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Health and Life Sciences Law Daily - February 17, 2009
Stimulus bill includes funding for comparative effectiveness research.
In a front-page article, the New York Times (2/16, A1, Pear) reported, "The $787 billion economic stimulus bill approved by Congress will, for the first time, provide substantial amounts of money for the federal government to compare the effectiveness of different treatments for the same illness." Specifically, "researchers will receive $1.1 billion to compare drugs, medical devices, surgery, and other ways of treating specific conditions. The bill creates a council of up to 15 federal employees to coordinate the research, and to advise President Obama and Congress on how to spend the money." The Times noted that the "program responds to a growing concern that doctors have little or no solid evidence of the value of many treatments. Supporters of the research hope it will eventually save money by discouraging the use of costly, ineffective treatments." But, critics worry that "the legislation would allow the federal government to intrude in a person's healthcare by enforcing clinical guidelines and treatment protocols." In a brief recap, UPI (2/17) cites the details of the New York Times story.
CBO estimates stimulus may cost $3 trillion over next 10 years. According to the Washington Post (2/14, A9, Montgomery), the stimulus bill "will blast another big hole in an already tattered federal budget. ... The federal government was headed for a budget deficit of nearly $1.2 trillion, a post-war record. The stimulus package will drive that number to nearly $1.4 trillion this year and to more than $1.1 trillion next year, according to congressional budget analysts, with expensive decisions about housing, healthcare and the banking system yet to come." The Post stated that "the budget outlook is likely to grow even darker: Liberal Democrats hope to extend big chunks of the stimulus package past their two-year expiration date, making permanent increases in funding for public education and healthcare for the poor and unemployed. ... Meanwhile, President Obama wants to permanently extend a tax credit in the stimulus package for workers that costs at least $66 billion a year. Taken together, those goals would push the price of the stimulus package to around $2.5 trillion over the next 10 years, according to a new estimate from the nonpartisan Congressional Budget Office. Adding interest costs associated with borrowing the money, the tab comes to $3 trillion."
The Wall Street Journal (2/14, A4, Weisman) reported that with the passage of the stimulus plan, Obama "will pivot quickly to address a budget deficit that could now approach $2 trillion this year." Obama "has scheduled a 'fiscal-responsibility summit' on Feb. 23 and will unveil a budget blueprint three days later, crafted to put pressure on politicians to address the country's surging long-term debt crisis." White House Budget Director Peter Orszag "has committed to instituting tougher budget-discipline rules -- once the economy turns around. Those include a mandate that any 'nonemergency' spending increases be offset by equal spending cuts or tax increases."
Stimulus funds boost healthcare record industry. The Washington Post (2/16, D1, Huslin), on the front page of its Business section, reported that the "$19 billion prescribed in Congress's economic stimulus package to bring America's healthcare records into the electronic age is a welcome opportunity for information technology firms seeking to build market share in a still-young industry." Few "expect the new spending to change things immediately." To "computerize their medical records, physicians and their practices stand to get $44,000 to $64,000 in incentives, and hospitals up to $11 million." But providers "who treat Medicare and Medicaid patients and have not gone to paperless systems within five years could lose funding. With the federal government spending more than $600 billion annually on 80 million Americans through Medicare, Medicaid and other programs, that could prove a powerful incentive for providers to get on board."
The New York Times (2/16, B3, Cohen) examined the broader issues of concerns over the erosion of personal privacy, including the recent revelations about baseball player Alex Rodriguez, corporate data mining and government surveillance of telephone calls, but does not explore concerns over electronic health records.
Medicare/Medicaid
Eliminating Medicare fraud would require cooperation from lawmakers, consumers.
CQ (2/16, Wayne) reported that despite years of efforts to combat Medicare fraud, it has been "stubbornly difficult for the government to get a grasp on shady practices in a system in which claims are paid quickly after submission, with few checked for accuracy or validity." Now, "more than just wasted money is at stake," because "President Obama is also promising to revamp Medicare to slow the growth of its costs, and prevent it from consuming an unsustainable amount of the government's budget. Moreover, many longtime observers of the healthcare system agree that reducing Medicare fraud is critical to building public confidence in the sort of universal healthcare overhaul Obama wants to enact." Therefore, "a serious crackdown on theft from Medicare would be a popular -- and politically palatable -- way to reduce healthcare expenses." One expert notes that the success of such an effort "would require an unprecedented level of sustained cooperation between the Justice Department and the agencies at the Health and Human Services (HHS) Department...buy-in from lawmakers who are often under pressure from those industries, and constituents who legally benefit from the system as it is."
Court ruling protects privacy of Medicare physician claims data.
American Medical News (2/16, Silva) reported, "A federal appeals court said physician privacy dictates that a consumer group is not entitled to receive and publicize Medicare physician claims data," and that "the information would not be of use to patients anyway." In 2006, Consumers' Checkbook/Center for the Study of Services sued "the Dept. of Health and Human Services under the Freedom of Information Act to obtain selected physician claims data." The group believed patients 'could use the information when seeking a physician for a specific procedure." In August 2007, a district court ruled in favor of the consumer group, but "the appeals court's Jan. 30 decision reverses" that ruling. The American Medical Association "called the latest ruling a 'major victory' for preserving physician privacy and for protective patients who otherwise could have received bad data." The court stated that "exposure of the data 'would constitute a clearly unwarranted invasion of personal privacy.'"
Federal Agency News
FDA approves first new gout treatment in 40 years.
Bloomberg News (2/14, Matsuyama, Larkin) reported, "Takeda Pharmaceutical Co., Asia's biggest drugmaker, won US approval to sell the first new gout treatment in four decades."
The Chicago Tribune (2/14) reported that the Food and Drug Administration [FDA] approved Uloric [febuxostat], making the drug "another treatment option for the more than five million Americans who suffer from gout," Takeda announced late Friday.
WebMD (2/16, Hitti) explained that "Uloric, taken once daily by mouth, is approved for the chronic management of hyperuricemia (elevated levels of uric acid) in gout patients." The drug "works by blocking an enzyme called xanthine oxidase, which helps prevent uric acid production, lowering elevated uric acid levels." WebMD noted that "in 2005, the FDA refused to approve Uloric because there were slightly more deaths and heart problems in patients taking the drug than in patients taking allopurinol, another gout drug." But, the drugmaker "resolved the safety question by performing a large new phase III clinical trial," which "found no more deaths and no more heart problems in patients taking Uloric than in patients taking allopurinol."
Furthermore, "in several clinical trials, febuxostat was more effective than both placebo and allopurinol -- the other approved treatment for hyperuricemia in patients with gout -- in lowering serum uric acid levels," according to MedPage Today (2/16, Neale). And in the trials, "the most commonly reported adverse reactions were liver function abnormalities, nausea, arthralgia, and rash." Uloric is "to be available in once-daily 40 and 80 mg tablets." UPI (2/15) and the Canadian Press (2/15) also covered the story.
Health Business
Glaxo to reduce prices in the world's poorest countries.
The Wall Street Journal (2/14, Whalen) reported that GlaxoSmithKline PLC "plans to cut prices in the world's poorest countries and invest 20 percent of its profit from those markets into building health clinics and other infrastructure." Glaxo "will cut prices on its patented medicines in the poorest 50 countries in the world so that they are no higher than 25 percent of the price in developed countries." The company's "treatments for hepatitis B, genital herpes, malaria, and asthma are among those that will be subject to price cuts, a Glaxo spokeswoman said." The company "already sells its HIV drugs in these countries at not-for-profit prices, and if those prices aren't already lower than 25 percent of the developed-world price, they will be reduced, as well." Andrew Witty, the company's CEO, "also proposed that drug companies, nonprofit groups and others donate their patents related to neglected tropical diseases to a common pool, with the hope that such a pool would speed development of new drugs." The AP (2/14), BBC News (2/14), the Financial Times (2/14, Jack), the UK's Telegraph (2/14, Irvine), the Press Association (2/14), Australia's ABC News (2/15), and the UK's Guardian (2/13, Boseley) also covered the story.
Healthcare Policy/Legislation
Coalition promoting healthcare overhaul finds members disagreeing over specifics.
The AP (2/16, Davis) reported, "After spending two years and more than $20 million to promote" national healthcare changes, "collaborators in the Divided We Fail coalition -- a project of the seniors lobby AARP, the service workers' union, and groups representing small business and the Fortune 500 -- are...divided over key elements of how to fix healthcare." In fact, the group admits "that keeping the coalition together is getting more difficult as Obama and Congress prepare to delve into specifics." For example, "labor unions and liberal groups are pressing for a universal health coverage system in which the government provides insurance that competes with private plans." But the Business Roundtable, with members like Aetna and Humana, and the National Federation of Independent Business "want a system based mostly on private health insurance and are against new requirements for employers." According to the AP, "the emerging rifts highlight how difficult it will be for Obama and the Democratic-run Congress to deliver" a healthcare overhaul.
Legislators in some states considering laws limiting health insurance rescission practices.
American Medical News (2/23, Berry) reports, "Legislators in at least four states are considering passing new laws limiting insurance companies' ability to rescind insurance coverage, a practice that has come under criticism both for harming patients and leaving doctors with unpaid bills or claims from insurers who want their payments back." California, Connecticut, and New Mexico already have such laws in place, with Texas, South Dakota, and Maryland currently considering legislation to restrict rescission practices. According to American Medical News, "the issue of individual health insurance rescissions has been in the spotlight for nearly two years in California, after investigations by the media and regulatory agencies uncovered a pattern of companies' revoking policies of members who had ended up filing costly claims." Following investigations, insurance companies "including Kaiser Permanente, Health Net, WellPoint subsidiary Anthem, and Blue Shield of California agreed over the last year to reinstate hundreds of members and to pay past medical claims as well as hefty fines to the state."
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Chiropractor seeks Florida legislation effectively banning vaccines with thimerosal.
On its front page, Florida's Herald Tribune (2/15, A1, Scott) reports that political fundraiser and chiropractor Gary Kompothecras, who has "made himself a multi-millionaire building clinics to treat people hurt in car accidents," and the father of two children with autism, believes that the "disorder was caused by an ingredient in vaccines, mercury-based thimerosal, that they received as infants." Now, "this legislative session, Kompothecras wants lawmakers to pass a law preventing any vaccines with more than a tiny amount of thimerosal from being given in Florida, creating what would be the nation's strictest vaccine law." But, according to pediatricians, the "legislation, which essentially amounts to a ban on the preservative, is rooted in bad science, and will put children and the elderly at risk for deadly flu viruses." Should the preservative be restricted in flu shots, "there could be a shortage, medical experts warn."
Anti-smoking advocates critical of Virginia smoking ban.
On the front page of its Metro section, the Washington Post (2/16, B1, Kunkle, Craig) reported that anti-smoking advocates "said vague language in the ban allowed restaurants to create separate ventilated rooms for smokers but didn't define the standards for such a room. And they said the fine for ignoring the ban was tiny -- $25 for a violation." When the bill came out, "anti-smoking lobbyists began urging lawmakers to toughen the bill, telling them that key provisions mirrored language that tobacco companies have used for years to turn the momentum of change to their own advantage." A lobbyist for health advocates, Teresa Gregson, said, "It would be naive for anyone in Virginia to believe that anything comes through the General Assembly without Philip Morris's blessing."
Proposed ban would outlaw smoking in bars, restaurants, all indoor public places across Texas. The Dallas Morning News (2/17, Ramshaw) reports that a "proposed state ban, which is being championed by cyclist and cancer survivor Lance Armstrong, would outlaw smoking in bars, restaurants and all indoor public places across Texas, including offices, convention centers and bus stations. It would also ban smoking in the bleachers of outdoor sporting or music events, and anywhere within 15 feet of a doorway to a public building." Supporters of the bill say it has "overwhelming public support. A survey commissioned by Smoke-Free Texas, a coalition of public health organizations backing the bill, found that 68 percent of Texans support banning smoking in all indoor and public places." According to Patrick Dixon, chairman of the Texas Libertarian Party, "the measure is bad for business." Dixon "said the government shouldn't be intruding on private property -- and businesses qualify."
Changes to bill would exempt Indiana casinos from proposed smoking ban. The AP (2/17) reports, "Changes to a bill in the Indiana House would completely exempt casinos from a proposed smoking ban." Originally, the smoking ban bill "would have banned smoking in all enclosed public places, including restaurants, bars, bowling alleys, and casinos."
The legislation, "House Bill 1213, sponsored by Rep. Charlie Brown, D-Gary, had been watered down in committee, but the House, on a voice vote, overwhelmingly voted to let cities and towns enact more stringent smoking bans," the Indianapolis Star (2/17, Ryckaertand, Schneider) added. "The amendment was offered by Rep. Peggy Welch, a Democrat who said her hometown of Bloomington bans smoking in all public places and would not want to roll back the restrictions." But, "the bill -- already amended in committee to exempt bars and casinos -- also was changed to allow smoking at horse-racing tracks, their 'racino' gambling areas and off-track-betting parlors. All the gambling facilities, however, would be required to set aside 20 percent of their space for nonsmokers."
Hospitals and Health Systems
Federal appeals court rules hospital violated anti-kickback, self-referral laws.
American Medical News (2/16, Sorrel) reported, "A panel of the 3rd US Circuit Court of Appeals found that a hospital failed to meet the personal services exception under federal referral regulations, known as Stark, when it contracted with an anesthesiology group." Under the exception, physicians can "contract with a hospital entity to provide particular services -- as long as the agreement meets certain criteria and does not violate federal laws prohibiting illegal referrals between entities that share a financial stake." In 1998, Carlisle Hospital and Health Services "built an ambulatory surgery center and pain clinic" and "contracted exclusively with Blue Mountain Anesthesia Associates PC...to provide anesthesiology services at the facility in exchange for free office space, equipment, supplies, and staff." The hospital "argued the arrangement was an extension of" a 1992 contract, "which referenced pain management." The court ruled, however, that the 1998 deal "opened up possibilities for illegal referrals and failed to meet a host of safe harbor requirements." The judge noted that "the 1992 agreement did not detail the pain management relationship at the separate facility or any related compensation arrangement."
Some health groups question MRSA screening mandates for hospitals.
American Medical News (2/16, O'Reilly) reported that "since 2007, four states -- California, Illinois, New Jersey and Pennsylvania -- have enacted laws requiring hospitals to screen high-risk patients for MRSA infection or colonization and follow precautions to prevent other patients from becoming infected." Furthermore, "eight states considered similar legislation last year, and as of late January, new bills had been filed in Washington and Kentucky." In 2007, "the Society for Healthcare Epidemiology of America (SHEA) and the Assn. of Professionals in Infection Control and Epidemiology issued a joint position statement...opposing MRSA screening mandates, saying they limit hospital infection-control programs' flexibility and are too costly." But, "SHEA and the Infectious Diseases Society of America endorsed a compendium of MRSA strategies, published in the October 2008 Infection Control and Hospital Epidemiology." American Hospital Association spokesman Matthew Fenwick "said the organization is taking the issue seriously. The AHA partnered with infectious-disease-control groups on the MRSA strategies compendium."
Insurance and Managed Care
Kaiser Permanente faces suits alleging malpractice, failure to pay claims associated with its emergency procedures.
The Sacramento Bee (2/15, Dahlberg) reported that "a special, doctor-to-doctor call operation" run by Kaiser Permanente "has become a target of legal actions alleging malpractice and failure to pay claims." In a case that has been settled, a California couple sued Kaiser, arguing that "the doctors' call center played a role in the death of their 19-year-old daughter by making it difficult to get the young woman quickly to the first available neurosurgeon." Meanwhile, "Prime Healthcare Services...has filed five lawsuits against Kaiser over failure to pay claims, largely involving emergency patients who Prime said couldn't be moved safely." According to Kaiser, "if disagreements arise," physicians' "decisions will be reviewed to determine whether they or the hospitals get paid." Dr. Myles Riner, past president of the California chapter of the American College of Emergency Physicians, noted that "when it works well, the center can quickly give emergency doctors a Kaiser patient's medical history and arrange for transfer." Still, some Kaiser members criticize the operation "as callous or dangerous."
Nonprofit Blues plans see underwriting income fall as more workers lose jobs.
American Medical News (2/23, Berry) reports, "Nonprofit Blues plans, the insurers of last resort in many states, have seen finances take a hit as underwriting income falls, thanks to workers losing jobs and insurance." And "Blues plans no longer can count on investment income to offset operating losses. For what appears to be a first, investment and underwriting income are in decline at the same time." Furthermore, "the national BlueCross BlueShield Assn. and more than 30 subsidiaries are being monitored by the [American Medical Association] and 27 other societies to ensure they comply with a settlement reached in federal court last year to reform their business practices." Additionally, "Blues plans in states from Hawaii to Maryland have been targeted with legislation aimed at their cash reserves." But, "experts say Blues plans will have to continue to draw on backup cash because legislators and regulators are not inclined to give a strategic advantage to plans that often dominate their states."
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