Ill. rules against Provena in property-tax case

From Modern Healthcare's Daily Dose:

The director of the Illinois Department of Revenue [link] rejected an appeal by Provena Health, Mokena, Ill. [link], in a widely watched property-tax exemption case. [See previous posts here, here, and here.] In doing so, the director overruled an administrative law judge in the department who had sided with the not-for-profit system. Provena said it "will quickly and aggressively appeal" department director Brian Hamer's decision [news release]. At stake is some $1.5 million in annual property taxes, according to county tax officials. Provena has paid taxes on property in Urbana, Ill., including its 120-bed hospital there and medical-office buildings, since 2003, while the system appealed the state's initial denial of its request for a property-tax exemption. Rejecting the administrative law judge's ruling in favor of an exemption, Hamer said the property was not used exclusively for charitable purposes.

Last month, the Chicago Tribune reported "the cost to the hospital has been nearly $5 million since it lost its tax-exempt status in January 2003. The hospital says the taxes have been a drain on its balance sheet. The hospital lost $7.9 million last year on $127.9 million in revenue and is projecting a loss again this year." Hospital losing money as tax-exempt appeal languishes, Chicago Tribune, Sept. 7, 2006.

Latest from AHLA's Health Lawyers Weekly (29 Sep 2006)

From the excellent Health Lawyers Weekly (AHLA member benefit), here's the table of contents from the September 29 issue:

Top Stories

• IOM Issues Recommendations For Improving FDA Post-Market Drug Surveillance -- The Food and Drug Administration’s (FDA's) ability to oversee the safety of prescription drugs after they hit the market is undermined by a number of systemic deficiencies--including chronic under funding, organizational problems, and inadequate data--that require far-reaching changes to address, according to a new report by the Institute of Medicine (IOM) of the National Academies. Full Story
• Health Insurance Premiums Rose More Than Twice As Fast As Inflation In 2006, Report Finds -- Premiums for employer-sponsored health insurance rose an average of 7.7% in 2006, more than twice as fast as workers' wages (3.8%) and overall inflation (3.5%), according to the 2006 Health Benefits Survey released September 26 by the Kaiser Family Foundation and the Health Research and Educational Trust (HRET). Full Story

Articles & Analyses

• CMS Announces Revisions To The Emergency Medical Treatment And Active Labor Act, By Adrienne Marting and Raquel Gayle, Powell Goldstein LLP

Current Topics

• DHHS
  1. OIG Issues FY 2007 Work Plan
  2. Leavitt Names Norwalk Acting CMS Administrator
• Food and Drug Law
  Homeland Security Conferees Agree To Limited Drug Importation Provision
• Fraud and Abuse
  1. OIG Approves Charitable Organization’s Proposed Grants To Financially Needy With Certain Diseases To Defray Costs Of Medicare Premiums
  2. Update
  3. U.S. Court In Pennsylvania Allows Qui Tam Case To Go Forward, Says Specifics Of False Claims Not Necessary
  4. OIG Approves Two Cities’ Exclusive Contracts For Non-Emergency Inter-Facility Ambulance Transport Services
  5. DHHS OKs Drug Maker’s Pharmaceutical Assistance Program For Financially Needy Part D Enrollees
  6. State MFCUs Report Over $1 Billion In Recoveries In FYs 2004 And 2005
  7. Tenet Executes Five-Year CIA With OIG
• Health Policy
  1. Group Makes Recommendations For Better Healthcare System
  2. House Ways And Means Committee Approves Bill To Increase Use Of
  HSAs
• HIPAA
  U.S. Court In Nebraska Finds Physician Cannot Pursue Claims Against Hospital For Disclosing His Drug/Alcohol Treatment
• Hospitals and Health Systems
  1. Montana Supreme Court Finds Clinic Owes No Duty To Victims Of Car Crash Caused By Patient Seen At Clinic
  2. Emergency Department Crowding Common, CDC Study Finds
• Managed Care
  Illinois Supreme Court Strikes Down Percentage-Based Fee-Splitting Provision In Healthcare Company’s Participating Provider Agreements
• Medical Malpractice
  1. Indiana Appeals Court Finds Psychiatric Patient’s Claims Not Subject To Medical Malpractice Statute
  2. Florida Appeals Court Upholds Jury’s Finding That Physician's Negligence Caused Elderly Patient’s Death Following Car Accident
• Medicare
  1. U.S. Court In Indiana Rejects Hospitals’ Bid For Retroactive Adjustment Of Their Outlier Payments
  2. Federal Judge Enjoins CMS From Collecting Incorrect Medicare Part D Payments
  3. CMS Overpaid IRFs Almost $12 Million, OIG Finds
• News in Brief
  DHHS Partners With States To Promote Long Term Care Planning
• Quality of Care
  1. NCQA Finds Health Plans' Quality Gains Continue, Says Accountability Is Key

(c) 2006 AHLA. Reprinted with permission

Public hospital governance manual

From the National Association of Public Hospitals and Health Systems comes this handy 94-page guide, authored by three Powell, Goldstein health lawyers: Legal Structure and Governance of Public Hospitals and Health Systems. Good stuff.

Health costs' rate of increase down, but still 'way ahead of inflation, family incomes

Two stories in the New York Times today, both well worth reading. (And I don't have a stable link to take you to them; as soon as I find one, I will insert it here. Until then, the links I do have require a free registration.)

• "Health Care Costs Rise Twice As Fast As Inflation," by Milt Freudenheim:

A widely followed national survey reported yesterday that the cost of employee health care coverage rose 7.7 percent this year, more than double the overall inflation rate and well ahead of the increase in the incomes of workers.

The 7.7 percent increase was the lowest since 1999. But the average cost to employees continued an upward trend, reaching $2,973 annually for family coverage out of a total cost of $11,481.

Since 2000, the cost of family coverage has risen 87 percent while consumer prices are up 18 percent and the pay of workers has increased 20 percent, the survey noted. That is without counting the cost of deductibles and other out-of-pocket payments, which have also been rising.

• "The Choice: A Longer Life or More Stuff," by David Leonhardt:

These spiraling costs — a phrase that has virtually become a prefix for the words “health care” — are slowly creating a crisis. Many executives have decided that they cannot afford to keep insuring their workers, and the portion of Americans without coverage has jumped 23 percent since 1987.

An industry that once defined the American economy, meanwhile, is sinking in large measure because of the cost of caring for its workers and retirees. For every vehicle that General Motors sells, fully $1,500 of the purchase price goes to pay for medical care. “We must all do more to cut costs,” G.M.’s chief executive, Rick Wagoner, said on Capitol Hill this summer while testifying about health care.

Mr. Wagoner’s argument has become the accepted wisdom about the crisis: the solution lies in restraining costs. Yet it’s wrong. Living in a society that spends a lot of money on medical care creates real problems, but it also has something in common with getting old. It’s better than the alternative.

To understand why, it helps to look back to a time when Americans didn’t worry much about health care costs. In 1950, the country spent less than $100 a year — or $500 in today’s dollars — on the average person’s medical care, compared with almost $6,000 now, notes David M. Cutler, an economist who wrote a wonderful little book in 2004 titled, “Your Money or Your Life.”

Most families in the 1950’s paid their medical bills with ease, but they also didn’t expect much in return. After a century of basic health improvements like indoor plumbing and penicillin, many experts thought that human beings were approaching the limits of longevity. “Modern medicine has little to offer for the prevention or treatment of chronic and degenerative diseases,” the biologist René Dubos wrote in the 1960’s.

But then doctors figured out that high blood pressure and high cholesterol caused heart attacks, and they developed new treatments. Oncologists learned how to attack leukemia, enabling most children who receive a diagnosis of it today to triumph over a disease that was almost inevitably fatal a half-century ago. In the last few years, orphan drugs that combat rare diseases and medical devices like the implantable defibrillator have extended lives. Human longevity still hasn’t hit the wall that was feared 50 years ago.

Instead, a baby born in the United States this year will live to age 78 on average, a decade longer than the average baby born in 1950. People who have already made it to their 40’s can now expect to reach age 80. These gains are probably bigger than the ones the British experienced in the entire millennium leading up to 1800. If you think about this as the return on the investments in medicine, the payoff has been fabulous: Would you prefer spending an extra $5,500 on health care every year — or losing 10 years off your lifespan?

Yet we often imagine that the costs and benefits are unrelated, that we can somehow have 2006 health care at 1950 (or even 1999) prices. We think of health care as if it were gasoline, a product whose price and quality have nothing to do with each other.

There is no question that the American medical system does suffer from a lot of waste, be it insurance industry bureaucracy or expensive procedures that haven’t been proven effective. But the No. 1 cause of the cost increases is still the one you can see at the hospital and in your medicine cabinet — defibrillators, chemotherapy, cholesterol drugs, neonatal care and other treatments that are both expensive and effective.

Not even most forms of preventive care, like keeping diabetes under control, usually save money, despite what many people think. The care itself has some costs, and, more important, patients then live longer than they otherwise would have and rack up medical bills. “When I make this point, people accuse me of wanting people to die earlier. But it’s exactly the opposite,” Dr. Jay Bhattacharya, a researcher at Stanford Medical School, told me. “If these expenditures are keeping people alive, it’s money well spent.”

There's more, and it's all worth reading.

"Excited delirium": legitimate diagnosis or another name for "police brutality"?

Every so often -- as with the administration of the death penalty, for example -- medical science and law enforcement procedures overlap in interesting ways. So it is with this story -- dateline Dallas, Sept. 25, from the AP (courtesy of MyWay):

Police found 23-year-old Jose Romero in his underwear, screaming gibberish and waving a large kitchen knife from his neighbor's porch.

Romero kept approaching with the knife, so officers shocked him repeatedly with a stun gun.

Then he stopped breathing. His family blames police brutality for the death, but the Dallas County medical examiner attributed it to a disputed condition known as "excited delirium."

Excited delirium is defined as a condition in which the heart races wildly - often because of drug use or mental illness - and finally gives out.

Medical examiners nationwide are increasingly citing the condition when suspects die in police custody. But some doctors say the rare syndrome is being overdiagnosed, and some civil rights groups question whether it exists at all.
"For psychiatrists, this is a rare condition that occurs once in a blue moon," said Warren Spitz, a former chief medical examiner in Michigan. "Now suddenly you are seeing it all the time among medical examiners. And always, police and police restraint are involved." * * *

The chief psychiatric reference book, The Diagnostic and Statistical Manual of Mental Disorders [link], does not specifically recognize "excited delirium" as a diagnosis. The International Association of Chiefs of Police [link] says not enough is known about it.

"It is not a recognized medical or psychiatric condition," said spokeswoman Wendy Balazik. "That is why we don't use it and have not taken a position on it."

Dr. Matthew D. Sztajnkrycer [link], an emergency room doctor for 10 years and associate professor at the Mayo Clinic in Minnesota, said he has seen cases of excited delirium but has many questions about it.

"It is not like a heart attack where you can just get a blood test and know you have the right diagnosis," he said. "Part of the problem is that post-mortem there is a paucity of physical evidence."

Expect a bucketful of litigation over this concept in policy-brutality cases in the coming years. For further reading on this topic, take a look at:

• "Excited Delirium Syndrome: Cause of Death and Prevention," by DiMaio and DiMaio;
• O'Halloran RL, Lewman LV. Restraint asphyxiation in excited delirium. Am J Forensic Med Pathol, 1993;14(4):289-295
• M. S. Pollanen, D. A. Chiasson, T. J. Cairns and J. G. Young, Unexpected death related to restraint for excited delirium: a retrospective study of deaths in police custody and in the community. Canadian Medical Association Journal, 1998;158:1603-1607

Universal access, universal coverage, universal pessimism

Two developments on the access-to-health-care front today:

• The Congressionally-created Citizens' Health Care Working Group released their long-awaited "Recommendations to Congress and the President." (There appears to be no link to the entire report, only to individual sections and appendices.) As reported by Modern Healthcare:

The U.S. should work to ensure all Americans have access to affordable and appropriate core healthcare services by 2012, according to the Citizens' Health Care Working Group. The group, created by Congress to engage the public in a dialogue over basic healthcare values, submitted its final report after nearly 18 months of work. The final report contains one overarching recommendation for U.S. healthcare policy -- healthcare coverage for all -- and five actions for achieving it. It reflects public responses to an interim report released in June. The five recommended policy actions are: protect all Americans against catastrophic healthcare costs; foster innovative, integrated community health networks; define core health benefits and services for all Americans; promote efforts to improve quality of care and efficiency; and fundamentally restructure how end-of-life care is provided and financed.In its report, the group said it consistently heard that Americans believe current healthcare resources should be enough to ensure high-quality care for everyone if distributed more equitably.

In addition, participants in community meetings, an online poll and other forms of dialogue consistently emphasized the importance of shared responsibility and fairness in healthcare financing, the group said. Under the 2003 Medicare reform law that created the working group, President Bush is required to respond to the final report within 45 days, submitting his views to Congress and making recommendations on legislative and administrative actions. Five congressional committees then must hold hearings on the matter.

• And from sunny California, this bit of predicted non-news:

As expected, California Gov. Arnold Schwarzenegger vetoed a controversial single-payer bill designed to expand healthcare coverage to all of the state's 36 million residents. The legislation narrowly passed the state Assembly and Senate last month. It "would have made healthcare less affordable and cost billions (of dollars) in government mandates," according to a news release from the governor's office. The bill marked the second time in three years that California has come close to adopting sweeping health-insurance reform.

Interestingly, there isn't a whisper of this event on the governor's web site, not on the news page and not in the press releases. A veto message should appear on this page. Maybe tomorrow . . . .

This leaves Massachusetts with the one state-designed nearly universal coverage plan. Neither state is enjoying a rosy economic outlook, both have Republican governors, leaving one to wonder what explains the difference.

Is teacher's suicide attempt "an immoral act"?

This is probably a little more of an employment law issue, but mental health lawyers may find interesting this story from the September 20 issue of CDC's Public Health Law News:

“Teacher’s suicide attempt prompts morality debate”
St. Petersburg Times (09/10/06) Mary Spicuzza
http://www.sptimes.com/2006/09/10/Pasco/
Teacher_s_suicide_att.shtml

Next month, the Pasco County, Florida, School Board will hold a quasi-judicial hearing to determine the fate of a high school teacher who tried to kill herself at the school in May. Staff members and three or four students witnessed the incident. Schools superintendent Heather Fiorentino says Patti Withers’ suicide attempt was an “immoral act,” and that she should lose her job. Fiorentino also contends that witnessing a suicide attempt can adversely influence adolescents -- a phenomenon called “contagion.” In a letter to Withers, Fiorentino cited the Florida State Board of Education’s administrative rules, which allow dismissal for “immoral conduct.” The rules do not specifically mention suicide, but Fiorentino says Withers’ act was a clear case of misconduct. “As a teacher, you’re a role model for children,” she said. “And this is not what I want as an example.” Florida School Boards Association executive director Wayne Blanton said he supports Fiorentino’s decision. “The first job is not education,” he said. “The first duty is the health, safety, and welfare of students. [Fiorentino] is dealing with this in the way she feels is necessary….” But Chris Kuczynski, of the EEOC’s Americans with Disabilities Act division, said an employee with disabilities such as mental illness may need to pose a direct threat to themselves or others for an employer to take action. The teachers union has asked the School Board to allow Withers to go on health leave, rather than terminate her.

[Editor’s note: For information from CDC on suicide, visit: http://www.cdc.gov/ncipc/factsheets/suicide-overview.htm.]

Health policy redux

Our reading assignment in Health Law tomorrow is Chapter 7 in the casebook by Furrow et al. ("Health Care Cost and Access: The Policy Context"). The main focus of the reading is a comparison of various ways of expanding access and controlling costs. It's fortuitous that the invaluable journal Health Affairs, has just posted a new article ("U.S. Health System Performance: A National Scorecard") by researchers at The Commonwealth Fund. The full text of the article will be available for free until October 1 (PDF; HTML). Here's the abstract:

This paper presents the findings of a new scorecard designed to assess and monitor multiple domains of U.S. health system performance. The scorecard uses national and international data to identify performance benchmarks and calculates simple ratio scores comparing U.S averages to benchmarks. Average ratio scores range from 51 to 71 across domains of health outcomes, quality, access, equity, and efficiency. The overall picture that emerges from the scorecard is one of missed opportunities and room for improvement. The findings underscore the importance of policies that take a coherent, whole-system approach to change and address the interaction of access, quality, and cost.
[Health Affairs 25 (2006): w457-w475;10.1377/hlthaff. 25.w457]

The overall score for the U.S. is 61 out of a possible 100.

Change in organ allocation rules produce dramatic results

There's a good piece in today's N.Y. Times about the dramatic decrease in waiting times for patients on the lung-transplant waiting list, due in part by changes in allocation policies (from longest time on the list to a combination of medical need and ability to thrive after transplant). Technological advances have helped a lot, too, making it possible for more cadaveric lungs to be preserved for transplantation than ever before.

Latest from AHLA's Health Lawyers Weekly (22 Sep 2006)

From the excellent Health Lawyers Weekly (AHLA member benefit), here's the table of contents from the September 22 issue:

Top Stories

• Phased-In Pay-For-Performance Program Would Encourage Healthcare Quality Improvement, IOM Finds: The Department of Health and Human Services (DHHS) should phase in a pay-for-performance system in order to promote improvements in the quality of healthcare, the Institute of Medicine (IOM) said in a report released September 21.For an initial period of three to five years, Congress should reduce base Medicare payments across the board and use the money to fund rewards for strong performance, the report said. Full Story
• OIG Approves Charitable Organization's Practice Of Providing Financial Assistance To Needy Medicare Patients For Treatment Of Certain Diseases:
  In an advisory opinion posted September 21, the Department of Health and Human Services Office of Inspector General approved a nonprofit, tax-exempt, charitable organization's practice of providing certain therapy management services and financial assistance to financially needy Medicare beneficiaries undergoing treatment for certain diseases. Full Story

Articles & Analyses

• Grassley, The IRS Questionnaire, And Community Benefit: Are We Done Yet?, By Michael W. Peregrine, Robert C. Louthian, Elizabeth M. Mills McDermott Will & Emery LLP
• Caution Warranted For Employers As Supreme Court Adopts Broad Retaliation Test, By John P. Ryan and Kevin J. Gfell, Hall, Render, Killian, Heath & Lyman, P.C.

Current Topics

• Antitrust
  1. FTC Says Non-Profit Institution Act Applies To Health System's Drug Purchase And Distribution Program
  2. Seventh Circuit Rejects Anesthesiologist's Antitrust Challenge To Exclusive Contract Between Hospitals And Anesthesiology Group Practice
• Arbitration/Mediation
  Florida Appeals Court Compels Arbitration Under Nursing Home Admissions Agreement Even Though Portions Of Agreement Are Unconscionable
• Employment and Labor
  1. Fifth Circuit Rejects Hostile Work Environment Claim Against Nursing Home
  2. U.S. Court In California Finds Physician's History Of Alcohol Dependency Does Not Constitute "Disability" Under ADA
• Food and Drug Law
  1. Legislation To Improve Research On Drug Safety Introduced In Senate
  2. Study Finds Brand Name Prescription Drug Prices Continue To Rise, Manufacturers Group Disputes Findings
  3. Grassley Presses FDA's Acting Commission To Improve Drug Safety Oversight
  4. Generic Drugs Can Save Healthcare System Big Money, Senate Committee Told
• Fraud and Abuse
  1. Update
  2. U.S. Court In Arkansas Dismisses Qui Tam Lawsuit Against Hospital And Oncologist At Affiliated Radiation Therapy Facility
  3. U.S. Court In Tennessee Declines To Dismiss Qui Tam Lawsuit Against Manufacturer Of Implant Medical Devices
• Health Information Technology
  1. Provider Groups Tell Grassley, Baucus HIT Bill Poses No Antitrust Risk
  2. Study Shows Physicians Slow To Adopt Email As Means Of Communicating With Patients
• Health Policy
  Commonwealth Fund Presents Results Of Its National Scorecard On U.S. Health System Performance
• Insurance
  U.S. Court In Louisiana Finds Excess Liability Insurance Policy Not Triggered When Settlement Does Not Exceed Primary Coverage
• Medicaid
  Federal Judge Dismisses Challenge To New Medicaid Citizenship Verification Requirement
• Medical Malpractice
  1. Texas Appeals Court Finds Patient's Claims Against Healthcare Facility Are Healthcare Liability Claims Under Relevant Statute
  2. California Appeals Court Says Jury Should Decide Whether Physician Who Assisted In Chiropractic Procedure Owed Duty To Obtain Patient's Consent
• Medicare
  1. Medicare Providers Satisfied With Contractors, Survey Finds
  2. Study Shows Medicare Cuts For Imaging Services Will Affect Patient Care, Group Says
  3. OIG Report Finds Limiting Rental Payments For Home Oxygen Equipment Would Save Medicare $3.2 Billion Over Five Years
  4. CMS Says LCD Clarifications Intended To Ensure Medicare Beneficiaries Have Access To Appropriate PMDs
  5. CMS Proposes Limit On Recoupment Of Provider And Supplier Overpayments Until Second-Level Appeal Complete
• News in Brief
  Wal-Mart Will Offer Nearly 300 Generic Drugs At $4
• Physicians
  U.S. Court In Texas Says Physician Must Accept Reduced Damages Or Face New Trial In Credentialing Case Against Hospital
  
  (c) 2006 AHLA. Reprinted with permission.

Medicare Part D: appeals process and regulatory oversight

The Kaiser Family Foundation released two issue briefs on the Medicare prescription drug benefit program (Part D) last week:

Issue Briefs Examine Medicare Drug Benefit's Appeals Process and Regulatory Oversight
Kaiser released two issue briefs related to the Medicare drug benefit. The first focuses on the appeals process and highlights issues that can affect beneficiaries' access to needed medications, while the second examines the authority of the federal government to enforce the laws, rules and regulations governing Medicare drug plans. The papers were prepared by the Center for Medicare Advocacy.

Disasters and the law

I just received a copy of Disasters and the Law, the new book by Dan Farber and Jim Chen (Aspen 2006, ISBN 0735562288). It's an interesting read, obviously intended for teaching a course with the same title/focus as the book. It's a really different take on a lot of topics that would otherwise be found chopped up into pieces and distributed to different legal disciplines. To get a flavor of it, check out the publisher's description on the Aspen web site:

Recent hurricanes and other natural disasters demonstrate serious gaps in the legal system and its ability to respond to events of this magnitude. Innovative policies are needed if society is to deal effectively with the aftermath of these disasters and the risk of future ones. Disasters and the Law: Katrina and Beyond studies disaster response, prevention, and mitigation strategies. By integrating knowledge and experience from fields as diverse as urban planning, bankruptcy law, and wetlands law, the authors talk about the legal process in disaster response and reconstruction. Past responses to Hurricane Andrew, the terrorist attacks of September 11th, 2001 and the Loma Prieta Earthquake also are discussed along with a history of U.S. disaster response efforts.

The book examines a wide range of issues and engages in provocative discussion of such topics as:

• The goals and limits of Federal and military involvement in civilian and domestic support and our expectations of a swift and multi-layered response from government in times of a crisis versus government and private sector capabilities.
• Medicaid issues raised by the hurricane such as the New York Disaster Relief Medicaid waiver granted in response to the September 11 terrorist attacks and current federal legislation related to Medicaid and
  Hurricane Katrina relief efforts.
• Environmental issues such as the Army Corps of Engineers' work on levee constructions and the controversy over environmental litigation's role in the Corps' projects, as well as the future re-construction on floodplains.
• Issues concerning health care, communications, law enforcement, and evacuation.

Katrina alone will involve at least a hundred billion dollars in compensation, insurance, and rebuilding efforts, and lawyers will be heavily involved for at least the remainder of the decade in disputes over these funds. Unfortunately, there is no reason at all to think that Katrina is the last word on disasters. At first glance, disaster law seems to be nothing but a collection of legal rules of various kinds that happen to come into play when communities have suffered severe physical damage. But at a deeper level, disaster law is about assembling the best portfolio of legal rules to deal with catastrophic risks, a portfolio that includes prevention, emergency response, compensation and insurance, and rebuilding strategies. Because of this unifying theme, we think that the topic is deserving of serious law school attention even beyond its newsworthy qualities. Dan Farber

Table of Contents

1. Introduction
2. Background
3. Federalism
4. Statutes & Regulations
5. Prevention & Mitigation
6. Emergency Response

From the JCT: a handy little black-letter primer on tax-exempt hospitals

For health-law students who are struggling, or who (like mine) are planning to struggle, to understand the federal law of tax exemptions as it applies to hospitals, life just got a whole lot easier. In connection with the Senate Finance Committee's Sept. 13 hearings on the same subject, the staff of the Joint Committee on Taxation published "Present Law And Background Relating To The Tax-Exempt Status Of Charitable Hospitals (JCX-40-06)." It's almost a mile wide (there's nothing to speak of about campaign activity, for example) and an inch deep (intermediate sanctions alone could fill a small book; here it gets a paragraph). In the spirit of law students' favorite, the nutshell, however, it's a good big-picture document.

Latest from AHLA's Health Lawyers Weekly (15 Sep 2006)

From the table of contents of the September 15 issue of AHLA's Health Lawyers Weekly, a free member benefit:

Top Stories

• Grassley Continues To Examine Nonprofit Hospitals' Provision Of Charity Care -- Senate Finance Committee Chairman Charles Grassley (R-IA) took the next step in his effort to examine the nonprofit hospital sector by convening a hearing September 13, Taking the Pulse of Charitable Care and Community Benefits at Nonprofit Hospitals, as well as releasing responses from ten nonprofit hospitals on Grassley's 2005 query about their charitable activities. Full Story
• CMS Announces 5.6% Increase In Standard Medicare Part B Monthly Premium For 2007 -- The standard Medicare Part B monthly premium for 2007 will increase by 5.6%, from the current $88.50 to $93.50, which is lower than early projections, according to a fact sheet released September 12 by the Centers for Medicare and Medicaid Services (CMS).Both the 2006 Medicare Trustees Report issued in May and the July Mid-Session Review of the President's 2007 budget forecast a new Part B premium of $98.50, the fact sheet noted. Full Story

Articles & Analyses

• Thou Shalt Not Profit, Part II: D&O Liability Issues For Tax-Exempt Healthcare OrganizationsBy David M. Finz, Beecher Carlson, & Christopher S. Rizek, Caplin & Drysdale

Current Topics

• Antitrust
  Tenth Circuit Rules Excluding Optometrists From Provider Panel Does Not Violate Sherman Act
• Arbitration/Mediation
  Mississippi Supreme Court Finds Arbitration Agreement Precludes Wrongful Death Action Against Surgeon
• ERISA
  U.S. Court In Utah Finds Healthcare Provider's State Common Law Claims Against Insurer Not Preempted By ERISA
• Food and Drug Law
  1. FDA Fines American Red Cross $4.2 Million
  2. U.S. Court In Texas Finds Compounded Drugs Not Subject To FDA's New Drug Approval Process
  3. Tenth Circuit Rules FDA Has Authority To Ban Ephedra Under Unreasonable Risk" Standard
• Fraud and Abuse
  1. AdvaMed Asks OIG For More Guidance On Potentially Suspect Physician Investments In Medical Device Firms
  2. U.S. Intervenes In Whistleblower Suit Against Drug Manufacturer
  3. Eleventh Circuit Vacates Sentences Imposed On Consultant and Home Health Agencies For Conspiring To Submit False Claims To Medicare
  4. Update
• Hospitals and Health Systems
  Hospitals Failed To Report To CMS Nearly Half Of All Restraint And Seclusion Deaths, OIG Finds
• Insurance
  HSAs Have Lower Premiums, But Higher Out-Of-Pocket Costs, GAO Says
• Medicaid
  Senate Panel Holds Roundtable Discussion On Managed Care In Medicaid
• Medical Malpractice
  Kansas Appeals Court Finds On-Call Physician Owes No Duty Of Care To Patient When Physician Refused To Treat Patient
• Medicare
  1. OIG Finds Estimated $20 Million In Medicare Overpayments For Radiology Services
  2. CBO Estimates Costs Of Options For Overriding Medicare Physician Payment Rate Reductions
  3. CMS Releases Draft Part D Chapter For Comment
• News in Brief
  1. CMS Names Contractors To Study IPPS Reform
  2. Healthcare Price Transparency Bill Introduced In House
• Physicians
  1. Hawaii Supreme Court Allows Action Alleging Insurer Systematically Impeded Network Physicians' Claims
  2. U.S. Court In Pennsylvania Finds Hospital Has HCQIA Immunity From Suspended Physician's Antitrust And Breach Of Contract Claims
• Quality of Care
  HSC Study Finds Hospitals Participate In Quality-Reporting Programs But Coordination, Resources Lacking

(c) 2006 AHLA. Reprinted with permission.

Tax-exempt hospitals & Sen. Grassley's Finance Committee

The Senate Finance Committee's web page for the Sept. 13 hearing on tax-exempt hospitals is fully populated with witness statements, as well as the Senator's opening and closing remarks, including the words on the subject of charity care:

Turning now to charity care, particularly discounted care and free care for low-income uninsured, there actually seems to be some agreement that nonprofit hospitals should be providing such discounts and free care. The CHA and American Hospital Association (AHA) testimony talk about basic policies in this area. As always there are details, but I think it is important for members and the press to recognize that the nonprofit hospital organizations agree that there needs to be real charity care provided.

I think the question then comes about how can we make this policy real for folks like Mrs. Insco. I think Sister Carol has it exactly right in her testimony that: “It is one thing to have policies in place, and quite another to implement them.” We need to think about how we can best make policies of discounted and free care to low-income uninsured a real benefit to those in need.

Non-profit hospitals receive billions in tax breaks at the federal, state and local level. The public has a right to expect significant, measurable benefits in return. I hope the hearing will help the Finance Committee decide how we can best ensure that non-profit hospitals provide appropriate levels of benefit to the communities they serve. As we consider these questions, I think it right to also bear in mind the particular issues facing critical access rural hospitals.

Let me end by saying that the Government Accountability Office (GAO) and the IRS Commissioner Mark Everson have both commented that there is often little to no difference between for-profit hospitals and non-profit hospitals when it comes to charity care and community benefits provided. I’m confident that many non-profit hospitals are well-intended and do outstanding work on behalf of their communities and the poor. But I’m concerned that the best practices of non-profit hospitals are not common practices for all. That needs to change.

Latest from the law reviews

From the Marian Gallagher Law Library at the University of Washington:

FOOD AND DRUG

• Hareid, Jonathan A. Comment. Testing drugs and testing limits: Merck KGaA v. Integra Lifesciences I, Ltd. and the scope of the Hatch-Waxman safe harbor provision. (Merck KGaA v. Integra Lifesciences I. Ltd. [Integra II], 125 S. Ct. 2372, 2005.) 7 Minn. J.L. Sci. & Tech. 713-756 (2006). [L][W]
• Ma, Jonathan. Note. Lowering prescription drug prices in the United States: are reimportation and Internet pharmacies the answer? 15 S. Cal. Interdisc. L.J. 345-375 (2006). [L][W]
• Pisut, Patcharin. Recent development. Freedom to research: room for trial and error in drug development after ... (Merck KGaA v. Integra Lifesciences I, Ltd., 125 S. Ct. 2372, 2005.) 2005 U. Ill. J.L. Tech. & Pol'y 339-355. [L][W]
• Politis, Pamela D. Student article. Transition from the carrot to the stick: the evolution of pharmaceutical regulations concerning pediatric drug testing. 12 Widener L. Rev. 271-291 (2005). [L][W]
• Vokes, Sarah J. Student article. Just fill the prescription: why Illinois' emergency rule appropriately resolves the tension between religion and contraception in the pharmacy context. 24 Law & Ineq. 399-420 (2006). [L][W]

HEALTH LAW AND POLICY

• Greeley, Henry T. Neuroethics and ELSI: similarities and differences. 7 Minn. J.L. Sci. & Tech. 599-637 (2006). [L][W]
• Melden, Michele. Guarding against the high risk of high deductible health plans: a proposal for regulatory protections. 18 Loy. Consumer L. Rev. 403-433 (2006). [L][W]
• Nicosia, Joseph III. Student article. Avian flu: the consumer costs of preparing for global pandemic. 18 Loy. Consumer L. Rev. 479-501 (2006). [L][W]
• Su, Brian. Comment. Developing biobanking policy with an Oliver Twist: addressing the needs of orphan and neglected diseases. 66 La. L. Rev. 771-808 (2006). [L][W]
• Regulating for Patient Safety: The Law's Response to Medical Errors. Foreword by Barry R. Furrow; articles by Barry R. Furrow, Stanton N. Smullens, M.D., Adam S. Evans, David B. Nash, M.D., John D. Blum, Bryan A. Liang, M.D., William M. Sage, M.D., David A. Hyman, Charles M. Silver, Nicholas P. Terry, Robert B Leflar, Futoshi Iwata, Marshall B. Kapp, Darlene Ghavimi, Pamela D. Politis, Maggie M. Finkelstein and James W. Saxton. 12 Widener L. Rev. 1-325 (2005). [L][W]

MEDICAL JURISPRUDENCE

• Gonzalez, Jarod S. A matter of life and death--why the ADA permits mandatory periodical medical examinations of "remote-location" employees. 66 La. L. Rev. 681-731 (2006). [L][W]
• Upchurch, Angela K. The deep freeze: a critical examination of the resolution of frozen embryo disputes through the adversarial process. 33 Fla. St. U. L. Rev. 395-435 (2005). [L][W]

[L] = Lexis/Nexis link
[W] = WestLaw link

Senate Finance Comm. hearings scheduled on nonprofit hospitals and community benefit

From AHLA's Tax and Finance Practice Group comes this e-mail alert:

To: Tax and Finance Practice Group Members
From: Linda S. Moroney, Chair; John B. Beard, Vice Chair, Membership; James R. King, Vice Chair, Educational Programs; Stephen P. Nash, Vice Chair, Publications; Thomas J. Schenkelberg, Vice Chair, Research
Date: September 8, 2006

Under the leadership of Chairman Chuck Grassley, the Senate Finance Committee has scheduled a new hearing regarding tax-exempt hospitals. Entitled "Taking the Pulse of Charitable Care and Community Benefits at Nonprofit Hospitals," the hearing is scheduled for September 13, 2006, at 10:00 a.m. in 215 Dirksen Senate Office Building [link]. The current slate of witnesses includes the Kansas Attorney General (who has opened up investigations of the billing and collection practices of nonprofit hospitals after complaints from consumers), an employee union representative, and a Legal Aid Society official; it is anticipated that the foregoing will relate certain "horror stories" from indigent individuals who either did not receive care or got involved in billing disputes over care with tax-exempt hospitals. Other witnesses are anticipated to present the hospital perspective, including leaders from the Catholic Health Association and the American Hospital Association, in addition to a rural hospital administrator.

Senator Grassley has for several years conducted an aggressive examination of the entire charitable sector, with increased scrutiny on tax-exempt hospitals. Grassley conducted his first hearing on tax-exempt organizations back in 2004 [link]with a primary focus on governance and best practices of charities [staff discussion draft]. In 2005, the Senate Finance Committee held a second hearing on the nonprofit sector [link] in which Grassley indicated that it was time for comprehensive reforms for charitable organizations. Following that hearing, Grassley sent letters to ten nonprofit hospitals asking forty-five questions about their charity care and communitybenefit, as well as compensation, billing and debt collection practices (press release and copy of letter]. In March 2006, as part of his continued examination of nonprofit hospitals and their tax-exempt status, Grassley sent letters to the American Hospital Association [link] and the Catholic Health Association [link] requesting information from those organizations on a variety of issues, including community benefit, charity care, and certain nonprofit hospital practices [related hearing]. In June of this year, Grassley sent letters to the Chief Counsel of the IRS and Commissioner for Tax Exempt and Governmental Entities, calling for increased scrutiny of the nonprofit sector, particularly tax-exempt hospitals [link]. In July, Grassley, at the nomination hearing for Eric Solomon (nominee for deputy Treasury secretary for tax policy), raised the issue of the current rules governing charitable hospitals and requested that Treasury and the IRS revise those rules. Grassley criticized the 1969 IRS rules that established the "community benefit standard" and asked Solomon to commit to a timetable for review and proposals for reform of those rules [link]. That same month, Grassley harshly criticized the lack of response by the hospitals selected by the GAO for its survey on executive compensation and questioned certain compensation practices of those hospitals that did respond to the survey [link].

This latest action to schedule a new Senate Finance Committee hearing and the witnesses selected to testify demonstrate that Grassley, perhaps due to his dissatisfaction with the overall response from the nonprofit hospital community to his inquiries, is looking to keep the heat on nonprofit hospitals and continue the debate on their tax-exempt status. Any thoughts that the remainder of this year would be relatively calm as far as congressional activity on nonprofit hospitals are now in doubt.

The AHLA Tax and Finance Practice Group would like to thank Don Stuart, Esq. (Waller Lansden Dortch & Davis, LLP, Nashville, TN) for providing us with this email alert.

Imagine how Sen. Grassley's blood boils when he reads stories like this (from the Boston Globe): "Hospital CEOs join the $1m club":

Chief executives at charitable hospitals in Massachusetts received substantial pay and benefit increases in fiscal year 2005, for the first time boosting their overall compensation to more than $1 million at most of the largest institutions.

Also, the highest-paid hospital executive in the state, Partners HealthCare chief executive James J. Mongan, broke the $2 million barrier, another significant milestone.

DEA and proposed controlled-substances rules

From the Federation of State Medical Board's weekly "BoardNet News" (Friday, September 8, 2006):

DEA Seeks Comment on New Proposed Controlled Substances Rules
The Drug Enforcement Administration (DEA) is seeking comment on a policy statement and a proposed rule regarding the issuance of multiple prescriptions. The documents, “Dispensing Controlled Substances for the Treatment of Pain” and “Issuance of Multiple Prescriptions for Schedule II Controlled Substances” were published on the Federal Register website on Sept. 6.

The documents are in response to more than 600 comments received by the DEA regarding its withdrawal of the August 2004 document, "Prescription Pain Medications: Frequently Asked Questions and Answers for Health Care Professionals and Law Enforcement Personnel," and a subsequent interim policy statement issued in November 2004. State medical board comments were coordinated and submitted collectively by the FSMB in early 2005.

Under the DEA’s proposed rule change, the “Do Not Fill Until...” provision would allow physicians to write three separate prescriptions with staggered fill dates so patients can be given the equivalent of a 90-day prescription for schedule II controlled substances when medically appropriate.

The proposed rule addresses concerns voiced by medical boards and others regarding the DEA’s 2004 interim policy statement on issuance of multiple Schedule II prescriptions.

The policy document indicates that the DEA remains committed to a balanced approach policy; that it is outside the scope or authority of DEA to define or dictate the practice of medicine; and that the DEA’s authority does not supersede state medical board authority.

Latest from AHLA's Health Lawyers Weekly (8 Sep 2006)

From the table of contents of the Sept. 8 issue of AHLA's Health Lawyers Weekly, a free member benefit:

Top Stories

• CMS Reports On Ongoing Improvement Of QIO Program
  The Quality Improvement Organization (QIO) Program is an essential component of initiatives in transparency and performance-based payment of providers, the Centers for Medicare and Medicaid Services (CMS) said in an August 31 report to Congress, Improving the Medicare Quality Improvement Organization Program--Response to the Institute of Medicine Study. Full Story
• CMS Announces Physician-Hospital Gainsharing Demonstration Project
  The Centers for Medicare and Medicaid Services (CMS) announced September 6 the launch of its Physician-Hospital Collaboration Demonstration (PHCD), a three-year demonstration program to examine whether allowing hospitals to provide financial incentives for physicians to support better care can improve patient outcomes without increasing costs. Full Story

Articles & Analyses

• Thou Shalt Not Profit, Part I: New Penalties For Tax-Exempt Entities And Managers By Christopher S. Rizek, Caplin & Drysdale, & David M. Finz, Beecher Carlson

Current Topics

• Antitrust
  1. U.S. Court In Ohio Dismisses Physician's Antitrust Claims Against Hospital And Affiliated Group Practice Finding No Antitrust Injury
  2. Senate Panel Considers Competition In Group Healthcare
• DHHS
  McClellan To Step Down From CMS Administrator Post
• ERISA
  D.C. Circuit Says Insureds Not Entitled To "Make Whole" Relief From HMO's Subrogation Claim
• Food and Drug Law
  1. U.S. Court In Maryland Rejects County's Bid To Implement Drug Importation Program
  2. FDA Issues Draft Guidance On New Medical Device Test, Group Of Medical Tests
  3. Lawmakers Ask GAO To Investigate FDA Reliance On Certain Antibiotic Trials
• Fraud and Abuse
  Update
• Health Information Technology
  GAO Says Despite Progess, DHHS Still Needs More Detailed HIT Plan
• Health Policy
  Governor Schwarzenegger To Veto Universal Health Insurance Bill
• HIPAA
  U.S. Court In Kansas Says Hospital Satisfied HIPAA Requirements In Seeking Order To Access Medical Malpractice Patient's Records
• Individual/Patient Rights
  CMS Should Extend Privacy Breach Notification Requirements, GAO Says
• Medicaid
  New Hampshire Supreme Court Says State's Temporary Reduction Of Medicaid Reimbursement Rate For Pharmacies Exempt From Rulemaking Process
• Medical Malpractice
  1. Louisiana Appeals Court Affirms Jury Finding That Mental Health Facility Did Not Breach Standard Of Care After Patient Fell While Trying To Escape
  2. Louisiana Appeals Court Finds Genuine Issue Whether Hospital Met Standard Of Care In Malpractice Action
  3. California Appeals Court Finds Medical Malpractice Action By Patient Who Lost Ability To Walk After Spinal Surgery Not Time-Barred
• Medicare
  Most Americans Worried About Seniors' Access To Care If Medicare Physician Payment Cuts Take Effect, AMA Says
• News in Brief
  CMS Seeks Comments On Draft Chapter Regarding Part D Benefits And Beneficiary Protections

(c) 2006, AHLA. Reprinted with permission

New article documents higher brain activity in vegetative patient

The N.Y. Times reports today that the journal Science has published an article [abstract; pdf (requires subscription)] in which British researchers performed a functional MRI (fMRI) scan on a post-traumatic-brain-injury patient diagnosed to be in a vegetative state and got back scans that would be indistinguishable from results obtained from subjects without brain injury. According to the Times article:

A severely brain-damaged woman in an unresponsive, vegetative state showed clear signs on brain imaging tests that she was aware of herself and her surroundings, researchers are reporting today, in a finding that could have far-reaching consequences for how unconscious patients are cared for and how their conditions are diagnosed.

In response to commands, the patientÂ’s brain flared with activity, lighting the same language and movement-planning regions that are active when healthy people hear the commands. Previous studies had found similar activity in partly conscious patients, who occasionally respond to commands, but never before in someone who was totally unresponsive.

If the researchers' report is accurate, the patient may have met all clinical criteria for vegetative state but she didn't meet two criteria in the standarddefinitionn of vegetative state: "no evidence of awareness of self orenvironmentt and an inability to interact with others" and "no evidence of sustained, reproducible, purposeful, or voluntary behavioral responses to visual, auditory, tactile, or noxious stimuli."

Does this change anything we know about the vegetative state? Does this suggest there may be a need to redefine what we mean by vegetative state? I don't think so.

First, this is a report of a single patient. She may be the only brain-injured patient in the world with these results. Time will tell.

Second, it's possible that over 5 months' time her condition changed from vegetative to something between vegetative and the "minimally conscious state" -- that is, she's no longer vegetative despite outward ("clinical") signs that she is. Should this be a cause for concern that we are routinely misdiagnosing patients as vegetative when they're not? Not necessarily.

As best I can tell from the full text of the article, the fMRI test was performed 5 months after the traumatic brain injury occurred in July 2005. That's long enough to confirm a diagnosis of vegetative state, and even long enough to confirm a diagnosis of persistent vegetative state, but it's a good 7 months shy of the American Academy of Neurology's practice parameter's recommendation of 12 months to confirm a diagnosis of permanent vegetative state after traumatic brain injury.

If the patient continues to meet the clinical criteria for the vegetative state 12 months after her traumatic brain injury and the researchers can show evidence (in the words of their report) "which confirm[s] beyond any doubt that she was consciously aware of herself and her surroundings," that will be an impressive result, although still not enough all by itself to justify altering our present diagnostic criteria.

Meanwhile, I expect this report will be used by partisans in the Schiavo debate to "prove" they were right about Terri Schiavo's mental status, despite irrefutable post-mortem evidence that her brain had atrophied more than 50% over the 15-year course of her vegetative state. Science warned against such a misuse of this report in its press release yesterday, according to the Times: "Science . . . added a 'special note' citing the Schiavo case and warning that the finding 'should not be used to generalize about all other patients in a vegetative state, particularly since each case may involve a different type of injury.'"