Ernst & Young faces civil health fraud charges in Philly.

Kaiser's daily web report collects stories today about the civil case filed on Monday against Ernst & Young in connection with advice it allegedly gave to hospitals that in turn overbilled Medicare:

U.S. Attorney's Office in Philadelphia Files Lawsuit Against Ernst & Young for Allegedly Providing Hospitals Advice That Led to Medicare Overpayments
[Jan 06, 2004]
U.S. Attorney Patrick Meehan in Philadelphia on Monday filed a civil complaint against the accounting firm Ernst & Young for allegedly advising hospitals to overcharge Medicare for common blood tests, leading to excess reimbursements of $900,000 between 1991 and 1995, the New York Times reports (Freudenheim, New York Times, 1/6). The lawsuit claims that because of billing advice given by Ernst & Young, nine hospitals in Connecticut, Indiana, Pennsylvania and Virginia submitted more than 200,000 false claims to the government. The suit contends that the nine hospitals' laboratories used equipment that automatically performed a more thorough level of testing than necessary in some cases, which allowed the hospitals to bill for the complete battery of tests, regardless of whether they were requested by physicians, to maximize Medicare reimbursements. According to Ernst & Young attorney Mark Tuohey, the government permitted such billing until 1996, at which time Ernst & Young advised its clients to stop the practice. If found guilty, Ernst & Young could be ordered to pay three times the amount of damages and millions of dollars in fines. Associate U.S. Attorney James Sheehan said some of the hospitals involved in the dispute have already repaid Medicare (Caruso, AP/Long Island Newsday, 1/5).

Fascinating.

Purdue Pharma spanked by judge for Oxycontin patent claim

As reported in USA Today and elsewhere, a federal judge ruled that Purdue Pharma patents protecting its bestselling painkiller Oxycontin are invalid. The court's opinion states that Purdue's patent application was deceptive and that its patents are unenforceable, clearing the way for drug maker Endo Pharmaceuticals Holdings to sell a generic version of the drug. This is the same judge who held in 2000 (require WestLaw subscription) that Purdue had not obtained its patents through inequitable conduct. It will be interesting to see (when yesterday's opinion becomes available) what changed between 2000 and 2004. Meanwhile, there's lots of interesting background in the N.Y. Times' story on this decision.

New Jersey allows stem cell use in research

New Jersey's governor signed a bill (S. 1909 [passed without amendment - now P.L.2003, c.203]) on Sunday that makes the Garden State the second in this country to legalize embryonic stem cell research, while making human reproductive cloning unlawful. (California's the other state: see Health & Safety Code § 125300 (stem cell research) and § 24185 (cloning).) It's a fine line, and one that bedeviled the President's Council on Bioethics in its 2002 report on cloning, but it's an important line for those who believe that stem cells are the most promising source out there of treatments for a wide variety of diseases and conditions, including traumatic spinal cord injuries.

Reimportation of drugs from Canada.

The Kaiser Family Foundation did its usual excellent job in an article today that pulls together reports from disparate sources concerning the FDA's refusal to accept Canadian assurances that reimported drugs are safe:

FDA Pharmacy Affairs Directory Tom McGinnis on Dec. 24, 2003, said that a safe, legal program to reimport lower-cost, U.S.-manufactured prescription drugs from Canada would likely cost hundreds of millions of dollars, the AP/Richmond Times-Dispatch reports. In addition, McGinnis said that the FDA would never rely on Canadian inspections of prescription drugs to determine their safety. McGinnis said that although the FDA inspects pharmaceutical companies worldwide, Health Canada relies on inspections conducted by the home nations of the companies. McGinnis said, "We've never accepted inspection results from another country." He added that a reimportation program is "just not going to work. There would have to be mechanisms set up, and we would have to get permission from the Canadian government to inspect." Health Canada spokesperson Emmanuel Chabot defended the safety of the Canadian inspection system. He said, "We conduct regulatory reviews of drugs to ensure there is sufficient evidence of safety, efficacy and quality before they receive authorization to be sold in Canada." According to the AP/Times-Dispatch, the FDA position on reimportation "sets the tone" for an HHS study on the safety of the practice required under the new Medicare law (Baldor, AP/Richmond Times-Dispatch, 12/25/03). In recent months, a number of state and local governments have asked the federal government to allow them to import prescription drugs from Canada, the Washington Times reports (Fagan, Washington Times, 1/2). More than 12 states -- such as Iowa, Illinois, Minnesota and New Hampshire -- have considered or plan to implement reimportation programs, USA Today reports. Kevin Concannon, director of the Iowa Department of Human Services, said that the statements FDA officials "make about consumer safety or drug safety are the most bogus words I've seen spoken from a government agency. ... There's more protection of pharmaceutical manufacturers than there is of patients" (Welch, USA Today, 12/31/03). However, HHS spokesperson Bill Pierce said that the agency has twice determined that "we could not guarantee the safety" of reimported prescription drugs, adding, "Nothing has changed since that time" (Washington Times, 1/2).

The birth of an idea: iatrogenesis

There's an excellent review in the Sunday N.Y. Times of Sherwin Nuland's "The Doctors' Plague," a history of Ignac Semmelweis' attempt to nail down the etiology of childbed fever. If Semmelweis isn't exactly a household name, it may have to do with the fact that Pasteur, Lister, and Koch would need another 10 years after Semmelweis' research to develop a unified germ theory of disease. Also: Semmelweis' genious as an epidemiologist seems to have been matched by his dismal indifference to bench science --

Semmelweis was a lopsided genius. His singular talent lay in sorting through reams of data and finding subtle patterns squirming beneath -- all the while ignoring the essence of the infection lying within his fingers' reach. In Semmelweis, an insightful epidemiologist seemed to have collided with a blind pathologist. And unfortunately, the more he struggled to make the two prongs of his scientific inquiry meet, the more desperate and unreasonable he seemed to become. His book on childbed fever, written at the end of his life, reads more like a manic manifesto than a treatise. Scientific history never seems to have forgiven him for it.

But what continues to fascinate is Semmelweis' insight -- perhaps a commonplace in this century, but heretical int he 19th -- that puerperile fever was the result of an infection that was passed on from doctor to patient because of a lack of basic sanitation as physicians moved from patient to patient. The review (by Siddartha Mukherjee) concludes:

To the post-Thalidomide generation of doctors -- to doctors inured to the fact that a medicine or procedure can itself be toxic -- Semmelweis's discovery may come as no surprise. But, as Nuland reveals in some of his most reflective paragraphs, for the high-minded physicians of Vienna and Budapest this was a deeply unsettling premise, for it struck directly at the self-image of their profession. Doctoring was supposed to be a do-good business. It wasn't supposed to make young mothers die of preventable illnesses. What Semmelweis had managed to expose was a hidden anxiety within medicine itself, doctors' ''horror at the possibility that they had been killing their patients for years.''

It is this anxiety that still haunts us. In 2003, 150 years after Semmelweis, some of the most disturbing pieces of medical news involved iatrogenic complications -- doctors' plagues, if you will. The first -- SARS -- was an infection that was spread through hospital wards, often carried by doctors, much like the infections that had vexed Semmelweis in the 1850's. The second -- the so-called million-women study, which revealed the toxic side effects of hormone replacement therapy -- marked a moment of deep introspection in women's health, making doctors question their cavalier willingness to push theories and medicines on patients long before the evidence on them had accumulated.

Like Semmelweis himself, Nuland's book is short, intense and single-minded, and these larger themes and implications are left teeming underneath the text, for readers to peer in closely and uncover. ''To receive his due of honor,'' Nuland writes, Semmelweis ''had to be rediscovered.'' ''The Doctors' Plague'' succeeds for exactly that reason: in telling the story of childbed fever, Nuland has managed to rediscover a critical moment in the history of medicine, the anxieties of which, although somewhat attenuated, persist today.

Pharmacy plan in Florida scuttled after one day.

According to the Orlando Sentinel (reported Jan. 3 (requires free registration; AP picked the story up today -- see, e.g., NY Times/AP story),

Amid an outcry from patients and pharmacists, the state of Florida on Friday abruptly pulled the plug on a new system that forces private pharmacists to decide whether to make poor and medically needy patients pay a fee for prescriptions that have been free.

Health advocates and state lawmakers blasted the system, started just two days ago, which they said is illegal and could force thousands of poverty-stricken people to pay fees they can't afford -- or, at worst, deny lifesaving drugs to critically ill patients.

"We've made pharmacists the gatekeepers," said state Rep. Anne Gannon, D-Delray Beach. "They're deciding whether people live or die."

Don't look now, but the same thing is happening in Dallas County's own Parkland Memorial Hospital, where patients who are too poor to afford prescription meds and too "rich" to qualify for Parkland's health plan are being sent home from the ER and from surgery without the drugs they need to stay alive. As the Dallas Morning News editorialized on Saturday, the County Commissioners have a couple of big votes lined up this week, one of them on Parkland's plan to add to its current main hospital/8 clinics. (The other vote concerns a successor to health commissioner Betty Culbreath. What the editorial didn't mention is that Dallas County is currently experiencing a public-health meltdown. We lead the state in any number of infectious diseases and we lack the infrastructure to have a clue -- let alone a plan -- about an outbreak of salmonella that affected more than 650 people in all 50 states until we were warned by the CDC that something fishy was going on in the Anatole's salsa kitchen (story).) Meanwhile, it seems like business as usual on the Commissioner's Court, where public health -- not to mention life-and-death policies affecting Parkland patients -- seems to be a low priority at best. Shame on the Court and (so far) on County Judge Margaret Keliher, whose campaign touted that electing her would be good for Parkland. We're watching . . . .

Medicare and Medicaid - the outlook to 2050

This just in from the AHLA's Health Law Highlights:

CBO Predicts Federal Healthcare Program Spending May Reach Unsustainable Levels Under Current Policies

Total federal spending for Medicare and Medicaid in 2050 could range from 6.4% to more than 21% of gross domestic product (GDP), the Congressional Budget Office (CBO) predicted in its recently released long term budget outlook. In 2003, the programs accounted for 3.9% of GDP. "Unless taxation reaches levels that are unprecedented in the United States, current spending policies will probably be financially unsustainable over the next 50 years," CBO said.

The report is here.

U.S. News: Science calls at the deathbed(1/12/04).

The January 12 issue of U.S. News and World Report has a compelling article about human research conducted on "the nearly dead." The article contrasts research on University of Pittsburgh patients who have already been declared dead according to neurological criteria ("brain dead") but not yet taken off the respirator and research on terminally ill patients at M.D. Anderson who are expected to die soon after life-support is removed. The risk-to-benefit ratio for a dead patient is, of course, extremely low (pretty close to 0/0). The same is almost true of patients as to whom the decision has been made to withdraw life-sustaining treatment and allow the patient to die, but the risk is not zero:

"You can harm living people in ways that you can't harm dead people," says [Pittsburgh ethics panel member Michael] Wicclair. For example, what if the doctors are wrong and the person doesn't die after withdrawal of the machines?

Rebecca Pentz, formerly at M.D. Anderson and now at Emory, is organizing a conference on the topic for Spring 2004. Should be a lively event.

Safire: From politics to books, my 2004 picks

William Safire's New Year's prediction column is always a hoot. This year's outing was no exception. Apart from his prediction of the Academy Award for "Best Picture" ("Mystic River" -- my youngest son concurs), note item 8:

8. The scientific advance of the year will be (a) age retardation enhanced by memory protection; (b) a single pill combining erectile dysfunction treatment with a fast-acting aphrodisiac; (c) neuroscientists' creation of a unified field theory of the brain; (d) the awakening of geneticists to the liberating study of bioethics.

Safire's answer? (d)

British Medical Association's call for review of medical ethics training.

As reported in today's Scotsman, the British Medical Association today (i) published an 800-page 2nd edition of Medical Ethics Today, and (ii) called for a government-funded review of how effectively ethics and basic law are being taught in medical schools and how the system can be improved. A table of contents and a sample chapter are available from the BMA's web site and can be ordered here. It's a pricey paperback (£60) and they charge £18 for shipping to the US - converted to $US the total comes to about $134.42. You can get it for the same £60 but for a lot less in shipping charges through Amazon-UK.

There’s a Blurry Line Between Rx and O.T.C.

Interesting piece by Gina Kolata on the way prescription meds get reclassified for over-the-counter sales. The article accurately states:

At the heart of its decisions, the FDA says, are straightforward scientific and medical questions. Is there a low potential for abuse or misuse? Can consumers use it for self-diagnosed conditions? Can the drug be adequately labeled? Are doctors needed for its safe and effective use?

It also says:

The decision to sell a drug by prescription, experts say, may involve factors that have nothing to do with science or patient safety. Marketing and financial considerations, politics, doctors' concerns and consumer psychology all may play a role.

How can both statements be true? Consider the morning-after pill, which an expert panel has recommended to FDA Commissioner Mark McClellan be made available as an OTC drug, and the competing social agendas at work:

If the morning-after pill were sold over the counter, doctors who opposed the change said at the F.D.A. hearing, teenagers would avoid counseling on responsible sexual behavior. Some also said that making the drug over the counter would interfere with their relationship with their patients. Those favoring the change said that teenagers are going to have unprotected sex in any case and needed a safe way to avoid pregnancy.

And then there's the impact of insurance:

In other cases, straightforward commercial considerations can determine how a company wants a drug classified. For example, drug manufacturers know that patients with drug coverage often prefer prescriptions to paying the full cost of over-the-counter drugs.

Doctors say they see this insurance effect all the time. Dr. James Osborne, an internist in Greensboro, N.C., says when patients with occasional heartburn ask for a prescription for Nexium, he often suggests they buy Pepsid, which costs 24 cents a day for the four pills needed to equal prescription strength, or about 17 times less than Nexium. "They say, 'It doesn't matter, doc. I have a drug card,' " Dr. Osborne said.

You can stay abreast of developments in the drug field by monitoring the home page of the FDA's Center for Drug Evaluation and Research, which also features a handy daily or weekly e-mail update service. There's also an OTC information page there.

More on medical marijuana.

Angel McClary Raich, one of the successful plaintiffs (on appeal) in yesterday's ruling by the 9th Circuit (see below) has her own website, "Angel's Fight to Stay Alive" with tons of background information.

Medical marijuana use survives US Controlled Substances Act.

The US Court of Appeals for the 9th Circuit yesterday ruled that the federal government lacked the authority under the Commerce Clause of the US Constitution to criminalize the individual use of marijuana for medicinal purposes. The court's opinion is here (FindLaw) and here (court's web site). In most constitutional law cases, the facts are everything. Here is the court's recitation of the facts in this case:

B. Factual Background

Appellants Angel McClary Raich and Diane Monson (the “patient appellants”) are California citizens who currently use marijuana as a medical treatment. Appellant Raich has been diagnosed with more than ten serious medical conditions, including an inoperable brain tumor, life-threatening weight loss, a seizure disorder, nausea, and several chronic pain disorders. Appellant Monson suffers from severe chronic back pain and constant, painful muscle spasms. Her doctor states that these symptoms are caused by a degenerative disease of the spine. Raich has been using marijuana as a medication for over five years, every two waking hours of every day. Her doctor contends that Raich has tried essentially all other legal alternatives and all are either ineffective or result in intolerable side effects; her doctor has provided a list of thirty-five medications that fall into the latter category alone. Raich’s doctor states that foregoing marijuana treatment may be fatal. Monson has been using marijuana as a medication since 1999. Monson’s doctor also contends that alternative medications have been tried and are either ineffective or produce intolerable side effects. As the district court put it: “Traditional medicine has utterly failed these women . . . .”

Appellant Monson cultivates her own marijuana. Raich is unable to cultivate her own. Instead, her two caregivers, appellants John Doe Number One and John Doe Number Two, grow it for her. These caregivers provide Raich with her
marijuana free of charge. They have sued anonymously in order to protect Raich’s supply of medical marijuana. In growing marijuana for Raich, they allegedly use only soil, water, nutrients, growing equipment, supplies and lumber originating from or manufactured within California. Although these caregivers cultivate marijuana for Raich, she processes some of the marijuana into cannabis oils, balm, and foods.

On August 15, 2002, deputies from the Butte County Sheriff’s Department and agents from the Drug Enforcement Agency (“DEA”) came to Monson’s home. The sheriff’s deputies concluded that Monson’s use of marijuana was legal under the Compassionate Use Act. However, after a three-hour standoff involving the Butte County District Attorney and the United States Attorney for the Eastern District of California, the DEA agents seized and destroyed Monson’s six cannabis plants.

The court concluded that this entirely local, entirely intrastate activity of growing and using the pot fell outside the federal government's authority to regulate or criminalize pursuant to its power to regulate interstate commerce. This case will be the talk of Constitutional Law classes all across the country in January. The Commerce Clause has been so expansively interpreted in such a long line of cases over so many decades that any opinion that perceives a limit on Congress' power to regulate commerce will be seen as an outlier, no matter how compelling the facts. Indeed, you can count on the fingers of one hand the number of cases (since 1937) in which the Supreme Court has ruled that Congress exceeded its powers under the Commerce Clause, and all of them have been decided in the last 10 years. The thinking was that a more conservative Supreme Court thought the activist Congress needed to have its wings clipped so that it wouldn't have a blank check to regulate any activity it wanted to touch, no matter how local and no matter how much it was a subject of traditional state concern.

Now the worm has turned, and the liberal 9th Circuit (the most-reversed court of appeals in the federal system) has used this new view of the Commerce Clause to rule against John Ashcroft's Justice Department and uphold individual marijuana use in these cases. Stay tuned . . . I rather suspect the Department of Justice might want to run this one by SCOTUS. Meanwhile, news reports and commentary can be found on Google News.

Not-So-Public Relations - How the drug industry is branding itself with bioethics. By Carl Elliott

Carl Elliott from Univ. of Minnesota's Center for Bioethics - an excellent bioethics think tank - has a great commentary on Eli Lilly's efforts to bolster sales of its new and very expensive antisepsis drug, Xigris, through (among other things) its funding of the "Values, Ethics & Rationing in Critical Care Task Force." The story broke with the Wall Street Journal on September 18 (available here with a subscription). Elliott is predictably and properly critical of the potentially insidious influence of corporate dollars -- especially, it seems, Big Pharm's dollars -- on the research agenda and opinions of bioethicists. He concludes:

Somehow corporate-funded bioethicists have not been touched by the bad publicity. Many bioethicists continue to insist that they are learning from their industry relationships and shaping company policy for the better. A task force commissioned by the two major American professional bioethics bodies—the American Society for Bioethics and Humanities and the American Society of Law, Medicine and Ethics—concluded last year that private corporations should be encouraged to seek out paid bioethics consultants, because "bioethics will have an impact on that (corporate) activity only if bioethicists can be part of the dialogue." The task force went on to endorse the practice of bioethicists advertising their own services as private consultants.

So the next time you meet a bioethicist, pay close attention; he may look like a bioethicist, but when you peel back his mask, you just might see the adman smiling back.

Pattern of Mistakes Found in Zoo Deaths (washingtonpost.com).

HealthLawBlog doesn't often cover developments in the world of veterinary medicine, but a two-part Washington Post series on problems at the National Zoo in Washington, DC, is irresistible. Yesterday's article focused on possible areas of malpractice, as well as shoddy record-keeping and medical records that have been altered after the fact, with many links to the documents themselves on the newspaper's web server. Today's article offers more of the same, with an additional, pointed review of the Zoo's oversight by the Smithsonian. Fascinating reading.

Links to N.Y. Times articles.

Links like the one in the post immediately below are a little iffy. The Times takes articles off its free site after a few days and then limits access based on your ability or willingness to pay. They have relented to some extent, by allowing Dave Winer and USerland to provide stable links to their articles for the benefit of blawgers like me and readers like you. Thus, the Userland link to the article below should be good forever. But I pulled that article up through Google News, and their link, which is the one I used below, uses the same "partner=" format as Userland's link and may be just as stable.

Fortunately, at least with respect to some of their reporting on Medicare, the Times has announced that it will keep their articles in a section of their web site that is free to the public. So -- again, in theory -- the link to the Times' web page for Reed Abelson's piece should be good for a long time, as well. I don't actually believe it and will continue to provide Userland or Google News links until the whole question of stability settles out.

Hospitals Say They’re Penalized by Medicare for Improving Care.

Reed Abelson has an excellent piece in this morning's N.Y. Times about the Medicare prospective payment system (PPS) for reimbursing hospitals for in-patient care. The upshot is that hospitals that creatively and effectively produce the best health outcomes for their patients are often systematically punished by a reimbursement system that pays on the basis of admissions and discharges, rather than outcomes. The lead example in the article is Utah's Intermountain Health Care network, which

says it saves at least 70 lives a year. By giving the right drugs at discharge time to more people with congestive heart failure, Intermountain saves another 300 lives annually and prevents almost 600 additional hospital stays.

But under Medicare, none of these good deeds go unpunished.

Intermountain says its initiatives have cost it millions of dollars in lost hospital admissions and lower Medicare reimbursements. In the mid-90's, for example, it made an average profit of 9 percent treating pneumonia patients; now, delivering better care, it loses an average of several hundred dollars on each case.

"The health care system is perverse," said a frustrated Dr. Brent C. James, who leads Intermountain's efforts to improve quality. "The payments are perverse. It pays us to harm patients, and it punishes us when we don't."

And it's not just the providers who think the system is perverse:

"Right now, Medicare's payment system is at best neutral and, in some cases, negative, in terms of quality — we think that is an untenable situation," said Glenn M. Hackbarth, the chairman of the Medicare Payment Advisory Commission, an independent panel of economists, health care executives and doctors that advises Congress on such issues as access to care, quality and what to pay health care providers.

In a letter published in the current edition of Health Affairs, a scholarly journal, more than a dozen health care experts, including several former top Medicare officials, urged the program to take the lead in overhauling payment systems so that they reward good care.

Even the departing head of the Medicare program agrees with this assessment: "'It's one of the fundamental problems Medicare faces,' said Thomas A. Scully, who as the administrator of the Centers for Medicare and Medicaid Services has encouraged better care by such steps as publicizing data about the quality of nursing home and home-health care and by experimenting with programs to reward hospitals for their efforts."

Children's Hospital Bans Smoking by Staff.

I am no fan of the tobacco industry, but I wonder about today's news story that all employees of a children's hospital in Columbus, Ohio, will be barred from smoking anywhere on the "sprawling hospital grounds" effective May 2004. Is this about the health of employees? The health of patients and families? A public health statement? A form of public education? Aesthetics? (The CEO is quoted as saying patients should not have to contend with the lingering scent of cigarette smoke on staff members returning from breaks.) Ironically, no one quoted in the article, including the spokesperson for a second-hand smoke organization, claimed that this ban was to improve the healthiness or cleanliness of the hospital environment. As long as this is happening in a private hospital, there would appear to be no constitutional issue involved, so the hospital is well within its rights. But does that make the policy right?

Even the conservative Cato Institute hates this Medicare reform law.

Read their critique (largely based on the fiscal irresponsibility of the thing) here.

Clinton-era policy makers analyze Medicare reform law.

As reported by Reuters this afternoon (click here), liberal health care policy experts are blasting the new Medicare reform package.