Nonprofit class actions: 1st settlement announced.

Modern Healthcare is reporting that "[s]ix-hospital North Mississippi Health Services, Tupelo, reached an agreement with a Mississippi law firm to provide an estimated $150 million in refunds, debt forgiveness, discounts and free care to about 48,000 eligible uninsured patients. The $150 million would cover the system's obligations under the agreement for the past three years and into the future. The system is the first to address the issue with a group of plaintiffs' attorneys that has filed class-action lawsuits against 40 not-for-profit hospitals and systems covering more than 300 hospitals in 21 states. The lawsuits allege that the hospitals overcharge uninsured patients and are unfair in pursuit of payment."

There may be less here than meets the eye. This system has not yet been sued; it resides in Richard Scruggs' backyard; and it doesn't appear to cost the hospital system any real money that it wasn't already planning to spend:

North Mississippi had not been named in any of the lawsuits. However, the system reached an agreement with attorney Richard Scruggs and the Scruggs Law Firm of Oxford, Miss., because 'there are several community issues we need to be addressing,' North Mississippi's chief executive officer, John Heer, said in a system news release. A lawsuit would be distracting, and the proposed discounts were similar to North Mississippi's current policy, Heer said.

In a national teleconference, Scruggs said the attorneys group has approached several not-for-profit hospitals that have not yet been sued about reaching an agreement. Scruggs praised North Mississippi and called its agreement with the firm 'a very compelling template for the other hospitals and the American Hospital Association.' Under the agreement, which is awaiting approval by a federal judge, North Mississippi will not charge eligible uninsured patients more than 10% of their annual income. It also will provide free care, prospectively and retrospectively, to uninsured patients earning up to 200% of the federal poverty level and for uninsured patients earning more, it will establish a sliding fee scale based on Medicare rates. Scruggs said the system can ask the federal judge in U.S. District Court, Aberdeen, Miss., to revise the agreement if the terms prove too costly.

The teleconference/news conference can be downloaded here (follow links to main litigation page).

Abortion and deceptive trade practices.

It's a somewhat unusual combination, but a federal judge in New Orleans enjoined a local man from a variety of deceptive trade practices all intended to interfere with the abortion rights of women (see AP newswire story, courtesy of the Boston Globe). According to the news story:

US District Judge Stanwood Duval granted a preliminary injunction against William A. Graham, who was accused of listing the business phone of his Causeway Center for Women under ''Abortion Services" and making misleading statements aimed at delaying women until it was too late to get legal abortions. . . .

The lawsuit accused Graham of pretending to refer women to abortion providers at bargain prices, then telling them their appointments had been postponed. Louisiana law allows abortions only during the first 24 weeks of pregnancy.

One plaintiff said Graham told her that if an abortion were ''performed too early, it could be harmful to her health," according to the lawsuit.

Elizabeth Nette of Metairie, La., said Graham deterred her 19-year-old daughter, Mary Schloegel, from getting an abortion.

Nette contacted Graham in January. Graham told her he would set up appointments at a local hospital, but delayed them for six weeks, Nette said.

Schloegel is now eight months pregnant and will have the baby.

As unconscionable as Graham's conduct is (regardless of one's views of abortion), his comment was, ''I still don't see that we've done anything wrong." Clueless.

Indigent care woes.

The Milwaukee Journal-Sentinel has an article in today's paper about cutbacks by Aurora Sinai, a downtown hospital that serves a mostly poor patient population. Bottom line: Sinai isn't making enough money on Medicare and Medicaid patients to offset losses incurred from treating poor patients whose care is paid for by the county's general assistance medical program ("GAMP"). Following back-to-back losses of $24 million last year and $14 million projected for this year -- "[e]ven with staff cutbacks, clinic and ward closures and tougher restrictions on care in Sinai's emergency department" -- the hospital is encouraging its physicians to see fewer GAMP patients, which it hopes will translate into fewer GAMP admissions. A hospital spokesman said, "We are cutting back generally on the population that hurts us the most."

This, of course, is going down like chopped hay in local circles. First, there is the criticism that a tax-exempt hospital darned well ought to be able to provide charity care, which resonates with lawmakers on Capitol Hill, who are holding hearings in the House and the Senate on this topic, and is part and parcel of the 31 class-action lawsuits filed this summer against tax-exempt hospitals all over the country. Logically, however, there is nothing about tax-exempt status that precludes crippling financial losses. Put otherwise, is there any reason to believe that a hospital's tax savings are necessarily sufficient to pay for all the uncompensated care some hospitals are geographically and demographically situated to provide?

Then there's the criticism that at the same time Sinai is cutting back on services to GAMP patients it is seeking governmental approvals to build an $85 million 88-bed suburban hospital 3 miles from an existing facility. Of course, excess net operating revenues from the new hospital could offset operating losses at the downtown hospital and allow Sinai to see more GAMP patients, but critics of tax-exempt hospitals often miss the point that you sometimes have to spend money to make money, even in the nonprofit health sector.

For Dallas County residents, this all sounds dizzyingly familiar, right down to the County Commissioners' criticism of Parkland Hospital's plan to building an out-patient surgery center at the corner of Harry Hines and Motor Street. Aurora Sinai's statement that it want "to reinvent itself as a downtown destination hospital. We want a healthy mix of commercial and neighborhood patients" could have been taken from a page out of Parkland's playbook.

The article concludes with some insightful comments:

"[T]he even bigger issue here is that our health care system is broken, and relying on charity care is a weak patch to put on the system. We need political leadership in Milwaukee County and in this state to overhaul our health care system," said [Darcy Haber, health care campaign director of Wisconsin Citizen Action, a consumer advocacy group].

Aurora Sinai's downtown location is the reason it serves so many poor people, said John Whitcomb, director of Sinai's ER department.

"We are the last ones standing downtown. Someone please help us," he said. "The real villain here is an inadequate health care system."

Many hospital admissions are the result of poor patients not receiving primary care, said Bevan Baker, Milwaukee health commissioner. As they get sicker with conditions that could be managed in a primary care setting, they require expensive hospitalization, he said.

"The solutions are not wrapped around Aurora but around an understanding that care should be assessed through the primary care route," Baker said.

Reproductive rights update.

There are two items of note in today's news roundup:

• The Department of Justice has appealed their trial-court loss in San Francisco in which the district court declared the 2003 federal ban on late-term abortions unconstitutional; you can read the San Francisco Chronicle story here. Considering the unbroken string of losses they have suffered on this statute, which blatantly and baldly fails to include an exception to protect the health of the mother (as required by the Supreme Court in Stenberg), you have to wonder: Is this issue about anything other than staying in touch with the Republicans' conservative base and giving the president a debating point between now and November?
• Planned Parenthood (which is a plaintiff in the San Francisco litigation) has joined with the ACLU in a suit to take a parental-notification provision off the November 2 ballot; you can read the Tallahassee Democrat article here. The plaintiffs claim that the wording of the ballot item deceptively claims that it increases privacy protections: "'What it fails to tell voters is that it will reverse Florida Supreme Court decisions and take away the privacy rights guaranteed by the Florida constitution,' said ACLU attorney Randall Marshall." The ACLU's press release on the suit is here.

Uncompensated care and undocumented immigrants.

Two developments in the past couple of weeks provide enduring lessons in the politics of health care for undocumented immigrants.

On July 22 the Texas Attorney General issued Opinion No. GA-0219 to answer the question whether section 285.201 of the Health and Safety Code requires a hospital district to provide nonemergency public health services to undocumented persons who are otherwise ineligible for those benefits under federal law.

Background: In 2001, the Texas Attorney General told the Harris County Hospital District that federal law prohibited the district from providing free or discounted nonemergency health care to undocumented persons. Tex. Att'y Gen. Op. No. JC-0394 (2001). The Attorney General relied on the Federal Personal Responsibility and Work Opportunity Reconciliation Act ("PRWORA"), 8 U.S.C. §§ 1601-41 (2002), which provided that "undocumented or illegal aliens are ineligible for state and local public assistance, subject to specific exceptions." The Attorney General further observed that federal statute "preempts contrary state laws and renders illegal the state and local programs that provide public benefits to aliens contrary to its terms." The opinion concluded that, under the present state of Texas law, the federal statute prohibited the Harris County Hospital District. The opinion also noted, however, that the PRWORA contains an exception authorizing states to provide additional public benefits to undocumented persons. 8 U.S.C. § 1621(d) (2002).

That is precisely what the 78th Legislature did in 2003 when it added Tex. Health & Safety Code Ann. § 285.201 (Vernon Supp. 2004):

As authorized by 8 U.S.C. Section 1621(d), this chapter affirmatively establishes eligibility for a person who would otherwise be ineligible under 8 U.S.C. Section 1621(a), provided that only local funds are utilized for the provision of nonemergency public health benefits. A person is not considered a resident of a governmental entity or hospital district if the person attempted to establish residence solely to obtain health care assistance.

(emphasis added)

The question posed to the AG focused on the word "eligibility" and asked whether this provision requires a hospital district to furnish nonemergency public health benefits to undocumented persons, or, on the other hand, whether it merely permits a hospital district to do so.

Based upon the AG's reading of various dictionary definitions of "eligibility," as well as Texas caselaw, see Foreman v. Security Insurance Co. of Hartford, 15 S.W.3d 214 (Tex. App.-Texarkana 2000, no pet.) (requires WestLaw subscription), and legislative history, the AG concluded that "eligible," as used in this statute, means something less than "entitled," and therefore hospital districts are permitted but not required to provide nonemergency public health benefits to undocumented persons. This is bad news for undocumented immigrants, who can be turned away from hospitals with impunity unless they have an emergency condition, and it's bad news for the hospitals, which are faced with the Hobson's choice of admitting patients for treatment before their condition becomes life-threatening or waiting until the patients come to the hospitals' emergency departments hours, days, or weeks later with emergency medical conditions and the legal right to receive (more expensive) medical treatment. Of course, Texas (like most states) has never suggested how the care for these patients should be paid for.

Also on July 22, CMS announced a plan to implement a plan for hospitals and other providers to recoup $250 million a year for the next 4 years against the cost of providing unreimbursed health care services to undocument immigrants in emergency rooms. The plan can be read here. The plan would implement a provision in the Medicare reform act sets aside $1 billion over 4 years and requires CMS to have a plan in place by September 1. Comment: The amount that's been appropriated is a drop in the bucket, and it ignores the even more substantial costs of in-patient care for those emergency-department patients who have to be admitted in order to be stabilized as required by the Emergency Medical Treatment and Labor Act (EMTALA). But it's a start, and more of a start than we are seeing from the Lone Star State.

Maternal-fetal conflict, Texas style.

As reported in an article by Mary Alice Robbins in the Aug. 2 issue of Texas Lawyer, the Potter County DA is prosecuting a woman whose newborn tested positive for cocaine. The woman is charges with a violation of the Controlled Substances Act, Health & Safety Code § 481.122, which provides:

(a) A person commits an offense if the person knowingly delivers a controlled substance listed in Penalty Group 1, 1-A, 2, or 3 or knowingly delivers marihuana and the person delivers the controlled substance or marihuana to a person:
(1) who is a child . . . .
(c) An offense under this section is a felony of the second degree.
(d) In this section, "child" means a person younger than 18 years of age. . . .

It would be a stretch to apply this section to a pregnant woman who ingests cocaine and thereby "delivers" the controlled substance to her fetus, except for the fact that the 78th Texas Legislature passed S.B. 319 in 2003, which amended the definition of "person" in the Texas wrongful death statute and the Penal Code to include "an unborn child at every stage of gestation from fertilization until birth." The Legislature was careful, in amending both statutes, to make it clear that the new definition does not apply if the harm to the fetus is the result of conduct by the mother.

What am I missing here? First, the Legislature did not amend the Controlled Substances Act's definition of "child" to include an unborn child. So the amendments to the Wrongful Death Statute and Penal Code should be beside the point.

Second, with respect to the only Penal Code provisions that could conceivably apply to the alleged conduct (in addition to the Controlled Substances Act in the Health & Safety Code) -- which would include assault, endangering a child, and deadly conduct -- the Legislature made it clear that the new definition does not apply when the dangerous or harmful conduct is the mother's.

So if the 2003 change to the definition of "individual" doesn't apply, and the Legislature did nothing that would expand upon the class of protected persons in H&S Code § 481.122, this prosecution comes down to the now widely rejected theory that a woman can unlawfully "deliver" a controlled substance to a fetus prenatally. As terrible as it is for a woman to take cocaine while pregnant, there are plenty of good policy arguments against prosecuting a woman who does.

For health care providers, however, the Potter County DA's interpretation of the Controlled Substances Act is an ominous one. Reportable child abuse under chapter 261 of the Texas Family Code includes the following:

(I) the current use by a person of a controlled substance as defined by Chapter 481, Health and Safety Code, in a manner or to the extent that the use results in physical, mental, or emotional injury to a child; [or]
(J) causing, expressly permitting, or encouraging a child to use a controlled substance as defined by Chapter 481, Health and Safety Code.

It also includes

(B) causing or permitting the child to be in a situation in which the child sustains a mental or emotional injury that results in an observable and material impairment in the child's growth, development, or psychological functioning; [or]
(C) physical injury that results in substantial harm to the child, or the genuine threat of substantial harm from physical injury to the child, including an injury that is at variance with the history or explanation given and excluding an accident or reasonable discipline by a parent, guardian, or managing or possessory conservator that does not expose the child to a substantial risk of harm.

If any of these forms of abuse can be directed at an "unborn child," then physicians, nurses, and others who know the child tested positive for cocaine at birth have an obligation to inform Child Protective Services or local or state law enforcement authorities (Family Code § 103). This is a drastic expansion of current legal duties and would appear to fly in the face of the Supreme Court's 2001 decision in Ferguson v. City of Charleston.

I repeat: What am I missing?

Medical error: does it kill 195,000 annually?

When the IOM study, To Err Is Human (report brief), came out in 1999, it caused an uproar with its estimate that as many as 95,000 Americans a year die as the result of preventable medical error. According to HealthGrades, that estimate would have been twice as large if the IOM had included (1) failure to diagnose and treat a serious medical problem in time and (2) unexpected death in a low-risk hospitalization. HealthGrades bases its estimate on a review of 37 million Medicare records. Their report is HealthGrades Quality Study: Patient Safety in American Hospitals (July 2004).

Health care reform redux.

Tonight's Democratic National Convention kick-off will be punctuated by a lot of applause lines.  One of the biggest will be for health care reform.  The Clintons proved in 1993 just how volatile this issue can be, but the National Coalition on Health Care -- which claims to represent nearly 100 of the nation's largest businesses, unions, provider groups, insurers, pension funds, and other groups -- may have demonstrated last week that the country is at last ready to focus on access to care, as well as cost and quality.  From The Commonwealth Fund's "HealthBeat" for July 26:

A broad coalition of insurers, consumers, providers, labor unions, and other groups warned today that absent a dramatic overhaul of the health system in the near future, premiums will soar and the number of uninsured will rise sharply. Soaring health costs are reducing economic growth and new jobs, corporate profits, the competitiveness of corporations, and the viability of pensions, said the National Coalition on Health Care. . . .

The coalition said that if policymakers fail to act, premiums for family coverage will top $14,500 in 2006, and the number of uninsured will reach 51 million that year. In addition, the deficit will rise by trillions of dollars in coming decades, it added. The coalition calls for legislation covering all Americans within two or three years of enactment. Health cost increases should be brought in line with cost increases in other parts of the economy within five years. "Today's report is politically significant because it shows that there is broad support across most sectors of the economy and society, and across party lines for tough, system-wide reform," said coalition co-chair Paul Rogers, former Democratic House member from Florida. The coalition's honorary co-chairs are former Presidents Clinton, Bush, and Carter.

The NCHC's report, "Building A Better Health System," is worth a read.  As the Executive Summary makes clear, the Coalition has done a good job of identifying the most glaring needs of the health care system.  What remains to be seen is whether they -- or anyone else -- have a plan to implement the group's five specifications:

1. Health Care Coverage for All
• to be achieved within two to three years after the passage of legislation
• defined core benefit package
• employers and individuals able to purchase supplemental coverage beyond core package
• options for insuring all Americans include
     - employer mandates (supplemented with individual mandates as necessary)
     - expansion of existing public programs that cover subsets of the uninsured
     - creation of new programs targeted at subsets of the uninsured
     - establishment of a universal publicly financed program
• mandatory participation
• subsidies for less affluent

2. Cost Management
• within five years, bring increases in the costs and premiums associated with the core benefit package into alignment with increases in per capita gross domestic product
• increase the value for patients that is generated by any given level of health care spending
• measures include:
     - providing more and better information for patients, providers, and purchasers
     - improving quality and outcomes of care and reducing amount of unnecessary and injurious care
     - building national information technology infrastructure for health care
     - modernizing and simplifying administration
• urgent need for cost relief requires short-term constraints:
     - rates for reimbursing providers for care encompassed by core benefit package and
     - only after those rates take effect, limits on increases in insurance premiums for coverage defined by that package
• to facilitate comparisons, insurers required to set premiums separately for core benefit package and supplemental coverage

3. Improvement of Health Care Quality and Safety
• accelerated development of an integrated national information technology infrastructure for health care, including:
     - protocols for electronic patient records, prescription ordering, and billing
     - standards to protect privacy
     - mechanisms to incentivize and provide capital for the upfront investments necessary to build the infrastructure
• measures of process and outcomes quality to improve accountability and help payers and patients make better choices
• independent national board, with members drawn equally from public and private sectors, to coordinate public and private efforts to improve quality of care
• board also responsible for coordinating development of national practice guidelines
     - guidelines to be based on reviews, by panels of leading health care professionals, of research on impacts of technologies and procedures
- guidelines could be cited in malpractice cases as evidence of best medical practice
• board to update core benefit package to reflect changes in practice guidelines

4. Equitable Financing
• measures to reduce or eliminate cost-shifting across categories of insurance programs and payers
• mechanisms or sources that could be used, individually or in combination, to fund program costs include:
     - general revenues
     - earmarked taxes and/or fees
     - contributions required from employers
     - contributions required from individuals and families
• financial obligations to be adjusted, or subsidies provided, based on relative ability to pay for less affluent individuals, families, and employers

5. Simplified Administration
• assurance of coverage for all Americans and establishment of core benefit package to create consistent set of ground rules and reduce variations that now draw time and resources away from protection and advancement of health
• creation of an integrated national information technology infrastructure – including electronic patient records, prescription ordering, and billing – to reduce administrative complexity, costs, and medical errors
• national practice guidelines to reduce variability of care and billing and improve quality of care

The Coalition can't be faulted for failing to think big.  Specifically, its report sets out three premises that underlay their detailed specifications:

Health care reform must be a national priority.
Comprehensive health care reform is long overdue. Every year that reform is delayed, tens of millions of Americans live in peril, without health insurance; millions are harmed, and hundreds of thousands die needlessly, because of sub-standard care; and health care costs continue to spiral ever upwards.

The Coalition’s specifications are meant not just to encourage and help to frame a national debate about health care reform, but to create momentum for the passage of legislation. These specifications are an expression of operational intent: Our member organizations are determined to work with other organizations and with policymakers in both parties to secure the reforms described here.  Yes, we need a vigorous debate about health care policy — but what we really need is action, and soon.

Health care reform must be systemic.
The Coalition’s specifications were developed not as a shopping list of potential stand-alone initiatives, but as a linked series of targets, criteria, and options — meant to be adopted concurrently and to work together.  The vast American health care sector is exquisitely and elaborately interconnected. Partial or piecemeal reforms, even those conceived and implemented with the best of intentions, can produce unanticipated adverse consequences far from the focus or locus of those targeted reforms.

For example, a dramatic expansion of access, implemented without accompanying measures to improve quality and manage costs, could produce an overloaded health care system that delivers worse care (albeit to more people) at higher costs.  Similarly, constraints on costs (and reimbursements for care), pursued in isolation,
could compromise both access and quality.

A system is a set of institutions and processes that function together to achieve defined objectives. The Coalition’s specifications were designed to serve multiple goals simultaneously. We began our development of recommendations by agreeing on five core principles for reform (which appear below as section headings for our specifications).  Then, as our deliberations proceeded, we continuously revisited and recalibrated our recommendations to make sure that the individual components fused together into a sensible systemic strategy.

We believe that a systemic approach can increase not only the substantive
coherence of reform, but also its political feasibility. Thus, if constraints on health care cost increases were proposed in isolation, providers might understandably anticipate that their revenues going forward would be diminished. By contrast, if those same constraints were conjoined in a systemic strategy with an assurance of
coverage for all Americans and financing for their care, providers would receive payment for care that they now provide, with little or no compensation, to uninsured patients.

Health care reform must be system-wide.
The Coalition is calling for system-wide reforms, not for changes that would apply to only some payers, patients, or providers.  Unless reform is system-wide, gains in some sectors or for some groups are likely to be offset by losses elsewhere.  There is, in addition to this practical consideration, another compelling argument for making certain that reform is system-wide.  America is already a nation of health care haves and have-nots.  Reform should aim to assure that all Americans receive excellent
health care and are able to enjoy the quality of life and peace of mind for which such care is essential. Piecemeal reform that helps some categories of people to the detriment of others would not take us closer to an optimal health care system and could actually make it harder to attain.

Patient safety, quality bill heads to conference

Thanks to AHLA's Health Law Highlights for this summary of last week's events on the long-delayed patient safety and quality bill:

The Senate approved July 22 legislation intended to improve patient safety by promoting medical error reporting (Congressional Record). The "Patient Safety and Quality Improvement Act" would encourage voluntary error reporting by protecting patient safety data from disclosure so that healthcare providers could report medical errors without fear of being sued. The Senate Committee on Health, Education, Labor and Pensions unanimously approved S. 720 last year, while the House passed a similar bill in March 2003 (H.R. 663). [In parliamentary terms, the Senate incorporated S.720 in H.R. 663, as an amendment and then passed H.R. 663. So now the two versions of H.R. 663 go to conference to be reconciled.] The legislation was prompted by a 1999 Institute of Medicine Report [To Err Is Human] that found as many as 98,000 people die each year as a result of preventable medical errors.

FDA, preemption, & tort reform.

Preemption is one of those issues -- along with issue and claim preclusion, exhaustion of remedies, and justiciability -- that only a lawyer can love. It's technical, messy, and a one-way ticket to Palookaville for plaintiffs unlucky enough to bump up against it in their state-law-based tort suits.

Preemption starts off easy: Under the Supremacy Clause, federal laws take precedence over state laws. When a state law is inconsistent with federal law (whether in statutes, treaties, court decisions, or the Constitution), the state law gives way to the federal.

That may be the only easy thing about the doctrine. Figuring out what counts as a federal/state conflict, and then determining how broadly preemptive the federal law should be, can be very tricky.

Case in point: the federal laws that regulate drug and medical devices. Should the fact that a manufacturer has jumped through the hurdles of the federal Food, Drug and Cosmetic Act ("FDCA") to prove the safety and efficacy of its drug or device mean that an injured plaintiff cannot sue the manufacturer under state tort law, on the theory that "regulation" of these manufacturers by state tort law should be deemed preempted by the federal statutory regulation of drugs and devices that is already in place? With devices, it's particularly tricky, because medical devices are assisgned to "classes" based upon their potential harm to the user. Class I devices present the least potential harm and are subject to the least regulatory control. Class III devices, on the other hand, go through the most exacting level of agency regulation. When it comes to preemption of state tort law, different levels of regulation might very well be viewed in a different light and produce different results.

In 1996, the Supreme Court had an opportunity to consider the preemptive effect of federal law in a Class III device case. In Medtronic v. Lohr, the Court had to figure out the preemptive effect of language added to the FDCA by the Medical Device Amendments of 1976:

Except as provided in subsection (b) of this section, no State or political subdivision of a State may establish or continue in effect with respect to a device intended for human use any requirement (1) which is different from, or in addition to, any requirement applicable under this chapter to the device, and (2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under this chapter.

The Court concluded that -- despite the relative rigor with which Class III devices are regulated -- the federal statutory language did not preempt state-law claims for negligent design, negligent manufacture, and failure to warn. Primary among the the Court's reasons was the absence of any federal cause of action for injured consumers, so that acceptance of the manufacturers' argument that state law claims are preempted would have left plaintiffs with no remedy whatsoever. It was also important to the Court that with respect to the device involved in this case, Medtronic did not actually go through the high hurdles of Class III regulation, because it successfully claimed that its device was "substantially equivalent" to other peviously approved devices.

Since 1996, the FDA has taken the position that federal law is not broadly preemptive when it comes to state laws that would hold manufacturers to a higher standard than the federal one -- in effect arguing that federal law sets a floor when it comes to design, manufacturing practices, and labeling, but not a ceiling. Starting in 2002, however, the Bush Administration has taken the position that federal law is broadly preemptive and sets both a floor and a ceiling. The result of this shift can be seen in opinions like the Third Circuit's last Tuesday in Horn v. Thoratec Corp. (No. 02-4597), in which the court -- relying heavily on a brief filed by the Bush Administration as friend of the court -- concluded that Medtronic was not controlling precedent and the plaintiff's state tort claims were preempted by the federal law. The principal reason for dissing Medtronic was the fact that the device in the Horn case had in fact gone through the rigorous pre-market approval process for Class III devices rather than rely on the generic requirements that apply to devices that seek marketing approval under the "substantial equivalence" test.

Although this distinction appears to have been on the Supreme Court's mind in Medtronic and has much to recommend itself as a matter of statutory text and regulatory policy, its broad application to claims such as Mrs. Horn's (and numerous other plaintiffs who have been bounced out of court by the Bush Administration's zealous advocacy on behalf of manufacturers) represents a new chapter in the Bush Administration's pursuit of "tort reform," a chapter that leaves many injured patients and their survivors with no relief at all. "Compassionate conservatism"? Hah! Meanwhile, you can read about the shift and its political implications in a good article by Robert Pear in today's New York Times.

Death penalty & psychotropic drugs.

On July 21st, U.S. District Judge Royal Fergeson (U.S. District Court for the Western District, Pecos Division) granted a Texas death-row inmate's petition for habeas corpus relief in an 80-page opinion that (1) blows the state's case out of the water; (2) includes harrowing accounts of prosecutorial misconduct and ineffective assistance of counsel; (3) depicts the Texas Court of Criminal Appeals (our highest state court for the review of criminal convictions) as incompetent, uncaring, or both; and (4) declares unconstitutional the administration of antipsychotic drugs to the defendant without his knowledge or consent during the pre-trial and trial despite the fact that the defendant showed no symptoms of psychosis. The result of that last item was that during the guilt and punishment phase of the trial, the defendant was noticeably without facial expression or other affect, making him appear to be supremely indifferent to the charges, the evidence, the trial, or much of anything else.

I have two questions: (1) What do you suppose the U.S. Court of Appeals for the Fifth Circuit will do with this on appeal? (2) What did the physicians who ordered the daily doses of Haldol and Perphenazine think they were doing?

Drug reimportation: video conference.

The Alliance for Health Reform and Kaiser Family Foundation put on a 1.5 hour conference on reimportation yesterday. The video plus PowerPoint slides are available here. Of especial note are the slides from Donna Vogt and Susan Thaul (both of the Congressional Research Service) comparing and contrasting the competing bills, which are:

• HR 2427 (not yet available; try here) (Gutnecht)
• S 2307 (Grassley)
• S 2328 (Dorgan)
• s 2493 (Gregg)

Unfortunately, the slides presented by Tom McGinnis, Director of Pharmacy Affairs, FDA, aren't included on the Kaiser web site (above) or the Alliance's web site (though the Alliance site has a wealth of supplemental materials). The slides may eventually show up on the FDA web site, but until then, there's the July 14 testimony of William K. Hubbard, Associate Commissioner for Policy and Planning, FDA, before the Senate Judiciary Committee.

FTC/DOJ: Abolish CON laws.

It had to happen sooner or later: One of the mainstays of federal health care policy for 20 years -- state Certificate of Need (CON) laws -- are now being vilified by the joint FTC/DOJ task force on competition in health care. The group also counseled states not to pass laws that authorize collective bargaining by physicians (too late, in the case of Texas, but our law is so cumbersome and intrusive that it has been virtually a dead letter since its enactment) and was critical of state regulation of pharmacy benefit managers and state-mandated health insurance benefits.

The DOJ/FTC report was issued today and can be found here.

Long-term care: crisis.

Molly Ivins isn't the first, only the latest, in a long and growing line of commentators who see long-term care as The Next Big Thing in health care. This part of the health care industry is woefully undercaptalized and underdeveloped, and if things seem bad at the local nursing home now, wait until the Boomers start hitting those places (the oldest Boomers start turning 60 next year). Molly's most recent column highlights the problem. (For the next few days, it'll pop up when you click here. After that, click on the Archive window "To See Earlier Columns" and then click on July 20, 2004.)

Other recent coverage of this issue gives a glimpse into the looming crisis: "Long-Term Care Tests Governors" (Olympia (Wash.) Olympian) . . . "Congressional Briefing on Long-Term Care Alternatives" (U.S. Newsire) . . . Deborah Stone: "Shopping for Long-Term Care" (Health Affairs) . . .

JCAHO hit in GAO report for CMS.

If you can understand the title of this post without a translator, you're a true health-law nerd!

As the Associated Press reports today (courtesy of the Indianapolis Star), the Government Accountability Office (GAO (formerly the "General Accounting Office")) has filed a report that is extremely critical of the performance of the Joint Commission for Accreditation of Healthcare Organizations (JCAHO (formerly the Joint Commission for the Accreditation of Hospitals)) in its role as the designated Medicare accreditation-surveyor for the Centers for Medicare and Medicaid Services (CMS (formerly the Health Care Financing Administration). (The link to the GAO report is probably not a stable address; if it stops working, try here.)

The report includes the following:

JCAHO’s pre-2004 hospital accreditation process did not identify most of the hospitals found by state survey agencies in CMS’s annual validation survey sample to have deficiencies in Medicare requirements. In comparing the results of the two surveys, CMS considered whether it was reasonable to conclude that the deficiencies found by state survey agencies existed at the time JCAHO surveyed the hospital. In a sample of 500 JCAHO-accredited hospitals, state agency validation surveys conducted in fiscal years 2000 through 2002 identified 31 percent (157 hospitals) with deficiencies in Medicare requirements. Of these 157 hospitals, JCAHO did not identify 78 percent (123 hospitals) as having deficiencies in Medicare requirements. For the same validation survey sample, JCAHO also did not identify the majority -- about 69 percent -- of deficiencies in Medicare requirements found by state agencies. Importantly, the number of deficiencies found by validation surveys represents 2 percent of the 11,000 Medicare requirements surveyed by state agencies in the sample during this time period. At the same time, a single deficiency in a Medicare requirement can limit the hospital’s capability to provide adequate care and ensure patient safety and health. Inadequacies in nursing practices or deficiencies in a hospital’s physical environment, which includes fire safety, are examples of deficiencies in Medicare requirements that could endanger multiple patients.

The potential of JCAHO’s new hospital accreditation process to improve the detection of deficiencies in Medicare requirements is unknown because the process was just implemented in January 2004. JCAHO plans to move from using announced to unannounced surveys in 2006, which would afford JCAHO the opportunity to observe hospitals’ operations when the hospitals have not prepared in advance to be surveyed. In addition, the pilot test of the new accreditation process was of limited value in predicting whether it will be an improvement over the pre-2004 process in detecting deficiencies. Limitations in the pilot test included that hospitals were not randomly selected to participate; that observers from JCAHO accompanied each surveyor, thus possibly affecting surveyors’ actions; and that JCAHO evaluated the results instead of an independent entity.

CMS has limited oversight authority over JCAHO’s hospital accreditation program because the program’s unique legal status effectively prevents CMS from taking actions that it has the authority to take with other health care accreditation programs to ensure satisfactory performance. For example, requiring JCAHO’s hospital accreditation program to submit to a direct review process or placing the program on probation while monitoring its performance. Further, CMS relies on a measure to evaluate how well JCAHO’s hospital accreditation program detects deficiencies in Medicare requirements that provides limited information and can mask problems with program performance, uses statistical methods that are insufficient to assess JCAHO’s performance, and has reduced the number of validation surveys it conducts.

The AP story provides a little more detail:

Many of the overlooked problems related to fire safety, while others involved substandard care.

In a Texas hospital, a patient died after receiving a double dose of narcotics in the emergency room. A California hospital lacked "a sanitary environment to avoid sources and transmission of infections and communicable diseases and failed to develop a system for ensuring the sterilization of medical instruments," the report said.

Predictably, JCAHO isn't pleased with the report:

Commission President Dennis O'Leary said his group made sweeping changes to the accreditation process earlier this year.

"In our view, it is irresponsible to alarm the public using statistics that have little meaning," O'Leary said in response to the GAO report.

What the AP story doesn't say (and I can't find it in the GAO report, either) is that in the 20+ years JCAHO has been in the "deeming" business with CMS, a few provisionally accredited hospitals have been denied full accreditation, but no fully accredited hospital has ever lost its accreditation. (If any reader can cite me an example that disproves this statement, I'd love to see it.) Long viewed as a toothless tiger by many in the industry, JCAHO ought to feel the sting of this GAO report. And, as denials go, President O'Leary's face-saving comment that "we're better than that now" isn't much of one.

Genetic screening and . . .

Amy Harmon has a good article in today's N.Y. Times about genetic screening -- pre- and post-conception -- and (i) the lack of uniform professional standards for when to offer screening, (ii) the lack of government regulation of the field, and (iii) the growing belief that prospective parents are entitled at least to the information about which tests are available, which ones are covered by insurance, and what the risks are whichever way parents decide to go. Right now, its the Wild, Wild West, but the combined forces of consumer demand, tort law's search for evolving professional standards, and the self-protective instincts of professional societies suggest that there's going to be a new marshal in town, sooner rather than later.

Drug reimportation.

Here's a terrific audio report from Congressional Quarterly's Capitol Hill Bureau Chief Mary Agnes Carey on the status of the House and Senate reimportation bills, the prospects of anything coming out of this week's markup session, and the political angle on this issue in 2004. If you have trouble opening the audio file, here's a link to the transcript of this broadcast.

Blame the lawyers.

Today's on-line Wall Street Journal has the results of an interesting survey about Americans' concerns over health care quality (requires subscription). 

Public concern about medical, surgical and diagnostic errors is high and many Americans have doubts about the ability of medical institutions to prevent these types of errors, according to the latest WSJ Online/Harris Interactive health poll.

Sixty-three percent of those polled say they are "extremely concerned" or "very concerned" about medication errors, such as receiving the wrong medicine, that can take place in a hospital. And more than half of respondents are extremely or very concerned about surgical errors.

And the source of this problem?  According to Vice-President Cheney (as reported by Ceci Connolly in today's Washington Post, and brought to my attention by former student Jonathan Childers):

"This problem doesn't start in the waiting room," Cheney said in remarks released by the campaign. "It doesn't start in the operating room. The problem starts in the courtroom."

With lawsuits on the rise and multimillion-dollar awards making headlines, physicians and many Republicans say limiting damages is the solution to the broader challenges confronting the U.S. health system. In their analysis, capping damages will lead to lower malpractice premiums, which will reduce doctors' use of unnecessary tests and procedures, known as defensive medicine. Those improvements will result in better care at a lower cost, enabling more people to buy coverage, they say.

Here's the quote you will hear over and over again from the Administration between now and the November election: "When it comes to the legal crisis in American health care, the Kerry-Edwards ticket is on the side of personal-injury trial lawyers, and the Bush-Cheney ticket is on the side of doctors and patients." Easy on the ears, easy on the brain. Sure beats having an actual plan to deal with this country's health care problems, doesn't it?

Class actions suits against non-profit hospitals.

Julie Appleby has a review piece in today's USA Today. From the sidebar:

• Several high-profile law firms have filed 31 cases against non-profit hospitals and hospital chains since late June. The cases make similar allegations, including: Some hospitals violate an implicit contract with the government to provide charity care in exchange for tax-exempt status by charging uninsured patients more than the insured or aggressively pursuing debts from low-income patients.
• Some facilities have large cash reserves they should use to provide charity care.
• They allow for-profit entities, such as doctor groups, to use their facilities to earn a profit.
• Hospitals named include the Cleveland Clinic; New York-Presbyterian; Sutter Health in Sacramento; Advocate Health Care Network in Chicago; Phoebe Putney Health Systems in Albany, Ga.; Baptist Health Systems in Alabama; and Catholic Healthcare Partners in Cincinnati.

The article offers some quotations I haven't seen in previous reporting:

Patient advocates, who were the first to publicize some of the concerns now included in Scruggs' cases, have mixed thoughts on the lawsuits. "This is a huge wake-up call," says Claudia Lennhoff of the Champaign County Health Care Consumers group in Illinois.

They also worry about the financial effect of the cases on non-profits.

"Having more scrutiny of billing practices is a good thing, but the risk is we're not taking on big tobacco, we're taking on a vital service," says Mark Rukavina of the Access Project, a national resource center that works with local groups on health care issues. "It's an industry I want to preserve, not bring down."

Some health law attorneys are skeptical that Scruggs' arguments will succeed.

"The behaviors they're targeting (billing and collection practices against the uninsured) are atrocious in some circumstances, but they're not illegal," says Gregg Bloche, a law professor of health law at Georgetown University. "The suits will fail."

Nor do they think there is an implied contract between hospitals and the government.

"That's never been recognized in the law," says Stuart Gerson, a partner at Epstein Becker & Green in Washington, D.C., who represents a hospital being sued. "The idea of an individual citizen, a taxpayer, seeking to enforce charitable obligations is, at least, a very novel argument that finds little support."

If any laws are being broken by the common hospital practice of allowing for-profit doctors to use their facilities, or if facilities are improperly steering business to trustees' companies, those arguments should be heard by taxing authorities or federal and state antitrust or anti-kickback regulators, Gerson says.

The lawsuits are renewing debate over the legal and ethical responsibility the nation's non-profits have to provide charity care.

"The IRS has never been really clear about what the grant of tax-exempt status means," says attorney John Reiss of the law firm Saul Ewing in Philadelphia. "It's never been clear that it actually commits you to providing any particular amount of charity care or anything else."

Non-profit hospitals say they provide a variety of charitable services. Hospitals have different ways of classifying such care, with some saying charity is providing medical services to anyone who walks in the ER, regardless of their ability to pay.

Others consider write-offs for bad debt charity care or financing community services, such as supporting health clinics.

More on designer babies.

The Sunday Independent (U.K.) has a report in today's issue:

A two-year-old boy who needs urgent treatment to cure a rare and potentially fatal blood disorder is at the centre of a fresh row over creating "designer babies" with human embryos.

The Human Fertility and Embryology Authority (HFEA) is poised to relax its rules on using genetic screening for medical treatments on Wednesday. The decision will have profound consequences for the life of Joshua Fletcher and children like him.

Joshua suffers from a rare genetic defect called Diamond-Blackfan anaemia, one requiring regular blood transfusions. His parents, Joe and Julie Fletcher, from County Antrim, Northern Ireland, have asked the HFEA to permit the genetic selection of a healthy sibling to help cure him by using that baby to donate healthy stem cells.

The present HFEA rule prevents parents selecting embryos solely because that child will have desirable characteristics, even if they will save another life - the central issue in Joshua's case.

Two years ago, the HFEA was heavily criticised for rejecting a similar bid by the family of Charlie Whitaker, who suffered from the same disorder. His parents instead flew to Chicago for fertility treatment, and had a genetically matched son. . . .

The HFEA's possible relaxation of the rules in this field is already stirring up opposition:

At present, embryos can only be screened before implantation using a technique called pre-implantation genetic diagnosis if there is a significant risk that the baby will itself be born with a critical or extremely serious genetic condition. Using that child to then treat another child is currently seen by the HFEA as a secondary benefit of the technique.

The proposal, which follows an HFEA rule review, has already provoked a fierce controversy over the religious and medical ethics of creating "made to order" babies simply to save another child's life. Critics claim embryo selection could easily lead to parents selecting babies because of their hair colour, gender or intelligence, and eventually to cloning.

Yesterday, a Christian think tank warned that an HFEA rule relaxation would be instantly challenged in the courts. Roger Smith, of the Centre for Bioethics and Public Policy, said: "The law says the welfare and best interests of the child being born has to be their primary consideration - not creating one life for the sake of another. That seems to us to be outside ethical boundaries."

The HFEA is also under intense pressure from fertility experts, parents and medical charities to soften its regulations after rejecting earlier bids by other families with Diamond-Blackfan anaemia. One family flew to the United States for treatment. Three further families with children with Diamond-Blackfan anaemia are preparing bids to the HFEA.

An HFEA spokeswoman said the authority could either reject the Fletchers' proposal or seek further information before making a decision.