You asked if any states have established programs or funding mechanisms addressing physicians’ uncompensated care.

SUMMARY

Maryland and California have established programs and funds that address uncompensated health care services provided by physicians. In 2003, Maryland passed legislation establishing a fund to subsidize trauma physicians for trauma services provided to uncompensated care and Medicaid-enrolled patients listed on the state’s trauma registry. This trauma fund is financed through a $ 5 surcharge vehicle registration renewal fees collected by the state’s motor vehicle department.

California has several mechanisms to address and subsidize physician uncompensated care costs. An initiative passed by voters in 1988 increased state tobacco taxes and created a number of accounts, including one addressing treatment of indigent patients by physicians. Currently 23 counties receive funding from this account to help pay the uncompensated care costs incurred by certain physicians.

Another California law authorizes increasing the fines imposed by the courts for criminal offenses to establish local emergency medical services (EMS) funds. The funds are for reimbursing hospitals, physicians, and certain EMS agencies. Also, some of the funds California receives from the 1998 Tobacco Litigation Master Settlement Agreement are used for physician uncompensated care.

MARYLAND

Trauma Fund Basics

In 2003, Governor Ehrlich signed Senate Bill 479 establishing the Maryland Trauma Physician Services Fund (“Fund”). The fund provides the following benefits to trauma physicians and trauma centers:

1. reimbursement to trauma physicians for trauma services provided to patients without health insurance up to 100% of the Medicare rate for the Baltimore carrier locality;

2. increased reimbursement rates to trauma physicians providing trauma care to Medicaid enrollees up to 100% of the Medicare rate for the Baltimore area;

3. reimbursement to trauma centers for on-call stipends associated with maintaining trauma specific physicians; and

4. inclusion of trauma center physician stand-by costs in hospitals’ state-recognized rates.

The Maryland Health Care Commission (MHCC) and the Health Services Cost Review Commission (HSCRC) are the designated state agencies responsible for implementing the law and maintaining the funds collected for physician reimbursement.

Physicians Eligible for Payments From the Fund

Under the law, only certain trauma physician specialties are eligible for reimbursement from the fund for treating uninsured and Medicaid –enrolled trauma patients: trauma surgeons, orthopedic surgeons, neurosurgeons, critical care physicians, and anesthesiologists. In addition, physicians practicing emergency medicine can be reimbursed for trauma services provided to uninsured patients; however, the Maryland General Assembly capped funds allocated to emergency medicine physicians at $ 250,000 annually.

Source of Funding

The trauma fund is financed through a $ 5 surcharge added to the two-year vehicle registration renewal fees collected by the Maryland Motor Vehicle Administration.

Payments to Physicians for Uninsured Patients

The law defines an uninsured patient as someone without private health insurance (HMO, PPO, or indemnity), Medicare Part B coverage, VA health benefits, military health benefits, worker’s compensation, or Medicaid (traditional and managed care). Trauma physicians can be reimbursed for services to an uninsured patient if the practice has made a good faith effort to recover payment due for treatment. To obtain treatment, trauma physicians and emergency room physicians must submit a Maryland Trauma Fund Semi-Annual Uncompensated Trauma Services Application. Physicians can submit applications for payment on a semi-annual basis in January and July. Funds for uncompensated care will be considered only for physician practices that have exhausted their collection policies and procedures for services rendered.

Payments to Physicians for Medicaid-Enrolled Patients

Trauma services provided to Maryland Medicaid patients are eligible for reimbursement at up to 100% of the Baltimore Facility Medicare rate. Eligible payments are made directly by Medicaid, or the managed care organization through which the trauma physician participates. Medicaid has updated its provider manual to include the claims submission requirements for reimbursement of trauma services.

The Maryland Trauma Registry and the Fund

The Maryland Trauma Registry is a data base of information maintained by all trauma centers in Maryland. A trauma patient must be listed on the registry. It is administered by the Maryland Institute for Emergency Medical Services Systems. The MHCC and HSCRC use information from the registry such as patient trauma registry number, admission date, discharge date from the acute care hospital or date of release from the emergency room, and diagnosis codes in determining whether to reimburse for trauma services provided to trauma patients.

CALIFORNIA

Proposition 99

In November 1988, California voters approved Proposition 99, The California Tobacco Tax and Health Promotion Act, which increased the state surtax on cigarettes by 25 cents per pack and 42 cents on other tobacco products. Proposition 99 revenues are deposited into the Cigarette and Tobacco Products Surtax Fund. The fund is divided into six separate accounts, each of which receives a specified percentage of the new revenues for a specific purpose. For purposes of this report, the relevant account is the “Physician Account,” with 10% of the revenues allocated for treatment of indigent patients by physicians. In FY 04, the Proposition 99 Fund received $ 314 million in revenues and about $ 31 million was made available statewide for physician uncompensated care through participating counties.

In 1989, the California Legislature established the California Healthcare for Indigents Program (CHIP) and the Rural Health Services Program (RHS), which allocate the Proposition 99 funds to participating counties (there currently are 23 such counties). These funds reimburse emergency physicians, obstetricians, and pediatricians who provide uncompensated services to individuals who cannot afford care and for whom no other source of payment is available. In order to receive these funds, counties must agree to (1) maintain a financial level of effort, (2) report expenditure and utilization data to the California Department of Health Services, and (3) provide follow up medically necessary treatment to eligible children.

Under the law, claims can be paid only up to the statutory maximum of 50% of the county’s established rate schedule. (We have attached the program rules for one representative California county (Marin)).

EMS Services Funds

Another law passed in 1988 authorized increasing fines collected by the courts for criminal offenses and permitted the establishment of local EMS funds. The funds are to be used to reimburse physicians, hospitals, and the EMS agency that administers a county’s pre-hospital emergency medical care system and local boards are required to establish policies for fund administration and expenditures. The various county funds are supported by a $ 2 assessment on each $ 10 in fines and penalties, primarily on tickets and citations issued by local law enforcement and the California Highway Patrol.

Tobacco Settlement Funds

A portion of the funds derived from the 1998 Tobacco Litigation Master Settlement Agreement is used for physician uncompensated care. The tobacco revenues are split evenly between the state and local governments. The settlement agreement places no restrictions on how these tobacco revenues can be spent. Orange County, for example, distributed almost $ 8 million of tobacco settlement revenue to emergency room physicians and on-call physician specialists for services to nonpaying patients. In FYs 02 and 03 the legislature provided $ 45 million in supplemental funding for uncompensated care from its General Fund. These funds were used for both trauma centers and physicians and the counties were responsible for diving the resources among those requesting them.

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