HHS/CMS effort to silence CMS' chief actuary probably violated federal law.

The Kaiser Family Foundation's Daily Health Policy Report has done an excellent job in today's report rounding up the various strands of the story about the squelching of CMS' chief actuary:

The Congressional Research Service on Monday concluded that Bush administration officials "appear to have violated federal law" by barring CMS chief actuary Richard Foster from sharing with lawmakers his cost estimates for the Medicare legislation, the Wall Street Journal reports (Rogers, Wall Street Journal, 5/4). CRS is a branch of the Library of Congress and provides nonpartisan analysis and research to lawmakers (Pugh, Philadelphia Inquirer, 5/4). The analysis comes more than one month after Foster told members of the House Ways and Means Committee that he had shared with Doug Badger, President Bush's health policy adviser, and James Capretta, associate director of the Office of Management and Budget, his analysis that the Medicare legislation would exceed its target spending goal. According to OMB estimates released after Congress passed the legislation, the Medicare law will cost $534 billion over the next 10 years, $134 billion more than estimated by the Congressional Budget Office. Foster has said that the higher cost projection was known before the final House and Senate votes on the legislation in November but that former CMS Administrator Tom Scully told him, "We can't let that get out." In an e-mail to colleagues at CMS, Foster indicated he believed he might lose his job if he revealed his cost estimates for the Medicare legislation. Scully has said that he did not threaten to fire Foster if the higher estimates were released. Scully also said that he "curbed Foster on only one specific request" made by Democrats at the time of the first House vote on the Medicare bill (Kaiser Daily Health Policy Report, 3/25).

Analysis Details. In a nine-page memo to Rep. Charles Rangel (D-N.Y.), ranking member of the Ways and Means Committee, CRS said that federal officials "do not have the right to prevent or prohibit" employees from sharing information concerning "relevant public policy issues" to congressional members (Goldstein, Washington Post, 5/4). Further, Congress' "right to receive truthful information from federal agencies to assist in its legislative functions is clear and unassailable," the analysis states. According to CRS, since 1912, federal laws have protected federal employees' rights to communicate with lawmakers, and more recent laws have "reaffirmed and strengthened" those rights (Pear, New York Times, 5/4). Jack Maskell, a legislative lawyer at CRS, said that in 1997, "when some lawmakers felt that the Clinton administration threatened the candor of federal health experts, House and Senate appropriations conferees wrote into health care legislation" that the CMS Office of the Actuary serves both the administration and the Congress, the Inquirer reports. In addition, the legislation states that the actuary's independence to provide data to Congress is "vital," according to the Inquirer (Philadelphia Inquirer, 5/4). Thus, Scully's order "would appear to violate a specific and express prohibition of federal law," according to CRS (New York Times, 5/4). However, CRS said that such an act "may not rise to level of a criminal violation" (Heil, CongressDaily, 5/3). According to the Inquirer, Scully probably could not be prosecuted because "only individual lawmakers sought Foster's estimates." Scully could not be reached for comment Monday (Philadelphia Inquirer, 5/4).

Democrats' Response. The CRS report prompted Rangel, who requested the analysis, and Rep. Pete Stark (D-Calif.), House Ways and Means Health Subcommittee ranking member, to request a new committee hearing on the estimates (CongressDaily, 5/3). According to the Journal, some House Democrats "seized the nine-page memo" to reaffirm their argument for subpoenas to make Scully and Badger testify regarding their knowledge of the "alleged 'gag order'" (Wall Street Journal, 5/4). Scully and Badger declined to appear before the House panel when it considered the estimates last month (Kaiser Daily Health Policy Report, 4/2). In a letter, Rangel and Stark reminded House Ways and Means Committee Chair Bill Thomas (R-Calif.), who has declined previous requests to subpoena Scully or Badger, that he has said he would support a subpoena "if it was clear that laws had been broken," CongressDaily reports. In the letter, Rangel and Stark said, "It is clear that laws were broken. ... Indeed, the administration's steadfast refusal even now to release the requested information raises serious questions as to the ongoing violations of the spirit, if not the letter, of these laws" (CongressDaily, 5/3). HHS Secretary Tommy Thompson last week said he would not release additional documents related to Bush administration cost estimates for the Medicare law, despite a formal request from Democrats on the House Government Reform Committee (Kaiser Daily Health Policy Report, 4/29).

Administration Reaction According to the Journal, CRS "is respected by the administration" and therefore, the CRS analysis "makes it harder to isolate the complaints as driven by election-year politics and Democrats who opposed the bill" (Wall Street Journal, 5/4). However, HHS spokesperson Bill Pierce on Monday said that the department is "focusing on instituting the new Medicare law and not on the Scully-Foster controversy" (Philadelphia Inquirer, 5/4). Pierce added that "we are looking to the future, not the past" (New York Times, 5/4).

U of Wash update.

One interesting aspect of the qui tam case, the settlement of which was announced this morning, is that the "plaintiff" (technically, the qui tam relator) was their former compliance officer.

The Seattle Times has updated its story, to reflect the actual settlement announcement this morning.

The complaint, which was filed under seal in 1999 and released today, is here.

Qui tam action against Univ. of Washington teaching hospital settles for $35 million

Assuming the Seattle Times got it right in their article this morning, the pending announcement of a settlement in the False Claims Act suit against them is the final chapter in an appalling tale of lawlessness on the part of a pillar of the Seattle health-care community:

[W]hen [a 1996 compliance] program was put into place, auditors found rampant errors. Doctors were routinely overbilling Medicare and Medicaid, charging for more expensive services than those they had performed. According to the lawsuit, auditors found evidence of this in nine out of 10 departments at the Children's University Medical Group, the billing group for UW doctors who practice at Children's Hospital and Medical Center.

When UW Physicians found out, according to the lawsuit, it hid the practice by changing the compliance policy, making it acceptable to round up, meaning doctors could charge for a treatment that was one rung higher on the billing chart than the treatment they had actually provided.

With the new rules in place, UW Physicians began a second audit for 27 specialty departments. Even under the more permissive rule, though, the errors poured in, according to the lawsuit. The majority of errors came from doctors who were charging for services two or more rungs higher than the services performed. In the dermatology department, 90 percent of the cases reviewed were incorrectly billed. Rates were 57 percent for infectious-diseases, 21 percent for pulmonary and 22 percent for craniofacial.

Best of all, "UW Physicians destroyed the old reports, the lawsuit said, and wrote new, sanitized versions."

Bioethics novels.

Just came across this author profile from the April 18th edition of The Providence Journal. I don't know if Jodi Picoult's books are any good, but I plan to find out this summer. From a bioethics perspective, the most promising appear to be the recently published My Sister's Keeper (producing offspring in order to have a marrow donor for another child), Mercy (euthanasia), and Second Glance (sterilization laws).

ER care being triaged at University of Colo. Hosp. in Boulder.

It doesn't seem like much of a story until you read the details. But, acording to a piece in today's Washington Post, hospitals like the University of Colorado Hospital are no longer providing unreimbursed nonemergency care through their ER. The change is potentially enormous.

To begin with: "As the provider of last resort, hospital emergency departments across America have for decades accepted thousands of truly non-urgent cases and swallowed the cost. For the most part, the patients have nowhere else to go, no insurance and no money." In other words, ER patients with subacute conditions typically got triaged over to the nonemergent ER desk, where their sore throats and sprains were handled. If the bill was never paid, that was just a fact of life. No more. Now they are triaged out to another facility.

Beyond this change, the ERs are treating nonemergent ferently depending upon their financial ability to pay. Nonemergent cases will continue to be seen, as long as there's insurance coverage for that service or -- because most health plans will deny coverage of nonemergency services in the ER -- the patient has cash.

Whether this is a good thing (i.e., hospitals finally taking control of their emergency departments and running them a little more like a business) or not remains a hotly debated issue.

At least judging from the article, there is a chance that patients who present to the ER with a request for emergency services will get a cursory review, rather than a "medically appropriate screening," as required by the federal Emergency Medical Treatment and Active Labor Act (EMTALA). Federal officials say that isn't happening at the Univ. of Colo. hospital, but it is obviously a risk. And, apart from the legal liability that flows from an EMTALA violation, there is the added health costs: "'If we tell people don't come to the emergency department unless you're dying, that's exactly what they'll do,' said Arthur Kellermann, a professor at Emory University School of Medicine and chairman of the emergency medicine department at Grady Memorial Hospital in Atlanta. 'If no one else is willing to take care of that diabetic, then we are very unwise to turn that person away,' because chronic conditions tend to worsen if left untreated."

One of perhaps unintended patient benefits of EMTALA was precisely this: patients with chronic or sub-emergent conditions got seen by a doctor or nurse-practitioner/physician's assistant somewhere within the system, and conditions that could have worsened were treated sooner rather than later. The problems with this fix are (1) some ERs are stretched beyond their limits by such cases, which necessitates the diversion of true emergencies away from the ERs, and (2) from a cost standpoint, about the only more expensive (and less appropriate) hospital setting for these subacute patients is the ICU.

The message of the unsurprising story in today's paper is that our country's ER "fix" for unfunded patients (EMTALA) was an admirable attempt to fix the patient of "patient dumping" but was not a good solution -- nor was it really intended to be -- for the problem of inequitable access to health insurance, and it has become unsustainable. This was the message of a Wall Street Journal article last year about similar efforts to cut back on uncompensated care at the University of Texas Medical Branch (UTMB) at Galveston (Bernard Wysocki Jr., "At One Hospital, A Stark Solution For Allocating Care," WSJ, September 23, 2003, at A1) (may require paid subscription). In fact, the WSJ has done a good job on this issue with a series of pieces, from September to December 2003, including:

• Six Prescriptions to Ease Rationing, 12/22/03
• Universal Care Has a Big Price: Patients Wait, 11/12/03
• Longer Dialysis Raises Hopes, but Poses Dilemma, 10/02/03
• Stark Choices at a Texas Hospital, 09/23/03
• Lilly Fuels Debate Over Rationing, 09/18/03
• An Invisible Web of Gatekeepers, 09/16/03
• Health Care's Big Secret: Rationing Is Here, 09/12/03

Meanwhile, a quite useful analysis of the "hidden costs" in the Canadian health care system appeared last week in the WSJ and should be required reading for anyone who thinks health-care financing woes are subject to a quick fix.

The New York Times: "Administration Says a `Zone of Autonomy' Justifies Its Secrecy on Energy Task Force"

Couldn't help noticing this headline in today's Times. Too bad this Administration isn't equally eager to protect the "zone of autonomy" when it comes to the decisional choices of pregnant women, dying patients possessing and using medical marijuana pursuant to doctors' orders that are perfectly legal under California law, physicians who prescribe medications for terminally ill patients pursuant to Oregon's physician-assisted suicide law, and same-sex couples who seek the recognition and protection of a marriage license, just to name a few . . . .

Do poets die young(er)?

According to a study published in the Journal of Death Studies, the answer is yes. (See this Reuters article for the full story). Many news sources reported this story with what seemed to me to be unseemly glee, but no matter. Statistically, it's hard to say whether this study proves anything. Correlation, we all know, is not causation. Thus there are many possible explanations for the correlation. The one that I think is the most interesting was suggested by James Kaufman, the author of the study:

"Poets produce twice as much of their lifetime output in their twenties as novelists do," he said.

So when a budding novelist dies young, few people may notice.

"A great novelist or nonfiction writer who dies at 28 may not have yet produced her or his magnum opus."

Kaufman said poets should not worry, but should perhaps look after their health.

"The fact that a Sylvia Plath ... may die young does not necessarily mean an Introduction to Poetry class should carry a warning that poems may be hazardous to one's health," he said.

Good. Now we can go back to worrying about real health threats, like SARS and the environmental policies of George Bush.

Gov. Romney won't let gay outsiders wed in Massachusetts.

It seems the Bay State has a statute that dates back to 1913 prohibiting out-of-state couples from marrying if their marriage would be void in their home state (see the report in this morning's New York Times). Governor Mitt Romney is directing revisions to local marriage forms so that home states can be identified. Meantime, he plans to write to every governor in the country and ask for assurances that same-sex marriage is permitted in their states. As the Times noted, however:

It seems unlikely that any state would be able to say that at the moment. Thirty-nine states have passed so-called defense-of-marriage acts, which stipulate that marriage is between a man and a woman. Three other states — Maryland, New Hampshire and Wyoming — have laws precluding same-sex marriage. And seven states, including New York, New Jersey and Connecticut, make no specific reference to same-sex couples in their laws.

By my count, that's 49 states that will not recognize same-sex marriage. (Where's D.C. in all this?)

Described by various news reports as "obscure" and "little-known," the 1913 law is easily found in Chapter 207 ("Marriage") of the Domestic Relations Law of the Commonwealth of Massachusetts. The first part of Chapter 207 is entitled "Certain Marriages Prohibited," and Section 11 (of 14 sections) lays it out for all to see:

Section 11. No marriage shall be contracted in this commonwealth by a party residing and intending to continue to reside in another jurisdiction if such marriage would be void if contracted in such other jurisdiction, and every marriage contracted in this commonwealth in violation hereof shall be null and void.

I don't know of many other states with a similar provision, probably because most states are happy to marry 'most anyone who meets the legal requirements of their own state and leave it to the happy couples' home states to figure out whether they will recognize the union or not (depending on whether the marriage violates the public policy of the state). Gov. Romney, on the other hand, is not concerned with enforcing other states' rules about who can marry whom. His worry is that Massachusetts will "become the Las Vegas of same-sex marriage." Considering that all states are perfectly capable of protecting their own interests in traditional marriage without the help of the Commonwealth of Massachusetts, one wonders whether this is really about the proliferation of tacky little white marriage chapels or plain, old-fashioned discrimination.

More medical hoax sites on the WWW

I noted earlier (here and here) the masterful fake cloning Web site in connection with (but with no reference to) the new film, Godsend. Turns out this isn't the first one. Another was posted in connection with Eternal Sunshine of the Spotless Mind (Lacuna Inc.). And then there's malepregnancy.com.

Google Search: cloning

The fake cloning site is well done in a spooky kind of way. And if you type "cloning" into the Google search window, you get a sponsored link to the Godsend Institute website at the top of the page. Considering what's on the web these days, it's hard to get all lathered up over this hoax, but it still bothers me in a vague, undefined way. . . .

Godsend Institute.

If you want to see a movie promotion site that is over the top, but fascinating, check out the site for the new DeNiro move, Godsend.

Infectious disease . . . and the duty to treat: what are the limits?

I recently did a piece for the Pediatric Infectious Disease Journal on the duty (and the limits to that duty) of health care professionals to respond to an infectious disease even at a considerable risk to the responder. Today's N.Y. Times Magazine has an article that does a nice job of the epidemiology and the ethics issues related to it.

Health care and IT.

Steve Pearlstein has a good piece in today's Washington Post on the failure, so far, of the health care sector to jump on the information-technology bandwagon (resulting in much waste and worse: avoidable death and injury). His analysis of the problem seems right on the money:

So why has health care almost uniquely failed to invest in IT? First, the industry remains fragmented, with few entities big enough to make the necessary sizable upfront investment. Even in cases where hospitals or doctors' practices might be large enough, the economic incentives are pretty weak. In an industry in which service providers are still paid largely on the basis of how much they do, investing in systems that would help reduce the number of tests and procedures isn't the most obvious way to boost incomes.

The networked quality of the health care industry, with independent doctors, hospitals, labs and pharmacies all providing services to the same patient, also discourages IT investment. Any economic gains wouldn't be fully captured by the entity making the investment, but would be likely to leak out to other providers or the insurer. And because the big payoff from such investments comes only after lots of other enterprises install the same system and make it possible for information to be easily shared, there's little incentive to be first.

Finally, there are the doctors, who still pretty much control the health care system and, up to now, have resisted anything that threatens to increase their workload, change the way they practice or limit their medical discretion. It is no coincidence that some of the earliest successes have come at Veterans Affairs hospitals, where doctors are salaried employees.

All of this raises an obvious question: what can the government do, through Medicare conditions of participation and through changes in reimbursement, to encourage the transition to a safer and more efficient system?

HR 3108 signed into law

As stated by the White House Press Secretary, the President signed into law the pension law discussed here earlier today and yesterday, which includes the provision that purports to -- but may not quite -- kill the antitrust challenge to the resident match program.

April 10, 2004
STATEMENT BY THE PRESS SECRETARY

On Saturday, April 10, 2004, the President signed into law:
H.R. 3108, the 'Pension Funding Equity Act of 2004,' which establishes a two-year temporary replacement of the benchmark interest rate for determining funding liabilities of private sector pension plans; establishes temporary alternative minimum funding requirements for certain underfunded pension plans; and allows certain multiemployer plans to temporarily delay the amortization of specified losses.

Parkland's not the only one . . . .

According to a story in today's N.Y. Times, the Westchester County government has created a committee to monitor the public county hospital's weak finances. Though the losses appear to be much greater in Westchester than in Dallas, the political rhetoric is familiar:

The new "financial improvement committee" will give county officials greater power and control over the beleaguered medical center, which was once operated by the county but was spun off into a public-benefit corporation in 1997. Though Westchester has little direct control over the hospital corporation, the county is ultimately liable for its debts.

After the corporation posted two straight years of deficits totaling nearly $140 million, Westchester officials told hospital officials to set up the oversight committee or risk losing county financing.

"It gives us an ability to watch what goes on," said Bill Ryan, the chairman of the Westchester Legislature and a member of the committee. "We can't accept business as usual. There's been a tremendous failure over there over six years."

More on the pension bill that may kill the antitrust challenge to The Match.

AP has picked up the story that first appeared yesterday in Modern Healthcare. There seems to be some confusion as to whether the about-to-become-public-law would actually apply to the pending lawsuit, in light of its statement that "Nothing in this section shall be construed to exempt from the antitrust laws any agreement on the part of 2 or more graduate medical education programs to fix the amount of the stipend or other benefits received by students participating in such programs." Predictably, plaintiffs' counsel alleges that his complaint states just that: a price-fixing claim. You be the judge and read the complaint. There certainly are allegations that the participants in the match "fixed" resident compensation, and www.savetheresidents.com believes their complaint will survive:

First, the legislation contains an explicit exception stating that it does not apply to price-fixing claims and Judge Paul Friedman noted in a recent ruling that plaintiffs have brought such a claim. Senators Bingaman and Feingold both noted on the Senate floor that the legislation does not apply to the residents' lawsuit.

Second, any legislation depriving tens of thousands of medical residents of the same antitrust protections enjoyed by all other Americans would be unconstitutional. At stake are not only the constitutional rights of medical residents, but the rights of workers in all other industries where employers have the political clout to force unfair wages through price-fixing and cover it up with secretive, insulating legislation.

Despite the experience of Sen. Bingaman's wife, Anne, in heading the Antitrust Division of DOJ during the Clinton Administration, Bingaman's and Feingold's comments may not amount to much, considering their opposition to the inclusion of this provision in the pension bill. But they do have a point . . . .

In the district court's opinion (undated, but handed down Feb. 21, 2004), the court noted (beginning at p. 60) that "Plaintiffs raise one claim of price-fixing against all defendants under Section 1 of the Sherman Act." In response to motions to dismiss under Fed. R. Civ. P. 12(b)(6) for failure to state a claim, the court wrote that it "concludes that plaintiffs adequately have alleged a common agreement to displace competition in the recruitment, hiring, employment and compensation of resident physicians and to impose a scheme of restraints, which have the purpose and effect of fixing, artificially depressing, standardizing and stabilizing resident physician compensation and other terms of employment among a number of the named organizational defendants and those institutional defendants that participated in the Match Program."

Antitrust challenge to the residency match may be about to bite the dust.

Modern Healthcare is reporting that a Conference Committee-added provision of "the Pension Funding Equity Act [H.R. 3108] could end a 2-year-old antitrust challenge of the National Resident Matching Program. . . . President Bush is expected to sign the bill into law next week."

The law was passed by Congress on Thursday. The last-minute provision -- Section 207 -- exempts residency matching programs and sponsors from antitrust laws, other than for price-fixing claims:

SEC. 207. CONFIRMATION OF ANTITRUST STATUS OF GRADUATE MEDICAL RESIDENT MATCHING PROGRAMS.
(a) FINDINGS AND PURPOSES-

(1) FINDINGS- Congress makes the following findings:

(A) For over 50 years, most United States medical school seniors and the large majority of graduate medical education programs (popularly known as `residency programs') have chosen to use a matching program to match medical students with residency programs to which they have applied. These matching programs have been an integral part of an educational system that has produced the finest physicians and medical researchers in the world.

(B) Before such matching programs were instituted, medical students often felt pressure, at an unreasonably early stage of their medical education, to seek admission to, and accept offers from, residency programs. As a result, medical students often made binding commitments before they were in a position to make an informed decision about a medical specialty or a residency program and before residency programs could make an informed assessment of students' qualifications. This situation was inefficient, chaotic, and unfair and it often led to placements that did not serve the interests of either medical students or residency programs.

(C) The original matching program, now operated by the independent non-profit National Resident Matching Program and popularly known as `the Match', was developed and implemented more than 50 years ago in response to widespread student complaints about the prior process. This Program includes on its board of directors individuals nominated by medical student organizations as well as by major medical education and hospital associations.

(D) The Match uses a computerized mathematical algorithm, as students had recommended, to analyze the preferences of students and residency programs and match students with their highest preferences from among the available positions in residency programs that listed them. Students thus obtain a residency position in the most highly ranked program on their list that has ranked them sufficiently high among its preferences. Each year, about 85 percent of participating United States medical students secure a place in one of their top 3 residency program choices.

(E) Antitrust lawsuits challenging the matching process, regardless of their merit or lack thereof, have the potential to undermine this highly efficient, pro-competitive, and long-standing process. The costs of defending such litigation would divert the scarce resources of our country's teaching hospitals and medical schools from their crucial missions of patient care, physician training, and medical research. In addition, such costs may lead to abandonment of the matching process, which has effectively served the interests of medical students, teaching hospitals, and patients for over half a century.

(2) PURPOSES- It is the purpose of this section to--

(A) confirm that the antitrust laws do not prohibit sponsoring, conducting, or participating in a graduate medical education residency matching program, or agreeing to do so; and

(B) ensure that those who sponsor, conduct or participate in such matching programs are not subjected to the burden and expense of defending against litigation that challenges such matching programs under the antitrust laws.

(b) APPLICATION OF ANTITRUST LAWS TO GRADUATE MEDICAL EDUCATION RESIDENCY MATCHING PROGRAMS-

(1) DEFINITIONS- In this subsection:

(A) ANTITRUST LAWS- The term `antitrust laws'--

(i) has the meaning given such term in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)), except that such term includes section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent such section 5 applies to unfair methods of competition; and

(ii) includes any State law similar to the laws referred to in clause (i).

(B) GRADUATE MEDICAL EDUCATION PROGRAM- The term `graduate medical education program' means--

(i) a residency program for the medical education and training of individuals following graduation from medical school;

(ii) a program, known as a specialty or subspecialty fellowship program, that provides more advanced training; and

(iii) an institution or organization that operates, sponsors or participates in such a program.

(C) GRADUATE MEDICAL EDUCATION RESIDENCY MATCHING PROGRAM- The term `graduate medical education residency matching program' means a program (such as those conducted by the National Resident Matching Program) that, in connection with the admission of students to graduate medical education programs, uses an algorithm and matching rules to match students in accordance with the preferences of students and the preferences of graduate medical education programs.

(D) STUDENT- The term `student' means any individual who seeks to be admitted to a graduate medical education program.

(2) CONFIRMATION OF ANTITRUST STATUS- It shall not be unlawful under the antitrust laws to sponsor, conduct, or participate in a graduate medical education residency matching program, or to agree to sponsor, conduct, or participate in such a program. Evidence of any of the conduct described in the preceding sentence shall not be admissible in Federal court to support any claim or action alleging a violation of the antitrust laws.

(3) APPLICABILITY- Nothing in this section shall be construed to exempt from the antitrust laws any agreement on the part of 2 or more graduate medical education programs to fix the amount of the stipend or other benefits received by students participating in such programs.

(c) EFFECTIVE DATE- This section shall take effect on the date of enactment of this Act, shall apply to conduct whether it occurs prior to, on, or after such date of enactment, and shall apply to all judicial and administrative actions or other proceedings pending on such date of enactment.

More on drugs: Reimportation.

Chuck Grassley can be a royal pain sometimes, but this time the Republican Senator from Iowa, may have done something useful. Yesterday, he introduced S. 2307, a bill entitled, "Reliable Entry for Medicines at Everyday Discounts through Importation with Effective Safeguards Act of 2004." I thought this title confirmed that weird bill names have hit an all-time high (or low) until I read his press release on this and saw the bill title's acronym: REMEDIES. Cute. The printed bill hasn't made it to Thomas yet, but you should be able to click here in a couple of days and get it. Meanwhile, AHLA has a copy on their web site. Here's Grassley's description of the key provisions:

Overview of Key Elements of the REMEDIES Act of 2004

Legalizes reimportation (or importation) of prescription drugs from FDA approved exporters. To be approved, registered exporters must agree to meet safety requirements and to permit FDA inspectors on their premises full time to ensure compliance.

Creates a "fast-track" regulatory process for FDA to implement the importation system quickly.

Importation of qualified prescription drugs from Canada is immediately legalized while the new importation system is developed and implemented by FDA.

Under the new system, individuals, pharmacies, and drug wholesalers are permitted to legally import prescription drugs from registered foreign exporters:

o Individuals may order drugs from a registered exporter pursuant to a valid prescription issued by a U.S. doctor and filled by a pharmacist whose licensing requirements are equivalent to those required in the U.S. or by a dispensing pharmacist duly licensed by a state.
o Commercial shipments are permitted only to licensed pharmacists for resale directly to consumers and by drug wholesalers who can sell to pharmacies as they do today.

Drugs imported to U.S. pharmacies and drug wholesalers must be FDA approved drugs produced in the United States or in FDA inspected manufacturing facilities in other counties. FDA is required to provide the proper labeling for drugs for importation.

The FDA through its inspectors is responsible for tracing all drugs exported to the US back to their original manufacturing plant and ensuring that they have been stored and transported safely from that plant.

Individuals may also purchase drugs that are bioequivalent to FDA-approved brand name drugs that are produced by the same brand-name manufacturer.

o These drugs are drugs not technically approved by the FDA but the foreign government has approved the drug and that drug has the same active ingredient or ingredients as the FDA-approved drug and the same route of administration, dosage form, and strength.
o If a drug manufacturer believes, however, that the non-FDA approved drug is not bioequivalent to the FDA approved drug, then it must submit a petition to the FDA to show that (a) the differences result in a product that is not bioequivalent to the drug approved in the U.S., and (b) that such differences are due to scientifically and legally valid differences in the regulatory requirements of the U.S. and the country(ies) in which the apparently similar drug is marketed. The manufacturer is required to pay a user fee sufficient to cover the cost of the FDA's review of the petition and supporting documentation.

A User Fee charged to registered exporters provides the financing to provide the resources to FDA to ensure the safety of imported drugs.

o User fees charged to registered exporters would be sufficient to cover all costs including those incurred for inspection and verification within the United States, at the exporter's premises and any other location where the drugs have been stored prior to entry into the U.S.
o The FDA would be required to verify the source and inspect the intermediate handlers of all drugs intended for export into the United States.
o FDA would also be required to determine by a statistically significant sample that the recipients held valid prescriptions (individuals ordering 90-day supply or less) or verify that recipient was a licensed pharmacy that only dispensed drugs to individuals.

The FDA would also be required to supply valid U.S. labeling upon request of the registered exporter and affix or supervise the affixing of seals, markings or tracking technology that would inform border personnel that such imports were lawful to be entered as labeled.

Drugs not permitted for importation include controlled substances and certain other drugs not appropriate for importation because of storage, significant safety concerns, or drugs that are more likely to be counterfeited.

Provisions to Protect Safety of the Public:

Unauthorized imports would be treated as contraband and would be seized and destroyed upon entry without notice.

For the first two years, importation would be limited to Canada. The Department of Health and Human Services would submit a report to Congress in the second year, and unless Congress changed the law, countries from which importation is permitted would be expanded to include, the European Union, the European Free Trade Association, Japan, Australia, and New Zealand. Other countries meeting statutory criteria could also be added to the list by the Secretary.

The legislation continues to prohibit the import or reimport of drugs supplied free or at nominal cost to charitable or humanitarian organizations including the United Nations or a government of a foreign country.

Requires pedigrees from the manufacturer to the dispensing pharmacist for all prescription drugs sold within the U.S. or to an exporter authorized to export drugs into the U.S.

Requires the automatic suspension of an exporter's registration for any attempted entry of non-qualified or unsafe drugs with restricted ability to seek re-instatement in the future.

Requires that registered exporters submit to the jurisdiction of the U.S. federal court system and provides a mechanism for civil actions against the property of persons that import non-qualified drugs.

Repeals the provision in the Controlled Substances Act that permits the personal import of scheduled drugs, which is a significant source of illegal drug trade in the U.S. Tax Incentives for Manufacturers to Facilitate Reimportation

Incentive To Not Prevent Reimportation: Manufacturers that do not take any action, directly or indirectly, to prevent reimportation receive a 20% increase in R&D tax credit for that year.

Penalty For Preventing Reimportation: Manufacturers that take any action, directly or indirectly, to prevent authorized reimportation lose the business expense deduction for advertising expenses.

Drug costs redux.

Who knows? Maybe drug costs will be the leading edge of a health-care reform movement that drags the country, kicking and screaming, into universal coverage (maybe single-payer, but probably not). Lord knows we are working overtime trying to figure out how to make drugs affordable, or it least make it look as though we are trying to make drugs affordable.

The Medicare reform law last fall [Pub. L. No. 108-173] falls into that latter category: many Medicare beneficiaries will pay more out of pocket for their drugs than before this so-called reform, and their ability to lay off the risk through third-party insurance is restricted by the law. But the political message was, "Hi, we're Congress and we're here to help you with your staggering drug bills," and AARP and others bought it. (Tip: When the drug companies support a drug reform bill, hold on to your wallet.)

Maine has been experimenting with a plan to keep drug costs low for Medicaid beneficiaries, and despite being fought tooth and nail by the drug companies' representative, they had their law upheld in the Supreme Court last Term [PhRMA v. Walsh].

In addition, the on-going controversy over reimportation of drugs from Canada is a symptom of the lengths to which employers will go in order to lower sky-high drug costs, as well as the absurd lengths to which the FDA will sometimes go to promote the interests of Big Pharm. (Thankfully, this policy is currently under review, though nothing is expected to come of the review anytime soon.)

More recently, the Detroit Free Press reports in yesterday's paper that Michigan's drug price control law was upheld by the D.C. Circuit last week. The case, PhRMA v. Thompson, No. 02-5117 (D.C. Cir. April 2, 2004), affirmed summary judgment for DHHS, which had been sued by PhRMA for approving the Michigan plan ("the Initiative")"

Under the Initiative, if a drug manufacturer does not sign each of two specified rebate agreements with Michigan—one to provide rebates for drugs the state purchases for Medicaid recipients and the other to provide identical rebates for drugs the state purchases for the two non-Medicaid state health programs—the drug will be covered under the programs subject to ‘‘prior authorization.’’. . .

The court concluded that the resulting plan adequately promotes the best interests of patients and provides for a suitable appeal mechanism is a physician believes a nonlisted drug would be better for the patient than one of the discounted listed drugs.

Been down so long, it looks like up to me.

I'm not sure where the time goes sometimes, and it comes as a bit of shock that I haven't posted to this space in well over a week. The fact is, these puppies take some time to put together, and the last few weeks have been chockablock with writing and speechifying. Not that I expect any sympathy . . .

Since I've been gone:

DHHS' OIG has issued its long (long, long) awaited final Stark II, Phase 2 rule (albeit as an "interim final rule with comment period," which allows for the possibility of a final final rule), a mere 3 years and 3 months after the publication of the final Stark II, Phase 1 rule (available in three parts: 1, 2, 3) -- which allows for the possibility that the final final rule might appear in, say, June 2007. By the way, two omitted sections of the preamble were published in Tuesday's Federal Register.

DHHS also published an "OIG Alert" entitled "OIG ALERTS PHYSICIANS ABOUT ADDED CHARGES FOR COVERED SERVICES." This is a somewhat unhelpful title, but upon closer inspection, the alert addresses the situation of participating physicians (that is, physicians who agree to accept assignment for all Medicare patients) who charge their patients additional amounts for covered services. (The same problem would arise on a case-by-case basis if a physician charged extra for services provided to a patient for whom the physician agreed to accept assignment.) Everyone knows (or ought to know) that a physician who accepts assignment cannot "balance bill," but the alert seems to address a slightly different problem:

For example, the OIG recently alleged that a physician violated his assignment agreement when he presented to his patients -- including Medicare beneficiaries – a “Personal Health Care Medical Care Contract” asking patients to pay an annual fee of $600. While the physician characterized the services to be provided under the contract as “not covered” by Medicare, the OIG alleged that at least some of these contracted services were already covered and reimbursable by Medicare. Among other services offered under this contract were the “coordination of care with other providers,” “a comprehensive assessment and plan for optimum health,” and “extra time” spent on patient care. OIG alleged that based on the specific facts and circumstances of this case, at least some of these contracted services were already covered and reimbursable by Medicare. Therefore, OIG alleged that each contract presented to this physician’s Medicare patients constituted a request for payment for already covered services, other than the coinsurance and deductible, and was therefore a violation of the physician’s assignment agreement.

As I read it, this was a somewhat inept attempt to create a "boutique" or "concierge" practice with Medicare patients -- a topic I've addressed before, here and here.

It's nice to be back . . .