Health Law

AMNews (12/8, Sorrel) reports that "healthcare continues to top the government's list of federal fraud-investigation priorities, yielding the lion's share of recoveries in false claims cases in 2008." As of the fiscal year ending Sept. 30, Department of Justice figures indicate that "enforcement officials recouped $1.34 billion in settlements and judgments under the False Claims Act," of which "$1.12 billion, or 84 percent, came from healthcare entities." Specifically, "some of the largest settlements this year involved allegations of illegal off-label promotion by pharmaceutical manufacturers, as well as anti-kickback violations by drug firms, device-makers, and hospitals involving illegal referral agreements." While physicians are "rarely...targeted under the False Claims Act," federal prosecutors are, instead, "taking a more collaborative approach with physicians in investigations." In fact, "nearly 80 percent of the government's $1.34 billion in total recoveries in 2008 came from suits initiated by whistle-blowers, a role sometimes played by physicians."

Bloomberg News (11/28, Cernea) reported, "People enrolled in Medicare's Part D drug benefit will face higher drug premiums next year and fewer plans offering so-called gap coverage." In order "to bridge the coverage gap," consumers should consider "switching to generic or lower-cost drugs, and exploring national and community- based charitable programs, such as the National Patient Advocate Foundation or the National Organization of Rare Disorders." Those who have "limited income and resources may be eligible for extra help, according to information on the Medicare.gov website." In addition, "monthly premiums for insurers offering coverage under Part D will increase next year by an average 24 percent, according to management consultants at Washington-based Avalere Health." Esther Koch, chief executive officer of Encore Management in San Mateo, CA, urged consumers to "use the Prescription Drug Plan Finder on Medicare.gov." This "allows users to enter the prescriptions taken, including dosages and frequency, and to get a list of all plans available in a region by total annual cost."

Modern Healthcare (11/28, Lubell) reported that the Centers for Medicare and Medicaid Services (CMS) "has issued a paper that will help frame debate on transitioning Medicare physicians and other healthcare professionals to a value-based purchasing program." The "issues paper" summarizes a draft proposal "for a value-based system, including its objectives and design principles. The aim is to promote evidence-based medicine through measurement, public reporting and financial incentives, according to the draft." The agency said the "issues paper will serve as a discussion piece at a public meeting that will be held by the CMS on Dec. 9."

The AP (11/29) reported, "An Arizona appeals court panel ruled Friday that the Havasupai Indian tribe can proceed with a lawsuit that claims university researchers misused blood samples taken from tribal members." The ruling overturns "a judge's 2007 dismissal of the case," finding "enough information to go to trial" from Havasupai and other plaintiffs, "or at least enough to go forward in trial court pending further proceedings." At issue is whether "Arizona State University and University of Arizona researchers misused blood samples taken from more than 200" members of the tribe "for diabetes research in the 1990s by also using it for research into schizophrenia, inbreeding and ancient population migration." The tribe claims that now, "some members now fear seeking medical attention."

The Wall Street Journal (12/1, Wang, et al.) reports, "Western pharmaceutical companies are facing intensifying scrutiny over the conduct of clinical trials in developing countries -- an increasingly important source of patients to test new drugs and get them to the market." Although "companies have been conducting clinical trials in some developing countries for more than a decade," and "have faced questions from the start about ethical treatment of study participants and the integrity of the data generated abroad," both "companies and regulators have attempted to address these concerns and monitor trials closely." But recent investigations "underscore that concerns remain." Among the benefits of conducting trials in "lower-income countries," are the decreased cost and faster patient recruitment. "Moreover, in countries where access to medical care is poor, people are often desperate to participate in trials." But, one concern is that "locals who carry out the work" may "feel pressure to cut corners to boost enrollment or reconcile questionable data." Still, according to drugmakers, "they use the same study protocol regardless of where medicines are being tested."

The Los Angeles Times (12/1, Levey) reports, "After decades of failed efforts to reshape the nation's healthcare system, a consensus appears to be emerging in Washington about how to achieve the elusive goal of providing medical insurance to all Americans." According to "leading groups of businesses, hospitals, doctors, labor unions and insurance companies -- as well as senior lawmakers on Capitol Hill and members of the new Obama administration," an "unprecedented government intervention to create a system of universal protection" is the solution. These groups say that "the idea of a federal, single-payer system patterned on those in Europe and Canada...is now virtually off the table," as well as "the traditionally conservative concept...of reforming healthcare mainly by giving incentives for more Americans to buy insurance on their own." In addition, "there...is a widespread understanding that any expansion of coverage must be accompanied by aggressive efforts to bring down costs and reward quality care." In spite of these "areas of basic agreement," however, "the details...remain vague," as Obama "has provided few specifics about his plans once he takes office."

The AP (11/29, Alonso-Zaldivar) reported that the "pursuit of 'personalized medicine' is expected to get a major push from the incoming administration of President-elect Barack Obama." The President-elect is "interested in the role that personalized medicine could play as an element of changes in the broader healthcare system." For example, "varying responses to medications" among patients "may be linked to differences in genetic makeup that affect how the body processes a drug." While he was a senator, the President-elect "introduced legislation to coordinate the sometimes conflicting policies of government agencies and provide more support for private research." Now, Rep. Patrick J. Kennedy (D-RI) "has introduced legislation in the House that builds on Obama's." Kennedy's legislation "would direct Medicare to set a fixed policy for coverage of genetic tests and treatments." The President-elect has also "proposed a 100 percent tax credit for private research to develop diagnostic tests that can predict the safety and effectiveness of certain high-profile drugs."

The San Francisco Chronicle (11/29, Tansey) reported, "Stem cell research advocates have waited nearly eight years for the policy change President-elect Barack Obama has signaled he'll make in the early days of his administration: lifting the restrictions imposed by President Bush on federal funding for research on human embryonic stem cells." However, even if Obama "changes the policy," he may "still be powerless to send much more money to stem cell researchers. The U.S. government already will have committed a stunning $8 trillion to rescue the financial system." But scientists are optimistic. "Biotechnology groups are hoping Obama can increase government research funding from the National Institutes of Health (NIH) as part of his mammoth stimulus plan for the economy." And some scientists believe "the reversal of the Bush policy may quickly lower the cost of research. Under the Bush policy, researchers had to painstakingly separate their NIH-funded projects from human embryonic stem cell work funded by other sources." If Obama removes the NIH limits, work "will be much cheaper because scientists will no longer have to create duplicate labs and buy extra sets of equipment."

Healthcare IT News (11/26, Merrill) reported that, according to a study published in the Nov. 24 issue of the Archives of Internal Medicine, "the use of electronic health records (EHR) may reduce paid malpractice settlements for physicians." For the study, researchers from Harvard University "examined survey responses from 1,140 practicing physicians in Massachusetts during 2005, focusing on demographic characteristics and the length and extent of EHR use." Next, the "investigators compared the presence or absence of malpractice claims among physicians with and without EHRs, including only claims that had been settled and paid." The data revealed that "6.1 percent of physicians with EHRs and 10.8 percent of physicians without them had paid malpractice settlements in the preceding 10 years." The authors theorize that "EHRs may decrease paid malpractice claims" because they "offer easy access to patients' history, which may result in fewer diagnostic errors, improved follow-up of abnormal test results, and better adherence to clinical guidelines."

Government Health IT (11/26, Ferris) reported that "the American National Standards Institute (ANSI), an independent non-profit organization, has formed the EHR Clinical Research Value Case Workgroup." According to Fran Schrotter, ANSI senior vice president and chief operating officer, "This workgroup has an important opportunity to ensure that clinical research needs are addressed in the work that is done within [the Healthcare Information Technology Standards Panel] to harmonize [electronic health records (EHR)] standards." Government Health IT adds that "the workgroup will largely follow the process developed by the Bush administration and its American Health Information Community (AHIC). The AHIC, a high-level [Department of Health and Human Services] advisory panel, has been disbanded as the administration draws to a close."

USA Today (12/1, Rubin) reports that "free medication samples, which at first glance look like a win-win-win situation for manufacturers, doctors, and patients, can have hidden costs." That is because "doctors might pick a sub-optimal drug simply because they have a sample. Plus, only makers of expensive brand-name drugs are doling out samples." Notably, "leaving pharmacists out of the equation might raise the risk of errors." In fact, research has shown that "samples spur doctors 'to prescribe these more expensive brand-name drugs.' Without samples...'their decision on what drug to prescribe is what's best for the patient.'" Other studies suggest "that most samples go to insured patients." For instance, "in a study [published] in Pediatrics in October, Sarah Cutrona, of the Cambridge Health Alliance in Massachusetts, found that few needy children got samples, because they couldn't afford the doctors who dispense them." Consequently, "health systems around the country are beginning to curtail the practice."

CQ (11/28) reported that Sens. Kent Conrad (D-N.D.) and Sheldon Whitehouse (D-R.I.) "have asked the Government Accountability Office (GAO) to study how states, hospitals and other countries improve healthcare quality while reducing its cost." In a letter to the GAO, the Senate Democrats "note that in preparation for congressional action on healthcare, 'it would be helpful to understand how these 'best practices,' whether from the states, integrated delivery systems, or other countries, can be applied to the system as a whole.'" Their letter emphasizes, "If we as a society fail to control healthcare costs, there will be a detrimental effect on our nation's economy and standard-of-living. To improve value in healthcare spending, we must balance our need to control costs with the need to maintain quality-of-care."

The Atlanta Journal-Constitution (11/30, Judd, Miller) reported, "Under pressure to fix its mental health system, Georgia is embarking on an uncharted course: the total privatization of state psychiatric hospitals." After "150 years of state-provided psychiatric care in Georgia, marked by frequent revelations of horrid conditions, reforms, more revelations and more reforms," the state plans to "hire for-profit companies to build and operate three new psychiatric facilities to replace all seven existing state hospitals." Those "old facilities would close by 2012." The Journal-Constitution pointed out that "no other state has privatized its entire psychiatric hospital network," and the few that "have turned over pieces of their mental health systems to the private sector, [have done so] to mixed reviews. Florida, for instance, found that privately run facilities operate at a slightly less expensive rate than state institutions but can't track any difference in patient outcomes." Meanwhile, in "North Carolina, auditors said that state wasted $400 million after allowing unqualified private companies to perform many psychiatric treatment functions."

Modern Healthcare (11/26, Vesely) reported, "In a Securities and Exchange Commission (SEC) filing, UnitedHealth Group revealed some details of a previously announced class-action settlement with shareholders over the health insurer's stock backdating scandal." Under the settlement, the insurer "will supplement changes it has already made in its corporate governance policies," but the "nature of those changes was not disclosed." UnitedHealth "admitted to no wrongdoing as part of the settlement agreement." The agreement "stems from a stock backdating scandal that erupted in 2006."

AMNews (12/8, Berry) reports that some "opponents of the for-profit conversion of Horizon Blue Cross Blue Shield of New Jersey want state regulators to ask for a new application from the plan that takes into account the failing economy since the plan's application in August." In a letter to the director of the New Jersey Dept. of Banking and Insurance and the state attorney general, the "Medical Society of New Jersey, the Alliance for Advancing Nonprofit Health Care, and QualCare, a New Jersey-based hospital and physician-owned nonprofit health plan," called "for Horizon to withdraw its application, or for the state to require a new one," arguing that "the application should be amended to reflect the changes to the economy." According to Horizon spokesman Tom Rubino, the current "economic crisis has done nothing to change Horizon's reasons for wanting to convert, and has heightened the need for the economic benefit to the state that Horizon expects." Meanwhile, "there is no set deadline for Horizon to respond, or for the state to reach a decision."

CQ (11/27, Reichard) reported, "The nation's health system will have to rely on nurse practitioners and physician assistants to cope with a shortage of doctors that will climb to 124,000 physicians by the year 2025, according to new projections [released] by a medical school lobby." In fact, the Association of American Medical Colleges warns that "a 30 percent expansion in medical school enrollment and an increase in graduate medical education positions will not eliminate the projected shortage, only moderate it." This "estimated shortage of 124,000 doctors assumes that medical resources will be used at current levels, but the report says that 'practice and utilization patterns in the future are very unlikely to be the same as today.'" Thus, the authors projected that "the shortage in 2025 would reach 159,300 rather than 124,000. The higher projection assumes continued increases in the level of medical resources people consume, and younger doctors working fewer hours, among other factors."

        Healthcare legislation contributing to physician shortage in Massachusetts. NPR's All Things Considered (11/30, Brown) segment reported, "Healthcare reform in Massachusetts has led to a dramatic increase in the number of people with health insurance." Yet, "there's an unintended consequence: A sudden demand for primary-care doctors has outpaced the supply." While the shortage is widespread throughout the state, it is even "more acute" in some rural areas, such as Western Massachusetts. In part, some physicians attribute the shortage to the fact that insurers "pay less for primary care than for specialist visits." In addition," no one pays for the time it takes to fill out paperwork, take surveys for the insurance company or write sick notes to employers." According to State Sen. Jon Scibak, "Massachusetts recently passed legislation to make primary care more attractive -- through loan forgiveness, home buying help and better reimbursements."

The AP (12/1) reports, "About one in 10 U.S. doctors who vaccinate privately insured children are considering dropping that service largely because they are losing money when they do it," according to a survey published in the December issue of the journal Pediatrics. Another survey published in the same issue "revealed startling differences between what doctors pay for vaccines and what private health insurers reimburse: For example, one in 10 doctors lost money on one recommended infant vaccine, but others made almost $40 per dose on the same shot." The AP notes that these findings are a concern for public health officials because "reimbursement concerns were behind an exodus of doctors from vaccine programs in the 1980s, which contributed to a terrible resurgence of measles in 1989-91 that caused 11,000 hospitalizations and 123 deaths."

Life Sciences Law

The San Francisco Chronicle (11/30, Tansey) reported, "Taking a cue from nature, some biotechnology companies are reacting to the funding drought by becoming like spores -- forms of suspended life that can wait until future rains of new money allow them to reconstitute themselves and grow again." For instance, "Advanced Cell Technology, a headline-grabbing stem cell company...lacks funding for clinical trials," and "has retreated to its Worcester, Mass., base to conserve cash." In addition, "Avigen, Inc., said this month it will eliminate more than 70 percent of its workforce and put clinical studies on hold while it regroups after receiving disappointing data on its experimental drug for multiple sclerosis."

        Bloomberg News (11/30, Brandt) added that "Maxygen of Redwood City, which received $90 million by selling its hemophilia program to Bayer Healthcare, is slashing 30 percent of its workforce, and focusing on its one drug." At present, many biotechnology companies are "selling operations, cutting jobs, or finding partners to avoid having to declare bankruptcy."

In the Wall Street Journal (11/28) Health Blog, Jacob Goldstein wrote that Indonesia's "health ministry recently decreed that foreign drugmakers will only be allowed to sell products in the country if they build production facilities there." Since sales growth is "likely to slow in the U.S. and Western Europe in the coming years, the drug industry is looking to middle-income countries such as Indonesia as key growth markets. But, there have been some bumps in the road." At present, about "13 companies, including giants such as Eli Lilly, Merck Sanofi-Aventis, and AstraZeneca, sell drugs in Indonesia, but don't have factories there."

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