Health Lawyers Weekly, August 10

The AHLA's Health Lawyers Weekly features two articles by lawyers from Hall, Render, Killian, Heath & Lyman, P.S.C., on the IRS' publication in the July 26 Federal Register of its final rule for 403(b) plans (a/k/a tax-deferred annuity plans) and DOL's simultaneous publication of Field Assistance Bulletin 2007-02 containing guidance on how 403(b) plans can avoid compliance with ERISA.

This week's issue also has a good piece on the DC Circuit's en banc decision in the Abigail Alliance case (previously discussed here).

Top Stories

• D.C. Circuit Says Terminally Ill Do Not Have Constitutional Right To Experimental Drugs
  Terminally ill patients do not have a constitutionally protected right to assume the risk of taking experimental drugs that have passed early safety trials but have not yet been cleared by the Food and Drug Administration (FDA) as safe and effective, the D.C. Circuit held August 7 in an 8-2 ruling. Full Story
• FTC Rules Evanston-Highland Merger Anticompetitive But Declines To Order Divestiture
  In a unanimous ruling released August 6, the Federal Trade Commission (FTC) found the 2000 merger of Evanston Northwestern Healthcare Corp. (ENH) and Highland Park Hospital violated federal antitrust laws. But significantly, the Commission’s ruling, written by Chairman Deborah Platt Majoras, does not require ENH to divest its Highland Park acquisition as ordered by an agency Administrative Law Judge (ALJ) in 2005. Full Story

Articles & Analyses

• IRS Finalizes 403(b) Regulations, By Jay P. Turner, Hall, Render, Killian, Heath & Lyman, P.S.C.
• Labor Department Clarifies Application Of ERISA To 403(b) Plans, By William D. Roberts, Hall, Render, Killian, Heath & Lyman, P.S.C.

Current Topics

• Arbitration/Mediation
  Mississippi High Court Finds Family Of Deceased Nursing Home Resident Not Bound By Arbitration Provision Signed By Relative
• Criminal Law
  Tenth Circuit Affirms Prison Sentence For Physician Who Committed Healthcare Fraud
• Food and Drug Law
  1. Federal Circuit Finds Federal Patent Law Preempts D.C. Law Regulating Drug Pricing
  2. Dingell Introduces Bill Imposing User Fees On Food And Drug Imports
  3. Lawmakers Pledge Work On FDA User Fee Reauthorization Legislation Will Continue In August
  4. Grassley Questions FDA About Oversight Of Drugs Manufactured Abroad
• Fraud and Abuse
  1. Seventh Circuit Upholds Dismissal Of FCA Qui Tam Action Against Caremark Rx For Failure To Plead With Particularity
  2. Update
  3. OIG Approves Nevada, New York False Claims Acts
• Health Information
  Technology
  DHHS Releases White Paper On Creating Public-Private AHIC Successor
• Healthcare Access
  Report Recommends Policy Changes To Further Expand Health Insurance Coverage To Young Adults
• Insurance
  Regence Blue Shield Settles Lawsuit Over High Performance Network
• Long Term Care
  Equitable Abstention Doctrine Supports Dismissal Of Consumer Lawsuit Against Healthcare Facilities For Alleged Violations Of Minimum Nurse Staffing Law
• Managed Care
  New York Governor Spitzer Signs Managed Care Reform Law
• Medicaid
  Eighth Circuit Upholds Denial Of State Request For Increase In Medicaid Payments
  OIG Says New York Paid Over $17 Million In Improper SCHIP Payments
• Medicare
  1. Baucus, Grassley Introduce Bill Revamping QIO Program
  2. U.S. Court In District Of Columbia Finds Pharmacy Associations Lacked Standing To Bring Lawsuit On Behalf Of Its Member Pharmacies
• Physicians
  New York Appeals Court Upholds Physician’s License Suspension Following Conviction For Violating Anti-Kickback Statute
• PRRB
  CMS Administrator Update
• Tax
  Wisconsin High Court Finds Nonprofit Medical Center Not Entitled To Property Tax Exemption On Its Day Care Facility

© 2007 AHLA. Reprinted with permission.

NY Times editorial on why the U.S. doesn't have the world's best health system

The Times' editorial looks at the Commonwealth Fund's recent international report card that compared the U.S. with Australia, Canada, Germany, New Zealand, and the U.K. In the words of the Commonwealth Fund:

the U.S. health care system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives. The U.S. is the only country in the study without universal health insurance coverage, partly accounting for its poor performance on access, equity, and health outcomes. The inclusion of physician survey data also shows the U.S. lagging in adoption of information technology and use of nurses to improve care coordination for the chronically ill.

Bottom line for the New York Times editorialist:

With health care emerging as a major issue in the presidential campaign and in Congress, it will be important to get beyond empty boasts that this country has “the best health care system in the world” and turn instead to fixing its very real defects. The main goal should be to reduce the huge number of uninsured, who are a major reason for our poor standing globally. But there is also plenty of room to improve our coordination of care, our use of computerized records, communications between doctors and patients, and dozens of other factors that impair the quality of care. The world’s most powerful economy should be able to provide a health care system that really is the best.

The Commonwealth Fund's report card on U.S. states (previously mentioned here) is also worth a close look.

DC Circuit (en banc) reverses panel decision in Abigail Alliance case

The much-anticipated en banc decision of the D.C. Circuit came down today. The court ruled, 8-2, that dying patients do not have a fundamental right of access to drugs that have either just completed Phase I testing or are in Phase II. The big surprise to me was that no-one on the court joined the two judges -- Chief Judge Ginsburg and Judge Rogers -- who comprised the majority in the original panel. The idea of a new fundamental right seemed far-fetched and unlikely to go anywhere, but not one of the other eight judges on the court saw the issue the same way as the dissenters? This will be a good case for my fall Health Law class -- useful overview of the drug-approval process, good discussion of fundamental-rights law, and an example (if they didn't get this in Con Law II) of how the framing of the claimed right (narrow and specific vs. broad and general) will usually dictate the outcome of the case.

Next stop: Supreme Court. What are the chances four justices will vote to grant cert.? I'll venture a guess: 5% (never say never, but this case comes very close to a zero-percenter).

• AP story
• today's en banc ruling (including Judge Rogers' dissent)
• original 3-judge panel ruling
• Lyle Denniston's same-day analysis at SCOTUSBlog

Security issues for hospitals

Scary words: "Hospital = Target"

In this week's Health Lawyers Weekly, Mark Rogers analyzes hospital-security issues in a post-9/11 world. The risk is anything but speculative, as this list demonstrates:

Several incidents since the attacks of 9/11 have highlighted this risk. Consider
the following:

• November 2002: The Federal Bureau of Investigation (FBI) issued an alert to hospitals in San Francisco, Houston, Chicago, and Washington, D.C., warning of a vague, uncorroborated terrorist threat.


• August 2004: The FBI and U.S Department of Homeland Security (DHS) issued a nationwide terrorism bulletin that al-Qaeda may attempt to attack Veterans Affairs Hospitals as an alternative to more heavily guarded U.S. military institutions. The bulletin indicated that there had been persistent reports of suspicious activity at medical facilities throughout the United States.


• November 2005: Police in London, England arrest two suspected terrorists accused of plotting a bomb attack. One of the suspected terrorists was found to have a piece of paper with the words in Arabic, “Hospital = Target.”


• April 2005: FBI and DHS investigated incidents of imposters posing as hospital accreditation surveyors. The Joint Commission sent security alerts to the 5,000 medical institutions it accredits and warned them to be on the lookout for suspicious activity.


• July 2007: Eight individuals, all of them either physicians or other medical professionals associated with Britain’s National Health Service, were taken into custody in relation to attempted car-bomb attacks in London and a car-bomb attack at Glasgow Airport in Scotland. The FBI reported that two of the suspects contacted the Philadelphia-based Educational Commission for Foreign Medical Graduates to inquire about working in the United States as physicians.

Worth reading (as is the rest of this news-filled issue) . . . .

Washington pharmacists sue to block "morning after pill" law

From AHLA's Health and Life Sciences Law Daily:

Washington pharmacists sue state over requirement of morning-after pill. The AP (7/28) reported, "Pharmacists have sued Washington state over a new regulation that requires them to sell emergency contraception, also known as the 'morning-after pill.' In a lawsuit filed in federal court Wednesday, a pharmacy owner and two pharmacists say the rule that took effect Thursday violates their civil rights by forcing them into choosing between 'their livelihoods and their deeply held religious and moral beliefs.'" The state of Washington "ruled earlier this year that druggists who believe emergency contraceptives are tantamount to abortion cannot stand in the way of a patient's right to the drugs." However, the "state's Roman Catholic bishops and other opponents predicted a court challenge after the rule was adopted, saying the state was wrongly forcing pharmacists to administer medical treatments they consider immoral."

Transplant surgeon charged in patient death

In what is reported to be the first ever such prosecution, a California transplant surgeon has been charged with prescribing excessive doses of morphine and Ativan to hasten the death of a disabled patient in order to harvest organs for transplant. The story is here (AP/Washington Post). I suppose the fact that this sort of case has never been brought before won't stop it from being hyped in the media. It certainly plays to the conspiracy fantasists' view of the transplantation world, despite the fact that many states' laws and all transplantation centers' policies call for a strict separation of the treatment and transplantation teams, precisely to avoid even the appearance of a conflict of interest.

Medical tourism: Mexico for cost, quality, access

Today's Dallas Morning News has an article about the great medical care available south of the border for a fraction of the cost of comparable care here in Texas and without the delays and hassles. This is just the latest wrinkle in the unfolding story of medical tourism, which has already established India, Singapore, Malaysia, and Thailand as "go to" destinations for patients seeking high-quality, low-cost medical care.

My new colleague, Nathan Cortez, has an excellent piece on this phenomenon coming out soon in the Indiana Law Journal: "Patients without Borders: The Emerging Global Market for Patients and the Evolution of Modern Health Care." Here's the SSRN abstract:

This article addresses the unique legal, policy, and ethical questions that arise when patients travel to foreign jurisdictions for medical care. A growing number of patients are leaving the United States, and employers, insurers, and even government payors are beginning to explore whether they can reduce spending by utilizing hospitals and physicians in developing countries. Because this is a dramatic leap, it has generated countless media stories, and has drawn attention from the WHO, WTO, World Bank, and U.S. Senate - many of which believe so-called medical tourism may transform health care here and abroad.

Despite this attention, the market is developing independently of lawmakers and regulators. This is troubling because patients are effectively waiving their rights and benefits in the U.S. to seek medical care in countries that may not grant them remotely similar protections.

This article assesses the risk-benefit calculus for patients and payors entering the global patient market by examining how the market may affect health care costs, quality, and access - the three canonical themes of health care. Using this framework, I consider several policy responses, such as regulating patient travel, regulating referral networks, and regulating employers and insurers. Relying on previous regulatory efforts in analogous areas, I criticize some responses as either impractical or foreclosed by current constitutional doctrine governing the rights to travel and free speech. Instead, I propose that we build on existing consumer protection laws, expand licensing regimes, and recalibrate existing schemes that may unfairly allocate the risks and benefits. I also analyze the feasibility of public and quasi-public multilateral responses.

The underlying goal of this article is to examine how globalization is fundamentally changing health care. Medical tourism is both a symptom and a solution to what ails the U.S. health care system, and the issues it presents may portend future challenges.

States get health care report card from Commonwealth Fund

There's a good article in the current Modern Healthcare (may require paid subscription) about the recent state-by-state analyses of cost, quality, and access from the Commonwealth Fund and (looking at quality alone) AHRQ. The Commonwealth Fund web site has a fabulous interactive map and lots of features as well as downloadable report, executive summary, PowerPoint chartpack, and data tables. AHRQ's site updates its annual State Snapshots data, based on 129 quality measures drawn from 30 sources (news release; States Snapshot site (including massive spreadsheet)).

Here are a few tidbits from the MH article:

• there are wide variations among states in the five dimensions;
• higher quality does not translate into higher costs;
• even in the “best” states, performance does not meet optimal standards;
• From the report: “If all states could approach the low levels of mortality from conditions amenable to care achieved by the top state, nearly 90,000 fewer deaths before the age of 75 would occur annually,” it said.
• Similarly, if all states reached the low levels of potentially preventable admissions and readmissions, hospitalizations could be reduced by 30% to 47% and save Medicare $2 billion to $5 billion each year.

I am not quite sure exactly how this is going to work, but I am considering using the Commonwealth Fund site for the first-day reading assignment in Health Law this fall, with period visits back to the site as we make our way through the themes of cost, quality, and access in the course.

AMA urged to oppose retail health clinics

According to a story in today's Chicago Tribune, "several doctors groups" are urging the AMA to oppose the propagation of health clinics in retail outlets such as Wal-Mart and Walgreen. An AMA committee took testimony on Sunday and will be weighing its options for a recommendation to the full House of Delegates, which is in Chicago for its annual meeting, over the next two days. The groups are in effect asking the AMA to take its traditional role of protecting the physicians' franchise from competition under the guise of promoting quality care. What is less clear is whether reduced costs and greater access to trained nurse practitioners and physicians assistants is harmful to the health of patients who may not have a lot of other options available to them for nonemergent care. This is a story that isn't going away anytime soon . . . .

Health Lawyers News, June 22

From the folks at American Health Lawyers Association comes this week's issue of Health Lawyers News:

Top Stories

• OIG Finds Sale Of Part Of Physician-Owned ASC To Hospital Could Trigger Sanctions. The sale of part of an ambulatory surgery center (ASC) to a nonprofit hospital could potentially generate prohibited remuneration under the Anti-Kickback Statute and could lead to the imposition of administrative sanctions, according to Department of Health and Human Services Office of Inspector General (OIG) Advisory Opinion No. 07-05 posted June 19. Full Story


• President Bush Vetoes Stem Cell Bill, Calls For Expanding Alternative Research. President Bush vetoed June 20 a bill (S. 5) aimed at expanding research opportunities on embryonic stem cells. The measure cleared by a vote of 247-176 in the House and 63-34 in the Senate, short of the two-thirds majorities needed to override the veto. Full Story

Articles & Analyses

• Impact Of IRS’s Draft Redesigned Form 990 On Tax-Exempt Healthcare Organizations, By James R. King and Gerald M. Griffith, Jones Day


• Physician Quality Reporting Initiative Begins July 1, 2007, By Timothy J. Cahill, Porter Wright Morris & Arthur, LLP

Current Topics

• Antitrust
  1. DOJ Reaches Settlement With Federation Of Physicians And Dentists Resolving Allegations Of Antitrust Violations
  2. Illinois AG Alleges Clinics Conspired To Turn Away Medicaid Patients In Effort To Increase Reimbursement Rates


• Criminal Law
  Sixth Circuit Upholds Medicare Fraud Convictions, But Remands For Evidentiary Hearing On Documents Withheld By Government


• ERISA
  U.S. Court In Texas Remands Hospital's Action Against Managed Care Firm To State Tribunal, Finding ERISA Did Not Completely Preempt Claims


• Food and Drug Law
  1. U.S. Court In New York Upholds Plavix Patent, Enjoins Marketing Of Generic
  2. U.S. Court In Minnesota Allows Product Liability Claims Against ICD Device Manufacturer To Proceed To Trial


• Fraud and Abuse
  1. Update
  2. D.C. Circuit Finds Renal Physicians Association Lacks Standing To Bring Lawsuit Challenging Stark Safe Harbor Rule
  3. OIG Withdraws Proposed Rule On Exclusion Authority For Entities Submitting Claims Containing Excessive Charges
  4. OIG Approves Texas’ False Claims Act


• Healthcare Access
  Study Finds 689,000 Low-Income Children Eligible For SCHIP, DHHS Says


• Healthcare Spending
  Senate Budget Panel Considers Options For Controlling Healthcare Costs


• Hospitals and Health Systems
  1. Grassley Urges CMS To Collect Better Data From Hospitals On Uncompensated Care
  2. Baucus Questions CMS About Standards Of Safety And Care At California Hospital


• Insurance
  Connecticut Appeals Court Finds Liability Insurer Obligated To Cover Claim Made During Required Extension Period


• Medicaid
  CMS Releases Timeline For Implementing New AMP-Based FULs For Medicaid Prescription Drug Reimbursements


• Medical Malpractice
  Florida Appeals Court Finds Expert Opinion That Surgery Unnecessary Was Sufficient To Create Triable Issue


• Medicare
  1. Health Insurers Agree To Suspend Marketing Of Medicare PFFS Plans
  2. MedPAC Recommends Ways To Improve Efficiency In Medicare
  3. U.S. Court In New Jersey Refuses To Reconsider Its Previous Decision Affirming Finding That Provider Was Overpaid By Medicare
  4. Baucus, Grassley Oppose Speculative Cuts In Proposed Medicare Payment Rule
  5. Medicare To Expand Testing Of Personal Health Records Tools
  6. OIG Finds Medicare Beneficiaries Have Broad Access To Retail Pharmacies That Participate In Medicare Part D Program
  7. CMS Extends Timeline For Publication Of Provider Appeals Rule
  Study Examines Impact Of Medicare Part D On Nursing Homes And LTCPs


• News in Brief
  1. CHA Releases Draft "Vision" For Healthcare Reform
  2. CMS Enhances Hospital Compare Website

Table of Contents © AHLA, 2007. Reprinted by permission.

Bush vetoes stem-cell-funding bill

As promised, the President dropped S. 5 into the trash today.

• S. 5, the “Stem Cell Research Enhancement Act of 2007"


• President's veto message


• President's comments about his veto

As predicted, Bush made adult-stem-cell research the linchpin of his argument.

Amazing. Or not.

New Orleans grand jury moving in on Memorial Medical Center doctor

Disturbing news from CNN out of New Orleans:

(CNN) -- Two nurses accused in the post-Katrina deaths of four patients at New Orleans' Memorial Medical Center have been offered immunity to testify before a special grand jury, sources close to the investigation tell CNN.

Sources also told CNN the grand jury has been told as many as nine patients may have died after being administered what Louisiana's attorney general called a "lethal cocktail" of medications by hospital staff.

Family members said staffers used the drugs to kill patients so caregivers could flee appalling conditions inside the hospital after the storm.

Dr. Anna Pou and nurses Cheri Landry and Lori Budo were arrested in July 2006 after a 10-month investigation. Louisiana Attorney General Charles C. Foti charged them with second-degree murder.

Sources close to the investigation told CNN the two nurses are expected to testify before the grand jury in the next two weeks, which could signal a possible wrapping up of the case. It could also signal the main target of the investigation is Pou, a physician who was under contract with Memorial Medical Center when Katrina struck.

It's extremely important not to rush to judgment in this case. The report says "Family members said," and we don't know what the nurses are going to say when they testify. The offer of immunity is no doubt a worrisome turn of events for Dr. Pou, because the offer wouldn't have been made unless the DA thought they had something to give in exchange. But the last I heard (in her interview on "60 Minutes"), Dr. Pou persuasively denied that she killed patients at Memorial during Katrina. (Thanks to Dr. Mo Bernstein at USC for alerting me to this story.)

Happy Father's Day

Pain treatment and the fine line between therapy and felony

In this morning's NY Times Magazine:

When Is a Pain Doctor a Drug Pusher?
By TINA ROSENBERG
Published: June 17, 2007
Those treating pain make subjective choices about dosage. When a doctor gets it wrong, is it a mistake or a felony?

For a variety of reasons, and for a variety of patients (not only patients who have chronic and severe pain) and their doctors, the article includes some important facts, e.g.:

[F]or many people in severe chronic pain, an opioid (an opiumlike compound) like OxyContin, Dilaudid, Vicodin, Percocet, oxycodone, methadone or morphine is the only thing that allows them to get out of bed. Yet most doctors prescribe opioids conservatively, and many patients and their families are just as cautious as their doctors. Men, especially, will simply tough it out, reasoning that pain is better than addiction.

It’s a false choice. Virtually everyone who takes opioids will become physically dependent on them, which means that withdrawal symptoms like nausea and sweats can occur if usage ends abruptly. But tapering off gradually allows most people to avoid those symptoms, and physical dependence is not the same thing as addiction. Addiction — which is defined by cravings, loss of control and a psychological compulsion to take a drug even when it is harmful — occurs in patients with a predisposition (biological or otherwise) to become addicted. At the very least, these include just below 10 percent of Americans, the number estimated by the United States Department of Health and Human Services to have active substance-abuse problems. Even a predisposition to addiction, however, doesn’t mean a patient will become addicted to opioids. Vast numbers do not. Pain patients without prior abuse problems most likely run little risk. “Someone who has never abused alcohol or other drugs would be extremely unlikely to become addicted to opioid pain medicines, particularly if he or she is older,” says Russell K. Portenoy, chairman of pain medicine and palliative care at Beth Israel Medical Center in New York and a leading authority on the treatment of pain.

The other popular misconception is that a high dose of opioids is always a dangerous dose. Even many doctors assume it; but they are nonetheless incorrect. It is true that high doses can cause respiratory failure in people who are not already taking the drugs. But that same high dose will not cause respiratory failure in someone whose drug levels have been increased gradually over time, a process called titration. For individuals who are properly titrated and monitored, there is no ceiling on opioid dosage. In this sense, high-dose prescription opioids can be safer than taking high doses of aspirin, Tylenol or Advil, which cause organ damage in high doses, regardless of how those doses are administered. (Every year, an estimated 5,000 to 6,000 Americans die from gastrointestinal bleeding associated with drugs like ibuprofen or aspirin, according to a paper published in The American Journal of Gastroenterology.)

It's a well-balanced article that discusses all the reasons why 50% of patients who experience serious chronic pain remain undermedicated: poor medical school training, physicians who are as uninformed as the general public, well-intentioned but counter-productive laws such as Washington's, medical licensing boards that don't understand that high-dose opioids do not equal abuse or malpractice, and fear of criminal prosecution.

Ellen Goodman on stem cells

Ellen Goodman's column on the stem-cell breakthrough (a "breakthrough" if you're a mouse anyway) today in the Boston Globe hit just the right notes:

• Congress' bill to increase federal funding for stem-cell research (S. 5) is heading to the President, who -- if he keeps his promise, and who thinks he won't? -- veto the bill in order to protect the embryos that would otherwise be destroyed for their stem cells. The research report on reprogramming mouse skin cells to act like pluripotent stem cells, writes Goodman, will surely be a part of the president's spin ("see, told you so, we don't actually need to use human embryos").


• That's possibly good politics (unless everyone sees through it) but bad science. First, we don't know how to do this in humans, or even whether we can do this in humans. "Second, this breakthrough actually began with scientists studying the genes in mice embryos. Anybody who wants to repeat the work in humans will have to use human embryos to learn the same mechanics."

So this well-timed announcement about the switchability of skin cells in mice shouldn't for a minute provide cover for a presidential veto of this bill.

In health care, high cost not necessarily the same as high quality

Just an excellent article in today's NY Times about a study that shows significant disparities between health care charges and health care quality. This is a must read for teachers of health care law survey courses. Here's a bit from the early paragraphs:

Stark evidence that high medical payments do not necessarily buy high-quality patient care is presented in a hospital study set for release today.

In a Pennsylvania government survey of the state’s 60 hospitals that perform heart bypass surgery, the best-paid hospital received nearly $100,000, on average, for the operation while the least-paid got less than $20,000. At both, patients had comparable lengths of stay and death rates.

And among the 20 hospitals serving metropolitan Philadelphia, two of the highest paid actually had higher-than-expected death rates, the survey found.

Hospitals say there are numerous reasons for some of the high payments, including the fact that a single very expensive case can push up the averages.

Still, the Pennsylvania findings support a growing national consensus that as consumers, insurers and employers pay more for care, they are not necessarily getting better care.

Expensive medicine may, in fact, be poor medicine.

“For most consumers, the fact that there is no connection between quality and cost is one of the dirty secrets of medicine,” said Peter V. Lee, the chief executive of the Pacific Business Group on Health, a California group of employers that provide health care coverage for workers.

Some Pennsylvania employers said the state’s findings, based on data from 2005, might put more pressure on insurance carriers and hospitals to start demonstrating the value of care. “It now provides us a tool to have a serious dialogue with our carriers,” said Mark Dever, a benefits consultant for Duquesne Light, a regional utility in Pittsburgh.

“We have to question,” he said. “There’s a big difference in price — why?”

The report by the Pennsylvania Health Care Cost Containment Council, a state agency, provides a rare public glimpse of detailed information about hospital payments and patient outcomes. And the seemingly random nature of the payments is striking.

Although federal Medicare payments are largely fixed, they varied somewhat among the Pennsylvania hospitals surveyed. The far greater disparity involved commercial insurers, which must negotiate their rates hospital by hospital.

And the survey found that good care can go unrewarded. One Philadelphia area hospital, Main Line Health’s Lankenau center, which performs a large number of bypass surgeries and has a high success rate, according to the survey, was paid an average of $33,549 by private insurers. That was less than half the nearly
$80,000 in average payments received by the other hospitals, with poorer track records.

“It doesn’t make sense,” said Marc P. Volavka, the executive director of the Pennsylvania Health Care Cost Containment Council. “Certain payers are paying an awful lot for poor quality.”

He points to some of the experiments to change how hospitals are paid, like Geisinger Health System in central Pennsylvania, which is trying to demonstrate its commitment to high-quality care by offering a 30-day warranty on its cardiac surgery.

“The current reimbursement paradigm is fundamentally broken,” said Dr. Ronald Paulus, an executive with Geisinger, who says there is no current financial incentive
for a hospital to provide the kind of care that leads to better outcomes and lower payments.

What's up when the rich and well-insured can't get standard-of-care? You could teach an entire health law course on the basis of this one article, if you wanted to explore the in's and out's of this article.

The study is here and the press release about the study is here.

SCOTUS: Home health workers not entitled to overtime pay

The Supreme Court has held that home healthcare workers are not entitled to overtime pay (Long Island Care at Home, Ltd. v. Coke).

Here's AHLA's excellent media review of the Court's decision:

• In a unanimous decision in Long Island Care at Home, Ltd. v. Coke (pdf), the Supreme Court found that home healthcare workers employed by a private company or employer are not covered by laws on overtime pay or the minimum wage because they are "companion workers." ABC World News (6/11, story 9, 0:20, Gibson) noted that the decision "has implications for the nation's one million home healthcare workers and the people for whom they care."


• The Washington Post (6/12, D2, Barnes) reports that yesterday the Supreme Court ruled "that workers in the fast-growing home-care industry are not entitled to overtime pay." The court's decision upheld "a 1975 Labor Department regulation," which exempts "workers paid by third parties from minimum-wage and maximum-hour rules." The high court said the regulation "was a valid exercise of the power given to the agency by Congress."


• The Chicago Tribune (6/12, Rose) adds, "The decision came in a test case by Evelyn Coke, a 73-year-old Jamaican immigrant who, with union backing, sued a Long Island, N.Y.-based home-care agency."


• The AP (6/12) writes, "Lawyers for Coke challenged the Labor Department regulation, and the 2nd U.S. Circuit Court of Appeals in New York City ruled in the workers' favor," saying "it was 'implausible' that Congress would have wanted the Labor Department to wipe out protection for an entire category of workers."


• The Los Angeles Times (6/12, Savage) reports, "With an estimated 1 million workers now assisting the elderly and the injured in their homes, unions and civil rights groups had urged the justices to repeal the rule because it deprives many of the nation's lowest-paid workers of a decent wage. These employees tend to be women and minorities and often work all night, but they do not earn enough to rise above the poverty level, the advocates said."


• However, UPI (6/12) reports, "The issue is not that home-care agencies do not want to pay better wages, said New York State Association of Health Care Providers President Phyllis Wang, but because Medicare and Medicaid rates are set by the government, home healthcare agencies cannot raise rates like more traditional businesses in order to provide higher wages and benefits."


• Also, a separate AP (6/12, Yost) story notes that "Coke's former employer, Long Island Care at Home Ltd., says it would experience 'tremendous and unsustainable losses' if it had to comply with federal overtime requirements."


• Moreover, the New York Times (6/12, B3, Greenhouse) adds, "The Bloomberg administration filed an amicus brief in the case, arguing that a victory for Ms. Coke could force the city, state and federal governments, which finance home care through Medicaid, to pay $250 million more a year to the 60,000 home-care attendants in the city." The Times continues, "The main question in the case was whether several 1974 amendments to the Fair Labor Standards Act (FLSA) exempted home-care aides employed by agencies from minimum-wage and overtime protections. In contrast, all sides agreed that those amendments exempted aides hired directly by the elderly or infirm." Writing for the court, Justice Stephen G. Breyer "acknowledged that the Labor Department had issued conflicting regulations. One says that home-care aides employed through agencies or other third parties are exempt from protections under the Fair Labor Standards Act, and another that aides should not be exempt from minimum-wage and overtime protections unless they work in the home of their employer."


• USA Today (6/12, Biskupic) reports, "AARP lawyer Sarah Lock said the decision would make it more difficult for families to find attendants to undertake personal care of the ill and elderly, such as bathing and dressing. Lock called the decision a 'great disappointment' for AARP members of the baby-boom generation who are caring for aging parents and also concerned with their own needs." The "Service Employees International Union (SEIU), which backed Coke, and other advocates for home-care aides said they would push for federal legislation to lift the exemption or encourage a new administration to interpret the FLSA to cover the attendants." Ruling won't affect every state.


• Meanwhile, Bloomberg (6/12, Stohr) reports, "At least 10 states impose their own minimum-wage and overtime requirements on providers that employ home-care workers."


• For example, the Philadelphia Inquirer (6/12, Von Bergen) notes that "yesterday's decision will have little bearing on two local overtime cases involving home-care workers," because "Pennsylvania wage laws do not have the same ambiguities as the federal law. ... Philadelphia-area home-health employees, working with the Service Employees International Union, have filed lawsuits against two nonunion home-care agencies -- Lee's Industries Inc., of Germantown, and Total Health Home Care Corp., of Upper Darby."


• The Wall Street Journal (6/12, A12, Bravin, Anderson) also notes the Supreme Court's decision.

"Boarding" in EDs on the rise, according to survey

The number of uninsured (and underinsured) continues to rise. Where do these patients go for their health care? The most obvious answer is emergency departments, which are required by Medicare to screen for emergency conditions and to stabilize any they find, regardless of ability to pay. Even those without an emergency condition may get their sore throat and fever treated, or perhaps they will be triaged to the ambulatory care clinic down that hallway and to your left. Meanwhile, hospitals continue to close their emergency rooms after years of struggling to provide care for those uninsured patients, reducing the emergency-care capacity of one community after another.

One of the consequences of this pattern is that the remaining emergency rooms operate at or near capacity for far more hours of far more days than ever before -- over capacity, too, forcing emergency room personnel to treat patients in hallways while they wait for an examining room or in-patient room to open up. The practice is called "boarding," and according to a recent survey of doctors in NY, NJ, and CT conducted by the American College of Emergency Physicians, "boarding has increased significantly in recent years." Yesterday's NY Times had the story, which explored the quality-of-care implications of the practice.

New dispute over frozen embryos

Just in time for Monday's 4th Bioethics class, here's a Dallas Morning News article on the dispute in Austin over the disposition of frozen embryos, involving a divorcing couple and their interrupted plans for an IVF pregnancy. (The article exemplifies one of my pet peeves about journalists' tangential (at best) understanding of legal process. In its last paragraph, the article states, "Arguments before the Texas Supreme Court in the Roman case have not yet been set," but nowhere this statement does the reporter ever say what the outcome was at the trial court level (Family Court? Probate Court? In what county?) or the intermediate appellate level.)

This is a replay of the famous Tennessee Supreme Court case, Junior Davis v. Mary Sue Davis, which was the first case to say that, absent extraordinary circumstances, the ex-spouse who wants to avoid parenthood should ordinarily be allowed to do so:

In summary, we hold that disputes involving the Disposition of preembryos produced by in vitro fertilization should be resolved, first, by looking to the preferences of the progenitors. If their wishes cannot be ascertained, or if there is dispute, then their prior agreement concerning Disposition should be carried out. If no prior agreement exists, then the relative interests of the parties in using or not using the preembryos must be weighed. Ordinarily, the party wishing to avoid procreation should prevail,
assuming that the other party has a reasonable possibility of achieving parenthood by means other than use of the preembryos in question. If no other reasonable alternatives exist, then the argument in favor of using the preembryos to achieve pregnancy should be considered. However, if the party seeking control of the preembryos intends merely to donate them to another couple, the objecting party obviously has the greater interest and should prevail.

Most courts have followed the Tennessee court's lead in this arena.

As for the Texas case, here is the appellate court' s opinion (the husband won: "We hold that the embryo agreement provides that the frozen embryos are to be discarded in the event of divorce. By awarding the frozen embryos to Augusta, the trial court improperly rewrote the parties’ agreement instead of enforcing what the parties had voluntarily decided in the event of divorce. Accordingly, the trial court abused its discretion in not enforcing the embryo agreement. ") and a link to the Supreme Court's docket sheet in Roman v. Roman. Petitioner's reply brief on the merits is due June 15th, though the parties in this case have received many extensions of time during their year at the Supreme Court; all told, the case has been kicking around for almost 5 years (nearly as long as the Romans' marriage lasted). More to follow . . . .

Health Lawyers News, June 8

From the folks at American Health Lawyers Association comes this week's issue of Health Lawyers News:

Top Stories

• More Questions Surface About FDA's Response To Avandia Risks
  The House Oversight and Government Reform Committee held a hearing June 6 to probe the Food and Drug Administration’s (FDA's) role in evaluating the safety of the diabetes drug Avandia. Full Story
• House Passes Stem Cell Bill
  The House cleared June 7 a bill (S. 5) aimed at expanding research opportunities on embryonic stem cells in a 247-176 vote. The Senate cleared the measure in April by a vote of 63-34. Full Story

Articles & Analyses

• The Medicare Competitive Bidding Program For Durable Medical Equipment, Prosthetics, Orthotics, And SuppliesBy Carol Loepere, Elizabeth Carder-Thompson, Bob Hill, and Debra McCurdy, Reed Smith LLP
• Proposed Inpatient PPS Rule To Impact Specialty Hospitals: CMS Continues To Implement Its “Strategic And Implementing Plan For Specialty Hospitals”, By Thomas E. Dowdell and Lara E. Parkin, Fulbright & Jaworski, LLP

Current Topics

• Antitrust
  U.S. Court In Tennessee Refuses To Dismiss Nurses’ Claims Alleging Hospitals Conspired To Depress Wages
• Arbitration/Mediation
  Arkansas High Court Upholds Denial Of Medical Corporation’s Motion To Compel Physician To Arbitrate Claims In Employment Dispute
• EMTALA
  U.S. Court In Virginia Holds State Hospital's Agreement To Comply With EMTALA Did Not Waive Virginia's Sovereign Immunity
• ERISA
  1. U.S. Court In Missouri Finds ERISA Preempts Plan Beneficiaries' Suit Against HMO For Charging Copays In Violation Of State Law
  2. Eighth Circuit Reverses Lower Court Decision Upholding Health Plan Insurer’s Retroactive Rescission Of Plan Participant’s Coverage
• Food and Drug Law
  1. FDA Creates Communications Advisory Committee
  2. Health Subcommittee Will Mark Up Pharmaceutical, Device Bills Next Week
• Fraud and Abuse
  1. Eleven Arrested In Alleged $5 Million Billing Scheme For HIV Infusion Treatments
  2. Update
  3. U.S., Texas Reach $15 Million Settlement With Hospital District To Resolve FCA Claims
• Health Information Technology
  New Coalition Will Lobby For Immediate Deployment Of Health Information Technology
• Health Policy
  Business Roundtable Releases Principles For Healthcare Reform
• Healthcare Spending
  NGA-NASBO Reports Stable Fiscal Conditions For States In FY 2007, But Projects Increasing Strain On Budgets In FY 2008
• Hospitals and Health Systems
  Texas Supreme Court Finds Hospital May Not Maintain Lien Against Patient For Charges Not Covered By Workers Comp
• Individual/Patient Rights
  Sixth Circuit Strikes Down Michigan Abortion Law
• Insurance
  Maine High Court Rejects Payors’ Challenge To Calculation Of “Cost Savings” From Health Program Used To Set Offset Payments
• Medicaid
  OIG Finds AMPs For Most Drugs Remained Fairly Stable In Quarterly Comparison
• Medicare
  U.S. Court In District Of Columbia Stays Hospitals’ Action Seeking Reopening Of Medicare Cost Reports
• News in Brief
  AMA Consortium Approves 10 New Physician Quality Measures
• Physicians
  1. Physician Survey Finds Medicare Payment Cuts Will Affect Access, Care, AMA Says
  2. Oklahoma High Court Reinstates Physician’s Suit Against Hospital, Finding Peer Review Statute Does Not Provide Blanket Immunity
• Quality of Care
  Study Shows Pay-For-Performance Initiative Did Not Result In Significant Improvement For Heart Attack Patients
• Tax
  1. Ohio High Court Finds Provider Of Hospice And In-Home Nurse Services Entitled To Property Tax Exemption
  2. Indiana Tax Court Finds Taxpayer Failed To Show Medical Facility Was Used Predominantly For Charity, Denies Property Tax Exemption

Table of Contents © AHLA, 2007. Reprinted by permission.