New Texas Supreme Court case on workers' comp.

Texas Workers' Compensation Commission v. Patient Advocates of Texas, No. 02-0804, decided May 28:

In 1989, the Legislature enacted a new Workers’ Compensation Act in response to rising medical costs and increasing insurance premiums. The Legislature created the Texas Workers’ Compensation Commission and gave the agency broad powers to adopt rules necessary for the implementation and enforcement of the Workers’ Compensation Act. TEX. LAB. CODE § 402.061. One of TWCC’s new functions was to establish fee guidelines for reimbursements to health care providers who treat injured workers. Id. § 413.011. To this end, the agency promulgated the Texas Workers’ Compensation Commission Medical Fee Guideline 1996, adopted by reference in Rule 134.201 of the Texas Administrative Code. See 28 TEX. ADMIN. CODE § 134.201 (indicating that copies of the Guideline may be obtained from TWCC’s publication department). The Guideline contains the maximum allowable reimbursements (MARs) for thousands of medical procedures. The MARs establish upper limits on the amount of reimbursements payable to health care providers for the listed treatments or services. TWCC also promulgated a set of rules, now commonly referred to as the “Dispute and Audit Rules,” which establish a process for insurance carriers to review and audit bills submitted by health care providers. Id. §§ 133.301-.305.2 The rules also set up dispute resolution procedures to resolve disagreements over the necessity of medical procedures and the amount of reimbursements. Id. § 133.305. Requests for medical dispute resolution must be filed not later than one year from the date of the medical service. Id. § 133.305(d).

TWCC’s adoption of the Guideline and the Dispute and Audit Rules are at the base of this dispute. Patient Advocates of Texas and Allen J. Meril, M.D. (collectively PAT) initiated this lawsuit claiming that TWCC did not follow the rulemaking procedures required by statute when promulgating the Guideline. Additionally, PAT asserts that TWCC exceeded its rulemaking authority by setting a ceiling on many medical fee reimbursements and limiting the time for a party to seek medical dispute resolution to one year from the date the medical service was provided. PAT also challenges the validity of the Dispute and Audit Rules alleging that TWCC illegally delegated its audit and fee-setting authority to private insurance carriers. Lastly, PAT raises constitutional challenges to the rules on the grounds that the MARs and the one-year time limitation constitute a taking of their property without due process and just compensation. In response, TWCC argues that its enactment of the Guideline meets statutory procedural requirements and the limits placed on medical payments are consistent with the agency’s authority to establish medical policies and guidelines pursuant to section 413.011 of the Labor Code. TWCC claims that it retains its power to audit workers’ compensation participants and establish medical fees, and that the Dispute and Audit Rules are simply a means to facilitate insurance carriers’ review of the medical claims submitted by health care providers.

The Supreme Court concludes "that TWCC complied with the statutory requisites for promulgating the fee guidelines and acted within its designated powers in limiting specified medical fee reimbursements and the time to seek medical dispute resolution. We affirm the court of appeals’ judgment on these issues. Because we conclude that TWCC did not delegate its power to private entities, we reverse the portion of the court of appeals’ judgment that is contrary to this conclusion. We also overrule the constitutional challenge to TWCC’s fee reimbursement guidelines and time limitations for commencing medical dispute resolution."

Radicalized elders turn to drug smuggling.

Good article by Elisabeth Weil in today's N.Y. Times re: groups of elders who engage in illegal prescription drug reimportation. The piece is entitled "Grumply Old Drug Smugglers."

Harvard Medical amends conflict-of-interest policies

Trend-setter Harvard Medical School has amended its conflict policy for researchers, acording to an article in The Boston Globe.

Under the policy, Harvard faculty cannot own more than $30,000 in stock from public companies that benefit from their research, a $10,000 increase from the previous limit. They cannot have any stock from companies with which they have ongoing research collaborations. In addition, faculty members cannot own stock in private companies related to their research. But faculty can receive up to $20,000 in consulting fees from companies tied to their research, also a $10,000 increase from the previous limit. . . .

Until now, faculty could not hold upper management jobs in firms. The new policy extends this prohibition to include the positions of chief scientific officer and chief medical officer, slots Harvard faculty occasionally accept.

The new policy was crafted by Harvard medical dean Dr. Joseph B. Martin, in consultation with several faculty committees. He noted that some faculty members argued for looser rules that would foster increased interaction with Boston's vibrant biotechnology and pharmaceutical communities.

''The issues that some individuals raised were set aside for two reasons: that we need to protect human subjects in research . . . and that there not be any perception of bias in research work," he said.

But of faculty collaborations with industry, Martin said: ''We encourage it in every possible way." The increase in the stock and consulting limits, said Martin, reflected what he thought ''responsible people ought to be able to take in."

The Office of Public Health and Science at HHS published its own guidance on this subject on May 12.

Monkey business affects waiting times on transplant list in Albany.

Modern Healthcare's Daily Dose is reporting (alternate link) that yesterday the New York Health Department "fined Albany (N.Y.) Medical Center Hospital $18,000 for falsely reporting patient information in its heart-transplant program. The state accused the 576-bed academic medical center of exaggerating the seriousness of patient conditions to move transplant candidates higher on the transplant waiting list." Need it be added that this type of manipulation of the system only breeds fear and mistrust of transplantation programs?

Maternal-fetal conflicts: a moving target.

The Associated Press had a good article this week on a raft of recent cases in which authorities of one kind or another have come into conflict with pregnant women and the decisions they made concerning childbirth. Here's a link to the CNN publication of the story, which should be pretty stable for the next few months or years.

Interesting intersection of universal health care coverage, same-sex marriage, and domestic-partners' benefits

There is an Associated Press story out (published in today's Portsomouth (N.H.) Herald) about my hometown, Springfield, Mass. The article reports that Springfield is dropping health benefits for same-sex unmarried domestic partners of city employees. Cost is an obvious culprit, but there is also the issue of Massachusetts' decision to allow same-sex marriages. Now that this option is legally available, the city seems to be saying, what's the justification for domestic-partner benefits?

As pointed out in the article, however, same-sex couples may decide to remain unmarried in order to adopt children in countries than ban adoptions by married same-sex couples. And Springfield's three-month phase-out may leave out in the cold those couples that cannot (or choose not to) get their marital act together that quickly. Mayor Charlie Ryan (who was also mayor during my high school days, 37 years ago, and whom I always regarded as an exceptionally straight shooter) says his new order will bring the city into compliance with state insurance laws, though that didn't seem to be a high priority until now.

As for cost: Cambridge Vice-mayor Marjorie Decker is quoted as saying, "It’s an interesting debate for any city or town," she said. "We’re at the crossroads of what happens when you don’t have some universal form of health care." Cambridge, as well as other employers, is confronting the same choices:

Decker expects the city will eventually debate the issue. She predicts that some will argue that domestic-partnership benefits should be extended to all couples who are in long-term committed relationships, rather than forcing them to marry in order to access health benefits. . . .

Among Boston-area employers, Beth Israel Deaconess Medical Center and Babson College will discontinue domestic-partner benefits at the end of the year.

Employers including Massachusetts Institute of Technology, Brigham and Women’s Hospital, Massachusetts General Hospital, Fidelity Investments, Gillette Co. and EMC Corp. will maintain the benefits. Harvard University plans to maintain them for the immediate future, but will revisit the issue in the next two years.

Stay tuned . . . .

Physician-Assisted Suicide.

I am no great fan of legalizing physician-assisted suicide (PAS). But once a state has gone down that road, as Oregon has with its Death With Dignity law, it's exceedingly important for the federal government to get out of the way and not impose its pro-life political stance on states that see things a little differently. Just as this administration has done with California's experiment with medical marijuana, it has tried to squelch the Oregon initiative by leveraging its enforcement powers under the Controlled Substances Act. And just as it did last December in the California medical-marijuana case (Raich v. Ashcroft), the United States Court of Appeals for the Ninth Circuit last week hammered the Department of Justice for its use of the Controlled Substances Act, this time to interfere with Oregon's experiment with PAS. In State of Oregon v. Ashcroft, the judges scolded the Attorney General for "violating the plain language of the CSA, contravening Congress’ express legislative intent, and overstepping the bounds of the Attorney General’s statutory authority." Its concluding paragraph is sweeping in its condemnation of Ashcroft's attempt to impose his personal morality on the citizens of Oregon:

In sum, the CSA was enacted to combat drug abuse. To the extent that it authorizes the federal government to make decisions regarding the practice of medicine, those decisions are delegated to the Secretary of Heath and Human Services, not to the Attorney General. The Attorney General’s unilateral attempt to regulate general medical practices historically entrusted to state lawmakers interferes with the democratic debate about physician assisted suicide and far exceeds the scope of his authority under federal law. We therefore hold that the Ashcroft Directive is invalid and may not be enforced.

The irony in all this is that this most avowedly pro-State, anti-federalist administration hasn't hesitated to try to impose its will on the states when it perceived a hint of political mileage that might be gained with the far right, even when it means shamelessly trampling individual liberties and the traditional role of the states in regulating the practice of medicine.

Prisoner Abuse and Doctors' Duty.

Over the past few years, a couple of medical journals have quite regularly published articles on the torture and abuse of prisoners and detainees and the duty of physicians. Among the most active on this topic have been JAMA, Annals of Internal Medicine, Lancet, and BMJ; a PubMed search for articles with "torture" in the title turns up 589 hits. Until now, it's been easy to dismiss those articles as being of little relevance to most American physicians, let alone the general public. But as a letter in today's NY Times reminds us, "military doctors at Abu Ghraib returned several times to 'stitch wounds, tend to collapsed prisoners or see patients with bruised or reddened genitals' ('Only a Few Spoke Up on Abuse as Many Soldiers Stayed Silent,' front page, May 22). . . . As a medical student, I know that under those circumstances, any doctor should have known that torture was going on in the prison. The fact that those physicians did not speak up constitutes an abandonment of their duties both as soldiers and as doctors."

Texas Supreme Court decides informed-consent case.

In one of its famously tardy decisions (argued April 23, 2003; decided May 7, 2004), the Texas Supreme Court, in an opinion by Justice Owen (frequently the author of famously tardy opinions), unanimously held last week in Binur v. Jacobo, No. 02-0405, that "an erroneous prognosis that is the basis for recommending surgery cannot be the basis of a cause of action for lack of informed consent." Plaintiff claimed that she never would have consented to a bilateral mastectomy if her doctor hadn't erroneously and negligently opined that she was going to develop breast cancer. The court ruled that the risk of an erronoeous diagnosis or prognosis is not the type of risk the Legislature and the Texas Disclosure Panel require to be disclosed. Relying on the List A disclosures for radical or modified radical mastectomy, the Court noted that the required disclosures include the following:

(A) Limitation of movement of shoulder and arm.
(B) Swelling of the arm.
(C) Loss of the skin of the chest requiring skin graft.
(D) Recurrence of malignancy, if present.
(E) Decreased sensation or numbness of the inner aspect of the arm and chest wall.

None of the risks listed for this or any other procedure on List A include the risk that the physician's diagnosis or prognosis that supports his or her recommendation that the procedure be performed is or may be incorrect. If a physician told a patient that she had cancer and was therefore recommending a hysterectomy, the risks enumerated by the Texas Disclosure Panel do not include the risk that the surgery may be unnecessary. The risk that a physician may have erroneously made a diagnosis or prognosis as a predicate to recommending surgery is not inherent in any particular surgery or procedure or medication. That is a general risk of consulting a physician.

This opinion is consistent with those of four Texas courts of appeals. The Supreme Court emphasized that the negligent diagnosis or prognosis could give rise to a negligence claim, but in this case the plaintiff had waived those claims over the course of the litigation. It probably doesn't need to be emphasized that the consent process may be flawed, irredeemably so, when the practitioner affirmatively misleads the patient with statements that are known to be false, simply to procure a consent.

IRS ruling a template for hospital-physician deals.

As reported yesterday by Modern Healthcare, the IRS has issued Revenue Ruling 2004-51, which lays out the ground rules for nonprofit health care providers who want to go into ancillary joint ventures with for-profit entities. According to the story:

The five-page revenue ruling offers a template for how not-for-profit hospitals can protect their tax-exempt status and avoid paying unrelated-business income taxes in joint ventures with physicians or for-profit companies. . . .

[A] tax-exempt university asked for IRS guidance on its plan to offer training programs for elementary and secondary schoolteachers. The university would team up with a for-profit, interactive-video company in a 50-50 joint venture, with each partner naming three directors to the board. The governance agreement would prohibit activities contrary to the university's tax-exempt status, require the university to remain at arm's length in negotiations for contracts and other transactions, and establish fair-market value as a benchmark for prices.

The IRS said those stipulations would protect the university's tax-exempt status, and there would be no unrelated-business income taxes because the venture was an extension of the university's educational mission and insubstantial compared with its overall activity.

Schiavo timeline and significant documents.

Thanks are due to professors Steven Haidar and Kathy Cerminara for putting together a most useful timeline for the Schiavo case. My only suggestion for an additional citation is to the actual session law version of Terri's Law: chapt. 2003-418. The timeline is otherwise an altogether admirable and useful attempt to pull together everything a person might want to know about the history of this sad, sad case.

"Terri's Law" declared unconstitutional by Florida court.

It didn't seem possible that the case could come out any other way, but at least it's now official. On Wednesday, Circuit Judge W. Douglas Baird of the Circuit Court for the Sixth Judicial Circuit in and for Pinellas County declared that the hastily enacted Terri's Law (chapt. 2003-418), which authorized Gov. Jeb Bush to issue an executive order directing that artificial nutrition and hydration be restarted in Terri Schiavo, unconstitutional under a variety of provisions of the Florida Constitution:

• First, the court held that the law effects an unconstitutional delegation of legislative power to the governor, in violation of Art. II, sec. 3, of the Florida Constitution and separation-of-powers principles. The gist of this holding is that the legislature provided Gov. Bush with virtually no standards to guide his exercise of discretion as to whether to order the reinstatement of life-sustaining measures and for how long.

• Second, the court held that statute violates Terri Schiavo's right of privacy, a right that was added to the Florida Constitution in 1980 (Art. I, sec. 23). Section 23 provides: "Every natural person has the right to be let alone and free from governmental intrusion into the person's private life except as otherwise provided herein. This section shall not be construed to limit the public's right of access to public records and meetings as provided by law. "

• The court also found that the law was retroactive legislation and an unconstitutional intrusion into the judicial function.

The governor's office filed an immediate appeal, but by relying exclusively upon the Florida constitution, the trial judge has effectively immunized this case from review in the Supreme Court of the United States, so -- despite the seemingly inexhaustible willingness of Terri Schiavo's parents and Jeb Bush to litigate -- the end of this legal saga is in sight.

Limits on Stem-Cell Research Re-emerge as a Political Issue.

A month before the attacks on September 11, President Bush made the first major speech of his presidency, in which he announced the administration's new policy on federal funding for stem-cell research. The new policy significantly modified (PDF) (HTML) the NIH guidelines (PDF) (HTML) (corrected Nov. 21 (PDF) (HTML)) hammered out by NIH Director Harold Varmus in the waning days of the Clinton Administration and limited the use of federal funds for research on cell lines that had been derived from embryos before the date of the president's speech, August 9, 2001. Since then, many questions have arisen concerning the number, variety, and availability of stem-cell lines, as well as the underlying policy determination that federal funds should not be used to extract stem cells from newly created blastocysts or from frozen embryos that are the result of IVF fertility treatments. Interestingly, these questions do not track traditional Dem/GOP, liberal/conservative, pro-life/pro-choice political lines, with Nancy Reagan and Oren Hatch, among others, emerging as early and consistent supporters of more aggressive federal support for stem-cell research. The President's Council on Bioethics, which was created after August 9 as a source of advice to the president on such issues, put out a "monitoring report" on stem-cell research in January 2004, as well as a report on human cloning (both for reproduction (they recommended a ban) and -- importantly for the stem-cell issue -- for scientific research (they recommended a moratorium, with significant dissent within the Council)) in July 2002.

As reported in today's New York Times, the question of the federal government's funding policies is emerging as an issue in Campaign 2004. Stay tuned . . .

Quality of care lacking in a majority of communities in US.

Another article from the May-June issue of Health Affairs that is sure to create some buzz:

• "Profiling The Quality Of Care In Twelve Communities: Results From The CQI Study," by Eve A. Kerr, Elizabeth A. McGlynn, John Adams, Joan Keesey and Steven M. Asch.
  Abstract: Health care quality falls far short of its potential nationally. Because care is delivered locally, improvement strategies should be tailored to community needs. This analysis from the Community Quality Index (CQI) study reports on a comprehensive examination of how effectively care is delivered in twelve metropolitan areas. We find room for improvement in quality overall and in dimensions of preventive, acute, and chronic care in all of these communities; no community was consistently best or worst on the various dimensions. Having concrete estimates of the extent of the gap in performance should stimulate community-based quality improvement efforts. (Full text requires subscription to journal.)

As reported in today's New York Times:

Americans get substandard care for their ailments about half the time, even if they live near a major teaching hospital, the first comprehensive study of health care provided in metropolitan areas has found.

The inadequate treatment leads to "thousands of needless deaths each year," said Dr. Elizabeth A. McGlynn, a researcher at the RAND Corporation . . . .

The study's conclusions were based chiefly on a review of the medical records of nearly 7,000 people in 12 metropolitan areas, including Newark, Miami and Orange County, Calif. On average, the authors found, patients received substandard care, as defined by leading medical groups, 50 percent to 60 percent of the time. There was little variation among the metropolitan areas, randomly selected from 60 with populations of at least 200,000. The areas included cities and their suburbs.

Texas Leads Nation in Percentage of Uninsured Workers.

As reported in today's New York Times, Texas leads the nation (again) in the percentage of its population without health insurance, with 27 percent. For a measure of the financial strains on health care institutions and providers in the Deep South and Southwest generally, the national honor roll of states with the highest percentage of uninsured includes, in order: Texas (27%), Louisiana (23%), Mississippi (22%), New Mexico (22%), Oklahoma (21%), and Nevada (21%). This graphic pretty much tells it all:



The full report (Characteristics of the Uninsured: A View from the States (May 2003), from the Robert Wood Johnson Foundation) is here.

Two must-read articles in the current issue of Health Affairs.

• "How Does the Quality of Care Compare in Five Countries?," by Peter S. Hussey, Gerard F. Anderson, Robin Osborn, Colin Feek, Vivienne McLaughlin, John Millar and Arnold Epstein -- 23(3):89-99.
  Abstract: International data on quality of medical care allow countries to compare their performance to that of other countries. The Commonwealth Fund International Working Group on Quality Indicators collected data on twenty-one indicators that reflect medical care in Australia, Canada, New Zealand, England, and the United States. The indicators include five-year cancer relative survival rates, thirty-day case-fatality rates after acute myocardial infarction and stroke, breast cancer screening rates, and asthma mortality rates. No country scores consistently the best or worst overall. Each country has at least one area of care where it could learn from international experiences and one area where its experiences could teach others.



• "U.S. Health Care Spending In An International Context," Uwe E. Reinhardt, Peter S. Hussey and Gerard F. Anderson -- 23(3):10-25.
  Abstract: Using the most recent data on health spending published by the Organization for Economic Cooperation and Development (OECD), we explore reasons why U.S. health spending towers over that of other countries with much older populations. Prominent among the reasons are higher U.S. per capita gross domestic product (GDP) as well as a highly complex and fragmented payment system that weakens the demand side of the health sector and entails high administrative costs. We examine the economic burden that health spending places on the U.S. economy. We comment on attempts by U.S. policy-makers to increase the prices foreign health systems pay for U.S. prescription drugs.

The full text of both articles can be accessed through the links above, though access may require a paid-up subscription to the journal. Both articles are summarized in a news report in today's Wall Street Journal, which also may require a paid subscription.

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 . . .

Medicare: belly up or double down?

The scary news out of DC last week was from the Medicare Board of Trustees, whose 2004 Annual Report predicted that the middle-class health insurance benefit for retirees and others would go belly-up by 2019. Ellen Beck of UPI did a nice job of analyzing the dire predictions, which are less dire than the Administration would like to have you believe. Paul Krugman of the N.Y. Times added a political perspective on why the Administration is pushing the insolvency button:

The trustees' report does, however, give one more reason to hate the prescription drug bill the administration rammed through Congress last year. If deception, intimidation, abuse of power and giveaways to drug companies aren't enough, it turns out that the bill also squanders taxpayer money on H.M.O.'s. . . .

But whether because of ideology or because of H.M.O. campaign contributions, the people now running the country refuse to learn that lesson. As part of last year's prescription drug bill, they tried again, offering an even bigger subsidy to private plans.

And that turns out to be an important reason for the deterioration in Medicare's prospects: of the seven years lopped off the life of the trust fund, two are the result of increased subsidies mandated by last year's law, mainly in the form of higher payments to H.M.O.'s.

So what did we learn this week? Social Security is in decent shape. Medicare has problems, but ill-conceived "reform" has only made those problems worse. And let's rip up that awful prescription drug bill and start over.

I hate to say 'I told you so,' but the consistent line from this blogger since last July has been that the R_x benefit was too expensive and not a sufficient benefit to those who need the help with their medications. Subsequent analysis and news have borne this out: (1) the true cost of the bill was intentionally underestimated by 25 percent and (2) the true beneficiaries of the bill are the pharmaceutical companies and the HMOs.

When (and how) will the Administration's chicaneries catch up to Dubya? Time will tell . . . . Speaking of chicaneries, check out this report: "United States House of Representatives, Committee on Government Reform -- Minority Staff Special Investigations Division (March 16, 2004): Iraq on the Record -- The Bush Administration's Public Statements on Iraq, prepared for Rep. Henry A. Waxman."

Seventh Circuit Court of Appeals Backs Privacy of Hospital Abortion Records

As reported by the N.Y. Times today, the US Court of Appeals for the Seventh Circuit (in Chicago) became the first appellate court to uphold the right of hospitals to refuse to turn over abortion information to the Bush Administration's Justice Department. The opinion is here. The district court quashed the government's subpoena for Northwestern's abortion records on the ground that HIPAA does not preempt state laws that provide greater privacy protection than does HIPAA. Since Illinois law is very restrictive about turning over medical records, even after identifying personal information has been redacted, the district court reasoned that state law survived HIPAA preemption and controlled the evidentiary question posed by the DOJ subpoena. The Court of Appeals affirmed the district court's order but disagreed with the lower court's reasoning. State privacy laws such as Illinois' do not provide evidentiary privileges in suits to enforce federal law (in this instance, DOJ claims that it needs the abortion information in order to enforce the federal law against partial-birth abortions). The Court of Appeals also rejected the district court's separate and independent basis for quashing the subpoena: a brand new, common-law privilege for abortion records:

He based this ruling on their sensitivity, which he compared to that of psychotherapists’ treatment records, held privileged in Jaffee v. Redmond, 518 U.S. 1 (1996). The creation of new common law evidentiary privileges is authorized by Fed. R. Evid. 501, and Jaffee is not the only recent case in which the authority was exercised. Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976, 979–81 (6th Cir. 2003); In re Air Crash Near Cali, Colombia, 959 F. Supp. 1529, 1533–35 (S.D. Fla. 1997), and United States v. Lowe, 948 F. Supp. 97, 99–100 (D. Mass. 1996), all created new privileges on the authority of Jaffee. But none relates to medical records and we are reluctant to embark on a case-by-case determination of the relative sensitivity of medical records of different ailments or procedures. Most medical records are sensitive, and many are as sensitive as late-term abortion records, such as the records of AIDS patients. Proceeding down the path taken by the district court would inevitably result in either arbitrary line drawing or the creation of an Illinois-type comprehensive privilege for medical records. Northwestern Memorial Hospital concedes that there is no federal common law physician-patient privilege. It is not for us—especially in so summary a proceeding as this litigation to quash the government’s subpoena—to create one, whether all at once or by a process of slow but inevitable additions to the sole category recognized by Jaffee.

The government wants abortion records on patients of doctors who are challenging the constitutionality of the Partial-Birth Abortion Ban Act of 2003, Pub. L. No. 108–105, 117 Stat. 1201, 18 U.S.C. § 1531, presumably to impeach them when they testify as medical experts in their own case. The Court of Appeals ultimately decided the burdens of production outweighed the benefits to the government:

What is true is that the administrative hardship of compliance would be modest. But it is not the only or the main hardship. The natural sensitivity that people feel about the disclosure of their medical records—the sensitivity that lies behind HIPAA—is amplified when the records are of a procedure that Congress has now declared to be a crime. Even if all the women whose records the government seeks know what “redacted” means, they are bound to be skeptical that redaction will conceal their identity from the world.

This is hardly a typical case in which medical records get drawn into a lawsuit. Reflecting the fierce emotions that thelong-running controversy over the morality and legality of abortion has made combustible, the Partial-Birth Abortion Ban Act and the litigation challenging its constitutionality—and even more so the rash of suits around the country in which the Department of Justice has been seeking the hospital records of abortion patients—have generated enormous publicity. These women must know that, and doubtless they are also aware that hostility to abortion has at times erupted into violence, including criminal obstruction of entry into abortion clinics, the firebombing of clinics, and the assassination of physicians who perform abortions. Some of these women will be afraid that when their redacted records are made a part of the trial record in New York, persons of their acquaintance, or skillful “Googlers,” sifting the information contained in the medical records concerning each patient’s medical and sex history, will put two and two together, “out” the 45 women, and thereby expose them to threats, humiliation, and obloquy. . . .

Even if there were no possibility that a patient’s identity might be learned from a redacted medical record, there would be an invasion of privacy. Imagine if nude pictures of a woman, uploaded to the Internet without her consent though without identifying her by name, were downloaded in a foreign country by people who will never meet her. She would still feel that her privacy had been invaded. The revelation of the intimate details contained in the record of a late-term abortion may inflict a similar wound.

If Northwestern Memorial Hospital cannot shield its abortion patients’ records from disclosure in judicial proceedings, moreover, the hospital will lose the confidence of its patients, and persons with sensitive medical conditions may be inclined to turn elsewhere for medical treatment. It is not as if the government were seeking medical records from every hospital and clinic that performs late-term abortions, in which event women wanting assurance against the disclosure of their records would have nowhere to turn. It is Dr. Hammond’s presence in the New York suit as plaintiff and expert that has resulted in the government’s subpoenaing Northwestern Memorial Hospital. . . .

The merits of the dispute are for determination at trial. The only issue for us is whether, given that there is a potential psychological cost to the hospital’s patients, and a potential lost in lost goodwill to the hospital itself, from the involuntary production of the medical records even as redacted, the cost is offset by the probative value of the records. The district judge presiding at the trial has said that the records are “relevant,” and no doubt they are—in the attenuated sense in which nonprivileged materials may be sought in discovery. “Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Fed. R. Civ. P. 26(b)(1); see Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 350–52 (1978); CSC Holdings, Inc. v. Redisi, 309 F.3d 988, 995–96 (7th Cir. 2002). The trial judge has not opined on the probative value of the records, which appears to be meager. . . .

The Partial-Birth Abortion Ban Act was passed, as we said, in response to the Supreme Court’s decision in the Stenberg case. Stenberg was one of a number of “first generation” partial-birth cases. . . .

Were the government sincerely interested in whether D & X abortions are ever medically indicated, one would have expected it to seek from Northwestern Memorial Hospital statistics summarizing the hospital’s experience with late-term abortions. Suppose the patients who undergo D & X abortions are identical in all material respects (age, health, number of weeks pregnant, and so on) to those who undergo procedures not forbidden by the Partial-Birth Abortion Ban Act. That would be potent evidence that the D & X procedure does not have a compelling health rationale. No such evidence has been sought, in contrast to the Planned Parenthood case, supra, at Transcript 26 (Mar. 5, 2004). A variant of the suggested approach would be to obtain a random sample of late-term abortion records from various sources and then determine, through good statistical analysis, whether the patient characteristics that lead Dr. Hammond to perform a D & X lead other physicians to perform a conventional D & E instead, and whether there are differences in the health consequences for these two groups of women. If there are no differences, the government might have a good defense of the Act. Gathering records from Hammond’s patients alone will not be useful; but if the government has other records (say, from VA hospitals) already in its files, then records of Hammond’s procedures might enable a useful comparison. The government hasn’t suggested doing anything like that either. Its motives in seeking individuals’ medical records remain thoroughly obscure.

The question whether the D & X procedure is ever medically indicated will be resolved as a matter of legislative fact not requiring the taking of trial-type testimony at all (see Hope Clinic v. Ryan, supra, 195 F.3d at 885 (dissenting opinion)), or will pivot on the clash of expert witnesses at the New York trial, or perhaps, as suggested in Stenberg, will be answered by some combination of these two approaches to determining facts. The medical records of expert witnesses are irrelevant to the first inquiry; and, so far as we can determine after having listened to the government’s arguments at length, those records will not figure significantly in the resolution of experts’ disagreements either.

The fact that quashing the subpoena comports with Illinois’ medical-records privilege is a final factor in favor of the district order’s action. As we held in Memorial Hospital for McHenry County v. Shadur, 664 F.2d 1058, 1061 (7th Cir. 1981), comity “impels federal courts to recognize state privileges where this can be accomplished at no substantial cost to federal substantive and procedural policy.” See also United States v. One Parcel of Property Located at 31–33 York Street, 930 F.2d 139, 141 (2d Cir. 1991) (per curiam). Patients, physicians, and hospitals in Illinois rely on Illinois’ strong policy of privacy of medical records. They cannot rely completely, for they are not entitled to count on the state privilege’s being applied in federal court. But in a case such as this in which, so far as we can determine, applying the privilege would not interfere significantly with federal proceedings, comity has required us not to apply the Illinois privilege, but to consider with special care the arguments for quashing the subpoena on the basis of relative hardship under Fed. R. Civ. P. 45(c).

The full opinion contains the suggestion -- hinted at rather than explicitly stated -- that the government's true motivation in seeking these records from hospitals across the country is harrassment -- of physicians and patients alike. The Court of Appeals may not have created a new common-law privilege, but it did the next best thing.

SCOTUS heard oral arguments in the Texas HMO case today.

As previously discussed here (Nov. 3 and Nov. 6), SCOTUS has two taken two Texas cases, both decided (with two others) in a single Fifth Circuit opinion. The cases involve tort claims under the Texas health care liability statute, which the HMOs argue is completely preempted by ERISA. Oral argument was today. My short piece in Mealey's Managed Care Liability Report is here (requires Lexis/Nexis account). The early report from Bloomberg News indicates that a majority of the Court appeared, in their comments and questions, to be leaning toward Aetna and Cigna and in favor of striking down Texas' health care liability law. The Associate Press' Anne Gearan agrees. I will post more news reports tomorrow and a link to the transcript as soon as it becomes available.

One Crucial Issue in Pledge Case: What Does "Under God" Mean?

In addition to this key question -- which Linda Greenhouse's article in today's NY Times summarizes nicely -- there is a tricky little standing question as well. Seems Michael Newdow, the plaintiff, isn't married to the student's mother and isn't the custodial parent, either. So does he have standing to sue the school district to stop the pledge? The briefs make fascinating reading (for students of standing law): petitioner school district, United States, Mike Newdow.

Law profs weigh in on Scalia's recusal decision.

Interesting piece in today's NY Times: 6 law profs grade Scalia's 21-page memorandum opinion denying the motion of the Sierra Club to recuse himself from the Cheney case. Ther's no actual grade or even conclusion, but reading between the lines, three seem to give a passing grade (Ed White, David Lubet, Ron Rotunda) and three give him an "F" (Monroe Freedman, Stephen Gillers, James Moliterno). Just like real law school . . .

More on Scalia's recusal refusal.

Much has been made in the days following Scalia's memorandum opinion denying Sierra Club's motion to recuse about "the appearance of impropriety or bias." I agree that appearances matter, and that Supreme Court justices should strive mightily to avoid even the appearance of impropriety or bias. But if "appearance" is what a well-oiled publicity machine can get a dozen editorial-page writers to agree with, then we've created a kind of "heckler's veto," and we will all reap the whirlwind if that becomes the standard for recusal.

It would have been better for us all, especially for Scalia and the Court, if he hadn't gone duck hunting with the Veep three weeks after the Court granted cert. in Cheney's case. If Scalia truly believes in his heart that this is not true, he has as tin an ear for appearances as he has been accused of having. But it did happen. And he explained it in as direct and forceful a manner as one could wish. Is there still an appearance of impropriety? Do you really believe that Scalia has left the impression that he might throw the case for Cheney?

A generation ago, conservatives mounted a witch hunt to get William O. Douglas off the Court. Liberals howled, even though Douglas probably gave his opponents more impeachment fodder to work with than Scalia ever will. Going after the scalps of justices whose positions we oppose may seem like sport, but it can be turned against justices whose positions we support in a heartbeat. And, regardless of whose ox is getting gored, the Court and the rest of us are the losers at the end of this game.

More on the "F-word"

The FCC can't have the last word, now, can it?