Saturday, October 21, 2006

Latest from AHLA's Health Lawyers Weekly (20 Oct 2006)

From the excellent Health Lawyers Weekly (AHLA member benefit), here's the table of contents from the October 20 issue:

Top Stories

Articles & Analyses

Current Topics

Copyright 2006 American Health Lawyers Association. Printed with permission.

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Wednesday, October 18, 2006

If it could happen to Triad, it could happen to you

It's a sign of the times, I suppose: As health insurance becomes more expensive, more employers (especially small businesses and others that operate at the margins of profitability) drop health insurance, throwing more employees into the category of "self-pay" (unless they can afford coverage in the extravagantly priced individual-policy market), thus increasing the percentage of self-pay patients showing up at hospitals' doors, thus increasing the percentage of bad debt those hospitals carry (as a percentage of patient revenue). That is Triad Hospitals' explanation for third-quarter earnings that are 18 or 19 cents below analysts' expectations. The story is from Modern Healthcare's "Daily Digest" (requires paid subscription). Triad's press release is here.
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Tuesday, October 17, 2006

Latest from AHLA's Health Lawyers Weekly (13 Oct 2006)

From the excellent Health Lawyers Weekly (AHLA member benefit), here's the table of contents from the October 13 issue:

Top Stories

  • CMS Reduces Improper Claims By $1.3 Billion
    Improper Medicare claims payments were reduced $1.3 billion between 2005 and 2006, the Centers for Medicare and Medicaid Services (CMS) said October 12.The Medicare fee-for-service (FFS) error rate has declined from 14.2% in 1996 when the improper payment rate was first reported, to 5.2% in 2005, to the current 4.4% in 2006, CMS said in a press release. Full Story
  • OIG Finds DME Manufacturer's Proposal To Offer Suppliers Free Advertising Problematic
    A proposed arrangement in which a durable medical equipment (DME) manufacturer would provide free advertising and reimbursement consulting services to some of its DME supplier customers could generate prohibited remuneration under the Anti-Kickback Statute and potentially trigger administrative sanctions, according an advisory opinion posted October 10 by the Department of Health and Human Services Office of Inspector General (OIG). Full Story

Articles & Analyses

Current Topics

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Monday, October 16, 2006

"The Massachusetts Plan and the Future of Universal Coverage"

That's the title of an upcoming conference (click here) and law review symposium issue (click here) at the University of Kansas School of Law. (Do I see the fine hand of old pal Gail Agrawal in this topic and the great lineup of speakers?) Thanks to Professor Elizabeth Weeks for the heads up on this one.
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AHLA, Matyas & Valiant score with new edition of fraud and abuse classic

I wouldn't want to guess how many thousands of health lawyers have turned to one of the first two editions of Legal Issues in Healthcare Fraud and Abuse by David Matyas (who joined in on the 2nd edition) and Carrie Valiant, both of the Washington, D.C., office of Epstein, Becker & Green. Since its publication by AHLA in 1994, LIHFA has served as a primer on fraud and abuse issues for the newly minted healthcare lawyer and a quick desk reference for anyone looking for a leg up in his or her research on a specific issue.

The third edition has just been published, and I'm happy to report that it is a worthy successor to the first two editions. For a book that comes in at just under 500 pages, it is surprisingly comprehensive. It also doesn't scrimp on historical background and policy analysis and includes a useful chapter on the ethical and legal aspects of representing healthcare organizations in fraud and abuse matters.

Strong "buy" recommendation.
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Sunday, October 15, 2006

Back to the world of the living

I've been away for a little work on my damaged left knee. Sorry for the break in communications. I'll try to make up for lost time tonight and tomorrow. . . .
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Wednesday, October 11, 2006

Falling into Medicare Part D's doughnut hole

Good editorial in the Oct. 6 N.Y. Times about the Part D Medicare pharmaceutical benefit. It omits one fact and misleadingly states another.

1. For some beneficiaries, the effect of the doughnut hole -- which leaves seniors paying 100% of their drug costs between $2250 and $5100 -- will be higher out-of-pocket costs after Part D became effective than before. For some, perhaps many or even most, Medicare beneficiaries -- including those whose drug use doesn't push them into the doughnut hole, as well as those whose utilization is at truly catastrophic levels, where Plan D kicks back in and covers 95% of drug costs -- Part D will be a boon. But it's promise is false for many who fall into the doughnut hole and aren't "lucky" enough to have catastrophic levels of drug needs.

2. The Times says Medigap coverage can be purchased to insure the doughnut hole. That's only true, I believe, if the beneficiary's drug plan offers supplemental coverage, and many don't. In many other cases, seniors who were unaware of the implications of the doughnut hole chose a drug plan that didn't offer supplemental coverage and was therefore cheaper than another plan that did offer the supplemental coverage at a somewhat higher price. This is confusing for young, healthy law students in my health law class; imagine what confusion was out in the land when seniors were sorting and evaluating their options earlier this year.
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Saturday, October 07, 2006

Rationing flu vaccine: WSJ considers the ethics

Good discussion in a FREE online article over at the Wall Street Journal: "If We Must RationVaccines for a Flu,Who Calls the Shots?," by Sharon Begley. Here's the teaser:

You have 100 doses of a vaccine against a deadly strain of influenza that is sweeping the country, with no prospect of obtaining more. Standing in line are 100 schoolchildren and 100 elderly people.

The elderly are more likely to die if they catch the flu. But they also have fewer years left to live and don't get out enough to easily spread or catch the disease. The kids are more likely to act like little Typhoid Marys, sneezing virus over anyone they encounter, and have almost their whole life ahead of them. But they're also less likely to die if they get sick.

Whom do you vaccinate?

This dilemma is haunting experts concerned that avian influenza might start spreading from person to person instead of (as far as we know) mainly from birds to people. But it also applies to regular old flu, which always has the potential to reach pandemic proportions. In response, studies now are shedding light on the ethical issues and the most effective strategy for reducing illness and death if vaccine must be rationed. Sadly, they make a pretty good case that current U.S. policies leave a lot to be desired.

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Friday, October 06, 2006

Latest from AHLA's Health Lawyers Weekly (06 Oct 2006)

From the excellent Health Lawyers Weekly (AHLA member benefit), here's the table of contents from the October 6 issue:

Top Stories

Articles & Analyses

Current Topics

(c) 2006 AHLA. Reprinted with permission

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Wednesday, October 04, 2006

GAO: CMS' medical data susceptible to hackers


Here are a few opening paragraphs that ought to startle even the most jaded government bureaucrat:

Security weaknesses have left millions of elderly, disabled and poor Americans vulnerable to unauthorized disclosure of their medical and personal records, federal investigators said Tuesday.

The Government Accountability Office said it discovered 47 weaknesses in the computer system used by the Centers for Medicare and Medicaid Services to send and receive bills and to communicate with health care providers.

The agency oversees health care programs that benefit one in every four Americans. Its massive amount of data is transmitted through a computer network that is privately owned and operated.

However, CMS did not always ensure that its contractor followed the agency's security policies and standards, according to the GAO report released Tuesday.

"As a result, sensitive, personally identifiable medical data traversing this network are vulnerable to unauthorized disclosure," the federal investigators said. "And these weaknesses could lead to disruptions in CMS operations."

There is more here: AP/MyWay. The GAO report is here (pdf).

Oh, and back to the government bureaucrat who should be at least a little alarmed that there are 47 access points for hackers to gain access to the medical records of 1 out of 4 Americans. CMS administrator Mark McClellan -- who, with a Ph.D. in economics and an M.D., presumably knows when he is commenting on the story he wished he had read rather than the story that he was actually reading -- commented that the GAO "found no evidence that confidential or sensitive information had actually been compromised."
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SSRN roundup: public health law (September 2006 additions)


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Tuesday, October 03, 2006

NLRB rules most charge nurses are "supervisors"

In a potentially far-reaching opinion on September 29 (and released today), the NLRB (by a 3-2 vote) ruled that permanently assigned charge nurses are supervisors -- and therefore are a part of managment -- and ineligible for union membership. Here's the "Daily Digest" version of the story from Modern Healthcare:

The National Labor Relations Board ruled that certain full-time hospital charge nurses are supervisors and therefore ineligible to join unions in a case involving Oakwood Healthcare, Dearborn, Mich., and the United Auto Workers. The long-awaited decision creates a "broad new standard" for union membership, labor leaders said. The "immediate implications" of the case are "devastating to workers in the healthcare industry and potentially in other industries where professional employees direct or assign the work of others," AFL-CIO [link] President John Sweeney said in a statement [link].

The case is Oakwood Healthcare, Inc., No. 7–RC–22141 (pdf). It reverses a 2002 decision by the Acting Regional Director to include charge nurses in the bargaining unit, principally on the basis of the Supreme Court's decision in NLRB v. Kentucky River Community Care, 532 U.S. 706 (2001). In Kentucky River, another nurse-supervisor case, the Court rejected the Board's categorical exclusion from supervisor status of employees who exercise “ordinary professional or technical judgment in directing less-skilled employees to deliver services in accordance with employer-specified standards.” (This was the second time in a decade that the Court had spanked the NLRB for its analysis in a nurse-supervisor case. See NLRB v. Healthcare & Retirement Corp. of America, 511 U.S. 571, 579 (1994) (holding 5-4 that the Board erred in finding a nurse’s supervisory activity that was incidental to patient care was not exercised “in the interest of the employer”).)

Left to figure out what its standard should be after Kentucky River, the Board states: "exercising our discretion to interpret ambiguous language in the Act, and consistent with the Supreme Court’s instructions in Kentucky River, we herein adopt definitions for the terms 'assign,' 'responsibly to direct,' and 'independent judgment' as those terms are used in Section 2(11) of the Act. In a key paragraph, the Board writes:

Consistent with the Court’s Kentucky River decision, we adopt an interpretation of the term “independent judgment” that applies irrespective of the Section 2(11) supervisory function implicated, and without regard to whether the judgment is exercised using professional or technical expertise. In short, professional or technical judgments involving the use of independent judgment are supervisory if they involve one of the 12 supervisory functions of Section 2(11). Thus, for example, a registered nurse who makes the “professional judgment” that a catheter needs to be changed may be performing a supervisory function when he/she responsibly directs a nursing assistant in the performance of that work. Whether the registered nurse is a 2(11) supervisor will depend on whether his or her responsible direction is performed with the degree of discretion required to reflect independent judgment.
Webster's Third place a large role in the Board's analysis, which leads the Board to complain, somewhat defensively, "In interpreting those statutory terms, we do not, as the dissent maintains, blindly adopt 'dictionary-driven' definitions. Rather, we begin our analysis with a first principle of statutory interpretation that 'in all cases involving statutory construction, our starting point must be the language employed in Congress. . . . '"

Much is at stake in these cases involving professionals in the workplace, cases in which the Board is struggling to extend the scope of the NLRA -- a remedial statute -- but not beyond the limits of Congressional intent. As the dissenters point out:
Today’s decision threatens to create a new class of workers under Federal labor law: workers who have neither the genuine prerogatives of management, nor the statutory rights of ordinary employees. Into that category may fall most professionals (among many other workers), who by 2012 could number almost 34 million, accounting for 23.3 percent of the work force. “[M]ost professionals have some supervisory responsibilities in the sense of directing another’s work—the lawyer his secretary, the teacher his teacher’s aide, the doctor his nurses, the registered nurse her nurse’s aide, and so on" [quoting from NLRB v. Res-Care, Inc., 705 F.2d 1461, 1465 (7th Cir. 1983) (opinion by Circuit Judge Posner)].

In the view of the dissenting Board members, the Board has failed yet again:
If the National Labor Relations Act required this result — if Congress intended to define supervisors in a way that swept in large numbers of professionals and other workers without true managerial prerogatives—then the Board would be dutybound to apply the statute that way. But that is not the case. The language of the Act, its structure, and its legislative history all point to significantly narrower interpretations of the ambiguous statutory terms “assign . . . other employees” and “responsibly to direct them” than the majority adopts. The majority rejects what it calls a “results-oriented approach” in interpreting the Act. But the reasonableness of the majority’s interpretation can surely be tested by its real-world consequences. Congress cared about the precise scope of the Act’s definition of “supervisor,” and so should the Board. Instead, the majority’s decision reflects an unfortunate failure to engage in the sort of reasoned decision-making that Congress expected from the Board, which has the “primary responsibility for developing and applying national labor policy.” NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 786 (1990).
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SSRN roundup: health law (September 2006 additions)


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Monday, October 02, 2006

More on the Provena tax-exemption case

As previously noted here, Provena Covenant Medical Center last week lost its administrative appeal to the Illinois Department of Revenue of Champaign County's decision to revoke Covenant's tax-exempt status. The Department's September 29 ruling is available here (pdf).

For an extremely helpful analysis of all the issues -- prepared by Linda Sauser Moroney, a partner in the Milwaukee office of Gardner Carton & Douglas, and her colleagues T.J. Sullivan and Karen McAfee (partner and counsel to the firm, respectively, in its Washington office) -- go here (pdf).
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Sunday, October 01, 2006

GAO report on emergency medical services post-Katrina

Hurricane Katrina: Status of Hospital Inpatient and EmergencyDepartments in the Greater New Orleans Area. GAO-06-1003, September29. Report; highlights.

Summary findings:
While New Orleans continues to face a range of health care challenges, hospital officials in the greater New Orleans area reported in April 2006 that a sufficient number of staffed inpatient beds existed for all services except for psychiatric care -- some psychiatric patients had to be transferred out of the area because of a lack of beds. Overall, as of April 2006, the greater New Orleans area had about 3.2 staffed beds per 1,000 population, compared with the national average of 2.8 staffed beds per 1,000 population reported by the American Hospital Association. Hospital officials told us that they planned to open an additional 674 staffed beds by the end of 2006 -- 390 of which would be at University Hospital -- although they also reported that recruiting, hiring, and retaining nurses and support staff was a great challenge. With the addition of these beds, the population would have to increase from 588,000 in April 2006 to 913,000 by December 2006 before staffed beds would drop to the national average. For all types of care, eight of the nine hospitals we contacted provided us with an estimated overall occupancy rate for the 9-month period following the hurricane (through April 2006) and for the 12-month period before the hurricane. The hospitals’ occupancy rates for the 9-month period after the hurricane ranged from 45 percent to 100 percent, or an average of 77 percent, compared with a range from 33 percent to 85 percent, or an average of 70 percent, for the 12-month period before the hurricane. The American Hospital Association reported that the average monthly hospital occupancy rate nationwide was 67 percent in 2004. Eight of the nine hospitals that remained open after Hurricane Katrina also reported a high demand for services in their emergency departments, similar to the nationwide trend reported by the Institute of Medicine in June 2006 that emergency department crowding is a nationwide problem.
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Cancer treatment @ $4200 a pop: is it worth it?

Today's NY Times had an article in the Business section on Abraxane -- in the words of the author, "a new version of an old cancer drug has helped make Dr. Patrick Soon-Shiong a billionaire":

The drug, Abraxane, does not help patients live longer than the older treatment, though it does shrink tumors in more patients, according to clinical trials. And the old and new medicines have similar side effects. An independent review of Abraxane published in December in a cancer research journal concluded that the drug was “old wine in a new bottle.”

Still, Dr. Soon-Shiong’s company, Abraxis BioScience, has promoted Abraxane as a major advance in treating late-stage breast cancer — that is, for patients who have not responded to other treatments and are now close to death —and is seeking approval for patients to use it earlier in their treatment. And, in at least one way, Abraxane is a breakthrough: it costs about 25 times as much as a generic version of the older medicine, which is best known by its brand name, Taxol.

Because of the odd economics of the cancer drug market, though, Abraxane’s price does not seem to be hurting its popularity.

About 20,000 people have now been treated with the drug, and Dr. Soon-Shiong expects its sales to approach $200 million this year. By 2010, Abraxane’s annual sales could reach $1 billion, analysts say.

Those rosy forecasts illustrate the pricing power that makers of cancer drugs wield. With patients often facing grim prognoses and desperate for new therapies, and insurers relatively powerless to negotiate prices or deny coverage, the cost of treatments seems to have little impact on demand.

The rise in cancer-drug prices is a microcosm of broader trends pushing up health care costs nationally. Despite decades of efforts by governments and insurers to restrain costs, patients continue to want the newest — and most expensive — drugs and medical devices. And doctors and the health care industry have little reason to keep costs in check, because insurers rarely deny coverage for new treatments on the basis of price.

As a result, health care costs continue to skyrocket. On Tuesday, the Kaiser Family Foundation reported that the cost of employee health insurance coverage rose 8 percent, according to a survey conducted from January to May this year. Businesses now spend about $8,500 a year for health insurance for the average family, the foundation said, with employees adding $3,000, not counting the cost of deductibles and other out-of-pocket payments.]

Abraxane, and cancer drugs generally, are still a tiny part of total medical spending. But their costs are rising even faster than overall health care inflation. Worldwide, spending on cancer drugs is expected to more than double from 2004 to 2009, to $55 billion, with most of that in the United States.

Largely as a result of investor enthusiasm for Abraxane, the stock market value of Abraxis is $4.6 billion. The company, which also makes several generic drugs used in hospitals, had a profit of $86 million last year on sales of $519 million. Dr. Soon-Shiong, the company’s chairman, owns 84 percent of the stock, worth about $3.8 billion.

What is wrong with this picture?
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Friday, September 29, 2006

Ill. rules against Provena in property-tax case

From Modern Healthcare's Daily Dose:

The director of the Illinois Department of Revenue [link] rejected an appeal by Provena Health, Mokena, Ill. [link], in a widely watched property-tax exemption case. [See previous posts here, here, and here.] In doing so, the director overruled an administrative law judge in the department who had sided with the not-for-profit system. Provena said it "will quickly and aggressively appeal" department director Brian Hamer's decision [news release]. At stake is some $1.5 million in annual property taxes, according to county tax officials. Provena has paid taxes on property in Urbana, Ill., including its 120-bed hospital there and medical-office buildings, since 2003, while the system appealed the state's initial denial of its request for a property-tax exemption. Rejecting the administrative law judge's ruling in favor of an exemption, Hamer said the property was not used exclusively for charitable purposes.

Last month, the Chicago Tribune reported "the cost to the hospital has been nearly $5 million since it lost its tax-exempt status in January 2003. The hospital says the taxes have been a drain on its balance sheet. The hospital lost $7.9 million last year on $127.9 million in revenue and is projecting a loss again this year." Hospital losing money as tax-exempt appeal languishes, Chicago Tribune, Sept. 7, 2006.
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Latest from AHLA's Health Lawyers Weekly (29 Sep 2006)

From the excellent Health Lawyers Weekly (AHLA member benefit), here's the table of contents from the September 29 issue:

Top Stories

Articles & Analyses

Current Topics

(c) 2006 AHLA. Reprinted with permission

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Thursday, September 28, 2006

Public hospital governance manual

From the National Association of Public Hospitals and Health Systems comes this handy 94-page guide, authored by three Powell, Goldstein health lawyers: Legal Structure and Governance of Public Hospitals and Health Systems. Good stuff.
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Wednesday, September 27, 2006

Health costs' rate of increase down, but still 'way ahead of inflation, family incomes

Two stories in the New York Times today, both well worth reading. (And I don't have a stable link to take you to them; as soon as I find one, I will insert it here. Until then, the links I do have require a free registration.)

A widely followed national survey reported yesterday that the cost of employee health care coverage rose 7.7 percent this year, more than double the overall inflation rate and well ahead of the increase in the incomes of workers.

The 7.7 percent increase was the lowest since 1999. But the average cost to employees continued an upward trend, reaching $2,973 annually for family coverage out of a total cost of $11,481.

Since 2000, the cost of family coverage has risen 87 percent while consumer prices are up 18 percent and the pay of workers has increased 20 percent, the survey noted. That is without counting the cost of deductibles and other out-of-pocket payments, which have also been rising.

These spiraling costs — a phrase that has virtually become a prefix for the words “health care” — are slowly creating a crisis. Many executives have decided that they cannot afford to keep insuring their workers, and the portion of Americans without coverage has jumped 23 percent since 1987.

An industry that once defined the American economy, meanwhile, is sinking in large measure because of the cost of caring for its workers and retirees. For every vehicle that General Motors sells, fully $1,500 of the purchase price goes to pay for medical care. “We must all do more to cut costs,” G.M.’s chief executive, Rick Wagoner, said on Capitol Hill this summer while testifying about health care.

Mr. Wagoner’s argument has become the accepted wisdom about the crisis: the solution lies in restraining costs. Yet it’s wrong. Living in a society that spends a lot of money on medical care creates real problems, but it also has something in common with getting old. It’s better than the alternative.

To understand why, it helps to look back to a time when Americans didn’t worry much about health care costs. In 1950, the country spent less than $100 a year — or $500 in today’s dollars — on the average person’s medical care, compared with almost $6,000 now, notes David M. Cutler, an economist who wrote a wonderful little book in 2004 titled, “Your Money or Your Life.”

Most families in the 1950’s paid their medical bills with ease, but they also didn’t expect much in return. After a century of basic health improvements like indoor plumbing and penicillin, many experts thought that human beings were approaching the limits of longevity. “Modern medicine has little to offer for the prevention or treatment of chronic and degenerative diseases,” the biologist René Dubos wrote in the 1960’s.

But then doctors figured out that high blood pressure and high cholesterol caused heart attacks, and they developed new treatments. Oncologists learned how to attack leukemia, enabling most children who receive a diagnosis of it today to triumph over a disease that was almost inevitably fatal a half-century ago. In the last few years, orphan drugs that combat rare diseases and medical devices like the implantable defibrillator have extended lives. Human longevity still hasn’t hit the wall that was feared 50 years ago.

Instead, a baby born in the United States this year will live to age 78 on average, a decade longer than the average baby born in 1950. People who have already made it to their 40’s can now expect to reach age 80. These gains are probably bigger than the ones the British experienced in the entire millennium leading up to 1800. If you think about this as the return on the investments in medicine, the payoff has been fabulous: Would you prefer spending an extra $5,500 on health care every year — or losing 10 years off your lifespan?

Yet we often imagine that the costs and benefits are unrelated, that we can somehow have 2006 health care at 1950 (or even 1999) prices. We think of health care as if it were gasoline, a product whose price and quality have nothing to do with each other.

There is no question that the American medical system does suffer from a lot of waste, be it insurance industry bureaucracy or expensive procedures that haven’t been proven effective. But the No. 1 cause of the cost increases is still the one you can see at the hospital and in your medicine cabinet — defibrillators, chemotherapy, cholesterol drugs, neonatal care and other treatments that are both expensive and effective.

Not even most forms of preventive care, like keeping diabetes under control, usually save money, despite what many people think. The care itself has some costs, and, more important, patients then live longer than they otherwise would have and rack up medical bills. “When I make this point, people accuse me of wanting people to die earlier. But it’s exactly the opposite,” Dr. Jay Bhattacharya, a researcher at Stanford Medical School, told me. “If these expenditures are keeping people alive, it’s money well spent.”

There's more, and it's all worth reading.
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