Health Law

The AP (2/12, Foley) reported, "A dozen defendants who allegedly swindled the military's healthcare program out of hundreds of thousands of dollars in the Philippines won't face justice or pay any restitution after authorities failed to arrest them. The US Attorney's Office in Madison," WI, "has dismissed indictments against the suspects -- Philippine doctors, spouses of military retirees, and one Navy veteran -- because of lengthy pretrial delays." The piece notes that some defendants have confessed to fraudulent Tricare claims, but US authorities "decided to wait for the suspects to step foot on US soil so they could be arrested, but they either never did or weren't caught. In 2006, prosecutors finally asked the Philippines government to arrest and extradite five of the suspects but those attempts failed."

The New York Times (2/13, A18, Pollack) reports, "Medicare has tentatively decided not to pay for virtual colonoscopies, dealing a setback to a technique that some medical experts recommend as a more tolerable alternative to conventional colonoscopy in screening for colon cancer." In an online statement, the CMS said "that there was 'insufficient evidence' to conclude that virtual colonoscopy [also known as CT colonography] 'improves outcomes in Medicare beneficiaries.'" The Times adds, "In its analysis, Medicare said many studies supporting virtual colonoscopy were done in people with a mean age around 58, so results might not fully apply to Medicare's older population."

Bloomberg News (2/13, Van Voris, Lucoff) reports, "Altria Group Inc., the biggest US cigarette maker, lost the opening phase of a trial in a sick smoker lawsuit that is the first of 8,000 cases pending in Florida courts to be heard by jurors." The Florida Supreme Court "threw out a $145 billion punitive-damages verdict awarded by a Miami jury to a statewide class of smokers in 2006," ruling that "smokers can't sue as a group." Individual smokers were then allowed to sue the company, relying "on factual findings by the Miami jury, including that cigarettes are addictive and cause cancer." At issue in the current case was whether "Stuart Hess's nicotine addiction was the cause of his death from lung cancer in 1997."

        The AP (2/13) adds that attorneys for Elaine Hess, "widow of Stuart Hess," argued that he "smoked heavily for 40 years and tried numerous times to quit," but that "the nicotine was too powerful, forcing Hess to continue smoking even as he was undergoing chemotherapy before he died in 1997." Evidence used by Hess' attorneys focused on "the tobacco industry's well-documented efforts to hide and downplay the dangers of smoking." Meanwhile, Kenneth Reilly, attorney for Altria's Philip Morris USA unit, noted that "Hess was well aware by the mid 1960s of government warnings about health risks."

        The company also "defended itself...by arguing Stuart Hess was not addicted to cigarettes," citing "numerous chances to quit," the Miami Herald (2/12, Danner) noted. Attorneys representing the company contended that Hess "simply chose not to stop." Next, the case "moves into its second phase, where the six-member jury will have to determine the amount of damages to award Elaine Hess." They will also "decide whether punitive damages are warranted." The South Florida Sun Sentinel (2/13, Alanez) also covered the story.

The Tennessean (2/12, Ward) reported, "Psychiatric Solutions Inc. has been hit with a lawsuit that accuses the company of negligence in its oversight of employees at a residential psychiatric facility in Florida." The "abuse including beatings by employees at the Manatee Palms Youth Services in Bradenton caused plaintiff Nicholas E. Rossi to suffer severe emotional distress and bodily harm, according to the lawsuit filed last week in Manatee County Circuit Court. Rossi was a resident at the facility from September 2004 to May 2005." The complaint says that "Manatee Palms failed to run proper background checks on several employees with criminal histories that battered Rossi, who at the time was a minor."

The Wall Street Journal (2/13, Brin) reports, "Aetna Inc. said its fourth-quarter net income tumbled 57 percent, weighed down by investment losses, but the health insurer's revenue climbed as premiums and enrollment increased." The insurer reported fourth-quarter "net income of $194.7 million, or 42 cents a share, down from $448.4 million, or 87 cents a share, a year earlier. The latest quarter includes $198 million in investment losses." But, "excluding net realized capital losses and other items, earnings rose to 96 cents from 88 cents." Additionally, "revenue increased 8.6 percent to $7.76 billion amid a 17 percent increase in premium revenue."

        Aetna's "full-year earnings includes 99 cents per share in capital losses and other one-time expenses," the AP (2/12) noted. And "profit from operations grew to $3.93 per share from $3.49 per share." For 2009, the company "said it expects a profit of $3.85 to $3.95 per share from operations in 2009. Analysts are expecting $3.87 per share." The Hartford Courant (2/13, Levick) also covers the story.

USA Today (2/13, Wolf) reports that in the conference committee on the stimulus package, "all sides gave a little this week to get a lot: the most sweeping legislation ever passed to spur economic activity." Still, "Obama retained what House Speaker Nancy Pelosi called his 'strategic vision' for the stimulus package: using an emergency package to make long-term investments in areas such as renewable energy, information technology in healthcare and an expansion of broadband Internet service." Democrats in Congress who wrote the bill "won broad assistance for the unemployed, including federal subsidies for continued health insurance." Amongst the plan's "three main elements" is "help for...those in need of Medicaid."

        The Washington Post (2/13, A6, Murray, Kane) reports, "The bill would make a significant down payment on Obama's healthcare and energy agendas. It would provide nearly $20 billion to adopt uniform medical-records technology, portrayed as a job-creating exercise and part of the foundation for broader healthcare reform." Also, $2.1 billion goes to expand Head Start.

        USA Today (2/13), CQ (2/12, Schatz, Krawzak), and the Chicago Tribune (2/13, Oliphant, Hook) also report on the stimulus and mention healthcare parenthetically.

        Stimulus Medicaid money to provide relief for state budgets, lawmakers say. The New York Times (2/13, A26, Halbfinger) reports, "New York State and New York City officials expressed a measured sense of relief on Thursday as they began totaling the vast sums of money for Medicaid, education, transportation, and housing that could soon begin flowing here as part of the federal stimulus package." The stimulus package would increase the federal government's share of Medicaid costs in New York to 57 percent from 50 percent, providing "$12.6 billion in budget relief over 27 months." Still, "the added Medicaid assistance from Washington quickly set off a new skirmish between the governor and New York's hospitals and healthcare workers, who said that it should be used to undo Mr. Paterson's planned Medicaid cuts."

        Meanwhile, the Los Angeles Times (2/12, Simon, Halper) reports, "The $789-billion economic stimulus bill headed toward congressional approval is expected to pour $26 billion into California." Due to "language inserted by the committee chaired by Rep. Henry A. Waxman (D, Beverly Hills) to give more money to states, such as California, where the unemployment rate has significantly increased," California "will receive an estimated $11 billion in Medicaid funds -- about $650 million more than it would have received under the Senate version of the bill."

The AP (2/13) reports, "Insurance companies would be required to cover autism treatment for children under a bill approved by a Utah Senate committee." The proposed legislation's sponsor, state "Sen. Howard Stephenson, R-Draper, says treatments would include behavioral correction therapy, which could take up to eight hours a day for several years."

        According to the Salt Lake Tribune (2/12, May), the bill received much "opposition from insurance companies and a small business association. The legislation "would require insurance to pay up to $50,000 a year for early behavioral therapy, which typically involves one-on-one instruction at least 25 hours a week." Known as "Clay's Law," the bill "now moves to the Senate floor." The Tribune noted that "Utah has one of the highest rates of autism, with 1 in 133 children affected, compared to the national rate of 1 in 150." Currently, "eight other states require similar coverage." Utah's Deseret News (2/13, Thalman) also covers the story.

The Seattle Times (2/12, Song) reported that lawmakers in the Washington state Senate "have introduced two related bills outlawing a special waiting period for transplant coverage that even insurers widely concede is unfair." The proposed "measures amount to the most concerted push yet in Washington to overturn what critics say are antiquated exclusions for transplant coverage." In fact, "the rules date to the 1980s, when organ transplants were much riskier procedures than they are today." Washington's "three largest health insurers -- Regence, Premera Blue Cross and Group Health Cooperative -- support banning the special waiting period." The insurers, however, seem against "eliminating the cap on transplant benefits," which oftentimes falls well below the lifetime benefit cap, "saying that it could drive up premiums for all."

The AP (2/13, Miller) reports, "For a second straight year, the [Idaho] House State Affairs Committee on Wednesday refused to back a measure being pushed by Gov. C.L. 'Butch' Otter, demanding instead more details about its effect on up to 400 retirees with high prescription drug costs." Notably, the measure "would end state retiree insurance benefits for new employees. Current workers who retire after age 55 would get a $100 monthly state subsidy, down from $155 now, and Medicare-eligible retirees 65 and over would be shifted onto private supplemental insurance plans."

Government Health IT (2/12, Ferris) reported that "the House and Senate are expected to vote this week on a compromise economic stimulus package that includes at least $19 billion for health information technology." According to "a summary released by the Senate and House appropriations committees...the measure includes $2 billion to be spent by the Office of the National Coordinator for Health IT and $17 billion for doctors and hospitals to earn in increased Medicare and Medicaid payments if they use e-medical records."

        Healthcare IT News (2/12, Manos) reported that "the bill supports Medicare and Medicaid incentive payments for critical access hospitals, federally qualified health centers, rural health clinics, children's hospitals and others and phases in Medicare payment penalties for physicians and hospitals not using electronic health records starting in 2014." Furthermore, "it seeks a 90 percent HIT adoption rate for physicians and 70 percent for hospitals for using electronic health records and would generate savings of more than $12 billion through improvements in quality of care and care coordination and reductions in medical errors and duplicative care."

The New York Times (2/13, A17, Strom) reports that "nonprofit hospitals vary widely in the amount and type of charitable benefits they provide the communities they serve, an Internal Revenue Service study released Thursday found." The research "also found that most hospitals followed proper procedures in establishing salaries and benefits for their executives." The nearly "500 hospitals responding to the...survey reported spending an average of nine percent of their total revenues on providing community benefits, including free medical care, education and research." During "the last several years, members of Congress have raised concerns over whether nonprofit hospitals provide enough free care and other community benefits to justify their tax exemptions," but there is currently "no test for measuring how much community benefit is enough or even what constitutes community benefit." The Times adds that Sen. Charles Grassley (R-IA) "said...he was disappointed that the study did not provide better definitions and comparable data on the community benefits provided by for-profit hospitals."

        The Wall Street Journal (2/13, A3, Martinez, Carreyrou) reports that Sen. Grassley "is considering introducing legislation that would hold nonprofit hospitals more accountable for their tax breaks," according to aides to the senator. Altogether, "58 percent of the hospitals" in the study "reported uncompensated care amounts of less than or equal to five percent of total revenue." Slightly more than 20 percent "of the hospitals reported aggregate community benefit expenditures of less than two percent of total revenue." The Journal adds that "the American Hospital Association called the report 'seriously flawed,' saying the agency is 'undercounting community benefit' and 'overcounting executive compensation.'"

        Modern Healthcare (2/12, Evans) reported that "not-for-profit hospitals...reported chief executives officers earned $490,431, on average, in total compensation," according to the study.

Florida Today (2/12, Jenks) reported that, in a hearing before the "retired 18th Judicial Circuit Court Judge Larry Johnston," Holmes Regional Medical Center officials said they "believed 'patients were at imminent risk' when" they "ordered the suspension of four" trauma surgeons. The case centers on "whether some of the surgeons had performed enough procedures to be qualified as trauma surgeons" and whether "some quality data required by the state had been missing." Dr. Richard Hynes, chief medical officer argued that the hospital's "greatest concern was that, when a negative outcome occurred, we might not even know about it." But, when "Health First, the company which operates Holmes and employs the four surgeons, went to court" over the suspensions, it "successfully won a temporary injunction," which was later extended. Health First argued that "the surgeons' suspension did not meet the 'imminent danger' test required under the hospital bylaws," and that "the suspensions 'jeopardized patient safety.'"

Life Sciences Law

The AP (2/12, Blank) reports that a proposed amendment to the Missouri constitution that would ban state funding for stem cell research or abortions "has prompted dueling lawsuits contending the ballot summary is insufficient and unfair. At issue is a proposed ballot measure sponsored by the Missouri Roundtable for Life, a critic of embryonic stem cell research. The organization contends Missouri's secretary of state, auditor, and attorney general conspired to prepare an unfair ballot summary for the proposal."

The Wall Street Journal (2/13, Burton) reports, "A federal judge who early last month threw out massive litigation against Medtronic Inc. didn't disclose that his son's law firm has long had the medical-devicemaker as a client." Judge Richard H. Kyle of the federal district court in Minneapolis stated that "he didn't realize the firm, Frederickson & Byron, had represented" Medtronic "on multibillion-dollar deals." Now, "members of the 'steering committee' of plaintiffs lawyers told him they plan to seek his disqualification from the litigation." Stephen Gillers, a law professor at New York University School of Law, noted that "the losers may now be able to ask that the case be reinstated and sent to a new judge but only if they can meet...the 'tough test that a Medtronic loss would have a substantially negative effect on the son's firm." At issue in the case was whether "federal regulation of medical devices 'preempts,' or precludes any such product–liability cases under state law."

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