California health reform

Ned Spurgeon (Utah and visiting distinguished chair at McGeorge this semester) has done a really nice piece on California health reform. It's been posted by Elizabeth Ann Weeks (Kansas) on the Jurisdynamics blog page.

Living with an incurable genetic disease

The N.Y. Times ran a remarkable story last Sunday describing the life changes that occur when a person chooses to learn whether she has the genetic condition -- Huntington's Disease (or HD) -- that killed her grandfather and afflicts her cousin. Is it a good idea to find out, or is it an invitation for sorrow, stigmatization, and loss of insurability? The issues are explored sensitively and in detail in this article, which I didn't see last Sunday as I prepared for and gave a talk to The Institute for the Humanities at Salado on, of all things, medical privacy and the uses to which genetic information may be put. Thanks to college classmate Rick Goggans, M.D., for pointing this one out to me!

Links to HD resources (provided by The Times):

• Huntington’s Disease Society of America


• Hereditary Disease Foundation


• Huntington’s Disease Advocacy Center

Fen-phen lawyers defrauded plaintiffs, court rules

Physicians, other health care professionals, hospitals, and other health-care entities take their lumps here with some regularity, so it is perhaps only fitting that I should note this story from yesterday's N.Y. Times:

W. L. Carter knew there was something fishy going on when he went to his lawyers’ office a few years ago to pick up his settlement check for the heart damage he had sustained from taking the diet drug combination fen-phen.

The check was, for starters, much smaller than he had expected. And his own lawyers threatened to retaliate against him if he ever told anyone, including his family, how much he had been paid. “You will be fined $100,000, you will go to jail and you will be sued,” Mr. Carter recalled them saying.

Mr. Carter was right to have been suspicious. The lawyers defrauded their clients, a state judge has ruled in a civil case, when they settled fen-phen lawsuits on behalf of 440 of them for $200 million but kept the bulk of the money for themselves. Legal experts said the fraud might be one of the biggest and most brazen in legal history.

This week, several clients testified before a federal grand jury that has begun to investigate potential criminal wrongdoing arising from the settlement.

“It enrages me,” said Sonja Pickett, a retail manager, who testified Thursday before the grand jury. “They robbed us.”. . .

The basic facts are not in dispute. When the clients sued the drug maker, they agreed to pay the lawyers 30 percent to 33 percent of any money that was recovered, plus expenses. In this case, that would have left the 440 clients to divide perhaps $135 million.

But the clients received only $74 million. An additional $20 million went to a questionable “charitable fund.” The rest — $106 million — went to lawyers. Though amounts of the individual settlements remain sealed, court papers suggest they were from $100,000 to $5 million. On average, plaintiffs received less than 40 percent of what the settlement agreement specified, instead of the roughly 70 percent to which they were entitled.

Had the lawyers merely taken what they were contractually entitled to, they would have become very rich men, said Tracy Curtis, a mortgage loan officer who is also suing her former lawyers. “They could have taken the high road,” Ms. Curtis said. “They would have made plenty of money.”

There's more, and it's all ugly. Shameful.

Federal bill prohibiting genetic discrimination analyzed by Congressional Budget Office

H.R. 493 (the "Genetic Information Nondiscrimination Act of 2007") would broadly prohibit genetic discrimination by employers (including states and their political subdivisions), unions, employment agencies, and insurers. It has 221 co-sponsors, which is more than enough (assuming they all vote for the bill in the form in which it hits the floor and after amendments, if any) to pass in the House. Here's the Congressional Research Service's summary of the bill:

• Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Public Health Service Act to expand the prohibition against discrimination by group health plans and health insurance issuers in the group and individual markets on the basis of genetic information or services to prohibit: (1) enrollment and premium discrimination based on information about a request for or receipt of genetic services; and (2) requiring genetic testing. Sets forth penalties for violations.


• Amends title XVIII (Medicare) of the Social Security Act to prohibit issuers of Medicare supplemental policies from discriminating on the basis of genetic information.


• Extends medical privacy and confidentiality rules to the disclosure of genetic information.


• Makes it an unlawful employment practice for an employer, employment agency, labor organization, or training program to discriminate against an individual or deprive such individual of employment opportunities because of genetic information. Prohibits the collection and disclosure of genetic information, with certain exceptions.


• Establishes a Genetic Nondiscrimination Study Commission to review the developing science of genetics and advise Congress on the advisability of providing for a disparate impact cause of action under this Act.

For a more detailed discussion of the bill, go to H. Rept. 11-28 (Part I), March 5, 2007. Also, a number of states already have similar laws on their books. The National Conference of State Legislatures has a handy list of such laws (last updated Nov. 2006 (employment) and June 2005 (insurance)).

Yesterday, the CBO published its cost estimate for H.R. 493. Over 10 years, the federal treasury would be out about $2 million (because premiums for some of the new insureds would be tax-deductible) and the CBO estimates increased outlays of about $2 million (assuming appropriations are approved) for the Departments of Labor, Treasury, and HHS. There will be additional state and private-sector mandates in connection with the anti-discrimination law, but CBO figures the cost will be low for the states and below the threshold in the Unfunded Mandates Reform Act for the private-sector actors.

If there's a surprise in any of this, it might be in the estimated number of citizens expected to benefit from this law: 600. Is there any chance this is a typo?

From CMS today (see new COP in Friday's Federal Register (I'll supply the link when it's available tomorrow)):

NEW MEDICARE HOSPITAL CONDITIONS OF
PARTICIPATION FOR TRANSPLANT CENTERS

The Centers for Medicare & Medicaid Services (CMS) issued a final rule today setting forth the requirements that transplant centers must meet to participate in the Medicare program that moves Medicare covered transplant programs toward an outcome-focused system.

This final rule will move Medicare-covered transplant programs toward an outcome-focused system that reflects the clinical experience, resources and commitment of the transplant program. The rule contains comprehensive conditions of participation for transplant programs serving Medicare beneficiaries.

It will ensure effective oversight of transplant centers by advancing coordination between CMS, State survey agencies, the Health Resources and Services Administration, the Organ Procurement and Transplantation Network and the Scientific Registry of Transplant Recipients.

“This is a major milestone in our efforts to make sure that people needing transplants get the best possible care, while giving transplant centers and physicians comprehensive and reliable guidance,” said Leslie V. Norwalk, CMS acting administrator. “This rule both improves the current transplant outcome measure requirements and strengthens the protection of the health and safety of patients and living donors.”

In recent decades, remarkable strides in transplantation technology and pharmacology have turned organ transplantation into a mainstream treatment for many patients in end stage organ failure. CMS issued coverage decisions related to heart transplants in 1987, liver transplants in 1991, lung transplants in 1995, and intestine transplants in 2001 and updated in 2006. Kidney transplant centers have been regulated in the Code of Federal Regulations since 1976. This rule will consolidate all transplant center requirements into one regulation.

All transplant centers that continue to participate in Medicare, including kidney transplant centers, are required to submit a request for initial approval. Once approved by Medicare, transplant centers are eligible for re-approval every 3 years.

Transplant centers with current Medicare approval, that have applied for initial approval within 180 days from the effective date of the final rule may continue to provide transplant services and receive payment from Medicare until CMS makes a decision on the transplant center’s request for approval.

The final rule went on public display today at the Office of the Federal Register for publication on Friday, March 23, 2007.

IRS releases "Good Governance Practices" for charitable organizations

I meant to post this earlier, but the posts have been few and far between this month, and Davis & Tremaine beat me to the punch, so I have to give them credit for this one: The IRS has announced the release of a staff discussion draft of "Good Governance Practices for 501(c)(3) Organizations." Major sections of the draft include these topics: Mission Statement, Code of Ethics, Due Diligence, Duty of Loyalty, Transparency, Fundraising Policy, Financial Audits, Compensation Practices, Document Retention Policy. It's about three (3) pages long and its content shouldn't surprise anyone with a passing familiarity with the law of exempt orgs.

The IRS seems to be saying that adoption of these good governance practices is not a criterion for obtaining or retaining exempt status, but that an organization that departs to a significant degree from them is more likely to engage in practices that put its exempt status in jeopardy. Interestingly, if somewhat bizarrely, the Service inserted a comment about board size into its introduction that doesn't appear -- either implicitly or explicitly -- in the Good Governance Practices themselves. It's the trite-but-true "Goldilocks" principle that boards that are too small have difficulty representing "a public interest" and boards that are too large "may be less attentive to oversight duties." Presumably boards that are "just right" are more likely to see that their duties are carried out in a manner that promotes, in the case of exempt hospitals, community benefits.

GAO testimony on DOD/VA care problems for injured soldiers, vets

GAO released the text of its testimony today before the Subcommittee on National Security and Foreign Affairs of the House Committee on Oversight and Government Reform. The witness list and links to testimony and related documents are here. What is fairly clearly emerging is a sense that the problems with outpatient care at Walter Reed Army Hospital -- described in a series of articles in The Washington Post last week -- are the tip of the iceberg. That's the gist of an article by Anne Hull and Dana Priest in today's Post.

It may be true, as Paul Krugman writes in today's op-ed (paid TimesSelect subscription required) in the N.Y. Times, that the worst of the worst in terms of quality care (or the lack thereof) is in the military hospitals, which are separate and distinct from the VA. And the VA may still be the exemplar of quality that it's been touted to be for the past 10 years (although that's not what I hear from the medical students who rotate through the VA hospital here, and that's not the message from vets in today's Post article by Hull and Priest). But the testimony of the GAO witness documents some of the ways that the care in the VA system breaks down when a patient is handed off from the military's hospital system to the VA's.

To be middle-class and uninsured

Robert Pear has an interesting front-page article today in the N.Y. Times ("Without Health Benefits, a Good Life Turns Fragile") on the growing phenomenon of employees and independent contractors whose arrangements don't include health insurance. The main focus is about a 50-year-old real-estate agent with Century 21, Vicki Readling, who makes about $60,000 but can't afford a health-insurance policy that is priced -- on account of her pre-existing diagnosis of cancer -- at $27,000:

[T]he uninsured are not necessarily the poor, the unemployed and the undocumented. Solidly middle-class people like Ms. Readling are one of the fastest growing subgroups.

And that is one reason, according to a recent New York Times/CBS News poll, that the problems of the uninsured have jumped to the top of the domestic political agenda in Washington and on the campaign trail.

Today, more than one-third of the uninsured — 17 million of the nearly 47 million — have family incomes of $40,000 or more, according to the Employee Benefit Research Institute, a nonpartisan organization. More than two-thirds of the uninsured are in households with at least one full-time worker.

The article offers a good illustration of the problems encountered by the uninsured.

To save money, Ms. Readling said, she defers visits to the doctor and stretches out her cancer medication, which costs her about $300 a month. She takes the tiny pills three or four times a week, rather than seven days a week as prescribed.

“I really try to stay away from the doctor because I am so scared of what everything will cost,” said Ms. Readling, who is divorced and has twin 18-year-old sons. Before every doctor’s visit and test, she asks, “How much are you going to charge me?” She says she tries to arrange “the best deals I can.”

But in many cases, the price is still unaffordable, and “I have to do without.”

Undertreatment and general mismanagement of chronic conditions will, in the long run, result in more expense, not less, but if short-term cash flow makes the cost of care prohibitively expensive, where's the safety net for patients like Ms. Readling? It doesn't exist.