Health Law

Modern Healthcare (12/24, Burda) reported, "Two physician groups separately have settled charges that they violated federal antitrust law by engaging in price-fixing conspiracies to extract higher payments from certain health insurers, the Federal Trade Commission (FTC) announced." The groups "allegedly orchestrated a price-fixing conspiracy among [their] respective physician members by jointly negotiating service contracts with certain insurers," according to "civil antitrust complaints filed simultaneously with the proposed settlements." The FTC said that "in some cases...the groups threatened to terminate their physicians' contract with an insurer unless the insurer met the groups' price demands," which "restrained trade and artificially raised prices for the physicians' services." Under the proposed settlements, the groups will "cease and desist for a period of 20 years from directly negotiating prices for physician services with payers or indirectly assisting their physicians to jointly do the same." Neither group, however, "admits to any wrongdoing."

A front-page story in the Washington Post (12/26, A1, Goldstein) reported, "States from Rhode Island to California are being forced to curtail Medicaid, the government health insurance program for the poor, as they struggle to cope with the deteriorating economy. With revenue falling at the same time that more people are losing their jobs and private health coverage, states already have pared their programs and many are looking at deeper cuts for the coming year. Already, 19 states -- including Maryland and Virginia -- and the District of Columbia have lowered payments to hospitals and nursing homes, eliminated coverage for some treatments, and forced some recipients out of the insurance program completely." The Post noted that some states are cutting services and requiring more payments from the poor, adding, "Federal health officials set minimum rules about who can enroll and what care must be covered, but states are free to add to the basics. Those optional patients and services are what many states are rethinking now." The Post suggested that the incoming administration and Congress are receptive to calls for help from individual states, noting that Obama could back boosting Medicaid spending "as part of a broad strategy to spur the economy."

        States seek federal funding for Medicaid in stimulus bill. In a front-page story, the Washington Post (12/27, A1, Slevin) reported, "As the economy sputters and tax revenue plummets, governors and mayors across the United States are lining up to ask President-elect Barack Obama and the new Congress for hundreds of billions of dollars to plug holes in their budgets, arguing that services will suffer and joblessness will rise if Washington does not come to the rescue." The Post called Medicaid one of the most prominent programs "becoming more expensive" for states. "In the 2007 budget year, Medicaid costs devoured 24.2 percent of [Ohio's] general fund, or $4.3 billion. Four years earlier, the figures were 20.5 percent and $3.7 billion. While" Ohio Gov. Ted Strickland (D) "hopes a six percent increase in Medicaid will be part of a federal stimulus package, the relentless math of a balanced-budget mandate forces cuts.

In a front-page story, the New York Times (12/26, A1, Sack) reported that "President Bush leaves the office" having "doubled federal financing for community health centers, enabling the creation or expansion of 1,297 clinics in medically underserved areas." These centers, "known for their efficiency," are "often the only dependable providers of basic services" for people "in poor urban neighborhoods and isolated rural areas," and "are lauded as a cost-effective alternative to hospital emergency rooms." Still, "wide swaths of the country remain without access to affordable primary care," and "federal support is not keeping pace with the growing cost of treating the uninsured." In response, Democratic lawmakers "are proposing even more significant increases." Funding for community health centers is also expected to be a "feature of any healthcare deal struck by Congress and the Obama administration." Although "President-elect Barack Obama has said little about how the centers may fit into his plans," he sponsored "a Senate bill in August that would quadruple federal spending." The Wall Street Journal (12/26, Goldstein) Health Blog also covered the story.

The Boston Globe (12/28, Bolton) reported that Massachusetts Gov. Deval Patrick's (D) "recent announcement of $9 million in cuts to Department of Mental Health programs and services includes $8 million from adult day services and $1 million from clubhouses, or social clubs, that support the mentally ill in a comfortable and safe environment." While "some in the mental-health community held out hope that Patrick would reinstate the funding cuts, which take effect Thursday," the Department of Mental Health issued a statement saying that it "will make every effort to shore up existing community resources to help transition-affected clients." The Globe quoted Vic Degravio, president and chief executive officer of the Mental Health and Substance Abuse Corporation of Massachusetts, whose "100 member organizations serve approximately 117,000 clients a day and employ 20,000 staff members," as saying, "Unfortunately, I think there's no light at the end of the tunnel, despite overwhelming evidence that mental health took a disproportionate hit."

The AP (12/26, Bauman) reported, "More New Yorkers who are too poor for private insurance and not poor enough for Medicaid could get health coverage under Gov. David Paterson's (D) budget proposal." The governor is "pushing two ways to expand coverage for adults," in spite of "suggested cuts and decreased Medicaid reimbursements" that have left "hospital and health providers reeling." Under the proposal, "more 19- and 20-year-olds who don't live with their parents" would be allowed "to enroll in Family Health Plus, the state healthcare plan." According to Richard Daines, M.D., the state commissioner of health, "the change would cost the state about $5 million in the short term, but save much more by preventing illness later on." Currently, "single adults and childless couples...must be at 100 percent or less of the federal poverty level" in order to qualify for benefits. The proposal would also "allow adults at 200 percent of the federal poverty level to be eligible" for the plan, "up from 100 percent for singles and childless couples, and up from 150 percent for parents."

On the front of its Business Day section, the New York Times (12/26, B1, Lohr) reported in its ongoing Evidence Gap series that "across the national spectrum of healthcare politics, there is broad agreement that moving patient records into the computer age...is essential to improving care and curbing costs." During his presidential campaign, President-elect Barack Obama "vowed to spend $50 billion over five years to spur the adoption of electronic health records (EHRs), and said recently that a program to accelerate their use would be part of his stimulus package." But, for many physicians "who work in small practices, an investment in electronic health records (EHR) looks simply like a cost for which they will not be reimbursed. That is why policy experts say any government financial incentives to use electronic records -- matching grants or other subsidies -- should be focused on practices with 10 or fewer doctors, which still account for three-fourths of all doctors in this country."

Modern Healthcare (12/25, Conn) reported, "Healthcare information technology executives are making the first moves to ready their hospitals for the proposed upgrades to Accredited Standards Committee X12 Version 5010 data-exchange standards and the International Classification of Diseases, 10th Revision, or ICD-10, code sets, according to a recent survey by the College of Health Information Management Executives (CHIME)." The organization said that 72 "chief information officers responded to the CHIME survey." Sharon Canner, director of advocacy programs at CHIME, said that "hospital leaders are forming an ICD-10 work group," and that "outreach efforts are underway." The survey indicated, however, that "many vendors of IT systems have not been in contact with their customers about their plans for making the conversions." Three-fifths "of respondents said their vendor 'had not alerted them to the proposed new regulations and timelines for ICD-10/5010 implementations.'" Additionally, "72 percent of CHIME respondents said they didn't know if the ICD-10 upgrade would be included in their annual software upgrade."

On the front page of its Metro section, the Washington Post (12/25, B1, Fears) reported, "DC officials are planning to privatize the city's mental-health agency, a cost-cutting move that union leaders say would put about 200 healthcare professionals out of work and force thousands of emotionally troubled residents to seek private care." In doing so, the city is expected to "save as much as $14 million," according to an audit of the DC Community Services Agency (CSA). In support of the transition, "healthcare advocates...said the shift is needed, because the agency duplicates many services provided by private clinics." Still, "union leaders, who represent some employees, said the transition is risky," arguing that "city counselors provide care to the most difficult cases, people with deep psychiatric troubles" who "are less likely to make the transition to a private care provider." The audit, however, showed that "there is no appreciable difference between the demographics or the clinical presentation of consumers served by the DC CSA when compared to those served by the private provider network."

The AP (12/28, Johnson) reported that many hospitals in the US are "being squeezed by tight credit, higher borrowing costs, investment losses, and a jump in patients...not paying their bills." The culmination of these events has even "begun to trigger more hospital closings...as well as layoffs, other cost-cutting, and scrapping or delaying building projects." The "most endangered" facilities are located in rural and urban areas, both of which have "a lot of poor, uninsured patients." In addition, "hospitals, which employ five million people, are reporting that donations and investment returns are down, patient visits are flat, and profitable diagnostic procedures and elective surgeries are declining as people with inadequate insurance delay care." And, "those patients are turning up later at ERs, seriously ill, making it tough for hospitals to lay off nurses and doctors." In short, all of these "problems are aggravating long-standing stresses: stingy reimbursements from commercial insurers, even-lower payments that generally don't cover costs for Medicare and Medicaid patients, and high labor and technology costs."

        Recession intensifies hospitals' struggles. The AP (12/27) reported, "Hospitals around the country are struggling to stay afloat amid the recession, although many have had financial problems for years, often blamed on Medicare, Medicaid. and other government-health programs that don't fully cover the costs of care for millions of patients." For example, "numerous hospitals have filed for bankruptcy," while others "are laying off workers, trimming the hours of part-timers, and reducing use of more-expensive temporary nurses hired through agencies." In addition, "some hospitals have been posting multimillion-dollar losses, or had credit rating agencies put their bonds on credit watch or downgrade their ratings," and a number of "investor-owned hospital companies have seen share prices plummet, missed Wall Street forecasts, or lowered their own financial performance predictions. Along with trimming expenses and delaying capital projects, some are discussing mergers or selling medical office buildings to raise cash."

California's Contra Costa Times (12/27, Rodriguez) reported that following the end of the contract "between Anthem Blue Cross and Pomona Valley Hospital Medical Center" on Aug. 15, "there is still no new contract between the two entities." To date, "the hospital continues to remain out of the Anthem Blue Cross network," said Anthem spokeswoman Peggy Hinz. Meanwhile, hospital spokeswoman Kathy Roche said that "hospital officials submitted a proposal to Anthem Blue Cross about seven weeks ago with the intent of reaching an agreement, but the insurance company has not responded." Recently, "hospital representatives...went before the state Department of Managed Health Care (DHMC) to seek an extension of a provision that has allowed physicians who admit patients only to the Pomona hospital to continue to do so if they are Anthem Blue Cross members, Roche said." But, DHMC spokeswoman Lynne Randolph "said last week that an extension is not necessary," because "physicians can still obtain" admitting "privileges regardless of an order from the (state agency)."

The AP (12/27) reported, "The family of a 17-year-old leukemia patient has sued health insurance giant Cigna Corp. for her death last year after the company initially refused to pay for a liver transplant." The suit "alleges breach of contract, unfair business practices, and unintentional infliction of emotional distress." The company is accused "of delaying and rejecting valid claims, which resulted in the wrongful death of Nataline Sarkisyan." A complication associated with a bone marrow transplant "caused the teen's liver to fail," and the insurer refused "to pay for a liver transplant." Although Cigna "eventually approved the transplant after Sarkisyan's family held a rally outside Cigna's suburban Los Angeles office," Sarkisyan died. According to a spokesman for the company, Cigna believes the lawsuit is "without merit," arguing that the "decision was made despite the fact that Cigna had no obligation to do so, and despite concluding...that the treatment would be unproven and ineffective, and therefore experimental and not covered by the employer's benefit plan."

In the third in a series of occasional articles, the Boston Globe (12/28, Allen, et al.) reported that in 2000, Partners HealthCare "cut a quiet deal with Blue Cross to ratchet up insurance costs across the state" of Massachusetts. This "deal, never before made public, marked the beginning of a period of rapid escalation in Massachusetts insurance prices, a" Globe "investigation has found, as Partners repeatedly used its clout to get rate increases and other hospitals tried to keep up." Since the "market covenant," state figures demonstrate that "individual insurance premiums have risen 8.9 percent a year...more than twice the annual rise in the late 1990s." But, "both Partners and Blue Cross deny that they acted improperly in the 2000 payment negotiations or in their dealings since." Now, some "company officials and industry allies say Partners shouldn't be blamed for medical inflation, which is a national problem." They also say that "their rise to power gave Massachusetts a needed counterforce to insurance companies that underpaid hospitals and doctors through much of the 1990s."

Medscape (12/28, Lowes) reported that many physicians are "feeling the repercussions of the recession that began in December 2007 and deepened during the financial crisis in the fall of 2008." Now, some patients "are postponing needed care," or are "skipping tests and treatments outright." Others are postponing elective surgery. Meanwhile, "the Kaiser Family Foundation found that one third of Americans were struggling to pay their medical bills in fall 2008." The credit crunch has also "made it harder for some physicians to borrow money to start a practice or expand an existing one." With some experts saying that the recession could "last well into 2009," how "physicians fare will depend partly on the success of federal bailout efforts enacted under the Bush administration...as well as the economic stimulants that President-elect Barack Obama has said he will administer."

Life Sciences Law

The Boston Globe (12/29, Johnson) reports that, according to Julian Goldman, M.D., a Massachusetts General Hospital anesthesiologist and advocate for "medical device 'connectivity,'" certain kinds of medical errors "could be prevented if medical devices were designed to talk to each other." The "push for greater connectedness in hospital electronics is" now "gaining momentum." The movement is aimed at "devices that can not only plug into one another, but can also 'understand' each other and automatically identify potential life-threatening problems sooner than they would have been caught" otherwise. Advocates contend that "the administration of pain medication is one area where the ability to connect could save lives." In fact, according to a study published this month in the Joint Commission Journal of Quality and Patient Safety, patient-administered pain medication "is four times more likely to result in patient harm than other medication errors." Still, "there are several reasons" why "greater connectivity in medical devices" has not yet been developed, including a lack of demand from physicians and nurses, and increases in "companies' liability and costs."

The Wall Street Journal (12/27, B5, Rundle) reported that "Allergan, Inc. said it received Food and Drug Administration (FDA) approval to market Latisse, a beauty treatment that increases the length, thickness, and darkness of eyelashes by using" bimatoprost, "a drug the company developed to treat glaucoma" that sells "under the brand name Lumigan. The drug's use as a beauty aid was discovered by patients and eye doctors, who have reported for years that a side effect of the Lumigan drops is enhanced eyelashes." According to Allergan, "Latisse's retail price will be $120 for a 30-day supply bottle for both eyes. The treatment is applied daily to the base of the upper lashes with a disposable applicator." Bloomberg News (12/27, Larkin), WebMD (12/26, Hitti), UPI (12/27), and the Boston Herald (12/27, McConville) also covered the story.

The Financial Times (12/27, Timmins) reported, "A wider range of costly 'end of life' treatments for terminal illness are to be made available on the" UK's National Health Service (NHS), according to the National Institute for Clinical Excellence (NICE), "the body that recommends which treatments the service should adopt." NICE plans to "issue new guidance to its advisory committees on January 2, which would have the effect of raising the price the NHS should pay for treating some terminal illnesses." NICE chairman Sir Michael Rawlins said that the "new guidance would 'have the effect of extending the threshold range of what we would normally regard as cost-effective.'" According to the Times, the change "has been warmly welcomed by the pharmaceutical industry." Still, "the NHS Confederation, which represents health authorities and trusts, has warned that such drugs will come at the expense of other treatments." The "guidance will only apply to conditions likely to affect small numbers of patients a year - up to about 7,000 -- and who have a life expectancy of two years or less."