AVMA; Practice; Issues

AVMA GHLIT medical insurance to end after 2013

AVMA Group Health & Life Insurance Trust medical coverage will end for some 17,500 Association members and thousands of their dependents at year's end.

New York Life Insurance Co. notified the GHLIT board of trustees Nov. 30, 2012, of its decision to no longer underwrite major medical coverage for professional associations after 2013 because of impending federal health care regulations.

With no other companies willing to take over for NYL, trustees had no other option than to terminate the medical insurance program, effective Dec. 31, 2013.

AVMA President Douglas G. Aspros said, “I'm concerned about how this reality is going to affect our members, many of whom have relied on AVMA GHLIT health insurance for themselves and their families for many years.

“Fortunately, we have a year to help sort this out, and I'm confident that GHLIT, who are experts in this field, will help ensure that every member finds an appropriate medical insurance home.”

The AVMA Membership and Field Services Division has received several calls and emails about the announcement but fewer than expected, according to Dr. Kevin Dajka, division director. Comments ranged from anger at the AVMA and frustration with the change to confusion and fear about finding new medical insurance, he said.

Identifying with the anxiety of policyholders jolted by this news, GHLIT and AVMA leaders—many of whom themselves carry this coverage—are focusing now on how to help affected AVMA members.

GHLIT and NYL attribute the program's demise to regulatory requirements put in place as a result of the Patient Protection and Affordable Care Act signed by President Obama in 2010. Company officials told trustees that the challenges of complying with provisions of the law that take effect in 2014 are the primary reason NYL opted to quit the association health insurance market entirely. NYL has underwritten the AVMA Trust's medical coverage for the past 20 years.

AVMA members covered by GHLIT's term life, disability income, and other nonmedical insurance policies will not be affected, as these policies will continue to be underwritten by New York Life. GHLIT CEO Libby Wallace recently told JAVMA News, “We approached a number of large and small insurance carriers about assuming this kind of business, but they all had the same reservations as New York Life.”

Later, in a presentation at the AVMA Veterinary Leadership Conference in early January, Wallace told the assembly that the health care law has fundamentally changed the way the Trust does business. “Prior to 2010, when the law was passed, the GHLIT medical insurance was a master group plan where we issued individual certificates to AVMA members for their health insurance. Beginning on January 1, 2014, we can no longer do that. They're now being treated as individual health policies,” she said.

GHLIT alerted affected AVMA members Dec. 14, 2012, that their medical insurance would end the following year. Members were assured they will be covered throughout 2013, provided they pay their premium on time. The Trust pledged to establish a program to assist members with transitioning to a new policy that meets their needs and to work to ensure there are no gaps in their coverage.

Within two weeks of the GHLIT's announcement in December, several hundred people had contacted the Trust. While a handful expressed anger at President Barack Obama for enacting the Patient Protection and Affordable Care Act, Wallace said most of them were simply afraid. “They don't know what to expect,” she said. “Anyone who has a chronic condition is worried about the cost of that new coverage.”

Approximately 35,000 people are currently covered by a GHLIT medical plan that includes such options as a preferred provider organization, health savings account, and traditional indemnity. That total includes 17,500 AVMA member veterinarians, their dependents, and 1,428 veterinary students insured by the Trust's student PPO plan.


GHLIT CEO Libby Wallace, at the AVMA Veterinary Leadership Conference in January, said provisions of the Patient Protection and Affordable Care Act make it too difficult to offer affordable medical insurance to AVMA members.

Citation: American Journal of Veterinary Research 74, 3; 10.2460/ajvr.74.3.364

Among the thousands losing their medical insurance are AVMA Executive Board members, trustees, and employees of the Trust, including Wallace.

As a Trust “insurance designed by veterinarians, for veterinarians,” GHLIT has offered medical insurance to AVMA members at a group rate for 56 years. The 10-member board of trustees comprises nine veterinarians and one AVMA staff member who tailor the benefits package to the health needs of veterinarians, such as covering rabies prophylaxis. The board is the final level of appeals for denied claims. “Those are things that in the new world aren't going to exist,” Wallace said in an interview with JAVMA News.

Other advantages of GHLIT's medical insurance, Wallace said, are its portability and guarantee of coverage to applicants with pre-existing medical conditions.

While people are understandably worried, Dr. Aspros noted that a key fundamental of the new federal health care law is to allow people to purchase affordable health insurance, regardless of age or pre-existing medical conditions.

GHLIT trustees had anticipated the new health care law would usher in dramatic changes to the medical insurance market. Early in 2012, they warned AVMA leaders and members that impending regulations could require GHLIT to begin offering medical coverage outside the Association.

To try to preserve its medical insurance program, the Trust hired a lobbyist to work with lawmakers and regulators to find a compromise that preserved the traditional understanding of association health plans. In addition, a grassroots campaign was initiated among AVMA members who contacted their congressional representatives to preserve the Association's program.

Trustees point to two key events in 2012 that essentially meant the end of GHLIT's medical insurance portfolio, however.

“Through most of 2011 and part of 2012, we were optimistic we'd be able to continue providing health insurance,” Dr. James Brandt, GHLIT board of trustees chairman, said. “But when the Supreme Court ruled the individual mandate was constitutional and President Obama was re-elected, we lost a lot of our enthusiasm. It seemed fairly evident at that time that New York Life would exit the association medical insurance business.”

As the underwriter for GHLIT's medical plans, New York Life currently files its plans on behalf of the Trust in Illinois, and most states recognize the terms and conditions stipulated in that filing. If NYL were to have continued underwriting the Trust's medical insurance, then starting in 2014, the new health care regulations would have compelled the company to file in every state as well as adhere to each state's medical coverage and rate requirements.

New York Life informed GHLIT that complying with all the various state mandates was too burdensome. Additionally, NYL expects the new regulations will create market conditions and a regulatory environment that would put the company at a competitive disadvantage against government-subsidized medical insurance providers.

Dr. Brandt has been a member of the GHLIT board of trustees for eight years and served the past two years as chairman. He wasn't surprised by NYL's decision to exit the association health insurance market, nor does he fault the company for doing so. “The circumstances and changes in the regulations forced what I believe was a reluctant business decision on the part of New York Life, because they really wanted to continue offering medical coverage,” Dr. Brandt said.

Dr. Dajka acknowledged that when a membership benefit is lost, an organization will necessarily worry about diminishing the value of association membership. But, he noted, medical insurance was just one of many advantages of being part of the AVMA.

“You do have to worry about the impact on membership, but you have to show all the things AVMA does besides offering medical coverage,” Dr. Dajka said. “We have other insurance products, including PLIT, which isn't affected. We have over 57,000 members with that coverage, and there were no premium increases for 2013.”

The AVMA GHLIT is in the early stages of researching whether a private medical insurance exchange is a viable option for Association members. Exchanges are like a market in bringing together insurance providers that offer a range of plans at various rates so individuals can select a plan that best meets their needs.

Throughout the year, GHLIT will update members about developments related to their AVMA medical coverage as they continue assisting them with finding a new provider.

“Members should realize we're doing everything we can to make this transition a nonevent for them,” Dr. Brandt said. “There are a lot of uncertainties about the requirements of the new law, and we're having to play it by ear, but don't panic. Stay with the AVMA.”

AVMA report details pet ownership, veterinary care

More than half of U.S. households owned pets at year-end 2011, and three-quarters of these pet-owning households made at least one visit to the veterinarian during 2011.

The new data appear in the 2012 edition of the U.S. Pet Ownership & Demographics Sourcebook, now available from the AVMA. The book draws on a 2012 survey of more than 50,000 households and on data from previous editions.

The report has provided a comprehensive picture approximately every five years since 1983 of the ownership and veterinary care of cats, dogs, and other pets.

At year-end 2011, 56.0 percent of households owned pets, down from 57.4 percent at year-end 2006.

More households owned dogs than cats at year-end 2011, but cat-owning households had a mean of 2.1 cats while dog-owning households had a mean of 1.6 dogs. The population of pet cats decreased from 81.7 million at year-end 2006 to 74.1 million at year-end 2011, and the population of pet dogs decreased from 72.1 million to 69.9 million over the same period.

Dr. Roy Brenton Smith, president of the American Association of Feline Practitioners, thinks the economy and lifestyle changes contributed to the decrease in cat ownership.

Among pet owners, 63.2 percent considered their pets to be family members. Another 35.8 percent considered their pets to be pets or companions. The remaining 1 percent considered their pets to be property.

“The human-animal bond is stronger than ever, but we are very concerned that pets may not be getting the preventive health care they need,” said Dr. Douglas G. Aspros, AVMA president.

Among cat owners, 44.9 percent did not take their cat or cats to a veterinarian during 2011, up from 36.3 percent in 2006. Among dog owners, 18.7 percent did not take their dog or dogs to a veterinarian during 2011, up from 17.3 percent in 2006.

The primary reason that cat and dog owners gave for not visiting a veterinarian during 2011 was that their pets did not get sick or injured.

“What is most perplexing is that so many dog and cat owners understand that routine check-ups and preventive health care are important for their pets,” Dr. Aspros said. “Nearly 90 percent of dog owners and 75 percent of cat owners surveyed indicated that routine check-ups and preventive care are either very or somewhat important.”

Another 21.5 percent of cat owners and 29.3 percent of dog owners who did not visit a veterinarian said they could not afford it.

“The affordability factor is critical,” said Dr. Mark Russak, president of the American Animal Hospital Association. “And I think if we make it more affordable for clients, then they're going to tend to bring the animals in.”

Dr. Russak listed pet insurance, wellness plans, and credit as ways to make veterinary care more affordable. Among dog owners, 5.7 percent had insurance for their dogs in 2011. Among cat owners, 2.6 percent had insurance for their cats.

Despite the number of pet owners who did not visit a veterinarian, total veterinary visits increased from 193.0 million in 2006 to 202.4 million in 2011.

Total veterinary visits for dogs increased from 119.4 million to 130.4 million, and mean number of veterinary visits per dog increased from 1. 5 to 1.6. Total veterinary visits for cats decreased from 63.3 million to 60.5 million, but mean number of veterinary visits per cat stayed constant at 0.7 because the population of cats decreased.

Total veterinary expenditures for all pets increased from $24.5 billion during 2006 to $28.0 billion during 2011, an increase of 14.3 percent, as the Consumer Price Index increased 11.6 percent.

The 2012 sourcebook also offers details about the demographics of pet owners and about the ownership and veterinary care of pet birds, horses that owners categorize as pets, and specialty and exotic pets.

The AVMA has released the sourcebook in book form and as a downloadable PDF file. The report is available for purchase through the AVMA Store by visiting www.avma.org/products, then clicking on “Market Research Reports,” or by calling (800) 248-2862, Ext. 6655.

Researchers, dealers, exhibitors need disaster plans

Animal dealers, researchers, exhibitors, and others licensed and registered under the Animal Welfare Act will need to have plans to protect their animals during disasters.

Authorities in the Department of Agriculture want to make sure such animal holders know what they will do during emergencies. The written emergency plans need to be in place by July 29, and employees of the registered facilities need to be trained in the specifics of the plans by Sept. 27.

The USDA Animal and Plant Health Inspection Service said in a December 2012 announcement that many registered facilities have had inadequate contingency plans, as shown during the 2005 hurricane season, when Hurricane Katrina hit New Orleans.

A Dec. 31 Federal Register notice states that each contingency plan will need to identify likely emergencies ranging from electrical outages to natural disasters; describe tasks to be performed during emergencies, such as evacuating animals and providing backup sources of food, water, shelter, and veterinary care; identify who is responsible for the tasks; and describe what materials, resources, and training are needed for response and recovery.

APHIS officials will not make affected animal owners submit their plans because processing, reviewing, and storing plans for more than 10,000 license and registration holders would require “enormous” resources, according to the Federal Register notice. Instead, the agency wants facilities, dealers, exhibitors, handlers, and carriers to review their own contingency plans at least once annually and document the reviews.

APHIS inspectors must be able to examine the contingency plans, annual review documentation, and training records.

Researchers identify new raccoon polyomavirus

Rare brain tumors emerging among raccoons in Northern California and Oregon may be linked to a previously unidentified virus discovered by a team of researchers, led by scientists from the University of California-Davis. Their findings, published in December 2012 in the journal Emerging Infectious Diseases, could lead to a better understanding of how viruses can cause cancer in humans and other animals.

Necropsies conducted since March 2010 by scientists at the UC-Davis School of Veterinary Medicine and UC-Davis–led California Animal Health and Food Safety Laboratory found brain tumors in 10 raccoons, nine of which were from Northern California, the article reports. The 10th was sent to the university by researchers at Oregon State University.

The common factor found in all the tumors was a newly described virus, dubbed raccoon polyomavirus. Researchers suspect the virus contributes to tumor formation. Polyomaviruses are common but rarely cause cancer, nor do they typically cross species, so the outbreak is not expected to spread to people or other animals.

Two more raccoons with the tumor and the virus have been found in Yolo and Marin counties since September 2012, when the article was submitted to the journal for publication.

“Raccoons hardly ever get tumors. That's why we take notice when we get three tumors, much less 12,” said study author Dr. Patricia Pesavento, a pathologist with the UC-Davis School of Veterinary Medicine.

Polyomaviruses are known to cause cancer under laboratory conditions. Less is known about their ability to cause cancer in people under natural conditions, because such cancers often takes decades to develop. With their short lifespans of two to three years, raccoons can provide a model for studying how these viruses spread outside the laboratory, how they cause cancer, and how easily they can jump from species to species.

Of the 12 raccoons affected, 10 were collected from Marin County. This does not mean the virus is limited to that county or even to Northern California, according to Dr. Pesavento. Marin County is home to WildCare, an animal rescue and rehabilitation center that routinely submits animal remains for diagnostic testing, which might result in a sampling bias.

Other California raccoons were submitted by Lindsay Wildlife Museum in Contra Costa County and Sonoma Wildlife Rescue. Dr. Pesavento's laboratory is collecting specimens and data from other sources across the country, looking for the virus and for raccoon exposure to it.

Dr. Pesavento said more research is needed to understand whether an environmental toxin, genetics, or something else is contributing to the cancer. The study notes that raccoons are exposed daily to human waste, garbage, environmental toxins, and environmental pathogens as the animals travel along sewer and water lines.

“This is just the beginning of a story,” Dr. Pesavento said, adding that high rates of cancer are found among animals that live in proximity to humans. “Wildlife live in our fields, our trash cans, our sewer lines, and that's where we dump things. Humans need to be guardians of the wildlife-human interface, and raccoons are important sentinel animals. They really are exquisitely exposed to our waste. We may be contributing to their susceptibility in ways we haven't discovered.”

Infectious pathogens are associated with 15 to 20 percent of all human cancers worldwide, according to the American Cancer Society. For example, papillomavirus can lead to cervical cancer in women, and feline leukemia virus can cause cancer in cats.

Ruling could let drug sellers say more

Two appellate court judges ruled in December 2012 that a pharmaceutical salesman's conviction for conspiring to sell prescription drugs for off-label uses violated his speech protections under the First Amendment.

A third judge wrote in a dissenting opinion that the ruling “calls into question the very foundations of our century-old system of drug regulation” and would let such pharmaceutical company representatives make any prescription drug claims not yet proved to be false or misleading.

The ruling vacated a conviction against Alfred Caronia, a pharmaceutical company salesman who had been convicted in October 2008 of a misdemeanor charge of conspiring to introduce a misbranded drug into commerce. He was sentenced to one year of probation and 100 hours of community service.

Orphan Medical Inc., now Jazz Pharmaceutical, hired Caronia in March 2005 to promote Xyrem (sodium oxybate), a controlled substance and CNS depressant approved for use in human medicine to treat two conditions connected with narcolepsy, court documents state. That fall, federal government agents investigating off-label promotion of the drug recorded statements made by Caronia to a physician about unapproved uses, including statements that Xyrem can be used to treat patients younger than 16 and to treat those with fibromyalgia, periodic leg movement, and Parkinson's disease.

The U.S. Attorney's Office could petition the appellate court for a rehearing by the 13 active judges on the 2nd Circuit, according to Thomas F. Liotti, whose law firm represented Caronia. The government also could ask the Supreme Court to consider the case if the 2nd Circuit judges deny the rehearing petition or deliver another judgment unfavorable to the government.

Liotti and his client are satisfied with the current decision, but he knows of lawyers in the pharmaceutical industry who would rather that the case be considered by the Supreme Court, which could deliver a ruling that would apply across the country. The 2nd Circuit includes Connecticut, New York, and Vermont. Liotti also expressed concern that the government could interpret the ruling to apply only to criminal cases and not civil ones.

Robert Nardoza, a spokesman for the U.S. Attorney's Office for the Eastern District of New York, said the office is reviewing the court decision and considering its options. He declined to answer a question about the potential impact of the case.