NEW MEDICARE HOSPITAL CONDITIONS OF
PARTICIPATION FOR TRANSPLANT CENTERSThe 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.
Health care law (including regulatory and compliance issues, public health law, medical ethics, and life sciences), with digressions into constitutional law, statutory interpretation, poetry, and other things that matter
Thursday, March 22, 2007
Tuesday, March 20, 2007
IRS releases "Good Governance Practices" for charitable organizations
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.
Monday, March 05, 2007
GAO testimony on DOD/VA care problems for injured soldiers, vets
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
The article offers a good illustration of the problems encountered by the uninsured.[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.
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.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.”
Wednesday, February 28, 2007
Washington state courts publish public health emergency bench book
NY Times article on the pervasive -- and perverse -- presence of IRBs on campus
Tuesday, February 27, 2007
Second Champaign hospital loses its exempt status
The Board of Review's letter brief argued that the hospital was guilty of inurement by providing a practice platform for the for-profit physician group that operated it. Granted, this is the position of a single taxing authority (and maybe the state as well), but if that analysis is adopted widely, a lot of multi-specialty physician groups (at least the ones that aren't organized as nonprofits) with an affiliated health or hospital group are going to want to take a close look at whether they are organized and operated for a charitable purpose. Every entity's facts will be a little different, and exempt status is a "facts and circumstances" determination, but counsel for any such organization will want to pay close attention to the County's analysis of the inurement issue, as well as the other facts relied on in their brief.
Monday, February 26, 2007
Everything you always wanted to know about nanotechnology but were afraid to ask
If you're coming to the nanotech party a little late, a good place to start would be the federal government's National Nanotechnology Initiative:
The National Nanotechnology Initiative (NNI) is a federal R&D program established to coordinate the multiagency efforts in nanoscale science, engineering, and technology.
The goals of the NNI are to:
- Maintain a world-class research and development program aimed at realizing the full potential of nanotechnology;
- Facilitate transfer of new technologies into products for economic growth, jobs, and other public benefit;
- Develop educational resources, a skilled workforce, and the supporting infrastructure and tools to advance nanotechnology; and,
- Support responsible development of nanotechnology
Twenty-five federal agencies participate in the Initiative, 13 of which have an R&D budget for nanotechnology. Other Federal organizations contribute with studies,
applications of the results from those agencies performing R&D, and other collaborations. (See NNI Participants and NNI Structure and Strategies)
Monday, February 12, 2007
Lethal injection: what does the physicians' non-role portend?
AHLA's Health Lawyers Weekly (Feb. 9)
Top Stories
- President Bush Issues FY 2008 Budget, Calls For Substantial Medicare, Medicaid Reductions
President Bush issued his fiscal year (FY) 2008 budget proposal this week, calling for roughly $101 billion in savings from Medicare and Medicaid over five years. Full Story - CMS Reports More Medicare Part D Beneficiaries Using Generic Drugs
New data indicates that many Americans are saving money by switching to generic drugs, according to the Centers for Medicare and Medicaid Services (CMS). Full Story
Articles & Analyses
- Michigan Legislature Passes Provisional Nurse Licensure Statute, by Gregory W. Moore, Hall Render, Killian Heath and Lyman
Current Topics
- Arbitration/Mediation
Ohio Appeals Court Upholds Nursing Home Arbitration Agreement Finding Procedural But Not Substantive Unconscionability - Business Transactions
Seventh Circuit Holds Management Company Breached Lease Agreement When Intermediary Care Facility Lost State CON - ERISA
U.S. Court In Michigan Finds Plan Member Has Standing To Sue Under ERISA Even Without Proof Of Personal Injury - Food and Drug Law
Drug Safety Legislation Introduced In Senate - Fraud and Abuse
1. Update
2. U.S. Court In Arkansas Dismisses FCA Qui Tam Action Against Hospital And Rehabilitation Services Provider On Finding Of Insufficient Evidence - Health Policy
Major Employers, Union Team Up To Improve Healthcare System - Healthcare Access
Workers' Decision To Participate In Employer-Sponsored Health Insurance Plans Affected By Affordability Of Premiums, Study Finds - HIPAA
U.S. Court In Connecticut Says HIPAA Does Not Bar Ex Parte Interviews With Employees At Group Home Where Plaintiff Was Allegedly Neglected - Hospitals and Health Systems
1. Texas Appeals Court Finds Hospital District Waived Its Immunity By Filing Counterclaim To Physicians' Retaliatory Discharge Claims
2. Lawmakers Question CMS About Specialty Hospital Following Patient Death In Texas - Insurance
U.S. Court In Texas Dismisses Hospital's Claims Against Plan Administrator After Plan Refused To Pay Because Of Pre-Existing Condition Exclusion - Medicaid
Study Finds Six States Have Reported Enrollment Drop Since Implementing New Medicaid Documentation Requirements - Medicare
1. OIG Presents Baseline Data On Medicare Part B Services For Nursing Home Residents
2. U.S. Court In Tennessee Rejects MSP Action By Individual Claiming Standing As Qui Tam Relator - News in Brief
Low Health Literacy May Lead To Unsafe Care, Joint Commission Says - Physicians
Ninth Circuit Allows Physician To Proceed With Retaliatory Termination, Unfair Competition Claims Against IPA - Quality of Care
1. Most Patients Do Not Comparison Shop For Healthcare Services, Study Finds
2. Public Reporting Efforts Help Improve Quality Of Care But Implementation Obstacles Remain, Report Says - Tax
IRS Issues Governance Guidelines For Charitable Organizations
(c) 2007, reprinted with permission of AHLA
Sunday, February 11, 2007
Texas' HPV vaccination mandate: upon further reflection . . . .
- Although you note the “opt out” approach taken by Gov. Rick Perry of Texas in which vaccination is required but parents can seek an exemption for reasons of conscience or religious beliefs, recommending the vaccine rather than requiring it could prove to be just as effective without violating the parents’ right to decide affirmatively — at least until the long-term effects are known. Amanda Styron
- Schools may rightfully require that children undergo immunizations that will protect schoolwide populations from acquiring communicable diseases, but cervical cancer does not fall into this category. However benevolent the intent, this is not a matter for Big Brother. Alan Katz
- In Texas, underscreening in African-American and Hispanic women probably accounts for their disproportionately high rates of cervical cancer. These adult women need access and coverage for screening. Unfortunately, there is no lobby for the Pap smear. Deborah Kamali, M.D.
- Compulsory vaccination has a legitimate place in our health care system. But why should the government restrict its vaccinations to the victims? Why not include the carriers? Sue Abercrombie
- Texas will pay hundreds of dollars per girl for the vaccination. Why not spend the money on health care, education about teenagers’ bodies and rights, enriching music, dance, art and science programs that engage, increase confidence and provide an alternative to sexual activity? What kind of people supply schoolgirls to a pharmaceutical company, allowing it to earn millions a year on such mandates? Elizabeth Beiter
Saturday, February 10, 2007
Hospice - rethought and revised
Monday, January 29, 2007
Does anyone know what John Kitzhaber's been up to since he stopped being governor of Oregon? The Archimedes Movement. Check it out.
Monday, January 15, 2007
AHLA's Health Lawyers Weekly (12 Jan 07)
Top Stories
- House Passes Bill Requiring Medicare Prescription Drug Price Negotiation; Bush Threatens Veto
President George W. Bush has threatened to veto a bipartisan bill that would require the Secretary of the Department of Health and Human Services (DHHS) to negotiate for lower prescription drug prices on behalf of Medicare. The House passed the bill January 12 by a vote of 255 to 170. Full Story - House Clears Stem Cell Bill
As expected, the House passed January 11 a bill aimed at expanding research opportunities on embryonic stem cells. The measure cleared the House by a 253-174 margin, short of the two-thirds majority needed to override a presedential veto. Full Story
Articles & Analyses
- Department Of Justice Revises Policies On Waiver Of The Attorney-Client Privilege In Corporate Fraud InvestigationsBy Joseph Burby, Jennifer Odom, and Kenneth Schwartz, Powell Goldstein LLP
. . . and many news items of note.
Sunday, January 14, 2007
GAO reports from November
- End-Stage Renal Disease: Bundling Medicare's Payment for drugs with Payment for All ESRD Services Would Promote Efficiency and Clinical Flexibility. GAO-07-77, November 13, 2006 (35 pages). http://www.gao.gov/docdblite/details.php?rptno=GAO-07-77
- End-Stage Renal Disease: Medicare Payments for All ESRD Services,Including Injectable Drugs, Should Be Bundled. GAO-07-266T,December 6, 2006 (5 pages). http://www.gao.gov/docdblite/details.php?rptno=GAO-07-266T
- Long-Term Care Insurance: Federal Program Has a Unique Profit Structure and Faced a Significant Marketing Challenge.GAO-07-202, December 29, 2006 (29 pages). http://www.gao.gov/docdblite/details.php?rptno=GAO-07-202
- New Drug Development: Science, Business, Regulatory, and Intellectual Property Issues Cited as Hampering Drug Development Efforts. GAO-07-49, November 17, 2006 (47
pages). http://www.gao.gov/docdblite/details.php?rptno=GAO-07-49 - Prescription Drugs: Improvements Needed in FDA's Oversight of Direct-to-Consumer Advertising. GAO-07-54, November 16, 2006 (47 pages). http://www.gao.gov/docdblite/details.php?rptno=GAO-07-54
Saturday, January 13, 2007
Health Affairs' 25 most-read articles of 2006
Health Affairs’ 25 Most-Read Articles From 2006
To celebrate the start of Health Affairs’ 25th anniversary year, we list here the 25 most frequently viewed articles published in 2006. In 2006, Health Affairs’’ Web readership grew to 12 million pageviews.
The paper on nurse staffing in hospitals by Jack Needleman and colleagues took the top spot for a paper published in 2006 with 37,547 pageviews. Two papers from 2005 earned the “most-read overall” ranking: “Can Electronic Medical Record Systems Transform Health Care?” by Richard Hillestad and colleagues from Health Affairs’ September/October 2005 issue attracted 40,263 pageviews in 2006, and the medical bankruptcy Web Exclusive by David Himmelstein and colleagues from February 2005 continued its high readership, adding 39,262 pageviews in 2006 to its over 70,000 pageviews from 2005, thus surpassing 100,000 readings of the paper.
25 Most-Read Health Affairs Papers Published in 2006: http://www.healthaffairs.org/Top25_2006_MostRead.php
25 Most-Read Health Affairs Papers Overall Online in 2006: http://www.healthaffairs.org/Top25_2006_MostRead_Overall.phpWe are sending this notice to subscribers so you may see which papers your cohorts viewed most often at www.healthaffairs.org. As a subscriber you have online access to these papers and to all journal content. To celebrate our 25th anniversary, we are opening access to the 25 papers from 2006 through January 19, 2007, so you may share these with colleagues, students and others who may not currently have access.
(emphasis added)
Wednesday, January 10, 2007
AHLA's Health Lawyers News (5 January 2007)
Top Stories
- Medicaid Commission Issues Final Report On Medicaid Reform
The Medicaid Commission said "fundamental reform" is needed to shore up the long term sustainability of the federal-state Medicaid program in a final report issued December 29 that details its recommendations for achieving that end. Full Story - OIG Finds Only Three Of Ten State False Claims Acts Submitted For Review Comply With DRA Requirements
The Department of Health and Human Services Office of Inspector General (OIG) has determined that only three of ten state False Claims Acts (FCAs) that it recently reviewed comply with all the requirements set forth in the Deficit Reduction Act of 2005 (DRA) to be eligible for the financial incentive bonus, according to information posted on OIG's website December 29. Full Story
Articles & Analyses
- Congress Approves Medicare, Medicaid Changes, by Karen S. Sealander and Eric Zimmerman, McDermott Will & Emery LLP
- CMS Issues Long-Awaited DRA Compliance Guidance And Teleconference, by Elizabeth Callahan-Morris, Hall, Render, Killian, Heath & Lyman, PLLC
. . . and many news items of note.
Monday, January 08, 2007
Another angle on middlemen
* Krugman's column is here, which is a TimesSelect address that requires a paid subscription. There's a good summary over at Mark Thoma's blog.
Tuesday, January 02, 2007
HIPAA privacy rule: Is it time for (re)reform?
"[I]ncreasingly complex confidentiality issues" in federal medical privacy rules "are affecting patients and their insurance coverage," the Wall Street Journal reports. According to the Journal, complaints of privacy violations "have been piling up." Between April 2003 and Nov. 30, 2006, HHS received 23,896 complaints related to medical-privacy rules. An HHS spokesperson said 75% of those complaints have been closed because no violations were found or informal guidance was provided to involved parties. Since HIPAA was enacted in 2003, HHS has not taken enforcement actions against any entity for violating the privacy rule. The Journal profiled attorney Patricia Galvin, who was denied disability benefits after her health insurer, UnumProvident, accessed notes from psychotherapy sessions at Stanford Hospital & Clinics. According to the Journal, UnumProvident said the notes indicated that Galvin was not "too injured to work" after she was involved in a car accident and applied for long-term disability leave. UnumProvident had asked Galvin to sign a broad release to access her basic medical records, which included some of the psychotherapist's notes about Galvin that Stanford had scanned into its computer records system. Galvin has filed a lawsuit against Stanford and UnumProvident for violating medical privacy laws, among other issues, under the federal Health Insurance Portability and Accountability Act. HIPAA includes added protection for mental health records, but Stanford in court papers said that "psychotherapy notes that are kept together with the patient's other medical records are not defined as 'psychotherapy' notes under HIPAA." Peter Swire, a law professor at Ohio State University who helped write the regulations, said, "We're three years into the enforcement of the rule, and they haven't brought their first enforcement initiative." He added, "It sends the signal that the health system can ignore this issue" (Francis, Wall Street Journal, 12/26/06).
Monday, January 01, 2007
Krugman touts single-payer system
The U.S. health care system is a scandal and a disgrace. But maybe, just maybe, 2007 will be the year we start the move toward universal coverage.
In 2005, almost 47 million Americans — including more than 8 million children — were uninsured, and many more had inadequate insurance.
Apologists for our system try to minimize the significance of these numbers. Many of the uninsured, asserted the 2004 Economic Report of the President, “remain uninsured as a matter of choice.”
And then you wake up. A scathing article in yesterday’s Los Angeles Times described how insurers refuse to cover anyone with even the slightest hint of a pre-existing condition. People have been denied insurance for reasons that range from childhood asthma to a “past bout of jock itch.”
Some say that we can’t afford universal health care, even though every year lack of insurance plunges millions of Americans into severe financial distress and sends thousands to an early grave. But every other advanced country somehow manages to provide all its citizens with essential care. The only reason universal coverage seems hard to achieve here is the spectacular inefficiency of the U.S. health care system. . . .
The truth is that we can afford to cover the uninsured. What we can’t afford is to keep going without a universal health care system.If it were up to me, we’d have a Medicare-like system for everyone, paid for by a dedicated tax that for most people would be less than they or their employers currently pay in insurance premiums. This would, at a stroke, cover the uninsured, greatly reduce administrative costs and make it much easier to work on preventive care.
Such a system would leave people with the right to choose their own doctors, and with other choices as well: Medicare currently lets people apply their benefits to H.M.O.’s run by private insurance companies, and there’s no reason why similar options shouldn’t be available in a system of Medicare for all. But everyone would be in the system, one way or another. . . .
But now is the time to warn against plans that try to cover the uninsured without taking on the fundamental sources of our health system’s inefficiency. What’s wrong with both the Massachusetts plan and Senator Wyden’s plan is that they don’t operate like Medicare; instead, they funnel the money through private insurance companies.
Everyone knows why: would-be reformers are trying to avoid too strong a backlash from the insurance industry and other players who profit from our current system’s irrationality. But look at what happened to Bill Clinton. He rejected a single-payer approach, even though he understood its merits, in favor of a complex plan that was supposed to co-opt private insurance companies by giving them a largely gratuitous role. And the reward for this “pragmatism” was that insurance companies went all-out against his plan anyway, with the notorious “Harry and Louise” ads that, yes, mocked the plan’s complexity.
Now we have another chance for fundamental health care reform. Let’s not blow that chance with a pre-emptive surrender to the special interests.
The L.A. Times story to which Krugman refers is a corker. It's also a good reminder that HIPAA's pre-existing condition reforms did not apply to individual policies, a particularly cruel fate for the millions of Americans for whom group policies are unavailable, either because their employer doesn't offer health benefits or because they are self-employed.
Sunday, December 31, 2006
Single-payer system for the US: you heard it here last
CBO and tax-exempt hospitals
1. Nonprofit Hospitals and the Provision of Community Benefits. How much tax benefit do nonprofit hospitals receive as a result of their exemption from federal, state, and local taxation? Answer (as of 2002): $12.6 billion, about half of which comes from the federal income-tax exemption. And what is the value of the community benefits provided by the tax-exempts? Therein lies a tale, because it all depends on how you define (and measure) community benefits. This report breaks out "uncompensated care" (also a thorny definitional problem), the unreimbursed cost of providing Medicaid-covered services, and such generally unprofitable specialized services as burn intensive care, emergency room care, high-level trauma care, and labor and delivery services. This reports limits itself to five states, including one (Texas) with a very explicit community-benefits requirement for nonprofit hospitals. The tax-exempt hospitals' performance in these three areas of service are also compared to their for-profit and government-owned counterparts. How do they compare?
- When regression techniques were used to adjust for the hospitals’ size and location and for the characteristics of the local populations, nonprofit hospitals were estimated to have an average uncompensated care share that was 0.6 percentage points higher than that for otherwise similar for-profit hospitals. That estimated difference corresponds to nonprofit hospitals in the five selected states providing between $100 million and $700 million more in uncompensated care than would have been provided if they had been for-profits.
- When regression techniques were used to control for hospital characteristics, nonprofit hospitals were found to have adjusted Medicaid shares that were 1.3 percentage points lower than those of otherwise similar for-profit hospitals.
- CBO found that nonprofit hospitals were more likely than for-profit hospitals to provide each of the four specialized services examined. After adjustment for hospital characteristics, nonprofit hospitals were found to be significantly more likely than for-profit hospitals to provide two of the four specialized patient services (emergency room care and labor and delivery services).
2. Nonprofit Hospitals and Tax Arbitrage. This one's a little more technical. It deals with the ability of tax-exempt hospitals to borrow at below-market rates by issuing tax-exempt bonds and then deploy the borrowed funds for higher-yielding investments. So-called "arbitrage bonds," however, are not exempt from federal taxes, which removed the main incentive to engage in such practices. That said, there are plenty of other opportunities for nonprofit hospitals to engage in a sort of tax arbitrage, and this report analyzes some of them. One occurs when a tax-exempt entity decides to invest some of its accumulated surplus and gifts in high-yield taxable securities and to finance structures and equipment with low-cost exempt bonds. In economic terms, it's the same as if bond proceeds were being invested in securities, and there's a "replacement proceeds rule" (26 CFR § 1.148-1(c)) that attempts to identify such events and subject them to taxation. But for a variety of reasons the rule is difficult to apply and undoubtedly misses a lot of such tax-arbitrage activity. The CBO report considers the possibility of broadening the definition of tax arbitrage, which they conclude would probably result in increased tax revenues for the federal government, at least in the short run. But over time, it seems likely hospitals would adjust to the new (increased) cost of capital by reducing their level of arbitrage bond issues, resulting in a decrease in tax savings for the federal government, even under the broader definition. A second likely effect would be
two different costs of capital for nonprofit hospitals. Nonprofits with larger portfolios of investment assets would be more likely to be subject to the rule and thus effectively face higher interest costs associated with financing using taxable debt. Hospitals with smaller amounts of such assets would be more likely to continue to receive the benefit of tax-exempt financing. Both would still face lower costs of capital than for-profit hospitals. But the different borrowing costs of the two groups of nonprofit hospitals could engender inefficiencies by creating a new differential in capital costs.
Saturday, December 30, 2006
Drug wholesaler settles with New York
Thanks to Eric Turkewitz, who "represented a counterfeit drug victim, Tim Fagan, for whom pending legislation in the House and Senate is named," for the heads up. The House and Senate bills are the Counterfeit Drug Enforcement Act of 2005, [H.R.2345.IH], [S.1978.IS].Cardinal -- based in Dublin, Ohio and ranked 19th on the Fortune 500 list of America's largest corporations -- is one of the three primary distributors of prescription drugs in the nation.
In today's settlement, Cardinal has agreed to adopt a set of Wholesaler Safe Product Practices that establish a new standard for the safe trading of pharmaceuticals and point the way forward for an industry that is vital to the health of Americans.
The investigation, which began in 2005 and is continuing with regard to other wholesalers, concerns trading practices in the secondary market for prescription pharmaceuticals. That is the market in which wholesalers trade drugs among themselves, after the drugs are sold by the manufacturer but before they are purchased by a pharmacy, hospital, or other end user. The wholesalers who sell drugs to other wholesalers are called alternate
source vendors.Secondary market trading is not illegal on its face, but can create opportunities for the introduction of unreliable drugs, including counterfeits, into the marketplace. In recent years, there has been an increase in the number of cases of counterfeit drugs in the American supply chain.
Secondary market trading also can create an opportunity for companies to divert drugs from their intended distribution channels. Diversion into the secondary market, often to take improper advantage of manufacturer discounts, can begin a series of trades from wholesaler to wholesaler that makes it difficult to trace the origin of a drug and impossible to ascertain its authenticity.The investigation determined that Cardinal purchased drugs from certain alternate source vendors, despite risks associated with buying from those vendors, to take advantage of higher available profit margins. Cardinal also sold pharmaceuticals to certain customers even in the face of evidence that those customers may have been illegally diverting the drugs outside their intended channels of distribution.
Under the terms of today's settlement, Cardinal will adopt an innovative set of Wholesaler Safe Product Practices, and has agreed that it will not sell pharmaceuticals to another wholesaler unless that wholesaler also adopts that same set of practices. The Wholesaler Safe Product Practices are designed to ensure that a drug may not pass through the hands of more than two wholesalers after the manufacturer sells it and before it is bought by a pharmacy or other end user.In addition to adopting the Wholesaler Safe Product Practices, Cardinal has agreed that in the regular course of its business it will:
- Buy pharmaceuticals directly from manufacturers and not on the secondary market from alternate source vendors;
- Sell pharmaceuticals only to wholesalers who have certified their compliance with the Wholesaler Safe Product Practices, and have agreed to allow audits of those certifications;
- Adopt "know your customer" provisions and monitor for customer diversion; and
- Hire an external auditor to conduct periodic reviews of its compliance with the settlement.
Middlemen redux
A lot of the money that goes to health-care middlemen is well spent. It allows employers to combine their purchasing power for leverage with hospitals and drug makers. It harvests data to uncover which new procedures are valuable and which aren't. Middlemen offer health-care expertise to employers who don't have it and don't want to hire it.-- the author then nails the downside:
But a lot of the money goes more toward fattening middlemen's bottom lines than toward improving the quality or efficiency of American health care. "At the end of the day, the only reasonable conclusion is that we waste a huge amount of money on the most nuttily cumbersome administrative system in the world," says Henry Aaron, a Brookings Institution economist.Amen.
When will this madness end?
The full case file for In re Advocate Health Partners et al., No. 0310021, is here. The proposed consent decree is available for public review and comment before the Commission decides whether to make it final.The FTC’s complaint challenges conduct during the period 1995 to 2004, during which the respondents collectively negotiated the prices and other contract terms at which their otherwise competing member physicians would provide services to the subscribers of health plans, without any efficiency-enhancing integration of their practices sufficient to justify their conduct. In particular, for a period of time AHP staff negotiated contracts on behalf of each PHO respondent, with each PHO respondent retaining authority to approve offers and counteroffers.Subsequently, AHP was given the authority to approve offers and counteroffers and, ultimately, to approve negotiated contracts on behalf of the AHP physicians, who could then opt in or out of the negotiated contract.
The complaint also alleges that in 2001, AHP terminated its members’ contracts with a health plan that rejected contract proposals for higher fees, and threatened that it would not contract with the plan for hospital services unless it stopped contracting with individual physicians and agreed to a group contract. The resulting contract included fees 20 percent to 30percent higher than the health plan’s individual physician contracts.
This is, by my rough count, the 22nd price-fixing/boycott case brought against physicians and/or physician groups or their representatives by the FTC since 2002 for similar or in some cases identical conduct. You can read all about them in the useful "Overview of FTC Antitrust Actions in Health Care Services and Products (Aug. 2006)."
The spine as profit center
Spinal-fusion surgery is one of the most lucrative areas of medicine. An estimated half-million Americans had the operation this year, generating billions of dollars for hospitals and doctors.
But there have been serious questions about how much the surgery actually helps patients with back pain and whether surgeons’ generous fees might motivate them to overuse the procedure. Those concerns are now heightened by a growing trend among some surgeons to profit in yet another way — by investing in companies that make screws and other hardware they install.
The parts can be highly profitable. A single screw that goes into the spine, for example, sells for about $1,000 — at least 10 times the cost of making it.
Within the medical device industry, it has been well chronicled how companies use consulting ties and other financial relationships to try to gain favor with the surgeons using their devices. But critics are especially troubled by the emerging trend in spinal devices, which so far has occurred largely under the radar.
Doctors’ taking significant ownership stakes in spinal parts makers, critics say, provides an extra financial incentive for a doctor to recommend a surgery. It may be one of the most distinct examples yet of the way monetary considerations can play a role in the way doctors practice medicine.
Such doctors face “an awfully pernicious conflict of interest,” said Dr. Richard A. Deyo, a physician and health services professor at the University of Washington in Seattle.
About 30 start-up companies have begun selling spinal devices, including screws, in the last couple of years. And industry experts say about a dozen companies have doctors among their investors. Because most of the companies are private and the relationships are not publicly disclosed, there is no way to know how many spine surgeons around the country are partial owners of device makers.
Typically, patients are not aware of the doctor’s financial interests. One patient who is suing her surgeon for malpractice learned only during the legal discovery process that her surgeon had a financial interest in the maker of the artificial disk he installed in her spine.
Federal regulators have voiced concerns about the growing popularity of the investment arrangements, which would potentially violate antikickback laws if doctors receive stock or are otherwise compensated to use or recommend certain devices.
“This is an area that is new and growing,” Vicki L. Robinson, a senior attorney in the Office of Inspector General at the Department of Health and Human Services, said in an interview. In a recent letter to a device industry trade group, Ms. Robinson wrote that the “ventures should be closely scrutinized under the fraud and abuse laws.”
Some spine surgeons are also concerned about whether they and their colleagues should enter into such arrangements. “These are, I believe, unethical and bias the doctors’ choice for what is best for the patient,” said Dr. Charles D. Rosen, a spine surgeon at the University of California at Irvine, who is the president of the newly formed Association of Ethical Spine Surgeons. The group has about 75 members so far, who have agreed not to invest in companies whose devices they use.
Other articles in the Times' series ("Side Effects"), which "examin[es] how monetary considerations can influence the ways doctors conduct business and practice medicine," include:
- Profit and Questions on Prostate Cancer Therapy (Dec. 1, 2006)
- New Nerve Test, a Moneymaker, Divides Doctors (Oct. 20, 2006)
- Heart Procedure Is Off the Charts in an Ohio City (Aug. 18, 2006)
- Drug Makers Pay for Lunch as They Pitch (July 28, 2006)
- Indictment of Doctor Tests Drug Marketing Rules (July 22, 2006)
- Charities Tied to Doctors Get Drug Industry Gifts (June 28, 2006)
Thursday, December 28, 2006
Viaticals -- something was rotten, indeed
Florida physician Clark Mitchell pleaded guilty to participating in a securities fraud scheme with Mutual Benefits Corp. that robbed investors of $965 million and conspiracy to commit healthcare fraud. According to the U.S. attorney's office for the Southern District of Florida, MBC principals induced investors to purchase interests in the life-insurance-policy death benefits of terminally ill or elderly people in return for a lump-sum cash payment. MBC dictated fraudulently low life-expectancy figures on thousands of the policies to doctors including Mitchell, who signed more than 5,000 letters and affidavits to investors falsely claiming that a physician completed a review of the insured's medical condition to determine life expectancy. Mitchell also pleaded guilty to inflating Medicare bills by more than $500,000 while he was director of an AIDS clinic. Mitchell will be responsible for $367 million in restitution payable to MBC investors and $500,000 in restitution for the healthcare fraud. He also faces up to 10 years in prison and a $5 million fine. His sentencing is scheduled for March 7, 2007.The Orlando Sentinel has a good story on this case.
For years, I had been skeptical of these contracts, but my concern had to do with the potential for coercive deals with dying patients who had run out of financial options and signed over life insurance contracts out of desperation and on terms that bordered on the unconscionable. Occasionally, the premiums for these policies had been paid by partners while they were still healthy enough to work and who could find themselves with nothing after the death of the insured person. I hadn't thought about the potential for ripping off investors, so a tip of the hat to Dr. Mitchell, whose breathtakingly massive fraud adds a chapter to my education on the subject of viaticals.
DeBakey's surgery
The gist of the story is pretty straightforward. Last Dec. 31, DeBakey, then 97 years old, was working at home
His heart didn't stop, and his self-diagnosis shifted to another life-threatening condition, a dissecting aortic aneurysm. Ironically, he pioneered the surgical procedure for correcting such conditions. Now, it appeared, he would have his own procedure performed on himself. And, one year later, he is the oldest patient ever to survive the procedure.when a sharp pain ripped through his upper chest and between his shoulder blades, then moved into his neck.
Dr. DeBakey, one of the most influential heart surgeons in history, assumed his heart would stop in a few seconds.
“It never occurred to me to call 911 or my physician,” Dr. DeBakey said, adding: “As foolish as it may appear, you are, in a sense, a prisoner of the pain, which was intolerable. You’re thinking, What could I do to relieve myself of it. If it becomes intense enough, you’re perfectly willing to accept cardiac arrest as a possible way of getting rid of the pain.”
Nice story, but that's not the end of it. Lawrence Altman is too good a doctor and too experienced a medical journalist not to notice the other strands of this tale:
[B]eyond the medical advances, Dr. DeBakey’s story is emblematic of the difficulties that often accompany care at the end of life. It is a story of debates over how far to go in treating someone so old, late-night disputes among specialists about what the patient would want, and risky decisions that, while still being argued over, clearly saved Dr. DeBakey’s life.
It is also a story of Dr. DeBakey himself, a strong-willed pioneer who at one point was willing to die, concedes he was at times in denial about how sick he was and is now plowing into life with as much zest and verve as ever.
Consider:
- DeBakey himself did not want the operation. He did not check into the hospital for nearly a month. After he did, he had a DNR order on his chart and a progress note that indicated he did not want surgery for the dissecting aortic aneurysm. How, then, did he get the surgery (and the continuous resuscitation that went along with the surgery), apparently against his wishes? (And would the result have been any different if he had executed an advance directive that forbade surgery?)
- The hospital ethics committee got involved. The question was apparently whether to follow DeBakey's stated wishes or the contrary instructions of his spouse. Lay people are often surprised that family members are taken seriously when they attempt to override a patient's medical choices, but they are, often to the point of an ethics consult to try to reconcile the family to the patient's wishes. This time, the ethics committee decided the spouse's wishes should prevail. Altman doesn't report their reasons, but the outcome ran against his reported preferences. As Altman reports, "Dr. DeBakey says that he refused admission to Methodist Hospital, in part because he did not want to be confined and he 'was hopeful that this was not as bad as I first thought.' He feared the operation that he had developed to treat this condition might, at his age, leave him mentally or physically crippled. 'I’d rather die,' he said."
These are usually decisions we allow a competent patient to make for himself. The flip side of the coin, however, is that once he was admitted, and after his condition worsened and his doctors recommended surgery, he said he wanted to re-evaluate the situation in a couple of days, which certainly suggests that he was willing to depart from the "no surgery" position he took at the time of his admission. Also, Altman reports:Each of Dr. DeBakey’s doctors had worked with him for more than 20 years. One, Dr. Pool, said they felt they knew Dr. DeBakey well enough to answer another crucial question from the ethics committee: As his physicians, what did they believe he would choose for himself in such a dire circumstance if he had the ability to make that decision?
DeBakey's condition continued to deteriorate, though, and he became unresponsive and was close to death before he could make his "re-evaluation." Under those circumstances, and with a life hanging in the balance, it was proper for the hospital's ethics committee to convene to decide whether there was sufficient evidence that he might have agreed to the operation to justify ignoring his prior statements.
Dr. Noon said that Dr. DeBakey had told him it was time for nature to take its course, but also told him that the doctors had “to do what we need to do.” Members of Dr. DeBakey’s medical team said they interpreted the statements differently. Some thought he meant that they should do watchful waiting, acting only if conditions warranted; others thought it meant he wanted to die. - The home care he received for three weeks, with occasional trips to the hospital for imaging to measure the size of the aneurysm, was a departure from the standard of care: "In providing the extraordinary home care, the doctors were respecting the wishes of Dr. DeBakey and their actions reflected their awe of his power." VIP medicine is usually discussed in medical school as a risk -- it often involves departures from standards and procedures that work far more often than not. VIP medicine, contrary to its connotation, is not usually better medicine but just the opposite. In DeBakey's case, it sounds as though he got a pretty high level of "home care" and that it was far from suboptimal. Still, time and distance would have separated his home from the operating room had he needed a procedure on an emergent basis, an increased risk that resulted from his insistence that he not be admitted and his doctors' decision to acquiesce to a preference other, less fearsome patients would not have been allowed to make.
- None of the anesthesiologists at Methodist Hospital were willing to participate in the surgery in light of his age and condition. Eventually an anesthesiologist from a different hospital put him to sleep. I've always marveled at the ability of surgeons and, in this case, anesthesiologists to unilateral refuse to perform a procedure when they think a patient is not a candidate for surgery. When did they acquire this right? When did medical docs lose it? The chancellor of the medical center is reported to have been stunned by their decision, one that he says he had never heard of before. (I'm stunned that he was stunned.) What does seem stunning, though, was the reported fact that none of the demurring anesthesiologists had been involved in his care so far and none had reviewed his medical record, so that their refusal was based upon "grapevine information." Maybe all they thought they needed to know was that the patient was 97 years old and on death's doorstep to conclude that his post-surgical prognosis, even with the best of care, was dismal. And maybe they would have had more going for their conclusion if they had reviewed his records before refusing.
Other interesting questions arose. As reported by Dr. Altman, the "other anesthesiologist" was Dr. Salwa Shenaq from the Michael E. DeBakey Veteran Affairs Medical Center, who had worked with Dr. DeBakey for 22 years:She said that a medical staff officer, whom she declined to name, warned her that she could be charged with assault if she touched Dr. DeBakey. The officer also told Dr. Shenaq that she could not give Dr. DeBakey anesthesia because she did not have Methodist Hospital privileges. She made it clear that she did, she said.
- The cost of his care "easily exceeded $1 million," and neither the hospital nor the physicians involved paid for his care. Professional courtesy? Who benefited from the professional courtesy? His insurer, probably. Who paid? Everyone else who paid for care at the hospital, through the increasingly difficult phenomenon of cross-subsidization, and others who might have benefited from alternative uses of that money, to the extent it came off Methodist's bottom line.
- Ethics committees spend a lot of time trying to divine patients' wishes. State laws require that very serious consideration be given to formal expressions of a patient's treatment and nontreatment preferences, with penalties for failing to do so. And yet, as the academic literature occasionally points out, patients' actual preferences frequently depart from their prior statements. That seems to be exactly the situation with Dr. DeBakey:
As he recovered and Dr. DeBakey learned what had happened, he told his doctors he was happy they had operated on him. The doctors say they were relieved because they had feared he regretted their decision.
“If they hadn’t done it, I’d be dead,” he said.
The doctors and family had rolled the dice and won.
Dr. DeBakey does not remember signing an order saying not to resuscitate him and now thinks the doctors did the right thing.
Doctors, he said, should be able to make decisions in such cases, without committees.
Wednesday, December 27, 2006
Physicians' "verbal orders": who may authenticate them?
Now that the usage lesson is over, the really interesting development with verbal orders is CMS' revision this fall to the Medicare Conditions of Participation:
In a surprising development, the newly revised Medicare conditions of participation (CoP) allow nurse practitioners and physician assistants to authenticate physicians' verbal orders, says Houston attorney Nancy LeGros. The Nov. 27 final CoP regulation said that verbal orders must be signed, dated and authenticated by the ordering physician — or another practitioner responsible for the patient's care — within 48 hours. CMS stated that physician extenders can authenticate physician orders as long as physician extenders are licensed to perform the services included in the verbal order, says LeGros, who is with the law firm of Vinson & Elkins.
This tidbit came from the Dec. 18, 2006, issue of Report on Medicare Compliance. The final rule appeared in the Nov. 27 Federal Register and included this language in the Preamble (at pp. 68682-83):
Comment: One commenter requested clarification as to whether a physician assistant or nurse practitioner who has prescriptive authority under State law is allowed to co-sign a physician's order.
Response: A physician assistant or nurse practitioner may only authenticate verbal orders written by a physician or other licensed independent practitioner that they have authority to write themselves as determined by hospital policy in accordance with state law. For example, some hospitals limit who may give orders for certain types of drugs or therapies. If a physician assistant or nurse practitioner is not permitted by hospital policy to order a specific drug or therapy, he or she would not be permitted to authenticate a verbal order for such a drug or therapy. Hospitals have the flexibility to limit who may authenticate verbal orders.In addition, a physician assistant or nurse practitioner may only authenticate verbal orders for a patient for whom they have physician delegated responsibility. Like all practitioners responsible for the care of the patient, a physician assistant or nurse[[Page 68683]]practitioner would be expected to have knowledge of the patient's hospital course, medical plan of care, condition and current status. With this knowledge, a practitioner can safely evaluate the completeness and accuracy of a verbal order.
Nice news for the antitrust bar
Nurses filed a class-action antitrust lawsuit against Detroit-area hospitals and health systems, claiming that they colluded since before November 2002 to fix wages at below-market levels. The lawsuit, filed in U.S. District Court in Detroit, names Bon Secours Cottage Health Services, Detroit Medical Center, Henry Ford Health System, McLaren Health Care Corp., Oakwood Healthcare and St. John Health Partners. It follows similar class actions filed on behalf of nurses in Arizona, Illinois, New York, Tennessee and Texas. A spokesman for the Michigan Health & Hospital Association declined to comment on the matter, citing the pending litigation.
[Modern Healthcare's "Daily Dose" (time-limited link)]
What ever happened to the bird flu pandemic?
- Bird flu may not be gone, but merely resting -- there are lots of potential hiding places, made difficult to find because of a combination of factors, including warmer weather, poultry vaccination programs, and the reluctance of academics and developing countries to part with virus samples.
- Cold weather, which allows the virus to live longer, encourages the spread of flu, and winter weather is just around the corner.
- It's way too early for public health authorities to breathe a sigh of relief.
Tuesday, December 26, 2006
Talking about what doctors don't want to talk about
Today's New York Times has an op-ed by Dr. Pauline Chen on "The Most-Avoided Conversation in Medicine" -- i.e., the one that includes the words "you're dying and we've run out of ways to slow it or stop it." Chen's useful suggestion, which probably amount to spitting into the wind but is worth repeating to every medical student and doctor you meet: "I think there is a simple way to change. We could add one question to every discussion we have about patients with terminal illnesses: 'How good is this patient’s end-of-life care?'” In conclusion:
Anyone interested in pursuing this topic further should pick up a copy of the Nov. 15, 2000 (!) issue of JAMA, which was dedicated to End-of-Life Care and included a valuable piece by Dr. Tim Quill, "Initiating End-of-Life Discussions With Seriously Ill Patients: Addressing the 'Elephant in the Room.'"The forums for posing this question are plentiful in medicine. Every morning and late afternoon, physicians in hospitals “round” on their patients, discussing their decisions in small groups or writing progress notes on patients’ charts. Doctors hold “grand rounds” (lectures before their colleagues) monthly or weekly, and in academic centers, physicians hold regular teaching conferences.
If in these settings we could bring ourselves to ask about each patient’s end-of-life care, we could influence one another in a more personal way than the Support study did. And while we might not get all the details right at first, we would grow more familiar with advance directives and pain treatment and learn to manage our patients’ resuscitation wishes.
We also might find ourselves — as I have found myself with patients since J. R. — one step closer to being the compassionate doctors we have always dreamed of becoming.