[Source: Health and Life Sciences Law Daily, November 27, 2007 - AHLA]
CQ Healthbeat (11/27, Carey) reports, "The Centers for Medicare and Medicaid Services (CMS) on Monday sent a series of options to Capitol Hill to change Medicare hospital payment so that it is based on the quality of care a facility delivers." Building on the existing Medicare "Value-Based Purchasing Program," which "pays hospitals more Medicare money if they report data on various performance measures designed to assess quality," a "percentage of the hospital's base operating payment for each discharge -- its 'diagnosis related group' or DRG payment -- would depend on its quality performance." Kerry Weems, CMS acting administrator, suggested that Congress could potentially implement the proposals "as a savings tool."
The Wall Street Journal (11/27, D3, Francis) described the report as offering "sweeping changes to the way" CMS "reimburses hospitals, outlining a plan that would essentially redistribute cash by reducing payments across the board and then giving providers a chance to 'earn back' money by meeting quality-of-care thresholds." However, "Some health-policy experts warn that incentive programs can backfire if structured poorly." Currently, "Medicare makes up nearly half of some hospitals' revenues, and many operate on razor-thin margins." In 2005, 50 percent of "hospitals netted less than 3.75 percent, according to a study by Cleverley and Associates."
Tuesday, November 27, 2007
Friday, November 16, 2007
CBO Projects Health Care Costs Could Reach 49% of GDP by 2082
In a November 2007 CBO Study, "The Long-Term Outlook for Health Care Spending," the CBO suggested that, in the absence of changes in federal law:
- Total spending on health care would rise from 16 percent of gross domestic product (GDP) in 2007 to 25 percent in 2025, 37 percent in 2050, and 49 percent in 2082.
- Federal spending on Medicare (net of beneficiaries' premiums) and Medicaid would rise from 4 percent of GDP in 2007 to 7 percent in 2025, 12 percent in 2050, and 19 percent in 2082.
"In 2005, the most recent year for which data are available, national spending on health care totaled nearly $1.9 trillion, or 14.9 percent of the nation’s GDP. Some 55 percent of the total was financed privately, and the rest came from public sources (see Table 1). Payments by private health insurers were the largest component of private spending, accounting for 37 percent of national health expenditures. Consumers’ out-of-pocket expenses, which include payments for deductibles and c
opayments for services covered by insurance as well as payments for services not covered by insurance, accounted for 13 percent of national health expenditures. Other sources of private funds, from philanthropy and on-site clinics that some employers maintain for their workers, accounted for 4 percent of the total.
Federal spending on Medicare accounted for 18 percent of national health expenditures in 2005, while federal and state spending on Medicaid accounted for 17 percent. A variety of other public programs accounted for 10 percent of national health expenditures, including ones by state and local health departments, the Department of Veterans Affairs, and the Department of Defense; workers’ compensation programs; and the State Children’s Health Insurance Program."
Read CBO Study
Tennessee Supreme Court Holds Attorney-In-Fact Could Bind Resident To Arbitration Agreement
[Source: Health Lawyers Weekly, November 16, 2007 - AHLA]
A durable power of attorney for healthcare authorizes the attorney-in-fact to enter into an arbitration agreement on behalf of a resident as part of a nursing home’s admissions process, the Tennessee Supreme Court held November 8.
Thus, the appeals court upheld the pre-dispute arbitration agreement in so far as plaintiff argued the attorney-in-fact could not bind the principal and that the agreement was otherwise unenforceable or violated public policy.
The high court did remand for further proceedings, however, on whether the arbitration agreement was an unconscionable contract of adhesion. Continue Reading
Owens v. National Health Corp., No. M2005-01272-SC-R11-CV (Tenn. Nov. 8, 2007).
[Corrected Opinion]
A durable power of attorney for healthcare authorizes the attorney-in-fact to enter into an arbitration agreement on behalf of a resident as part of a nursing home’s admissions process, the Tennessee Supreme Court held November 8.
Thus, the appeals court upheld the pre-dispute arbitration agreement in so far as plaintiff argued the attorney-in-fact could not bind the principal and that the agreement was otherwise unenforceable or violated public policy.
The high court did remand for further proceedings, however, on whether the arbitration agreement was an unconscionable contract of adhesion. Continue Reading
Owens v. National Health Corp., No. M2005-01272-SC-R11-CV (Tenn. Nov. 8, 2007).
[Corrected Opinion]
Shareholders sue Sanofi-Aventis after FDA rejects diet drug
[Source: Health and Life Sciences Law Daily, November 16, 2007 - AHLA]
Fortune Magazine (11/16, Simons) reports, "The world's third-largest drug company, Sanofi-Aventis is facing a shareholder lawsuit for allegedly hyping a weight-loss pill that eventually failed to pass FDA muster." The class-action lawsuit alleges "that Sanofi's statements regarding anti-obesity drug, Zumulti, 'were materially false and misleading' because they 'concealed data concerning Zumulti's propensity to cause depression.'" The lawsuit "calls into question the expectations investors have regarding any yet-to-be-approved drug. Since 2004's Vioxx (rofecoxib) withdrawal, the FDA has been under pressure to be more safety-minded." However, some legal experts "contend that cases such as the one filed against Sanofi are difficult to prove." John Coffee, professor of law at Columbia Law School, said that in cases like this one, "plaintiffs need to prove there was an intent to defraud, not just woeful misjudgment."
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Jeanne Whalen, in WSJ Health Blog, discusses the FDA's concerns with Sanofi-Aventis’s diet pill: "Sanofi-Aventis’s weight-loss pill rimonabant ran into trouble with the FDA this summer over concerns about the pill’s psychiatric side effects, such as suicidal thinking. Now the drug, dissed by advisers to FDA but sold in Europe and Latin America, is getting knocked in an analysis that concludes it increases a person’s risk for depression and anxiety." Continue reading
Fortune Magazine (11/16, Simons) reports, "The world's third-largest drug company, Sanofi-Aventis is facing a shareholder lawsuit for allegedly hyping a weight-loss pill that eventually failed to pass FDA muster." The class-action lawsuit alleges "that Sanofi's statements regarding anti-obesity drug, Zumulti, 'were materially false and misleading' because they 'concealed data concerning Zumulti's propensity to cause depression.'" The lawsuit "calls into question the expectations investors have regarding any yet-to-be-approved drug. Since 2004's Vioxx (rofecoxib) withdrawal, the FDA has been under pressure to be more safety-minded." However, some legal experts "contend that cases such as the one filed against Sanofi are difficult to prove." John Coffee, professor of law at Columbia Law School, said that in cases like this one, "plaintiffs need to prove there was an intent to defraud, not just woeful misjudgment."
- - - - - - -
Jeanne Whalen, in WSJ Health Blog, discusses the FDA's concerns with Sanofi-Aventis’s diet pill: "Sanofi-Aventis’s weight-loss pill rimonabant ran into trouble with the FDA this summer over concerns about the pill’s psychiatric side effects, such as suicidal thinking. Now the drug, dissed by advisers to FDA but sold in Europe and Latin America, is getting knocked in an analysis that concludes it increases a person’s risk for depression and anxiety." Continue reading
Thursday, November 15, 2007
Patient Privacy Rules under HIPAA May Come At a Cost
Kaiser Daily Health Policy Report: The medical privacy rule issued following passage of the Health Insurance Portability and Accountability Act might limit the ability of epidemiologists to conduct studies in the U.S., according to a study published on Wednesday in the Journal of the American Medical Association, the Pittsburgh Post-Gazette reports (Fahy, Pittsburgh Post-Gazette, 11/13).
The HIPAA Federal Privacy Rule, implemented in 2003, allows health care providers to share patient medical records for the purposes of treatment and other "health care operations." Providers do not have to obtain written consent before they disclose medical records but are required to inform patients of their rights and make a "good-faith effort" to obtain written acknowledgment from patients that they have received the information. Providers must obtain consent from patients before they can disclose medical records in "nonroutine" cases (Kaiser Daily Health Policy Report, 7/3).
For the study, researchers led by Roberta Ness, chair of the epidemiology department at the University of Pittsburgh Graduate School of Public Health, e-mailed surveys to more than 10,000 members of 13 epidemiology societies. Among the more than 1,500 respondents, two-thirds said that the medical privacy rule has limited their ability to conduct studies, and one in nine said that the rule prompted them to abandon a potential study, the study found (Johnson, AP/Chicago Tribune, 11/13). Only one-fourth of respondents said that the rule improved medical privacy for study participants, according to the study.
Ness said, "The privacy rule has made research more costly and time consuming" (Pittsburgh Post-Gazette, 11/13). According to the AP/Tribune, participants in the study, commissioned by the Institute of Medicine, "could have answered the survey more than once," and those "with strong feelings may have been more likely to participate, which would have skewed the results" (AP/Chicago Tribune, 11/13).
An abstract of the study is available online.
The HIPAA Federal Privacy Rule, implemented in 2003, allows health care providers to share patient medical records for the purposes of treatment and other "health care operations." Providers do not have to obtain written consent before they disclose medical records but are required to inform patients of their rights and make a "good-faith effort" to obtain written acknowledgment from patients that they have received the information. Providers must obtain consent from patients before they can disclose medical records in "nonroutine" cases (Kaiser Daily Health Policy Report, 7/3).
For the study, researchers led by Roberta Ness, chair of the epidemiology department at the University of Pittsburgh Graduate School of Public Health, e-mailed surveys to more than 10,000 members of 13 epidemiology societies. Among the more than 1,500 respondents, two-thirds said that the medical privacy rule has limited their ability to conduct studies, and one in nine said that the rule prompted them to abandon a potential study, the study found (Johnson, AP/Chicago Tribune, 11/13). Only one-fourth of respondents said that the rule improved medical privacy for study participants, according to the study.
Ness said, "The privacy rule has made research more costly and time consuming" (Pittsburgh Post-Gazette, 11/13). According to the AP/Tribune, participants in the study, commissioned by the Institute of Medicine, "could have answered the survey more than once," and those "with strong feelings may have been more likely to participate, which would have skewed the results" (AP/Chicago Tribune, 11/13).
An abstract of the study is available online.
CMS Proposes E-Prescribing Standards
Healthcare Financial Management Association (HFMA): On Nov. 13, HHS Secretary Mike Leavitt announced that the department, through the Centers for Medicare and Medicaid Services (CMS), is proposing rules to adopt new standards to advance the use of electronic prescribing (e-prescribing) for formulary and benefit as well as medication history transactions used under the Medicare prescription drug benefit. The proposed standards will be published in the Nov. 16 Federal Register.
The Medicare Modernization Act of 2003 requires CMS to adopt final standards for e-prescribing. All providers and pharmacies transmitting prescriptions electronically for Medicare-covered drugs are required to comply with any CMS standards in effect. The standards cover:
The Medicare Modernization Act of 2003 requires CMS to adopt final standards for e-prescribing. All providers and pharmacies transmitting prescriptions electronically for Medicare-covered drugs are required to comply with any CMS standards in effect. The standards cover:
- Transactions between prescribers and dispensers for new prescriptions; refill requests and responses; prescription change requests and responses; prescription cancellation, request, and response; and related messaging and administrative transactions
- Eligibility and benefits queries and responses between prescribers and Part D sponsors
- Eligibility queries between dispensers and Part D sponsors
Download the proposed standards.
The Joint Commission Annual Report Shows Further Improvement in Health Care Quality in Nation’s Hospitals
The Joint Commission, in a recent press release, shows that according to its second annual report on health care quality and patient safety in the nation's hospitals, American hospitals are making measurable strides in the quality of care provided for patients with heart attacks, heart failure, pneumonia and surgical conditions.
Among the specific findings in the 2007 report:
Theo Francis in WSJ Health Blog comments on the JC report.
Among the specific findings in the 2007 report:
- Accredited hospitals continue to show measurable improvements in performance. The magnitude of improvement from 2002 to 2006 ranges from 3.6 percent to 52.2 percent. Some improvements over the five-year period of data collection - such as in providing smoking cessation advice - have been dramatic. Hospitals provided this advice to 89.4 percent of patients admitted with pneumonia in 2006 compared with only 37.2 percent of such patients in 2002. Hospitals also demonstrated 90 percent or higher compliance with 10 of 16 National Patient Safety Goal requirements that address issues such as medication safety, caregiver communication and preventing patient falls.
- Requiring hospitals to follow standardized processes for quality measurement, reporting and improvement has contributed significantly to the positive results. For measures tracked for the first time in 2005, performance was generally lower and more variable than for measures tracked since 2002. This demonstrates a clear correlation between performance measurement and quality improvement. Much of the improvement reflected in this report can be attributed to the consistent application of focused, evidence-based measures which are the foundation of the Joint Commission’s performance measurement endeavors.
- Room for improvement exists for most of the quality measures. A 90 percent compliance level was achieved for only four of 22 quality-related measures tracked during 2006. In addition, certain treatments are not being performed consistently for some measures in place since 2002. For example, two measures introduced in 2002 that relate to prescribing of ACE inhibitors at discharge for patients with heart failure or with heart attack show the most room for improvement, with hospitals offering these treatments only 64 and 56 percent of the time, respectively.
- Hospitals continue to be challenged in meeting certain patient safety requirements. Non-compliance rates for six of the 16 National Patient Safety Goal requirements range between 16 and 37 percent. While some of this performance can be explained by more searching during on-site evaluations by Joint Commission survey teams, a number of hospitals appear to be struggling with the re-design of patient care processes - such as the reconciliation of medication lists when patients move from one care site to another - that the goal requirements are seeking.
- Significant variability exists in the performance of hospitals by state, as well as between the highest- and lowest-performing hospitals. For example, on the measure of providing pneumococcal vaccination, performance ranged from 55.5 percent to 91 percent. On specific measures of surgical care, the difference between the highest state rate and the lowest state rate ranged as high as 80 percent.
Theo Francis in WSJ Health Blog comments on the JC report.
Wednesday, November 14, 2007
New TN law sets forth parameters for reasonable non-compete covenants between health care providers and employees
Public Chapter 487
NON-COMPETE COVENANTS BEWEEN HEALTH CARE PROVIDERS AND EMPLOYEES
This new law sets forth parameters for reasonable non-compete covenants between health care providers and employees upon termination or conclusion of the employment or contractual relationship. It applies to health care providers licensed by the Board of Registration in Podiatry, Board of Chiropractic Examiners, Board of Dentistry, Board of Medical Examiners, Board of Optometry and Board of Examiners in Psychology. It does not apply to physicians who specialize in the practice of emergency medicine or radiology.
The restriction must be set forth in employment agreement or other written document signed by the health care provider and the employing or contracting entity and must be for two years or less. The maximum allowable geographic restriction is the greater of a ten mile radius from the primary practice site of the health care provider while employed or contracted or the county in which the primary practice of the health care provider while employed or contracted is located or there is no geographic restriction but the health care provider is restricted from practicing his or her profession at any facility at which the employing or contracting entity provided services while the health care provider was employed or contracted with the employing or contracting entity. Any restriction under this subsection shall not be binding on a health care provider who has been employed by, or under contract with, the employing or contracting entity for at least six years.
It also allows that an agreement entered into in conjunction with the purchase or sale of a health care provider's practice, or all or substantially all of the assets of the health care provider's practice, may restrict such health care provider's right to practice his or her profession, provided that the duration of the restriction and the allowable area of the restriction are reasonable under the circumstances. There shall be a rebuttable presumption that the duration and area of restriction agreed upon by the parties in such an agreement are reasonable.
The complete text of the Public Act, including provisions for any areas of exemption; enforcement of the Act; and action to be taken for violations of the Act, is available at here.
This law becomes effective on January 1, 2008.
. . . . . . . . . .
Note: This law effectively overrules Murfreesboro Medical Clinic, P.A. v. Udom, 166 S.W.3d 674 (Tenn. 2005)
NON-COMPETE COVENANTS BEWEEN HEALTH CARE PROVIDERS AND EMPLOYEES
This new law sets forth parameters for reasonable non-compete covenants between health care providers and employees upon termination or conclusion of the employment or contractual relationship. It applies to health care providers licensed by the Board of Registration in Podiatry, Board of Chiropractic Examiners, Board of Dentistry, Board of Medical Examiners, Board of Optometry and Board of Examiners in Psychology. It does not apply to physicians who specialize in the practice of emergency medicine or radiology.
The restriction must be set forth in employment agreement or other written document signed by the health care provider and the employing or contracting entity and must be for two years or less. The maximum allowable geographic restriction is the greater of a ten mile radius from the primary practice site of the health care provider while employed or contracted or the county in which the primary practice of the health care provider while employed or contracted is located or there is no geographic restriction but the health care provider is restricted from practicing his or her profession at any facility at which the employing or contracting entity provided services while the health care provider was employed or contracted with the employing or contracting entity. Any restriction under this subsection shall not be binding on a health care provider who has been employed by, or under contract with, the employing or contracting entity for at least six years.
It also allows that an agreement entered into in conjunction with the purchase or sale of a health care provider's practice, or all or substantially all of the assets of the health care provider's practice, may restrict such health care provider's right to practice his or her profession, provided that the duration of the restriction and the allowable area of the restriction are reasonable under the circumstances. There shall be a rebuttable presumption that the duration and area of restriction agreed upon by the parties in such an agreement are reasonable.
The complete text of the Public Act, including provisions for any areas of exemption; enforcement of the Act; and action to be taken for violations of the Act, is available at here.
This law becomes effective on January 1, 2008.
. . . . . . . . . .
Note: This law effectively overrules Murfreesboro Medical Clinic, P.A. v. Udom, 166 S.W.3d 674 (Tenn. 2005)
FDA to hear arguments over proposed new "behind-the-counter" drug class.
[Source: Health and Life Sciences Law Daily, November 14, 2007 - AHLA]
HealthDay (11/14, Reinberg) reports, "Experts at the U.S. Food and Drug Administration are meeting Wednesday to hear arguments on whether or not pharmacists might someday bypass doctors and directly provide consumers with certain drugs that now require a prescription." If such a plan is adopted, "it would create a new class of drugs that could be sold by pharmacists 'behind-the-counter (BTC),'" and might include things like "birth control pills, cholesterol drugs, and migraine medicine." Pharmacists would be required to discuss purchases of these types of drugs with patients before dispensing them.
CNN (11/14, Smith) adds, "So far in the U.S., Plan B is the only prescription drug to switch to behind-the-counter status."
HealthDay (11/14, Reinberg) reports, "Experts at the U.S. Food and Drug Administration are meeting Wednesday to hear arguments on whether or not pharmacists might someday bypass doctors and directly provide consumers with certain drugs that now require a prescription." If such a plan is adopted, "it would create a new class of drugs that could be sold by pharmacists 'behind-the-counter (BTC),'" and might include things like "birth control pills, cholesterol drugs, and migraine medicine." Pharmacists would be required to discuss purchases of these types of drugs with patients before dispensing them.
CNN (11/14, Smith) adds, "So far in the U.S., Plan B is the only prescription drug to switch to behind-the-counter status."
GAO report finds 30,000 Medicaid providers did not pay federal taxes in 2006.
[Source: Health and Life Sciences Law Daily, November 14, 2007 - AHLA]
USA Today (11/14, Wolf) reports, "More than 30,000 Medicaid providers in seven states failed to pay more than $1 billion in federal taxes last year, but the government can't trim healthcare payments in order to collect," according to a report by the Government Accountability Office (GAO). "In its fifth report to a Senate panel investigating tax cheats that do business with the government," the GAO estimates that "about five percent of Medicaid providers in the seven states cheat on their taxes -- particularly payroll taxes collected from employees." According to USA Today, "Some of the more flagrant violators had multimillion dollar homes, along with fancy cars and boats, the report says. Others were guilty of patient abuse or other healthcare violations." However, the report did not identify the doctors or providers.
The AP (11/14) adds that the GAO report examined providers in "California, Colorado, Florida, Maryland, New York, Pennsylvania and Texas." Currently, "federal law does not prevent healthcare providers who owe back taxes from enrolling in Medicaid." And, officials at the CMS "said such a requirement could make it harder for states to provide healthcare to poor people." Meanwhile, the GAO's report stated "that if the IRS had a system to levy part of the Medicaid payments, it could have collected between $70 million and $160 million last year."
USA Today (11/14, Wolf) reports, "More than 30,000 Medicaid providers in seven states failed to pay more than $1 billion in federal taxes last year, but the government can't trim healthcare payments in order to collect," according to a report by the Government Accountability Office (GAO). "In its fifth report to a Senate panel investigating tax cheats that do business with the government," the GAO estimates that "about five percent of Medicaid providers in the seven states cheat on their taxes -- particularly payroll taxes collected from employees." According to USA Today, "Some of the more flagrant violators had multimillion dollar homes, along with fancy cars and boats, the report says. Others were guilty of patient abuse or other healthcare violations." However, the report did not identify the doctors or providers.
The AP (11/14) adds that the GAO report examined providers in "California, Colorado, Florida, Maryland, New York, Pennsylvania and Texas." Currently, "federal law does not prevent healthcare providers who owe back taxes from enrolling in Medicaid." And, officials at the CMS "said such a requirement could make it harder for states to provide healthcare to poor people." Meanwhile, the GAO's report stated "that if the IRS had a system to levy part of the Medicaid payments, it could have collected between $70 million and $160 million last year."
Wednesday, November 7, 2007
Federal court upholds dismissal of "Roe v. Wade for Men" lawsuit.
[Source: Health and Life Sciences Law Daily, November 7, 2007]
The AP (11/7) reports that on Tuesday, a three-judge panel of the 6th U.S. Circuit Court of Appeals "upheld the dismissal of a lawsuit nicknamed 'Roe v. Wade for Men,'" which was filed on behalf of Matthew Dubay by the National Center for Men. Dubay "said he shouldn't have to pay child support for his ex-girlfriend's daughter," because she "knew he didn't want to have a child and assured him repeatedly she couldn't get pregnant because of a medical condition." Dubay "argued that if a pregnant woman can choose among abortion, adoption or raising a child, a man involved in an unintended pregnancy should have the choice of declining the financial responsibilities of fatherhood." However, U.S. District Judge David Lawson "disagreed, rejecting Dubay's argument that Michigan's paternity law violates the U.S. Constitution's equal protection clause because it didn't extend reproductive rights to men."
The AP (11/7) reports that on Tuesday, a three-judge panel of the 6th U.S. Circuit Court of Appeals "upheld the dismissal of a lawsuit nicknamed 'Roe v. Wade for Men,'" which was filed on behalf of Matthew Dubay by the National Center for Men. Dubay "said he shouldn't have to pay child support for his ex-girlfriend's daughter," because she "knew he didn't want to have a child and assured him repeatedly she couldn't get pregnant because of a medical condition." Dubay "argued that if a pregnant woman can choose among abortion, adoption or raising a child, a man involved in an unintended pregnancy should have the choice of declining the financial responsibilities of fatherhood." However, U.S. District Judge David Lawson "disagreed, rejecting Dubay's argument that Michigan's paternity law violates the U.S. Constitution's equal protection clause because it didn't extend reproductive rights to men."
Friday, November 2, 2007
CMS Issues New Rules for Physician Fees and for Outpatient Prospective Payment System (OPPS)
[Source: Healthcare Financial Management Association (HFMA)]
CMS Issues 2008 Outpatient Prospective Payment System Final Rule
On Nov. 1, the Centers for Medicare and Medicaid Services (CMS) continued its initiative to link payment with quality in a final rule with comment period updating the hospital Outpatient Prospective Payment System (OPPS), effective for services furnished during CY08. The rule also updates the payment rates for the revised ambulatory surgical center (ASC) payment system beginning in CY08.
After taking into account the market basket update and other factors that affect the level of payments, CMS estimates hospitals will receive an overall average increase of 3.8 percent in Medicare payments for outpatient services in CY08. The CMS Office of the Actuary projects that payments (including beneficiary coinsurance) under the OPPS will increase by about 10 percent to approximately $36 billion in CY 2008 from $32.7 billion in CY 2007, due in part to increased use of hospital outpatient services.
Hospitals that are paid under the Inpatient Prospective Payment System are required to report the applicable hospital outpatient quality measures in order to receive the full OPPS market basket update in CY 2009; otherwise, their CY 2009 update will be reduced by 2.0 percentage points.
In addition, the final rule provides larger payment bundles for certain OPPS services, which is intended to provide hospitals with greater flexibility in managing their resources.
The final rule will be published in the Federal Register on Nov. 27, 2007. View the final rule. Read the CMS press release.
See AHLA's report on this issue: "Final OPPS Rule Includes Overall 3.8% Update", Health Lawyers Weekly, November 2, 2007
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Medicare Final Rule Announces 2008 Physician Fees and Reforms for Accurate Payments and Quality
Under a final physician payment rule issued yesterday, the Centers for Medicare and Medicaid Services (CMS) estimates that it will pay approximately $58.9 billion to about 900,000 physicians and other healthcare professionals. The revised payments, quality incentive rates, and related policy changes, which will become effective Jan. 1, 2008, are included in the Medicare physician fee schedule final rule. The rule will be published in the Nov. 27 Federal Register.
Since July 1, 2007, under the Physician Quality Reporting Initiative (PQRI), eligible professionals who report specific measures on quality of care furnished to Medicare beneficiaries may earn incentives up to 1.5 percent of their total allowed charges, subject to a cap.
The Medicare law includes a statutory formula requiring CMS to implement a negative 10.1 percent update in payment rates for physician-related services. This formula compares the actual rate of growth in spending to a target rate, which is based on such factors as the growth in the number of Medicare fee-for-service beneficiaries and statutory or regulatory changes in benefits. According to a press release, "CMS has no choice but to implement this negative update because it is mandated by a statutory formula."
Download the final rule. Read the CMS press release.
See AHLA's report on this issue: "CMS Issues Final Physician Payment Rule With 10.1% Cut", Health Lawyers Weekly, November 2, 2007
CMS Issues 2008 Outpatient Prospective Payment System Final Rule
On Nov. 1, the Centers for Medicare and Medicaid Services (CMS) continued its initiative to link payment with quality in a final rule with comment period updating the hospital Outpatient Prospective Payment System (OPPS), effective for services furnished during CY08. The rule also updates the payment rates for the revised ambulatory surgical center (ASC) payment system beginning in CY08.
After taking into account the market basket update and other factors that affect the level of payments, CMS estimates hospitals will receive an overall average increase of 3.8 percent in Medicare payments for outpatient services in CY08. The CMS Office of the Actuary projects that payments (including beneficiary coinsurance) under the OPPS will increase by about 10 percent to approximately $36 billion in CY 2008 from $32.7 billion in CY 2007, due in part to increased use of hospital outpatient services.
Hospitals that are paid under the Inpatient Prospective Payment System are required to report the applicable hospital outpatient quality measures in order to receive the full OPPS market basket update in CY 2009; otherwise, their CY 2009 update will be reduced by 2.0 percentage points.
In addition, the final rule provides larger payment bundles for certain OPPS services, which is intended to provide hospitals with greater flexibility in managing their resources.
The final rule will be published in the Federal Register on Nov. 27, 2007. View the final rule. Read the CMS press release.
See AHLA's report on this issue: "Final OPPS Rule Includes Overall 3.8% Update", Health Lawyers Weekly, November 2, 2007
- - - - - - -
Medicare Final Rule Announces 2008 Physician Fees and Reforms for Accurate Payments and Quality
Under a final physician payment rule issued yesterday, the Centers for Medicare and Medicaid Services (CMS) estimates that it will pay approximately $58.9 billion to about 900,000 physicians and other healthcare professionals. The revised payments, quality incentive rates, and related policy changes, which will become effective Jan. 1, 2008, are included in the Medicare physician fee schedule final rule. The rule will be published in the Nov. 27 Federal Register.
Since July 1, 2007, under the Physician Quality Reporting Initiative (PQRI), eligible professionals who report specific measures on quality of care furnished to Medicare beneficiaries may earn incentives up to 1.5 percent of their total allowed charges, subject to a cap.
The Medicare law includes a statutory formula requiring CMS to implement a negative 10.1 percent update in payment rates for physician-related services. This formula compares the actual rate of growth in spending to a target rate, which is based on such factors as the growth in the number of Medicare fee-for-service beneficiaries and statutory or regulatory changes in benefits. According to a press release, "CMS has no choice but to implement this negative update because it is mandated by a statutory formula."
Download the final rule. Read the CMS press release.
See AHLA's report on this issue: "CMS Issues Final Physician Payment Rule With 10.1% Cut", Health Lawyers Weekly, November 2, 2007
Cost of Uncompensated Hosptial Care Reached $31.2 Billion in 2006; Underpayments Reached $29.9 Billion
The American Hosptial Association (AHA) released the results of its Annual Survey of Hospitals in October. In its Uncompensated Hospital Care Cost Fact Sheet, AHA said that the data from the Annual Survey showed that hospitals had uncompensated care costs amounting to $31.2 billion (5.7% of total expenses) in 2006. However, uncompensated care excludes other unfunded costs of care, such as underpayments from Medicare and Medicaid. In its Underpayment By Medicare and Medicaid Fact Sheet, AHA reported that underpayments to hospitals (defined as the difference between the costs incurred and the reimbursement received for delivering care to patients) reached $29.9 billion in 2006 (up from $4 billion in 2000).
Other reports and studies by the AHA can be found here.
Other reports and studies by the AHA can be found here.
District Court in Alabama to Determine Whether section 1395w-26(b)(3) of Medicare Act is a "Complete Preemption" Statute
[Source: Health Lawyers Weekly, November 2, 2007]
The U.S. District Court for the Southern District of Alabama granted a motion for interlocutory appeal October 15 on the question of whether whether § 1395w-26(b)(3) of the Medicare Act is a complete preemption statute. The court ruled in the instant case that at least some of plaintiffs' state law claims were completely preempted, while the same court and another district court ruled previously that similar claims were not subject to complete preemption. See Bolden v. Healthspring of Alabama, Inc., Nos. 07-413-CG-B, 07-414-CG-M (S.D. Ala. 2007); and Harris v. Pacificare Life & Health Ins. Co., No. 2:06-956-ID (M.D. Ala. 2007).
The cases involved lawsuits brought against health insurers by Medicare beneficiaries asserting they were fraudulently induced into enrolling in the insurers' Medicare Advantage (MA) plans.
Continue reading
Case: Dial v. HealthSpring of Ala., Inc., No. 2:07-0412-KD-C (S.D. Ala. Oct. 15, 2007).
The U.S. District Court for the Southern District of Alabama granted a motion for interlocutory appeal October 15 on the question of whether whether § 1395w-26(b)(3) of the Medicare Act is a complete preemption statute. The court ruled in the instant case that at least some of plaintiffs' state law claims were completely preempted, while the same court and another district court ruled previously that similar claims were not subject to complete preemption. See Bolden v. Healthspring of Alabama, Inc., Nos. 07-413-CG-B, 07-414-CG-M (S.D. Ala. 2007); and Harris v. Pacificare Life & Health Ins. Co., No. 2:06-956-ID (M.D. Ala. 2007).
The cases involved lawsuits brought against health insurers by Medicare beneficiaries asserting they were fraudulently induced into enrolling in the insurers' Medicare Advantage (MA) plans.
Continue reading
Case: Dial v. HealthSpring of Ala., Inc., No. 2:07-0412-KD-C (S.D. Ala. Oct. 15, 2007).
New York Court Says A Physician's E-mails With Attorney on Hospital's E-mail System Not Privileged
[Source: Health Lawyer's Weekly, November 2, 2007]
A physician's communications with his attorney via his hospital-employer’s email system were not protected from discovery under the attorney-client privilege or work product doctrine in a subsequent employment dispute, a New York court ruled October 17.
According to the court, because hospital policy explicitly prohibited personal use of its email system and informed employees of potential monitoring, the physician could not claim these communications were privileged.
Court said, “A ‘no personal use’ policy combined with a policy allowing for employer monitoring and the employee’s knowledge of these two polices diminishes any expectation of confidentiality.”
Continue reading
A physician's communications with his attorney via his hospital-employer’s email system were not protected from discovery under the attorney-client privilege or work product doctrine in a subsequent employment dispute, a New York court ruled October 17.
According to the court, because hospital policy explicitly prohibited personal use of its email system and informed employees of potential monitoring, the physician could not claim these communications were privileged.
Court said, “A ‘no personal use’ policy combined with a policy allowing for employer monitoring and the employee’s knowledge of these two polices diminishes any expectation of confidentiality.”
Continue reading
2007 Tennessee Medical Malpractice Claims Report - Judgments Down in 2006
The Tennessee Department of Commerce & Insurance released the 2007 Medical Malpractice Claims Report, which showed a decline in medical malpractice judgments and settlements in 2006. Tennessee trial courts issued six medical malpractice judgments totaling $4,951,459 (down from $6,075,724 in 2005). Settlements in 2006 occurred for 15.24% of medical malpractice claims, totaling damage payments of $100,233,337 (down from $119,091,990 in 2005).
See report here
See report here
Medicare Part D spent $32 billion in 2006, study finds.
[Source: Health and Life Sciences Law Daily, November 2, 2007]
HealthDay (11/2, Preidt) reports, "In 2006, introduction of the U.S. Medicare Part D prescription drug benefit increased the number of seniors' prescriptions by 158 million, at a cost of $32 billion to Medicare," according to a study published in the November/December issue of the journal Health Affairs. Co-author Frank Lichtenberg, a business professor at Columbia University, and colleagues "analyzed data on 584 million prescriptions filled at the Walgreens pharmacy chain from September 2004 to December 2006." After including "the increased number of prescriptions that followed the introduction of Medicare Part D," the researchers found "that the amount paid by patients decreased only 5.6 percent, while the amount paid by private insurers increased by 22.3 percent." In addition, the data indicated that "Medicare spent about $203 for each additional prescription for the elderly, about 3.5 times as much as the average price ($57) for a prescription in 2006." The researchers concluded that "we need to think carefully about the economic implications of this program, which the federal government will ultimately have to raise taxes to pay for," particularly since Medicare Part D is expected to cost "$797 billion by 2015."
HealthDay (11/2, Preidt) reports, "In 2006, introduction of the U.S. Medicare Part D prescription drug benefit increased the number of seniors' prescriptions by 158 million, at a cost of $32 billion to Medicare," according to a study published in the November/December issue of the journal Health Affairs. Co-author Frank Lichtenberg, a business professor at Columbia University, and colleagues "analyzed data on 584 million prescriptions filled at the Walgreens pharmacy chain from September 2004 to December 2006." After including "the increased number of prescriptions that followed the introduction of Medicare Part D," the researchers found "that the amount paid by patients decreased only 5.6 percent, while the amount paid by private insurers increased by 22.3 percent." In addition, the data indicated that "Medicare spent about $203 for each additional prescription for the elderly, about 3.5 times as much as the average price ($57) for a prescription in 2006." The researchers concluded that "we need to think carefully about the economic implications of this program, which the federal government will ultimately have to raise taxes to pay for," particularly since Medicare Part D is expected to cost "$797 billion by 2015."
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