Health Law

The Orlando Sentinel (3/8, Shelton) reported, "Consumer advocates in Florida are warning that some health insurers are using misleading tactics to steer patients toward cheaper medicines -- and the results can be harmful." The health plans are sending "letters to their members" with "a list of brand-name drugs and potential savings with generics," but "most brands on the list don't even have generic versions." In fact, "the alternatives are actually generics of different drugs within the same class." While "many doctors agree they can be safe and effective way to save on prescriptions," they are concerned that "insurers are getting more aggressive with their arm-twisting." Meanwhile, Robert Zirkelbach, spokesman for America's Health Insurance Plans, stated that "companies promote generics as a cost-saving tool, but only when they make sense." And, because "patients can't start taking the generic of a new medicine without a doctor's prescription," they "have to consult with their physicians to make the change."

The Chicago Tribune (3/9, Graham) reports that concerns are being raised "in some medical quarters about observation care -- a step up from the emergency [department] but a step down from a formal hospital stay." An increasing number of patients are being "affected by the classification...because Medicare and private insurers want only the sickest people to be treated in costly, resource-intensive medical centers." Some experts say that "medically...observation care often makes sense." A number of "patients are neither clearly sick enough to be hospitalized nor well enough to go home after they're evaluated. With observation care, doctors can test, diagnose, stabilize, and treat them rapidly, ideally within 24 hours." Medicare officials said that "longer-than-expected observation stays have become a concern, and an advisory committee is looking into the issue." The officials said that "hospitals are not required to inform Medicare patients they are in observation care." Meanwhile, "hospitals risk being charged with fraud if they bill a case as an inpatient stay when it doesn't meet Medicare's standards."

The Miami Herald (3/8, Weaver) reported, "In January 2007, Medicare shut down the businesses of 18 medical equipment suppliers in Miami-Dade County after investigators told the federal agency that the companies were shams." But, according to court records, "when Medicare heard their appeals, the operators were quickly reinstated -- only to be indicted later that year for submitting more than $10 million in phony claims to the very agency that had let them back in business." As a result, "Medicare wound up paying those suppliers at least $5 million," and "much of that ill-gotten money was never recovered." And, despite a "critical report" from the US Department of Health and Human Services that showed "Medicare's appeals system was flawed because it lacked strict rules of evidence," officials said "six months later...they have yet to establish new guidelines that would thwart fraudulent medical equipment operators from regaining billing privileges."

American Medical News (3/9, Silva) reports that CMS officials "are attempting to make a new online Medicare enrollment system more accommodating to physician practices after initial access restrictions led to a lackluster debut." Initially, the agency claimed that the web-based Provider Enrollment, Chain, and Ownership System (PECOS), first launched in 2008, "would be an attractive alternative to paper enrollment form CMS-855," but "it has been largely shunned by practices, many of whom were discouraged by the requirement that only physicians and nonphysician practitioners -- and not their billing staffs -- could access PECOS." Therefore, the agency decided to "allow physicians' credentialing staff to use PECOS, said Kim Brandt, director of program integrity for CMS' Office of Financial Management." And, "professionals who do Medicare billing and enrollment work were relieved to hear that staffers will be able use PECOS on behalf of physicians," as a number of physicians do "not do his or her own administrative work for credentialing."

The Los Angeles Times (3/9, Adams) reports, "Late last month, the Food and Drug Administration ruled that makers of the drug metoclopramide must put the strongest so-called black-box warning on the product's package insert." Metoclopramide, "if taken chronically," may "cause a serious neurological disorder called tardive dyskinesia (TD)." TD "can persist for months and years, and in some cases appears to be permanent." The neurological disorder "occurs as a side effect of drugs that block dopamine." The Times notes that "the main way to limit the risk is by limiting how long" metoclopramide is used. "The drug is already labeled for short-term use, defined as four to 12 weeks. But a 2007 FDA study found that 20 percent of patients were prescribed the drug for longer than this."

The Wall Street Journal (3/7, Winslow, Gryta) reported, "Roche Holding AG, seeking to conclude a long battle to take over biotechnology stalwart Genentech Inc., Friday increased its bid by 7.5 percent to $93 a share and extended its tender offer to shareholders until March 20." The increased "bid comes after Roche met during the past week with Genentech shareholders around the US to explain its rationale, Franz Humer, chairman of the Swiss company, said in an interview. Though price wasn't discussed," Humer "said, 'You get an impression of where the other side stands.'" Roche's "new offer values the 44.2 percent of Genentech shares [it] doesn't own at $45.7 billion. But the offer is short of the $112 a share that a special committee of Genetech's board set as its asking price during discussions with Roche in December."

        "Genentech urged shareholders to take no action for now on the latest bid," Bloomberg News (3/7, Rapaport, Lopatto) added. "A special committee of Genentech directors is reviewing the revised Roche offer...and will take a position on it 'promptly,'" Genentech said in a statement last week. Bloomberg added that "a survey by analyst Mark Schoenebaum, of Deutsche Bank, found most investors willing to sell at least some of their shares at $93-a-share. Among 150 respondents, of which 130 were Genentech shareholders, about 72 percent said they'd tender some portion of their holdings to Roche at the current offer, and 30 percent said they would surrender all their shares."

        "Roche's $86.50-per-share offer was set to expire March 12, but the company said it had only tendered 500,000 shares as of March 5," the AP (3/7) reported. The current "offer is extended to March 20."

        "Both sides are under considerable pressure to come to an agreement before data from [Avastin (bevacizumab)] trial are released in April," Forbes (3/7, Langreth, Herper) added. "The trial is the first to examine Avastin in early-stage cancer and would greatly boost Genentech shares if it works." But, "the trial is going down to the wire, and Genentech admits there is a significant chance it could fail. If the trial does fail and Roche cancels its offer, Genentech shares will plunge." The Financial Times (3/7, Simonian) and the San Francisco Business Times (3/7, Leuty) also covered the story.

Bloomberg News (3/7, Nussbaum, Pettypiece) reported, "Schering-Plough Corp. may be the next US drugmaker to be scooped up by a rival seeking a larger experimental pipeline and products unhindered by imminent patent losses, analysts said." Schering-Plough has medicines in late-stage testing that may generate more than $6 billion in annual sales, the" drugmaker announced at meeting with analysts in November. At the same meeting, Schering-Plough said that its "most promising treatment in development, called TRA, is designed to prevent blood clots with fewer side effects than older drugs and could come on the market as early as 2011." David Moskowitz, New York-based analyst with Caris & Co, told Bloomberg that "Schering-Plough is certainly a target. ...They would fit well with J&J. They're my top choice." Moskowitz added, "Also, we've heard that Merck may be interested in them as well."

In the Los Angeles Times (3/9) Your Money/Your Health column, Francesca Lunzer Kritz discusses "the insurance subsidy included in President Obama's stimulus package." The package will provide a 65 percent subsidy to "some laid-off employees...for up to nine months, to help defray the cost of continuing healthcare coverage through a program known as COBRA." Qualifying employees "lost, or will lose, their jobs between Sept. 1, 2008 and Dec. 31, 2009." Those "who qualify for the subsidy will pay their employers for 35 percent (instead of 100 percent) of coverage costs each month they receive subsidies, up to nine months."

        The Atlanta Journal Constitution (3/8, Miller) noted that "workers whose income is less than $250,000 (for joint-return tax filers) or $125,000 (for other filers) can receive the full subsidy," but "those at slightly higher incomes may be eligible for part of the subsidy." The subsidy "is expected to help an estimated seven million Americans." Companies will receive guidance from "the US Department of Labor...by mid-March, and employers must notify eligible individuals by mid-April."

The Boston Globe (3/9, Cooney) reports that under a new program expected to be announced today, Massachusetts, which already has "its own" Medical Security Program "to help cover COBRA costs for low- and some middle-income unemployed people," will now combine the program "with the federal initiative" to cover COBRA payments, "using state money to offset the remaining one-third of a family's premium costs not covered by the federal benefit." Under the combined plan, "families will be able to stay covered under their former workplace insurance plans by paying as little as $350 a month in advance, with $280 of that reimbursed later." The Globe notes that "with the move, Massachusetts continues as one of the most generous states in providing health insurance assistance to laid-off workers."

Bloomberg News (3/7, Nussbaum) reported, "General Electric Co. [GE] and Siemens AG, the biggest makers of medical imaging machines, say President Barack Obama's plan to slash spending on the use of MRIs and X- rays threatens patients, and they'll lobby Congress to block it." The companies have "pledged to fight a plan, proposed in the president's budget last week, to require approvals from a private 'benefit manager' before Medicare will pay for imaging." Although "the measure would save $260 million over a decade," it may also "hinder equipment sales that accounted for more than half of GE's $17.4 billion in healthcare sales last year." Mark Vachon, president of GE Healthcare's Americas' division, stated that under the plan, "benefit managers will 'actually hamper access and add administrative cost' to Medicare." In addition, "the Medical Imaging & Technology Alliance, the trade group representing both" companies has "issued a statement warning that the plan would deny seniors 'life-saving medical services.'" Meanwhile, "Medicare has already moved to cut imaging costs, ordering radiologists who conduct the tests be accredited by 2012," according to Eleanor Kerr, a Siemens lobbyist.

The Wall Street Journal (3/9, Maher) reports, "A healthcare network in upstate New York agreed to settle a class-action lawsuit alleging that managers conspired to keep registered nurses' wages artificially low, in a move that could affect other defendants in the case and four related suits across the country." The suit alleged that "hospitals agreed to enter into a conspiracy to keep nurse wages low and did so by sharing compensation information such as wage surveys." But, despite the $1.25 settlement, Northeast Health of Troy, NY "didn't admit any wrongdoing and called the allegations in the lawsuit 'completely false and offensive.'" The company said it agreed, however, "in order 'to stop spending our scarce resources on this litigation.'"

In the Wall Street Journal (3/8) Health Costs column, Jane Zhang wrote, "Seniors covered by private Medicare Advantage plans are on notice: If President Barack Obama has his way, over the next decade these plans could become less common and benefits could be trimmed." In fact, under "the president's budget proposal...government payments to insurers offering the plans" would be cut "by an estimated $175 billion over 10 years to help pay for overhauling the nation's healthcare system." The administration has also "moved quickly to rein in spending on Medicare Advantage" by proposing "only a 0.5 percent payment increase to Advantage insurers in 2010 -- instead of about four percent, as in recent years." According to Mark Miller, executive director of the Medicare Payment Advisory Commission, "there will be fewer managed-care plans and the generous benefit packages that they have right now will be less generous." In the meantime, "insurers have already started lobbying Congress to block the proposed cuts in Medicare Advantage."

ABC World News (2/8, story 7, 2:00, Harris) reported that "more and more people are using the Internet to find a doctor and to find patient reviews of that doctor," but "some doctors are sick of it." ABC's John McKenzie adds that some physicians are now "insisting their patients sign this contract that they will not post any reviews online."

        The Chicago Tribune (3/8, Deardorff) noted that "some doctors say the sites are unfair," because "one nasty comment left by a patient...could damage a reputation or career." In addition, there is "no objective way to make such a ranking." But, because "patients are now healthcare shoppers who want partnerships, transparency, and some way to find a quality doctor," economist Ruth Given noted that "they're out there and not going away." Given explained that "the main problem is that the information out there isn't very good yet."

American Medical News (3/9, Sorrel) reports that "the medical profession is mounting legal challenges against state boards and others" in an effort to fight what physicians "call an onslaught of scope of practice expansions by a growing number of allied health professionals" who "are pushing for more than 100 bills" nationwide "related to scope of practice, according to American Medical Association (AMA) research." AMA Board of Trustees Chair Joseph M. Heyman, MD, said that "in many cases, physicians warn that allied professionals are overstepping their bounds without appropriate medical expertise," threatening "the health and safety of patients...when healthcare providers are permitted to perform patient-care services that are beyond their level of education and training." The allied health professions also are increasingly seeking "expansions through their regulatory boards." For example, the Texas Medical Association "is engaged in legal disputes with the state's podiatrists, chiropractors, and marriage and family therapists, whose boards adopted regulations to include surgical, diagnostic, and other services that physicians say tread into the practice of medicine."

American Medical News (3/9, Sorrel) reports that physicians in Massachusetts "are turning to the Legislature to reverse two separate decisions by the" Supreme Judicial Court that "doctors say unfairly expand their liability." In a 2007 decision, the court found that physicians "are liable not just to their patients, but to anyone else 'foreseeably' put at risk when doctors fail to warn patients about potential side effects of drugs they prescribe." A year later, "justices in Matsuyama v. Birnbaum concluded that doctors may be held liable if their actions reduced a patient's chance for survival, even if the patient already had less than a 50 percent chance of recovery." Last month, the Massachusetts Medical Society "helped file legislation that generally would require plaintiffs to have a direct relationship with a physician defendant and show that any alleged negligence caused injury that otherwise would not have occurred." For its part, "the Massachusetts Academy of Trial Attorneys argued in amicus briefs that the decisions do not increase doctors' risk or change existing duties."

Life Sciences Law

The Philadelphia Inquirer (3/7, Hill) reported that the FDA began to worry about the side-effects of antipsychotic drugs "that came on the market in the late 1990s" and as a result, they asked "AstraZeneca PLC and other pharmaceutical companies to share data on cases of new-onset diabetes and related illnesses in patients taking the drugs." AstraZeneca "told the FDA that patients and doctors had reported 12 new cases of diabetes and five cases of related illnesses among the 623,000 who had taken its antipsychotic drug Seroquel [quetiapine fumarate]." However, "internally, the company had reported the number as 27 cases of diabetes and two of hyperglycemia, according to court documents released late Thursday."

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