in his will that all his assets be distributed in equal shares in separate trusts for his children’s benefit. In the alternative, Dr. Brown could have had a living trust divided into equal shares for his children upon his death. Sam’s and Martha’s trusts should have included language for creditor protection and spend-thrift clauses. Such language would likely have prevented Sam’s wife from obtaining any of Sam’s inheritance during the divorce. Martha, the spendthrift, would be subject to the discretion of a trustee for any distributions made to her. Bill’s trust would have language making it a special needs trust, and Medicaid payments to Bill would not be cut off. Dr. Brown could have placed his home in a trust with Sam as the trustee, which would trifurcate upon Dr. Brown’s death into separate trusts for Sam, Bill, and Martha as beneficiaries, again with creditor protection, special needs, and spendthrift language. This would have enabled Sam to engage in legal transactions regarding the home, would likely have prevented his ex-wife from claiming it as a marital asset, and would have equally divided the proceeds for Sam, Bill, and Martha. The trustee could have decided to wait for sale until the real estate market rebounded.

IV. CONCLUSIONIt is evident that having only a will may have dire unin-

tended consequences in terms of passing on and preserving your legacy. It is vital that physicians consult with an attor-ney with in-depth knowledge of sophisticated estate planning techniques to ensure their legacy is passed on and their assets protected. Disclaimer: This article is not intended as leagal advice. Each reader should consult his or her own attorney.

Mark Monasky, MD, JD, FACS, FCLM

is a board certified neurosurgeon practic-

ing at St. Alexius Hospital in Bismarck

and a practicing attorney at Bormann &

Myerchin, LLP in Bismarck with a prac-

tice limited to estate planning, asset pro-

tection, wills and probate, and representa-

tion of physicians with licensure and other

professional issues. He is a member of

the American Bar Association Section of

Real Property, Trust & Estate Law, a member of Wealth Counsel, a

national association of estate planning attorneys, and fellow of the

American College of Legal Medicine. The author can be contacted

at 250-8968 or neurosurgeonlawyer@msn.com. Mailing address

Bormann & Myerchin 418 E. Broadway, Bismarck, ND 58501.

15J U N E 2 0 0 9

NDMA CHECKUP16

NDMA is currently involved in implementation of legislation

enacted by the 2009 ND Legislative Assembly to encourage the build-ing of health information technol-ogy (HIT) infrastructure and facili-tate electronic health information exchange. SB 2332 creates a Health Information Technology Advisory Committee comprised of designated government officials and persons appointed by the Governor, with a primary duty to collaborate with and make recommendations to a new Health Information Technology Office created in the state’s Information Technology Department. The new office is required to implement a statewide interoperable health information infrastructure that is consistent with emerging national standards; promote the adoption and use of electronic health records and other health information technolo-gies; and promote interoperability

of health information systems for the purpose of improving health care quality, patient safety, and the overall efficiency of health care and public health services.

The new state HIT office is required to:

1) Apply for federal funds that may be available to assist the state and health care providers in imple-menting and improving health information technology;

2) Establish a health information technology loan program to pro-vide loans to health care provid-ers for the purpose of purchasing and upgrading certified electronic health record technology, training personnel in the use of such tech-nology, and improving the secure electronic exchange of health information;

3) Establish a health information technology planning loan pro-gram to provide low-interest loans

ND Legislative Assembly Enacts Health Information Technology Bill

to health care entities to assist those entities in improving their health information technology infrastructure;

4) Facilitate and expand electronic health information exchange in the state, directly or by awarding grants; and

5) Establish application processes and eligibility criteria for and accept and process applications for loans and grants that are con-sistent with federal requirements associated with federal funds received.

The bill creates three funds – a Health Information Technology Loan Fund in the Bank of North Dakota, a Health Information Technology Planning Loan Fund, and an Electronic Health Information Exchange Fund. The bill transfers $8 million from the earnings and prof-its of the Bank of North Dakota to the Health Information Technology Loan Fund to match with federal stimulus funds on a 5 to 1 basis or to the Electronic Health Information Exchange Fund to match fed-eral stimulus funds on a 10 to 1 basis – a total appropriation of up to $88,000,000 of combined state and federal funds. An additional appropriation of $5 million from the earnings and profits of the Bank of North Dakota will become available for planning loans based on dem-onstrated need. The bill includes an additional appropriation of $350,000 from the general fund to the Information Technology Department to defray costs of the advisory committee and Health Information Technology Office.

J U N E 2 0 0 9 17

The following is an example of this calculation for a PPS hospital:

• 2,000 discharges• 4,000 Medicare and Medicare Advantage days• 7,000 total days• $100 million hospital charges• $2 million Charity Care• Year 2

Total Payment:(2,000,000+((2,000-1,149) *200)) *(4,000/(7,000*(100,000,000-2,000,000)/100,000,000))*3/4 = $949,067

If the facility’s first year of eligibility is after 2013, the transition factor is the same as a facility with a first pay-ment in 2013. If the first payment year is after 2015, the transition factor is 0. PPS hospitals that fail to become a meaningful EHR user by 2015 will see their Market Basket Adjustments reduced 33 1/3 percent in 2015, 66 2/3 percent in 2016 and 100 percent in 2017.

Critical Access Hospitals (CAHs)CAHs are allowed to expense costs associated with the

purchase of certified EHR technology in a single year, versus depreciating these costs on the cost report. This amount is adjusted by multiplying the cost by the sum of the Medicare Share and 20 percentage points. This sum is lim-ited to 100 percent. A prompt lump sum payment is paid to the hospital and is subject to reconciliation.

The facility can receive payments for up to four years. No payments are made after 2015. In addition to the lump sum payments, the legislation provides for penalties for CAHs that do not become meaningful EHR users by 2015. Adjustments will reduce the 101 percent of cost calculation to 100.66 percent in 2015, 100.33 percent in 2016 and 100 percent in 2017.

Eligible ProfessionalsEligible physicians can obtain incentive payments for

up to five years. The total payments for the five years can

The American Recovery and Reinvestment Act of 2009 was signed by President Obama on February

17, 2009. This legislation provides more than $180 billion in new health care related spending, including $23 bil-lion for modernizing Health Care Information Technology (HIT). Navigating the maze of rules, technical require-ments and timing for obtaining funding is a challenging task for most providers. Many software vendors are using the legislation as a tool to entice customers to purchase upgrades or implement new solutions. Before acting on any of these suggestions, it is critical that providers under-stand the terms of the legislation, including incentives, Electronic Health Record (EHR) requirements and the role of Health Information Exchanges (HIEs).

Incentives

The legislation includes financial incentives to providers for adoption and meaningful use of certified EHR technol-ogy. These incentives vary, based on the type of entity and begin during fiscal year 2011.

Prospective Payment System (PPS) HospitalsPayment for PPS hospitals begins with a base payment

level of $2 million per facility. Facilities with 1,150 to 23,000 discharges receive an additional $200 per dis-charge for each discharge in this range. The sum of this amount is then multiplied by the Medicare Share. A pro-vider’s Medicare Share is calculated as a percentage. The numerator is the inpatient days for Medicare and Medicare Advantage patients. The denominator is the product of the total inpatient days and the hospital charges, less charity care divided by hospital charges. This total is adjusted by the transition factor, as follows:

1. Year 1 = 12. Year 2 = 3/43. Year 3 = 1/24. Year 4 = 1/45. Subsequent Years = 0

Understanding the Health Care Understanding the Health Care Provisions of the Stimulus PackageProvisions of the Stimulus Package

Eide BaillyBy Ralph Llewellyn, CPA

range from $2,000 to $44,000, depending on the year of adoption. The maximum incentive in any year is $18,000 if adoption occurs in 2011 or 2012. Adoption must occur before 2015, and no incentive payments are available after 2016.

EHR Requirements

In order to qualify for incentives, providers (for hospi-tals or physician practices) will need to have a “meaning-ful use” implementation of an EHR solution. Some provi-sions of the meaningful use designation are defined in the legislation, including use of ePrescribing (as defined by the HHS Secretary), being connected to a Health Information Exchange (HIE) and an ability to submit data on clinical quality measures (as specified by the HHS Secretary) are all specific requirements of the meaningful use of EHR provisions. There are many additional poten-tial requirements for meeting the meaningful use require-ments of the legislation. These are areas not specifically defined by statute, but will be determined by several fed-eral advisory committees.

Examples of potential requirements include using a certified EHR product, use of Computer Physician Order Entry (CPOE) capabilities and implementation to Stage 4 of the HIMMS EMR Adoption Model.

The Role of HIEs

A Health Information Exchange (HIE) is a mobilization of health care information electronically across organiza-tions within a region or community. In most regions or communities, HIEs are not currently in place to meet this key requirement for obtaining incentive payments. However, given the financial incentives at stake with the stimulus, legislation market forces and state/regionally funded initiatives are likely to emerge at a rapid pace in the coming months. HIEs will play a crucial role, not only meeting requirements to obtain funding, but in achiev-ing the vision of truly portable electronic medical records within regions and the nation. Providers should look for opportunities to actively participate in any regional or statewide efforts in this area.

Ralph Llewellyn, CPA, is a partner at Eide Bailly LLP with more than 16 years health care experience. He can be reached at rllewellyn@eidebailly.com or 701.239.8594.

18 N D M A C H E C K U P

J U N E 2 0 0 9 19

By Tracy Vigness Kolb*

On February 17, 2009, the American Recovery & Reinvestment Act (ARRA) was signed into law. Title

XIII of ARRA is the Health Information Technology for Economic and Clinical Health (HITECH) Act, legislation intended to improve the privacy and security requirements of the Health Insurance Portability and Accountability Act (HIPAA). All of the new changes under HITECH are not yet in effect, but compliance efforts should begin now.

BREACH NOTIFICATIONOne of the most significant changes to the privacy require-

ments is a breach notification requirement for all PHI that is unsecured. The term “breach” under HITECH means:

“the unauthorized acquisition, access, use, or disclosure of protected health information which compromises the security or privacy of such information, except where an unauthorized person to whom such information is dis-closed would not reasonably have been able to retain such information.”

A breach does not include “any unintentional acquisition, access, or use of protected health information” by employees of covered entities or business associates if it was in good faith and within the course and scope of employment and the information is not further acquired, accessed, used, or dis-closed; or “any inadvertent disclosure from an individual who is otherwise authorized to access protected health informa-tion” at a covered entity or business associate and the infor-mation is not further acquired, accessed, used, or disclosed.

If there is a breach, a covered entity will be required to notify affected individuals no later than 60 days after dis-covery of the breach that unsecured PHI has been, or is reasonably believed to have been, accessed, acquired, or disclosed as a result of the breach. Breach notification only applies to unsecured PHI, which is PHI that is not secured

by a technology standard that renders it unusable, unread-able, or indecipherable to unauthorized individuals and is developed or endorsed by a standards developing organiza-tion that is accredited by the American National Standards Institute. Guidance has been issued from the Secretary of Health & Human Services (HHS) specifying the technologies and methodologies that render PHI unusable, unreadable, or indecipherable. Two methods were identified–encryption and destruction.

HITECH also sets forth the methods of breach notifica-tion, for example, first-class mail; the content of notification; and additional notice requirements depending on the number of individuals affected. For example, if the breach involves more than 500 individuals, a covered entity must immedi-ately notify HHS and media outlets.

The breach notification requirements will take effect for breaches occurring 30 days after the Secretary of HHS pro-mulgates final regulations, which must occur no later than August 17, 2009. But compliance with this federal provision should begin now and should include an assessment of com-pliance with North Dakota’s state breach notification law, which has been in effect since 2005, and the Federal Trade Commission’s Identity Theft “Red Flags” Rule, which will be enforced August 1, 2009.

TIERED PENALTIES AND DAMAGES Other provisions of HITECH take effect immediately, like

the increased penalties for violations and the authority of state attorneys general to sue on behalf of individuals injured by HIPAA violations. A tiered penalty structure has been cre-ated that is based on the nature and extent of the violation and the nature and extent of the harm resulting from the vio-lation. The law provides as follows:

WILL YOU BE READY FOR WILL YOU BE READY FOR HITECH HITECH HEALTH CARE?HEALTH CARE?

Tier A If the person did not know and by exercising reasonable diligence would not have known that he or she violated the law, $100 for each violation, except the total amount imposed on the person for all such violations of an iden-tical requirement or prohibition during a calendar year, may not exceed $25,000;

Tier B If the violation was due to reasonable cause and not willful neglect, $1,000 for each violation, except the total amount imposed on the person for all such viola-tions of an identical requirement or prohibition during a calendar year, may not exceed $100,000;

Tier C If the violation was due to willful neglect and was cor-rected, $10,000 for each violation, except the total amount imposed on the person for all such violations of an identical requirement or prohibition during a calendar year, may not exceed $250,000;

Tier D If the violation was due to willful neglect and was not corrected, $50,000 for each violation, except the total amount imposed on the person for all such violations of an identical requirement or prohibition during a calendar year, may not exceed $1,500,000.

20 N D M A C H E C K U P

In addition to civil monetary penalties, HITECH clari-fies that employees of covered entities may be prosecuted criminally and requires that HHS: 1) formally investigate and impose penalties for HIPAA violations that are due to “willful neglect” and 2) conduct periodic audits to determine whether covered entities are complying with the law.

Covered entities are now also exposed to potential lawsuits and damages for violations of the law. HIPAA did not autho-rize an individual to sue a covered entity for a violation, but, under HITECH, state attorneys general have been granted the authority to sue a covered entity in federal court on behalf of residents of the state when one or more of residents has been or is threatened or adversely affected by a HIPAA violation. Damages can be awarded but may not exceed $25,000 for all violations of an identical requirement or prohibition during a calendar year. Costs and reasonable attorney fees may also be awarded to the state.

BUSINESS ASSOCIATE AGREEMENTSContracts between covered entities and business associ-

ates will need to be revisited under HITECH. HIPAA applies to covered entities and, to some extent, business associates through business associate agreements. The reach of HIPAA will now extend beyond covered entities because HITECH applies the privacy and security requirements directly to business associates and subjects them to the same civil and criminal penalties to which covered entities are exposed. As a result, business associate agreements may need to be updated

J U N E 2 0 0 9 21

or modified. It is anticipated there will be guidance on this issue from HHS before the provisions take effect in February 2010.

ACCOUNTING OF ANDRESTRICTIONS ON DISCLOSURES

Other important provisions of HITECH include:• providing individuals the right to an accounting of disclo-

sures through an electronic health record made by a covered entity for treatment, payment, and health care operations;

• requiring covered entities to restrict disclosure of an indi-vidual’s PHI if the disclosure is to a health plan for purposes of carrying out payment or health care operations and the PHI pertains solely to a health care item or service for which the health care provider has been paid out of pocket in full;

• prohibiting the sale of an individual’s PHI without autho-rization;

• requiring covered entities to obtain an individual’s autho-rization to use PHI for marketing and fund-raising activities; and

• requiring HHS to issue guidance on what constitutes the “minimum necessary” standard for use or disclosure under the privacy rule.

ENFORCEMENTCovered entities should expect there will be increased

enforcement and oversight of their compliance programs. In

the years since HIPAA, HHS’ Office of Civil Rights (OCR) has been criticized for not adequately enforcing HIPAA. Those efforts are expected to change, particularly in light of two provisions under HITECH: 1) any civil penalty or mon-etary settlement collected for a violation will be transferred to OCR to be used for purposes of enforcement, and 2) an individual who is harmed by a HIPAA violation may receive a percentage of any penalty or settlement. The methodology under which individuals may receive a percentage must be established by regulations from HHS in three years, or by February 17, 2012.

CONCLUSIONThis article is not intended to be an exhaustive analysis of

HITECH, only to highlight the more significant changes as they apply to covered entities. More guidance and regulations are needed, and will be forthcoming from HHS, to explain and better understand the law. But, to be ready for HITECH, covered entities should begin their compliance efforts now. Becoming familiar with HITECH and the various compliance deadlines is a good first step toward formulating a strategy and plan for achieving compliance with each requirement.

*Tracy Vigness Kolb is a partner with Zuger Kirmis & Smith in Bismarck, practicing in medical malpractice defense and healthcare law.

COMPLIANCE DEADLINES FOR CERTAIN SELECTED HITECH PROVISIONS

Breach notification HHS must issue interim final regulations within 180 days, or no later than August 17, 2009. Breach notification requirements will apply to breaches 30 days after the final

regulations are published.

Tiered penalty structure Immediately (February 17, 2009).

Application of criminal February 17, 2010.penalties

Enforcement in cases of Applies to penalties imposed on or after February 17, 2011.willful neglect HHS must issue regulations within 18 months. Enforcement by state Immediately (February 17, 2009).attorneys general

Application of HIPAA February 17, 2010.privacy and security rules to business associates

Accounting of disclosures For covered entities acquiring electronic health records (EHRs) as of January 1, 2009, applies to disclosures made from such records on or after January 1, 2014.

For covered entities acquiring EHRs after January 1, 2009, applies to disclosures made on or after January 1, 2011, or the date the entity acquires an EHR, whichever is later.

Restrictions on disclosures Immediately (February 17, 2009).of PHI

Individual access to PHI in February 17, 2010.an EHR

Sale or marketing of PHI HHS must issue regulations within 18 months.

22 N D M A C H E C K U P

Your NDMA and AMA are working for you every day. These are some of the more significant recent activities of your state and national medical societies.

North Dakota Medical Association

61st ND Legislative Assembly – Advocated every day in the 2009 ND

Legislative Assembly on behalf of North Dakota physicians and patients, accomplishing a partial rebase of Medicaid physician payments, defeating legisla-tion that would have repealed the state’s cap on non-eco-nomic damages and other outcomes (see article on page 5).

Changing Rules on Verbal Orders – NDMA is pursuing changes to Health Department administrative rules regard-ing the authentication of telephone and verbal orders in response to CMS interpretive guidelines.

Congressional Delegation – NDMA President Robert Thompson and Vice President Kimberly Krohn met with members of the ND Congressional Delegation in March, discussing health care reform initiatives and the need for repeal of the sustainable growth rate. Ongoing discussions have ensued discussions with Sen. Kent Conrad, Sen. Byron Dorgan and Rep. Earl Pomeroy by NDMA physi-cian leaders on federal health care reform.

BCBSND Contracts – Worked with the ND Insurance Department to accomplish changes in BCBSND physician and hospital contracts to prohibit unilateral withholding or reduction of payments.

North Central Medical Conference – Participated in the regional caucus of north central states for the AMA at its annual meeting in Minneapolis, including the states of North and South Dakota, Minnesota, Iowa, Nebraska, and Wisconsin. NDMA’s Alternate AMA Delegate Robert Beattie serves as Conference president through next year.

AMA Sign On Letters – NDMA “signed on” to AMA

Your NDMA and AMA are working for you every day. These are some of the more significant recent activities of your state and national medical societies.

letters: Letter to President Obama urging support for Action Plan that outlines important steps the medical profession will undertake in the coming months to engage and support physicians in using patient-centered measures and health information technology that empowers them to provide high quality, cost-effective care across the continuum of care; Letter to the National Board of Medical Examiners expressing dismay over the organization’s involvement in the Doctor of Nursing Practice certification examina-tion process which is used to draw untrue comparisons of equivalency between physician and DNP examinations; Letter to the Chairman of the Federal Trade Commission strongly objecting to including physicians as “creditors” for purposes of the implementation of the mandatory identity theft prevention programs (Red Flag Rules); Letter to the CMS Acting Administrator with formal comment on recent and proposed changes to Medicare’s Quality Improvement Organization (QIO) case review program.

POLST – NDMA agreed to support efforts to imple-ment statewide the Physician’s Orders for Life Sustaining Treatment (POLST) form.

Congressman Earl Pomeroy receives the 2008 Friend of Medicine Award in his Washington, D.C., office. l to r: Dr. Robert Thompson, Dr. Kim Krohn, Dinah Goldenberg and Bruce Levi.

23J U N E 2 0 0 9

American Medical Association

Health Care Reform – The AMA is aggressively involved

in advocacy efforts related to health care reform. Recently, the AMA sent comments to Max Baucus (D-Mont.), chair-man of the U.S. Senate Finance Committee, and Charles Grassley (R-Iowa), the committee’s ranking Republican, on the policy options papers released outlining proposals to reform the health care delivery system and addresses key physician policy issues such as Medicare physician payment options for expanding insurance coverage, and potential sources for financing reform efforts.

Delay of FTC Red Flag Rule – Due to aggressive AMA advocacy, the Federal Trade Commission (FTC) voted to delay the implementation of the Red Flags Rule from May 1 to August 1. The AMA will continue its efforts to con-vince the FTC and Congress that physicians are not “cred-itors” under the Fair and Accurate Credit Transactions (FACT) Act of 2003, and therefore, should not be subject to the regulation.

A

Hospital Acquired Conditions Policy – On May 1, the CMS released its FY2010 Inpatient Prospective Payment System (IPPS) Proposed Rule. As a result of AMA advo-cacy efforts and those of others in the medical community, the agency is not proposing to add new categories of non-payable Hospital Acquired Conditions (HACs) at this time. Rather, it is encouraging public dialogue about refining the HAC list. The AMA has strongly advocated that before the HAC non-payment policy is expanded, the agency should analyze the impact of the current program.

FDA Regulation of Tobacco – Both the House of Representatives and the Senate have passed H.R. 1256, the “Family Smoking Prevention and Tobacco Control Act. The legislation would provide authority to the Food and Drug Administration to regulate the manufacture, sale, distribution and marketing of tobacco products with the primary goal of reducing youth and teen smoking. The AMA supports H.R. 1256 and is working to secure its enactment. The House is expected to consider the Senate-passed version in the near future, which is nearly identical to the House version.

North DakotaNDMGMA Medical Group Management Association

Spring has finally arrived. The Legislature has gone home.

Thanks to all those who got involved in the legislative process. Hopefully you have recovered from the flooding and will be able to enjoy the beauti-ful spring weather.

Your NDMGMA board and sub-committees have several projects in various stages of completion. State Chapters from the Midwest Section have agreed to financially support the development and maintenance of a NDMGMA Website. Our goal is to have this project completed before the Annual Conference. The website will be used as a communication tool

between the board and the member-ship, recruitment, promote National MGMA, promote meetings and other educational opportunities and a meth-od of recruiting new vendor support by offering web advertising space.

Along with the launching of the website we are in the beginning stages of developing a program to increase vendor and sponsor sup-port for our organization. We could use your help identifying national, regional and local suppliers. Take a moment to send name, address and contact information to rkuntz@primecare.org.

The Membership Committee has

completed a membership drive that produced small increases in both individual and network member-ships. Membership is everyone’s responsibility. Invite someone to join NDMGMA and attend the Annual Conference. Membership information can be requested through the NDMA office.

The Conference Committee is currently working on putting together the agenda for the Annual Conference. The Payer Update is back and we will host a Technology Summit. The conference is scheduled for September 24-25 in Bismarck. Save the dates on your calendar now!

By Rosemarie Kuntz, President

24 N D M A C H E C K U P

Congressional Delegation to ensure that ND impacts are explored fully with respect to any federal proposals being considered, and that current ND concerns relating to Medicare payment disparities are also addressed. We will also continue to work with our state legislators on issues they raised for further interim study in the coming months prior to the 2011 legislative session.

Whatever your views on the need for health care reform or how best to do it, we must listen diligently to these winds of change. Whatever the proposed outcome, our role is to actively advise our political leaders on potential impacts to our state and to your medical practice.

State Legislative Outcomes

I encourage you to review the work of your Legislative Assembly in the summary article provided in this issue of Checkup, as well as the separate report e-mailed to you. If you don’t receive NDMA e-mail, let us know. Most of our ongoing communication with members now occurs by e-mail.

The 61st ND Legislative Assembly was remarkable in the breadth of support from legislators for addressing the many health care challenges we face in this state. There were many legislator “champions,” on many issues. Please take time when you can to express appreciation to your legislators. This was a particularly difficult session with flooding and federal stimulus funding issues, and your citizen Legislative Assembly worked admirably across chambers and across the aisle and with the Governor’s office to forge agreement on many issues that impact your daily practice.

One of our major priorities this session was the rebase of Medicaid physician and hospital payments. This effort was facilitated primarily by efforts last session to garner funds for a rebasing study by independent consultants

The winds of change are blowing over the health care landscape in North Dakota. Many new faces are

already here as new administrative leadership comes to several health care systems and hospitals, and leadership positions at the ND Healthcare (Hospital) Association, UND School of Medicine & Health Sciences, Workforce Safety & Insurance, UNDSMHS Center for Rural Health, and BlueCross BlueShield of North Dakota. These new leaders will shape the future of health care in North Dakota and we welcome them with their new ideas and energy to the task.

The winds of change are blowing over the national land-scape as well. President Obama and Congressional leaders continue the push for health system reform. The President is urging Congress to pass legislation by July 31. In his remarks, the President outlined his three main goals for reform, saying, “first, that the rising costs of health care have to be brought down; second, that Americans have to be able to choose their own doctor and their own health plan; and, third, all Americans have to have quality, afford-able health care.” He added, “We’ve got to get it done this year, both in the House and the Senate. We don’t have any excuses.”

I encourage you to read the three “options papers” put out for comment by the Senate Finance Committee, as ref-erenced in Dr. Thompson’s article, and familiarize yourself with the broad scope of potential reform initiatives and the new language of health care reform being bantered back and forth in Congress. The Senate Finance Committee expects to mark up legislation in June. An outline frame-work for reform has developed among the three commit-tees with health care reform jurisdiction in the House. Sen. Ted Kennedy recently introduced health care reform legislation and there is a Senate-House Republican version of health care reform as well.

Our goal at NDMA is to work closely with our

By Bruce Levi, Executive Director

The Winds of Change

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NDMA/NDHA Medicare Payment Task Force

The Medicare Payment Task Force comprised of repre-sentatives of NDMA and the ND Healthcare (Hospital) Association in April finalized its recommendations to Sen. Kent Conrad in exploring various options for Medicare hospital and physician payment reform. Many of those options are reviewed in an options paper prepared by a Task Force consultant, Options for Improving Medicare Payments to North Dakota’s Healthcare Providers by Harold D. Miller [Options Paper), Center for Healthcare Quality and Payment Reform, February 2009. Please call the NDMA office if you would like a copy of the options paper.

The Task Force, of which Dr. Thompson served as a co-chair along with Medcenter One CEO Jim Cooper, recom-mended that the North Dakota Congressional Delegation pursue multiple options for Medicare hospital and physi-cian payment reform, i.e., pursue modifications to the cur-rent physician payment system and hospital prospective system (GPCI adjustments; wage index); and ensure that any new payment systems are appropriate for ND, assess-ing risks and rewards, and recognizing ND goals for cost containment and accountability. Both the NDMA and NDHA strongly agreed that the current Medicare payment system must be modified as follows, working toward geo-graphic equity, reducing the increase in costs, and improv-ing the quality and value of our health care system:

Hospitals: Create a wage index floor of 1.0; reduce the labor-related share for areas with a low wage index to 50%; and extend Section 508 to reduce payment dispari-ties (expires September 30, 2009).

Physicians: Make permanent the work GPCI thresh-old of 1.0; establish a threshold of 1.0 on the practice expense GPCI; establish an initiative to study and cor-rect the methodology deficiencies in the GPCI calcula-tions, including consideration of modification of the cost share weights in the practice expense GPCI; and eliminate the Sustainable Growth Rate (SGR) formula (21% cut at year end) which cuts North Dakota physi-cian payments due to higher spending in other parts of the country.

The Task Force also developed principles for our Congressional Delegation to consider in reviewing propos-als for federal health care reform. In considering proposals for any new payment systems, the Task Force recommend-

and earlier studies including the Governor’s 2004 Medicaid Task Force. The resulting rebase methodologies became the underlying basis for argument this session that the time for rebasing had come. Increasing physician payments from 51% to almost 89% of cost, based on the methodology developed during the 2007-08 interim, is a significant $40 million state and federal investment by your legislators in the future sustainability of the state’s Medicaid program to ensure access to care for the most vulnerable of the state’s people. Fee schedule updates will be published before July 1.

Several studies were proposed for interim ND Legislative Council committees to address health care issues between legislative sessions. Many of these studies were prioritized by the ND Legislative Council on May 20, including these studies: 1) issues relating to unmet health care needs, 2) access to psychiatric services and mental health commit-ment procedures, 3) factors impacting the cost of health insurance, 4) the needs of pregnant minors and whether additional education and social services would enhance the potential for a healthy child and a positive impact for the minor, 5) consideration of workers compensation laws with respect to prior injuries, preexisting conditions and degen-erative conditions, 6) the emergency medical services fund-ing system, 7) the state immunization program, 8) work-force needs, and 9) the impact of traumatic brain injuries.

BCBSND Rate Hike Approved

In your last issue of Checkup, we explored the legal implications of NDMA efforts to assist Insurance Commissioner Adam Hamm in ensuring that our state’s dominant health insurance carrier cannot unilaterally reduce or withhold payments for medical services provided its policyholders. Since then, much change has occurred and the BCBSND Board of Directors is engaged in a search for a new CEO. NDMA President Dr. Thompson and I recently sat down with Interim CEO Tim Huckle and reexamined many of our shared concerns regarding future health care reform, the need for amicable relationships and other issues. Recently, Insurance Commissioner Hamm approved a 7.9% rate increase for BCBSND group poli-cies after renewed negotiations with the carrier. According to the Insurance Department, the 7.9% rate increase was based on an 11.4% rate increase requested in February. Included in that rate increase request was a trend assump-tion equal to 8.5%. This trend assumption is a combination of factors including medical price inflation (which includes provider reimbursement increases); deductible/co-payment leveraging; cost-shifting; utilization; and other more minor factors.

26 N D M A C H E C K U P

rewards emphasize performance rather than improvement. • Recognize implications of applying GPCIs to initia-

tives for incenting quality (e.g., PQRI) and technology (e.g., e-prescribing, health information technology).

Health Care Reform – Still Need to Repeal the SGR

This year’s annual report by the Medicare Board of Trustees shows an increasingly bleak forecast for the Medicare Trust Funds. The program already faced an enormous gap between forecast revenues from Medicare payroll taxes and expected costs, but the economic crisis and high unemployment have exacerbated the problem. The trustees, who issued their report May 12, also contin-ue to forecast steep cuts in Medicare physician payment rates due to the program’s sustainable growth rate (SGR), starting with a 21.5 percent cut in 2010 and growing to a total of 38 percent by 2014!

The House and Senate passed the final congressional budget resolution, providing only a partial allowance for eliminating the cost of replacing the SGR formula. The AMA expressed its strong disappointment that the budget agreement failed to facilitate complete repeal of the SGR. Also of note, the agreement would allow Congress to use procedural protections, known as reconciliation, for the consideration of health system reform legislation. The AMA argues that you can’t build a new health care sys-tem on the foundation of a crumbling Medicare program.

ed that Congress: • Ensure that North Dakota hospitals and physicians

are not penalized for providing services more efficiently and at higher quality (hold harmless principle); that North Dakota is not penalized for the value achieved from the value of teamwork and accountability from its current high quality, highly efficient health care system.

• Ensure that for any services currently under-provided in North Dakota (recruitment problems), that those under-utilization levels not be locked in to any baseline expenditure levels that may be imposed.

• Ensure that new payment systems provide a means for ND to rebuild and strengthen its primary care base.

• Ensure that performance measures emphasize cur-rent ND strengths. Ensure that performance thresholds are achievable and payment differentials are of sufficient magnitude to help offset ND’s payment disadvantages.

• Ensure that payments for physician services be more than what they would have otherwise under the cur-rent payment system. Recognize that the current SGR formula as a nationwide spending target has resulted in Medicare payment cuts for physicians in low spending regions in large part because of high Medicare expen-ditures in other regions; oppose any geographic (GPCI) adjustments in future bundled physician payments unless regional quality payments and regional spending targets are also included.

• Ensure that if a total pool is divided among all high-performing providers in any payment scheme, ensure that

EXPAND COVERAGE• Provide affordable, essential health insurance coverage for all• Promote a robust private insurance market• Ensure sustainable public programs for vulnerable populations

IMPROVE QUALITY• Provide real time data at point of care• Use measurement as a tool, not an end point• Correct problems with the Physicians Quality Reporting Initiative (PQRI)

REFORM GOVERNMENT PROGRAMS• Ensure adequate payments• Enable balance billing and private contracting• Replace Medicare sustainable growth rate (SGR)• Allow public subsidies for purchasing private insurance

REDUCE COSTS• Break down silos and reward physicians for reducing costs• Enact medical liability reforms• Streamline insurance claims processing

INCREASED FOCUS ON WELLNESS/PREVENTION• Align insurance benefit design with prevention evidence• Make public investments in education, community projects, and nutrition• Eliminate racial, ethnic, and gender disparities

PAYMENT AND DELIVERY REFORMS• Promote medical home and other steps to reward care coordination of chronic disease• Provide antitrust relief to improve quality and care coordination• Conduct adequate testing of new payment models

Overall, the AMA general principles for health care reform are to:

J U N E 2 0 0 9 27

Minor Consent for Minor Consent for Prenatal Care and SB 2394Prenatal Care and SB 2394

Dean Haas, General Counsel

This article provides a brief introduction to SB 2394, and suggests the resolution to two problems that physi-cians might face implementing the law. This article is not intended as legal advice.

Introduction. The 2009 ND Legislative Assembly enacted SB 2394 which, in brief, expands the circumstanc-es under which pregnancy-related health care may be pro-vided based on minor consent. NDMA thanks the primary sponsor, Senator Krebsbach, for her diligent efforts in pur-suing this legislation for the third consecutive session, as well as many other legislators who over the course of the several years have sought changes in the law. Other spon-sors of SB 2394 were Reps. Stacy Dahl and Ralph Metcalf and Sens. John Warner and Robert Erbele. Prior to enact-ment of SB 2394, North Dakota law, N.D.C.C. § 23-12-13, required parental consent to treat a pregnant minor. Of course, parental involvement is beneficial to the health of children. But it is human nature that minors may wish to keep such private and intimate matters as their sexual lives from disclosure to their parents. Understandably then, the issue concerning the extent to which a minor is entitled to confidentiality of her health information regarding preg-nancy has engendered considerable controversy over the years; such a bill previously failed in the House twice–in the 2005 and 2007 legislative sessions.1

Before reaching the details of the bill, we note our belief that the legislation does represent a step forward, benefit-ting public health. By affording confidentiality to a minor hesitant to involve her parents at the beginning of her pregnancy, she will feel able to seek health care earlier in the pregnancy to improve pregnancy outcomes, as well as potentially limit the risks and eliminate the cost of addi-tional treatment for complications.

What the bill does. SB 2394, entitled “Minor Consent for Prenatal Care,” allows a physician to rely on the con-sent of a minor for pregnancy testing, prenatal care and pain management related to pregnancy. The bill was sub-

stantially amended in the House, allowing generally as fol-lows:

• A physician or other health care provider may provide pregnancy testing and pain management related to pregnancy to a minor without the consent of a parent or guardian.

• A physician or other health care provider may provide prenatal care to a pregnant minor in the first trimester of pregnancy or may provide a single prenatal care visit in the second or third trimester of pregnancy without the consent of a parent or guardian.

• A physician or other health care provider may provide prenatal care beyond the first trimester of pregnancy or in addition to the single prenatal care visit in the second or third trimester if, after a good-faith effort, the physi-cian or other health care provider is unable to contact the minor’s parent or guardian.

• The costs incurred by the physician or other health care provider for performing services under this section may not be submitted to a third-party payer without the con-sent of the minor’s parent or guardian.

• This section does not authorize a minor to consent to abortion or otherwise supersede the requirements of Chapter 14-02.1 (Abortion Control Act).

Other provisions in the bill provide that, if a minor requests confidential services, the physician or other health care professional must encourage the minor to involve her parents or guardian. The bill also allows a physician or other health care professional who provides pregnancy care services to a minor to inform the parent or guardian of the minor of any pregnancy care services given or needed if the physician or other health care professional discusses with the minor the reasons for informing the parent or guardian prior to the disclosure and, in the judgment of the physician or other health care professional:

a. Failure to inform the parent or guardian would seri-

1 Previous bills were introduced in 2005 and 2007, as Senate Bill 2308 and Senate Bill 2181 respectively. Though differing in detail, both bills would have authorized minors to consent to care related to pregnancy and passed easily in the Senate. The House handily defeated the 2005 bill, but the 2007 version died in a tie vote in the House, 46-46.

28 N D M A C H E C K U P

the physician-patient relationship (i.e., limiting the care available based on minor consent based on the number of visits allowed per physician) is to have in place a referral system so that the care of the minor patient objecting to dis-closure may be readily transferred to another physician. The referral system will comply with physi-cian’s ethical obligations to ensure continuity of care, avoid patient abandonment, and abide by the terms of SB 2394.

The bill raises a second issue regarding compensation for servic-es, providing that the costs of the care may not be billed to a third-party payer without the consent of the minor’s parent or guardian. Since a physician’s primary ethical duty is to the patient, where it is

lawful to provide care based on minor consent, affording this confidentiality takes precedence, despite the inability to bill the parent’s insurer. But the likely solution–billing the minor directly–raises an issue too. That is, can the minor disavow her contractual obligation to make pay-ment? Under North Dakota law, N.D.C.C. § 14-10-11, minors may generally disavow otherwise valid contracts, but there are two exceptions. First, minors remain obli-gated “to pay the reasonable value of things necessary for the minor’s support,” N.D.C.C. § 14-10-12, and second, they may not disavow contracts “entered into by the minor under the express authority or direction of a statute.” N.D.C.C. § 14-10-13.

We believe that the minor’s support exception provided by N.D.C.C. § 14-10-12 might successfully support physi-cian’s rights to receive payment from the minor, especially in light of the court-made rule that where the minor has the right to consent to treatment, the emancipated minor (one able to give consent to the medical care) is respon-sible for paying for their own treatment, and may not dis-affirm any contract made with a care provider.2

Physicians should seek the advice of legal counsel in developing appropriate policy relating to minor consent issues under SB 2394. A more detailed article concerning physician’s ethics, minor consent, and reproductive rights under the laws and constitution is also available upon request at NDMA (e-mail: dhaas@ndmed.com).

ously jeopardize the health of the minor or her unborn child;

b. Surgery or hospitalization is needed; or

c. Informing the parent or guard-ian would benefit the health of the minor or her unborn child.

The bill also requires the ND Legislative Council to consider an interim study of existing services for minors who are pregnant and whether additional education and social services would enhance the potential for a healthy child and a positive outcome for the minor. That interim study was recently prioritized by the Legislative Council. The study will also con-sider the potential benefits of sup-port services for parents of these minors and guardianship for the minor for cases in which parental abuse or neglect may be an issue. The study must also consider the benefits to the minor of subsidies for open adoptions and supportive housing and child care for single parents enrolled in secondary and postsecondary educational institutions. The study must also determine the most desirable evidence-based service delivery system and the amount and sources of adequate funding. The interim study may provide an avenue for further revision of the approach taken in SB 2394 if that becomes neces-sary.

Issues that require solution. While the legislation is an improvement, it also raises two issues of interest to physicians. First, the bill attempts to manage a physician’s practice by limiting a minor’s right to consent to treatment to one prenatal visit during the second and third trimester, and, second, it prohibits billing the minor parent’s insurer if parental consent is not obtained.

As noted, the bill authorizes provision of prenatal care without parental consent in the first trimester, “or…a single prenatal care visit in the second or third trimester.” And according to the bill, additional care beyond this may be provided without parental consent only if the physi-cian is unable to locate the minor’s parent or guardian, despite “good-faith effort,” to do so. This limitation on care raises the first potential problem: affording patient confidentiality and avoiding abandonment of the patient. One practical solution to the legislature’s involvement in

2 See generally Michael J. Dale, et.al., Representing the Child Client, § 3.02(c)(v) (2008); John D. Hodson, Annotation, Infant’s Liability for Medical, Dental or Hospital Services, 53 A.L.R.4th 1249, 1256-1260 and 1278-1279 (1987) (courts generally hold that medical, dental and hospital services are necessaries that may not be disavowed by emancipated minors).

J U N E 2 0 0 9 29

RACs identify potential cases for review through proprietary analysis of the Medicare claims file. Identification of poten-tially inappropriate payments results in an automated review and data collection process. Cases involving a likely error result in a request for the medical record and a complex review that may be performed by non-physician personnel. Claims may be denied due to improper coding, inaccurate assignment of medical necessity, insufficient documentation, duplication of charges, or billing for services already included in other pay-ments. In sum, the RAC program attempts to identify practices (i.e., medical services) in which errors in coding and billing are occurring. Once a practice is targeted, it receives a letter from the RAC requesting a copy of the Medicare patient’s entire medical record. Providers do not need to redact the records, as the RACs are operating within the scope of CMS and are autho-rized to view this information. The record must be delivered to the RAC within 45 days. The RAC has 60 days to review the record and notify the provider of the outcome of the review. A request may ask for one specific record or multiple records.

Preparing for the RACs

Complete, accurate, and timely documentation of the patient’s clinical condition is critical in order to ensure that patients receive the appropriate level of care in the setting that their clin-ical condition requires, and that the medical provider receives the appropriate Medicare reimbursement for the level of care provided.

Many health care providers are in the early stages of prepara-tion to be ready for the expansion of the RAC program to their region. Experts suggest following these six steps to prepare for a RAC audit: 1) implement a RAC team; 2) monitor problemat-ic areas; 3) focus on clinical documentation; 4) establish record management protocols; 5) plan a systematic appeal process for RACs; and, 6) monitor governmental reports. Another sug-gestion is to employ certified coders; CMS is requiring RACs to use certified professional coders in their reviews, so if your medical practice or facility doesn’t have certified coders, they won’t be able to talk peer-to-peer. Plus, certification ensures that there is knowledge and professionalism applied to your claims.

It is important that your RAC coordinator periodically moni-tor the CMS RAC website in order to be aware of any updates or changes to the RAC program. HDI is also in the process of obtaining CMS approval of its online site. HDI can be reached: HealthDataInsights, Inc.-Part A: 866-590-5598, Part B: 866-376-2319, e-mail: racinfo@emailhdi.com

The Recovery Audit Contractor (RAC) program, cre-ated by the Medicare Prescription Drug, Improvement,

and Modernization Act of 2003 (MMA), was designed to find and correct “inappropriate payments,” for Medicare Services. Begun as a demonstration project, the program is expanding to a national rollout that will be completed by 2010. Health Data Insights (HDI) is the recovery audit contractor in CMS Region D, which includes North Dakota. HDI and CMS recently provided a program of introduction to medical providers in Bismarck. This article is intended to provide you with some of this background, including steps to ensure you’re ready for the RACs.

Although CMS has reported a declining error rate in paid claims over the past five years due to significant compliance efforts, a January 2008 report by the Office of Management and Budget indicated that Medicare is still among the top three Federal programs with improper payments, totaling an estimated $10.8 billion in 2007. The Medicare fee-for-service paid claims error rate was estimated to be 10.1% in FY 2004 but had declined to 3.6% in FY 2008. CMS reports that it has identified nearly $1.03 billion in improper Medicare payments since the RAC program began in 2005. Approximately 96% of the improper payments ($992.7 million) identified by the RACs were overpayments collected from health care provid-ers. Most overpayments occur when providers do not comply with Medicare’s coding or medical necessity policies. An overwhelming majority of the overpayments found by RACs during the demonstration project were from hospitals: only 3% of overpayments came from physician practices. Almost half of the improper payments were attributed to incorrect coding, 32% for medically unnecessary service or setting, and 9% to no or insufficient documentation. Although CMS reports that only 5% of determinations were overturned on appeal, only 11.3% of the RAC determinations were appealed. Though the number of appeals was small, 44.2% of the appealed claims were decided in the provider’s favor.

Congress directed CMS to utilize commercial contractors to administer the RAC program. As per the MMA, RACs are paid on a contingency fee basis.1 CMS contends that this com-pensation arrangement appropriately aligns incentives for the RACs, as they are also required to return any funds overturned on appeal. However, this payment methodology–some call it bounty hunting–has been criticized as potentially creating an incentive to focus their reviews on high dollar value claims, particularly in the inpatient hospital setting, as well as overpay-ments rather than underpayments.

The Recovery Audit Contractor (RAC) Is Here

1 Contingency fees have long been decried as a cause of aggressive collection tactics. CMS could mollify its critics in part by adopting a blended compensation formula for its RACs: part fixed, part contingent. It has already addressed a related concern and has instituted contingent fees for RAC-identified underpayments as well as overpayments.

By Dean Haas, General Counsel

North Dakota Medical AssociationNorth Dakota Medical Association& NDMA Alliance& NDMA Alliance Annual MeetingAnnual Meeting

September 24-25, 2009 • Bismarck Ramkota HotelSeptember 24-25, 2009 • Bismarck Ramkota Hotel

North Dakota Medical AssociationNorth Dakota Medical Association 122nd Annual Meeting 122nd Annual Meeting

Thursday, September 24

3:00 p.m. House of Delegates First Session, Reference Committee of the Whole

6:45 p.m. Annual Social and Dinner

Friday, September 25

7:00 a.m. Registration and Breakfast

8:00 a.m. House of Delegates Final Session

9:30 a.m. Conference Program 11:45 a.m. Luncheon

NEW LAWS BEGIN WITH NDMA RESOLUTIONSMany bills before the 61th Legislative Assembly began

as resolutions in the NDMA House of Delegates or as recommendations from NDMA Commissions. Now is the time to begin putting your ideas for a resolution on any policy matter to paper, in time for the NDMA annual meeting in September. The NDMA staff can assist you in preparing an effective resolution with a clear action or stand that you would like NDMA to take. Call (800) 732-9477 or 223-9475 for assistance.

NDMA AWARD NOMINATIONSThe Professional & Community Services Award

is given each year to an outstanding NDMA member physician. To be nominated, the physician 1) must be an NDMA member; 2) must not be deceased; 3) must not have been a previous recipient of the award; and 4) must have compiled an outstanding record of community ser-vice, which, apart from his or her specific identification as a physician, reflects well on the profession of medi-cine.

The NDMA Friend of Medicine Award is also given annually to an individual who 1) must be a person either living in or operating a business enterprise in the state; 2) must not be a Doctor of Medicine or Osteopathy; and 3) must have distinguished herself or himself by serv-ing as an effective advocate for healthcare, patient ser-vices, or the profession of medicine in the state of North Dakota.

Members are invited to submit the names of quali-fied individuals for each of these awards, along with a description of the individual’s relevant background and accomplishments, to the NDMA office by July 15 for consideration this summer by NDMA’s Commission on Medical Services and Public Relations. This does not require a District nomination; any NDMA member can submit a nomination.

Promoting Physician Promoting Physician

Leadership in Ethics Leadership in Ethics

and Advocacyand Advocacy

W AT C H F O R T H E M E E T I N G B R O C H U R E C O M I N G I N A U G U S T

30 N D M A C H E C K U P

LODGINGA block of rooms has been reserved at the Ramkota

Hotel, 800 S 3rd St, Bismarck. The rate is $84. For reservations call (701) 258-7700. Please indicate that you are with the ND Medical Association. The block of rooms will be held until August 25.

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The Administrative Rules Committee of the ND Legislative Council approved rules amendments on

June 11 proposed by the ND Health Department, changing the legal framework for authenticating telephone and verbal orders.

New interpretive guidelines issued last year by the Centers for Medicare and Medicaid Services (CMS) resulted in a year-long process to amend the rules. Both NDMA and the ND Healthcare (Hospital) Association commented on the Department rule revision in March.

The new federal regulation (482.24(c)(1)(iii)) provides that if there is no state law designating a specific time frame for authentication of verbal orders, then those orders must be authenticated within 48 hours. Since North Dakota’s law did not designate a specific time frame, the 48 hours applies under all circumstances. Clearly, the rule created difficult implementation challenges and needed changing.

The interpretive guidelines to the new CMS regulation note that authentication of a verbal order represents an opportuni-ty to identify a transcription error and potential risk to patient safety. While the guidelines defer to state law on a specific time frame, those guidelines also note that CMS expects hospital policies and procedures for verbal orders to include a read-back and verify process, in addition to specifying a time frame for authentication of the orders. The guidelines state: “…a State law that establishes a 48 hour authentication

period for verbal orders where no read-back and verify pro-cess was used, but 30 days for verbal orders using read-back and verify, does qualify for the State law exception.” The Health Department followed the CMS direction with a new rule that incorporates a thirty-day time frame for a read-back and verify process, which states as follows (new language is underlined):

Telephone and verbal orders may be used provided they are given only to qualified licensed personnel and reduced to writing and dated, timed, and signed or ini-tialed by a licensed health care professional responsible for the care of the patient within forty-eight hours unless the hospital policies and procedures for verbal orders and telephone orders include a process by which the reviewer of the order reads the order back to the order-ing practitioner to verify its accuracy. For verbal orders and telephone orders using the read-back and verify process, the verbal orders and telephone orders must be authenticated within thirty days of the date the order was given if the length of stay is longer than thirty days. NDAC 33-07-01.1-20(1)(i)(2)

Special thanks to Dr. Shiraz Hyder and others, who assist-ed in the discussion with the Department on the revised rule. The rule becomes effective July 1.

New Verbal Orders Authentication Rule Adopted

CONTRIBUTE TO THE NDMA PAC TODAY

Please select a NDMA PAC dues category:Physician Member _____ $200Alliance Member _____ $200

Payment:Please send a Personal Check payable to

NDMA PAC

$100 of the suggested contribution amount is transmit-ted to AMPAC, or $10 for a student or resident. Detach and return this form along with your voluntary contribu-tion. For more information, please call (701) 223-9475. Thank you.

Name_______________________________________________

Home_______________________________________________

Address_____________________________________________

City_________________________________________________

State____________________ Zip________________________

P L E A S E R E M I T W I T H PAY M E N T

Contributions to NDMA PAC/AMPAC are not deductible for federal income tax purposes. Voluntary political contributions by individuals to NDMA PAC/AMPAC should be written on personal checks. Funds from corporations will be used for political education activities and/or state election activities where allowed. Contributions are not limited to suggested amounts. Neither the AMA nor its constituent state associations will favor or disadvantage anyone based upon the amounts of or failure to make PAC contributions. Voluntary political contributions are subject to limitations of FEC regulations.

The North Dakota Medical Association Political Action Committee

The North Dakota Medical Association (NDMA) advocated a pro-medicine agenda in the 2009 ND Legislative Assembly. NDMA PAC, the nonpartisan political action committee of NDMA, plays an important role in the success of our advocacy efforts by supporting candidates who work in the best interest of physicians and patients. Join us as we continue to work for: • Medicare/Medicaid reforms and fair payment; • Support for public health initiatives; • Protection of our medical liability reforms; • Fair contracts with commercial insurers; • And much more.

Your support for NDMA PAC will also give physicians a strong, unified voice at the national level, where we partner with the American Medical Association Political Action Committee (AMPAC) to support medicine-friendly candidates for the U.S. Congress. Join your colleagues from across the nation as we call for expanding health coverage to the uninsured; Medicare physician payment reform; medical liability reform; and more.

On average, UNDSMHS medical students gradu-ate with over $138,000 in debt. As the largest volun-teer arm of the AMA, our Alliances throughout the country raise money each year for medical schools to distribute to deserving students of their choice. The AMA Foundation tracks these donations for medi-cal schools independently in separate accounts. Each dean or dean’s designate chooses scholarship recipi-ents based on the funds available.

The NDMA Alliance and NDMA encourage you to contribute to the Scholars Fund. Any amount can be donated at any time throughout the year. If you have questions or want more informa-tion, please call NDMA at 701-223-9475.

SEND YOUR CONTRIBUTIONS TODAY!Make payable to the AMA Scholars Fund and mail to:

North Dakota Medical AssociationPO Box 1198 • Bismarck ND 58502-1198

Contribute to the AMA Foundation Scholars Fund

ER COVERAGEER BACKUP COVERAGE MONDAY TO FRIDAYJamestown Hospital is seeking to create a pool of emergency room qualified physicians to fill in when one of our regular doctors is not available.

• Jamestown Hospital will pay a retainer of $300 per month to be on call whether or not the doctor is called.

• If a doctor refuses two times in a row or twice in a twelve month period, they will be dropped.

• The expectation is that the doctor would be available for up to five days per month. Once they have worked twenty days in a year, they will have no further obligation and will continue to receive the $300 per month.

• Physicians must be able to arrive in Jamestown within twelve hours.

• Payment per hour will be $110 per hour w/o benefits from 7AM to 7PM and $150 per hour 7PM to 7AM. Jamestown Hospital does all billing.

• Doctors are guaranteed six hours for each visit.

• We pay mileage at the federal rate.

For further information, contact CEO Marty Richman at 701-952-4850.

ER COVERAGE

For more information about Jamestown Hospital, go to:

www.jamestownhospital.com

out-o- date. Please email dinahgold@cableone.net with your correct contact information. We also want to hear from you with answers to these questions:

• What can the ND Alliance do for you?• What kind of information do you want to receive regularly via email?• What type of community projects would you support?• Are you willing to work with a planning committee for the 2009-2010 year?• Other thoughts, concerns, suggestions……..If you have not received a mailing yet and would like

to join the North Dakota Medical Association Alliance, please fill in the attached application and return with pay-ment ($55 for MAL to NDMAA) to:

Dinah Goldenberg, 2173 Victoria Rose Drive, Fargo, ND 58104

It is my hope that by the time you read this, the flood cleanup will be well underway. Recent weeks have been difficult for us all, whether we were directly affected by flooding or were helping friends and family. I have found it incredible to see how communities have come together to help each other. I am proud to be a North Dakotan.

Dinah GoldenbergPast President, NDMA Alliancedinahgold@cableone.net

Today I would like to tell you about a small but incredibly committed group of Alliance mem-

bers. Felicia Davis-Cooper, Carolyn Grimmett, Sharon Humphrey and Lori Tiongson have worked tirelessly over the last several months to rebuild the Alliance in North Dakota.

The first step was creating a new North Dakota Medical Association Alliance brochure. The initial mail-ing went to potential members in First District in Fargo, the only community that still has a local Alliance struc-ture. The membership is now nearly 40 strong with one third being first time members. Attendance at events has increased as well as interest and support for local proj-ects.

The next step is to create an active MAL (member at large) organization throughout the state. Just before the flood derailed us all, mailings went out to Third and Sixth District. Membership is still coming in from this mailing. Mailings to other areas of the state are in the planning. Our intent is to create an email network throughout the state to help keep our members informed of health and legislative issues. Our hope is also to support Alliance projects and events throughout the state. One distinct advantage of AMA Alliance membership is access to all the resources of the national organization in Chicago. Check out the website at www.amaalliance.org

We need your help; many of the addresses on file are

ALLIANCE MEMBERSHIP APPLICATION

Yes, I’m interested in joining the North Dakota Medical Association Alliance

NAME: _______________________________________________________________

ADDRESS: ___________________________________________________________

PHONE: ______________________________________________________________

EMAIL: _______________________________________________________________

SPOUSE’S NAME: _____________________________________________________

Interested areas for volunteer and/or community involvement: _______________________________________________

Dinah GoldenbergPast-President, NDMA Alliance

Director, AMA Alliance

Dues: Member at Large - National and State $55

Make checks payable to:NDMA Alliance

Return with payment to:Dinah Goldenberg2173 Victoria Rose DriveFargo, ND 58104

33J U N E 2 0 0 9

34 NDMA CHECKUP

Managing Medication Risks

By Cinda Velasco RN, JD, Attorney-Risk ManagementMMIC Midwest Medical Insurance Company

One of the most common pro-cedures performed in physi-

cians’ offices – prescribing medica-tions – is also frequently a factor in patient injuries and malpractice claims. According to the Institute of Medicine, medication errors affect at least 1.5 million people every year. Data reported to the Physicians Insurance Association of America show that 56.5 percent of claims involving medication errors occur in the physician’s office.

Factors leading to patient injury and malpractice claims from medica-tion errors include:• Poor drug selection, incorrect dose

and length of treatment• Failure to monitor drug side effects

and drug levels• Communication failures between

the physician and patient• Ambiguities in product names,

directions for use, medical abbre-viations or writing

• Poor procedures or techniques when prescribing

• Inadequate medical history and charting

Patient Education and Counseling

Studies suggest that as many as half of all patients fail to take pre-scriptions as intended by the provider. The reasons for this can include not understanding what the medication is for, why or how to take it, or a conscious decision not to spend the money filling the prescription. Some

patients are not comfortable asking questions so instead they do not take the medication or do not take it as prescribed. Knowing that patients are often reluctant to ask questions, physicians and other health care pro-viders need to provide patients with the information they need to take the medication safely and effectively. Collaborating with and involv-ing patients in their care decisions through shared decision-making can be effective in reducing patient injury and improve compliance with medi-cation regimens.

Following these simple rules could prevent needless medication errors and potentially harmful outcomes:

• Perform medication reconciliation at each patient visit. Medication reconciliation is the process of comparing the medications a patient is currently taking with your medication record and mak-ing any necessary changes. This list should include all prescription, over-the-counter herbal and supple-ment medications.

• Every time a patient has a new prescription, explain the prescrip-tion including the drug name, what it’s for and how often they should take it.

• Take the time to tell your patients the reason for the medication.

• If you give patients medication

samples, check the medication reconciliation list to be sure that there are no interactions with other medicines the patient is taking.

Risk Management Tips to Reduce Medication Errors: • When prescribing medicine, phy-

sicians should have ready access to drug information references in either traditional text or electronic format.

• Develop written protocols for pre-scribing that include:- Basic standards for writing pre-

scriptions- Protocols for verbal or telephone

prescriptions including a require-ment for “read back”

- Specific protocols for prescrib-ing controlled substances

• Develop written protocols for

refilling prescriptions that address the following:- Obtaining physician authoriza-

tion- Handling after-hour requests or

when the primary physician is not available

- Monitoring patient’s therapeutic drug levels

Additional resources:

For a copy of My Medication List go to: www.mnpatientsafety.org

The Institute for Healthcare Improvement: www.ihi.org

For resources to help patients: www.consumermedsafety.org

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PRESORT STANDARDUS POSTAGE

PAIDBismarck, ND 58501

Permit No. 419

2009 Calendar of Upcoming Events

August 28-29 ND Society of Obstetrics and Gynecology Annual Meeting, Medora

September 18 ND Chapter American College of Physicians Annual Meeting UND Clinical Education Center, Grand Forks, ND For more information contact Pam Heisler at 701-780-6129 or email: pheisler@altru.org September 24-25 NDMA Annual Meeting, Ramkota Hotel, Bismarck NDMA Alliance Annual Meeting, Ramkota Hotel, Bismarck NDMGMA Annual Meeting, Ramkota Hotel, Bismarck

September 25 ND Psychiatric Society, Ramkota Hotel, Bismarck

January 18-22, 2010 33rd Annual Family Medicine Update, Huntley Lodge, Big Sky, Montana. For more information contact Brandy Jo Frei at 701-772-1730 or email: brandy@ndafp.org