Hammon Acuna is the Vice President of Membership Services at the Cooperative of American Physicians (CAP). He believes in providing excellent customer service through both human interactions on the phone and leveraging cutting-edge technology. Acuna oversees a staff that handles over 20,000 calls per year from CAP members. Under his leadership, CAP has implemented online services like credentialing documents and certificates that save members' time. Acuna's goal is to continue improving CAP's online services so members can accomplish more tasks digitally.

1. th e M o n thl y P u blicatio n for cap M e mb e rs
CAPsules®
Hammon P. Acuna, vice president, Membership Services
for the Cooperative of American Physicians, knows the best
customer service “is a bit old-fashioned. It is a human being
answering the telephone, listening, and taking the time to
respond with just the right answers.” But he is also quick
to leverage the most cutting-edge technology to serve
members, anytime, day or night.
It is all in a day’s work for Acuna, who is always seeking
ways to help members save money, work more efficiently,
and serve their patients better in economically
challenging times.
Acuna was born in the Philippines. His grandmother, a U.S.
citizen, brought him to the United States when he was a
year old. “My grandmother always dreamed of moving
to the country in which she was born a citizen, so we
moved to San Francisco in the early 1960s. We eventually
settled in the Los Angeles area.” Hammon was raised by
his grandmother in the San Fernando Valley and studied
psychology and economics at UC Santa Cruz.
Acuna first worked with medical professional liability
insurance companies at Johnson & Higgins, a large
brokerage firm. He then moved to the former SCPIE
insurance company, where for 18 years he specialized
in policyholder services as a marketing vice president,
created a midsize group unit, and automated the client
management system, among other accomplishments.
It was an almost unanswered e-mail sent to him during
a wedding celebration that brought Acuna to CAP on
July 17, 2007. At CAP, he draws on his technical proficiency,
puzzle-solving ability, and people skills, while leveraging
“the incredible talents of our staff” to help physicians make
the most of their membership.
Acuna supervises a staff of Membership Services
representatives who are the first line of response,
fielding more than 20,000 calls a year, always with the
goal of making one phone call do the job.
The representatives are experts in everything about CAP
and serve as liaisons to other departments. They field
questions on almost every subject, such as finance and
billing, credentialing, claims, coverage details, records
maintenance, operations, and the many benefits available
to members. This means there are few transferred calls.
And for the most challenging and demanding calls,
Acuna delights in saying “send them to me!”
One of the technological service innovations implemented
on Acuna’s watch is CAP Privileges Online, which saves
members’ time and an estimated 8,000 to 10,000 calls to
CAP each year. The system allows members to log in and
access, print, and e-mail credentialing documents and
certificates of coverage at their convenience. More than
76 percent of members are participating and saving time
and money, especially at year-end.
Service representatives are spreading the word about
the most recent member benefit, the CAPSource group
purchasing program. Members can purchase more than
40 products and services including everything from
October2012
continued on page 2
CAP Vice President Delivers
Old-Fashioned Service and
Cyber-Age Innovation
Hammon P. Acuna
Vice President,
Membership Services
by Barbara Dillard

2. CAPsules®2
cover story continued
Let CAP’s Membership Services Department Help You
with Your Year-End Planning
If you are contemplating a change in your practice for
2013, you need to notify CAP in writing as soon as possible
so that our Membership Services Department can review
your options with you and make your coverage transition a
smooth one. For example, contact us if you plan to:
• Retire from practice at age 55+
• Practice part-time
• Reduce or otherwise change the scope of your practice
• Work for a government agency or non-private
practice setting
• Work for an HMO or other self-insured organization
• Join a group insured by another carrier or
• Move out of the state
Also, if you plan to terminate your membership, contact
our Membership Services Department to review the various
termination options available to you. All changes to your
practice that affect your assessment, including, but not
limited to part-time/full-time practice status, risk class
reduction, retirement, and termination, must be received,
in writing, prior to the levying of the next assessment if you
do not wish to be held liable for that assessment.
Termination requests must include the method and desired
date of termination. We recommend that you send in your
written request by October 31, 2012. Members of record
when an assessment is levied are liable for the full year
assessment. It is anticipated that the Board of Trustees
of the Mutual Protection Trust (MPT) will levy the next
assessment in November.
For more information or assistance with your year-end
planning, please contact our Membership Services
Department at 213-576-8555 or 800-252-7706. You may
also e-mail us at ms@capphysicians.com.
medical supplies, x-ray supplies, and laboratory services to
cell phones and office supplies. A recent study of the pilot
program found that those participating saved from 15
to 32 percent.
Acuna’s main goal for the future is continuing to improve
CAP’s online presence so members can accomplish even
more tasks online.
As for Acuna’s life outside CAP, he says that while he
once loved to travel all over the world, train with weights,
and read, he now spends his time joyously rediscovering
life and the world through the eyes of his two-year-old
daughter, Lola.

3. Global Payments, Accountable Care Organizations, Pay for
Performance, Integrated Delivery models……..What are
health care professionals to do in navigating this new
world of provider payment reform and increased risk
assumption? Experts are available to assist providers in
quantifying the assumed risk and obtaining Provider Excess
of Loss coverage to limit and control the assumed risk.
The Patient Protection and Affordable Care Act (ACA)
has been a huge driver for shifting risk to providers.
Insurers and HMOs now must meet minimum loss ratio
requirements, leading many payers to transfer more risk
to providers as a means of reducing the variability of their
medical claim activity. With the expansion of Medicaid
under the ACA, many states are mandating managed
care for Medicaid services as they strive to manage these
expanded services within severe budget constraints.
The Centers for Medicare & Medicaid Services is
encouraging innovation in modifying Medicare
reimbursements as our senior population grows.
Whether ACA stands or is ultimately overturned
legislatively, payment reform has been set in motion.
California has long been ahead of the rest of the country
in terms of alternative payment methodologies to
providers. There is now a nationwide groundswell of
activity among payers and federal and state governments
to experiment with new reimbursements to hospitals,
physicians, and other medical providers as a means of
reducing costs and overutilization, as well as to provide
economic incentives to providers for better coordination
of care and improved outcomes. The prevailing notion
is that providers are closer to the patient and can better
control and influence utilization and outcomes. Under the
terms of these new payment contracts, providers may be
at risk for only those services they perform or for services
performed within a specified network at a contracted rate,
or even for medical care delivered outside of a network or
in emergency situations.
Provider Excess of Loss coverage was developed to” follow
the risk” as payers transferred risk to providers. Many more
insurers and reinsurers are offering Provider Excess of Loss
coverage in recognition of new opportunities as these
market dynamics result in a shift in risk assumption.
Provider Excess of Loss coverage is driven by the “division
of financial responsibility matrix,” commonly called the
DOFR, and other risk assumption terms specified in the
agreement with the payer. It is also important to consider
the claim accumulation methodology applied by an
insurer. The claim accumulation basis is often limited to
the lesser of billed charges, the amount paid, or a
negotiated rate.
As provider payment reform escalates the transfer of
risk to providers, there is a need for providers to seek
expert counsel in evaluating their assumed risk, largely
because of an asymmetry of claims data between payers
and providers.
Analytics play a critical role as a decision-making tool
during three phases: 1) during the contracting phase
where analytics can be used as a negotiating tool, 2) when
determining the most appropriate Provider Excess of Loss
coverage to purchase, and 3) when evaluating Provider
As Payers Transfer Financial Risk to Health Care Providers,
the Need for Provider Excess Coverage Grows
continued on page 4
October2012
CAPsules®3

4. October2012Excess of Loss quotations. It is important to evaluate and
quantify the risk assumed by a provider under a payer
agreement. Ideally, this can be done during the contracting
phase. Physician groups should consider the types of
claims for which they are at risk and which have the most
potential to be both volatile in terms of predictability and
catastrophic in size. Experts can provide actuarial modeling
of claims data using a “Monte Carlo” simulation to provide
insight into the risk assumed by a provider. The modeling
produces a range of results from most favorable to most
pessimistic while also quantifying the most likely scenario
or expected claims costs. In concert with an understanding
of risk tolerance, this analysis can serve as a decision
making tool in determining the appropriate Provider Excess
of Loss coverage to pursue.
Once a provider determines the optimum coverage
structure for its medical practice, an expert will obtain
alternative Provider Excess of Loss quotes. The expert
then actuarially models the quotes based upon the
expected range of claims experience to determine the
most favorable options.
Coverage is typically written to provide coverage with
a specific deductible per patient for claims incurred
during a 12-month period and paid within 18 months.
Minimum deductibles are typically $15,000 for physicians
and $25,000 for hospitals. Coverage may vary from
inpatient only to comprehensive coverage, again
depending upon the medical services for which the
provider is at risk. There is often a coinsurance provision
whereby the provider retains a small percentage of the
excess claim.
Many payers will offer Provider Excess of Loss coverage as
part of a payment agreement. However, provider excess
insurers often offer better terms at more competitive rates,
so providers often benefit by seeking coverage outside of a
payer agreement. In addition, if a provider is assuming risk
from a number of payers, risk can be consolidated under
the same agreement, even if the medical expenses for
which the provider is at risk differ from payer to payer.
Another advantage to purchasing Provider Excess of
Loss coverage in the commercial market is providers may
benefit from access to medical management support,
specialty vendors, and specialty networks, such as
organ transplant networks, oncology care management
specialists, and specialty pharmaceutical vendors.
In summary, as physicians seek to navigate this new
world of medical services reimbursement changes and
risk assumption, there are experts available to assist with
quantifying the risk to support the contract negotiation
and the Provider Excess of Loss coverage decision-making
process. For more information, contact CAP Physicians
Insurance Agency, Inc. by phone at 800-819-0061, or by
e-mail at CAPAgency@CAPphysicians.com
Watch for more in-depth articles on Provider Excess of Loss
coverage in future CAPsules.
CAPsules®4

5. CAPsules®
CAP Members Help Defeat Drastic Change in State Law on Damages
California legislators have turned back a bill that
threatened to overturn not only a recent state Supreme
Court decision but also a fundamental principle of civil law.
After a flurry of amendments, SB 1528, by Senator Darrell
Steinberg (D-Sacramento), failed passage on the last day of
the Legislative session. Just days earlier, a large number of
CAP members contacted their local representatives with a
critical message that SB 1528 be rejected.
In its original form, the bill called for a change in California
law to allow litigants in personal injury lawsuits to collect
as economic damages money for medical expenses beyond
what they actually incurred. The bill followed a state high
court decision in August 2011 (Howell v. Hamilton Meats)
that said injured plaintiffs should not be compensated in
excess of losses they actually suffered.
Though SB 1528’s proponents had touted the bill as a way
to bring money back into the Medi-Cal system, the final
form of the legislation was not limited to patients treated
through the welfare benefit program, which itself already
has the ability to recover the value of benefits provided.
Indeed, that broad effect of SB 1528 would have severely
undermined the benefits to Californians provided by the
state’s landmark Medical Injury Compensation Reform Act
(MICRA). The Cooperative of American Physicians, working
closely with the Californians Allied for Patient Protection
(CAPP) and the Civil Justice Association of California (CJAC),
opposed the drastic change in California law that SB 1528
would have brought.
Following a CAP News Direct legislative alert sent by
e-mail to CAP members, several hundred CAP physicians
immediately contacted their local representatives to
explain why SB 1528 was a bad idea. The elected officials
got the message and agreed that SB 1528 would not be
good for Californians.
5
Cooperative of American Physicians Programs Earn Top Marks from
A.M. Best Company
The medical professional liability products managed
by the Cooperative of American Physicians, Inc. (CAP)
have received top financial strength ratings from A.M.
Best Company.
For six consecutive years, the Mutual Protection Trust (MPT)
has earned Best’s A+ (Superior) rating. The A- (Excellent)
rating for the Cooperative of American Physicians Insurance
Company, Inc., a risk retention group (CAPIC-RRG),
repeats last year’s rating. Both programs retain a Stable
outlook classification.
CAP’s Chief Executive Officer James L. Weidner says,
“We’re proud that A.M. Best Company has recognized
the exceptional financial strength and stability of CAP’s
MPT and CAPIC-RRG products. These ratings speak to the
outstanding financial stability of these programs despite
marketplace fluctuations.”
As an unincorporated interindemnity arrangement,
MPT operates pursuant to Section 1280.7 of the California
Insurance Code and is governed by a seven-physician
Board of Trustees. CAPIC-RRG is a wholly owned subsidiary
of the Cooperative of American Physicians, Inc. Formed in
2002 to provide supplemental reinsurance to MPT,
CAPIC was relicensed by the Captive Administrator for the
State of Hawaii in 2011 as an association risk retention
group. As a risk retention group, CAPIC-RRG offers medical
professional liability protection to physicians in large
medical groups.
A.M. Best Company’s Financial Strength Ratings are an
independent opinion of an organization’s financial
strength and ability to meet its ongoing coverage and
contract obligations.
MICRA

6. A southern California registered nurse recently pleaded
guilty to the “unlawful practice of medicine” after
administering Botox to an undercover investigator.
The nurse administered the Botox “without a physician
examining the patient first and prescribing the procedure,”
stated a spokesperson from the Department of Consumer
Affairs which oversees licensing of California professionals.
According to the Ventura County Star article, the California
Medical Board will review the case but no charges have
been filed yet against the nurse’s supervising physician.
The nurse will be sentenced this month.
The California Nursing Practice Act authorizes a Registered
Nurse to provide “patient care services, including,
but not limited to, the administration of medications
and therapeutic agents necessary to implement a
treatment, disease prevention, or rehabilitative regimen
ordered by and within the scope of licensure of a physician,
dentist, podiatrist or clinical psychologist” (Business and
Professions Code §2725).
In California, the practice of medicine includes the
administration of Botox, injection of cosmetic fillers,
and the use of a laser. Therefore, before a registered nurse
may perform these procedures, California law requires
that physician employers establish written protocols called
Standardized Procedures. Because California-licensed
registered nurses may not diagnose or prescribe (even
under Standardized Procedures), the California Medical
Board has taken the position that they may perform these
procedures only if the physician has examined the patient
first and prescribed the specific procedure and/or specific
medication for the specific patient.
Physicians who employ registered nurses to perform
cosmetic procedures take heed!
If a registered nurse performs any of the medical
procedures noted above:
• Standardized Procedures must be in place in the
practice that outlines the nurse’s knowledge and skill
and delineates the specific types of patients that he/
she may treat
• A physician must evaluate the patient and order the
procedure prior to treatment
• If the treatment will be provided at a physician’s
satellite office, the patient should be scheduled to see
the physician prior to performance of the procedure.
Exclusion from Medical Professional Liability Coverage
CAP reminds members to contact CAP’s Membership
Services Department to seek proper coverage for
registered nurses, nurse practitioners, and physician
assistants who will perform elective cosmetic procedures.
Under the terms of the Mutual Protection Trust Agreement,
medical professional liability coverage will not be provided
for the defense, settlement, or payment of any claim
against a covered person or a covered entity arising out
of the performance of elective cosmetic procedures
unless the covered person receives prior approval from MPT.
This restriction applies to both physicians and others in the
medical practice.
Nurse Practitioners and Physician Assistants
Nurse practitioners and physician assistants undergo
additional training that permits them to assess and
prescribe under written protocols (Nursing Standardized
Procedures or Physician Assistant’s Delegation of Services
Agreements, respectively). Therefore, unlike a registered
nurse, they may act in accordance with their written
protocols without the physician first examining the patient.
They may also furnish or administer drugs or medications
under the physician’s general supervision only.
Scope of Practice and Standardized Procedures information for nurses
may be found at http://www.rn.ca.gov/regulations/practice.shtml
The Ventura County Star article may be read in its entirety at
http://www.vcstar.com/news/2012/aug/08/camarillo-nurse-pleads-guilty-
in-connection-with/
Nurse Faces Sentencing for Felony Charges
Over Botox Treatments Waldene Drake, RN, MBA
CAPsules®6
Waldene Drake is CAP’s vice president, Risk Management & Patient
Safety. Comments about this article may be directed to Waldene K.
Drake at wdrake@CAPPhysicians.com

7. CAPsules®
Injuries Don’t Wait for the Paperwork to Clear
Physicians – and their patients – are justifiably
frustrated when delays in getting financial authority
interfere with the timely provision of medical services.
But health care providers need to be careful that they
do not become part of the delay.
A 20-year-old skateboarder fell and injured his right
elbow on a Friday. X-rays taken at the emergency
department revealed a fracture of the radial head.
On Monday, the young man saw his regular pediatrician,
Dr. P, who concluded that her patient needed to see
an orthopedic surgeon. The next day, Dr. P’s office
submitted an authorization request to her network for a
consultation with an orthopedic surgeon, Dr. OS.
That request was approved by the network’s managed
service organization (MSO) 14 days later and the patient
visited Dr. OS nine days after that. Dr. OS noted that
the patient had a comminuted fracture of the right
radial head with displaced fragments. Dr. OS noted
that the patient “requires excision of radial head and
bone fragments” and faxed his report to Dr. P with
a note: “This patient needs a surgery. Please get an
authorization for his surgery and fax it to us so we can
schedule him. It will be done at [Community Hospital]...
Please do it ASAP.”
As it turned out, Dr. P did not request the surgical
authorization until 15 days later. By that time, six weeks
had passed since the injury.
The next day, Dr. P received a fax from the MSO
indicating that the approval status was “deferred.”
More than three weeks later – now nine weeks after the
patient’s fall – the surgical request was denied because
of lack of records.
(The MSO later claimed that it had sent to Dr. P a request
for Dr. OS’s medical records – though that request does not
appear in Dr. P’s records nor is there a verification of such
a fax transmittal.)
When the patient finally saw another orthopedic surgeon
three months hence, that surgeon wrote: “It is clear
that this patient was absolutely mismanaged from the
beginning. He suffered a right radial head/neck fracture
which appears to have been severe. It has since healed in
a malunited position resulting in forearm synostosis and
debilitating loss of function and strength. The injury
should have been treated with urgency with ORIF ...
followed by immediate physical therapy to regain range
of motion... The failure to adequately provide correct
treatment for this patient has directly resulted in a
negligent outcome and essentially permanent loss of
function and permanent disability.”
The patient later received physical therapy and sued
Dr. P, the network, the MSO and the health plan for his
permanent injuries. As to Dr. P, the patient alleged that
she was negligent in the 15-day delay in requesting the
surgery recommended by Dr. OS and that she negligently
did not forward the medical records sought by the MSO.
Dr. P, the MSO, and the patient resolved the matter
informally prior to arbitration.
Just as physicians have detailed systems in place to follow
up on critical medical referrals and tests, so should they
treat financial authorizations for needed medical care.
Though health care providers and payers participate in
increasingly complex arrangements, it is still the physician
who has the primary responsibility to diligently act in the
best interests of the patient.
October2012
7
by Gordon Ownby
Case of the Month
Gordon Ownby is CAP’s General Counsel. Comments on Case of the Month may be directed to gownby@CAPphysicians.com.

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October2012
www.CAPphysicians.com
CAPsules® is a publication of the Corporate Communications Department of the Cooperative of American Physicians, Inc.
333 S. Hope St., 8th Floor, Los Angeles, CA 90071 | 800-252-7706
We welcome your comments! Please submit to communications@CAPphysicians.com
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I n T h i s I s s u e
1 Staff Member Profile: Hammon P. Acuna, Vice President, Membership Services
2 Let CAP’s Membership Services Department Help You with Your Year-End Planning
3 As Payers Transfer Financial Risk to Health Care Providers,
the Need for Provider Excess Coverage Grows
5 MICRA:
CAP Members Help Defeat Drastic Change in State Law on Damages
5 Cooperative of American Physicians Programs Earn Top Marks from A.M. Best Company
6 Risk Management & Patient Safety News:
Nurse Faces Sentencing for Felony Charges Over Botox Treatments
7 Case of the Month:
Injuries Don’t Wait for the Paperwork to Clear