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Teaching Hospital Update - December 14-18, 2009


Email Alert

By Clinton Mikel*

December 18, 2009

Obama Says Government Will Go Bankrupt Without Healthcare Reforms to Rein in Costs

President Barack Obama said in a Wednesday ABC News interview that if Congress fails to pass healthcare reform that reins in costs, it will "bankrupt" the federal government. "'Anybody who says that they are concerned about deficit, concerned about debt, concerned about loading up taxes on future generations, you have to be supportive of this health care bill because if we don't do this, nobody argues with the fact that health care costs are going to consume the entire federal budget,'" President Obama said.

In the meantime, in regard to the pending healthcare overhaul, President Obama's chief of staff, Rahm Emanuel, has been nudging the process at critical points, corralling powerful interests, and coaxing members of Congress, said lobbyists, labor leaders, lawmakers, and congressional staff. As he plays the inside game, President Obama plays the outside game: setting broad principles, building support beyond Washington, and applying pressure.

U.S. Department of Health and Human Services Secretary (HHS Secretary) Kathleen Sebelius told a crowd of healthcare providers Wednesday in Baltimore that reform would save money and improve care for "millions of Americans who do not get all the mental health services they need." "Bills passed by the House and being debated in the Senate would require mental health and substance abuse coverage for people getting new coverage for physical care. Other legislation passed last year will require that insurers that provide physical coverage also provide an equal level of mental health coverage," Sebelius said.

Kaiser Daily Health Policy Report, Obama Says Government Will Go Bankrupt Without Health Reforms to Rein In Costs, Henry J. Kaiser Fam. Fdn. (Dec. 17, 2009).

Single-Payor Amendment Withdrawn After GOP Tactics

In an earnest but doomed attempt to create a single-payor healthcare system, Senator Bernie Sanders (I-VT) brought up a Medicare-for-all amendment to the healthcare reform bill on Wednesday, but was forced to withdraw it in the face of Republican parliamentary tactics. Sanders introduced an amendment to create a national, wholly government-run health insurance program.

Sanders said his amendment would save $350 billion in administrative expenses by eliminating private insurance companies from the picture.

Senator Tom Coburn (R-OK), an OB/GYN, demanded that the 776-page amendment be read by Senate clerks--a move that is always an option but rarely invoked. Coburn stated that he had not seen Sanders' amendment before it was brought to the floor. The reading began at noon and continued on for several hours until Sanders withdrew the measure, ending a monotone, afternoon read-a-thon. Senator Dick Durbin (D-IL) estimated that reading the whole amendment would have taken ten hours.

After withdrawing the amendment, Sanders delivered a few more pointed words in favor of loosening the insurance industry's grasp on medical care and the need for universal coverage. "The day will come when this country will do the right thing. And on that day, we will pass a Medicare-for-all single-payer system." After Sanders' amendment, the Senate took up a defense spending measure.

It is appearing less and less likely that the Senate will vote on healthcare reform before Christmas, which Senate Majority Leader Harry Reid (D-NV) has said is his goal. Reid has yet to introduce his manager's amendment, which will include a series of changes to the older version of the healthcare bill. Republicans can again request that the amendment be read aloud. Hoping to avoid that, Democrat leaders have told the Republicans that the amendment will be available publicly for at least seventy-two hours before it is brought up on the floor.

Emily P. Walker, Single-Payor Amendment Withdrawn After GOP Delay Tactics, MedPage Today (Dec. 16, 2009).

New Strike Forces, Indictments Announced

New Medicare fraud "strike forces" are operating in Tampa, FL; Brooklyn, NY; and Baton Rouge, LA, the U.S. Justice Department (DOJ) revealed while announcing five indictments charging thirty people with running several unrelated scams that ripped off the federal healthcare program.

The expansion of the multiagency teams is the second since May, when the DOJ and the U.S. Department of Health and Human Services (HHS) announced that the government would dedicate more resources toward the problem. The first strike force hit Miami in 2007, which subsequently was replicated in Los Angeles in 2008, and in Detroit and Houston in 2009. The strike forces have led to 250 guilty pleas and more than twenty convictions at trial, said Assistant Attorney General Lanny Breuer at a news conference in Brooklyn.

The targets of the newly unsealed indictments allegedly submitted fraudulent Medicare claims totaling $61 million. In Detroit, owners of a clinic allegedly paid kickbacks to patients who agreed to fake symptoms that would justify expensive tests such as nerve-conduction studies.

In the Brooklyn case, the defendants allegedly billed the government for unnecessary medical equipment. Fifteen of the Miami defendants, including doctors and nurses, were alleged to have played roles in bogus claims for home care, an increasingly popular fraud target. Another case involved allegedly fraudulent HIV infusion therapy.

Greg Blesch, New Strike Forces, Indictments Announced, Modern Healthcare's Daily Dose (Dec. 15, 2009) (note: registration is required to view this content).

DOJ Joins FTC in Signaling Willingness to Provide Additional Guidance for Providers

DOJ is willing to consider providing additional guidance on how it will apply antitrust laws to healthcare providers who clinically integrate, according to a letter sent December 10, 2009, by Ronald Welch, an assistant attorney general in the Antitrust Division of DOJ, to Judiciary Committee Chairman Senator Patrick J. Leahy (D-VT) and others.

Welch acknowledged that joint ventures among providers "create efficiencies and provide benefits to consumers" and said DOJ believes providers "must be able to implement procompetitive integration models with confidence in their understanding of whether their actions violate the antitrust laws."

Welch also said that while the department and Federal Trade Commission (FTC) already have provided guidance on the issue, additional guidance may be appropriate in the context of specific provider proposals or to address changes in the healthcare industry associated with healthcare reform initiatives. "As the health care reform process proceeds, the Department will listen carefully to the questions, concerns, and requests of the provider communities as they consider potential new business models, and will consider suggestions from interested parties about the need for further clarification or modification to the agencies' guidance documents," the letter said.

Welch also said that the department tentatively plans to launch an initiative in February 2010 to engage members of the healthcare industry and consumers concerning the antitrust implications of collaboration efforts that it recognizes can render healthcare delivery more efficient and help deliver higher quality care at a reduced cost.

The DOJ letter follows a similar letter sent November 18, 2009, by FTC Chairman Jon Leibowitz to Senator Herbert H. Kohl (D-WI), in which the FTC head expressed his willingness to consider additional guidance, "where feasible and appropriate," especially in light of ongoing efforts to reform the healthcare system and legislative proposals that embrace accountable care organizations and other collaborative healthcare delivery models.

DOJ Joins FTC in Signaling Willingness To Provide Additional Guidance for Providers, BNA'S HEALTH L. REPRESENTATIVE (Dec. 17, 2009) (note: registration is required to view this content).

Consumers See Hospital Prices Jump in November

Consumer prices for hospital services climbed 0.9% in November, up from 0.3% the prior month and 0.2% from the same month a year ago, newly released Bureau of Labor Statistics figures show. The seasonally adjusted Consumer Price Index for hospitals increased 7.7% for the year ended in November compared with 5.9% a year ago.

For physician services, consumer prices increased 0.1% for the second straight month in November compared with 0.3% in November 2008. For the year that ended in November, consumer prices increased 2.7% after rising 2.9% during the prior twelve months.

Melanie Evans, Consumers See Hospital Prices Jump in November, Modern Healthcare's Daily Dose (Dec. 16, 2009) (note: registration is required to view this content).

Tea Party Protestors Rally Against Health Bills at Capitol

The most vocal opponents of the health bills, Tea Party protestors, took to the Capitol on Tuesday. Several thousand Tea Party protesters rallied near the Capitol to send a message: "Kill the Bill." The crowd's message and energy was only intensified by the encouragement of some of the nation's best known conservatives, including Senators Jim DeMint (R-SC), Tom Coburn (R-OK), Richard Burr (R-NC), Representative Michele Bachmann (R-MN), former House Majority Leader Dick Armey (R-TX), and radio personality Laura Ingraham.

"We fought the British over a 3 percent tea tax. We might as well bring the British back," said William Temple of Brunswick, GA, an American Revolution re-enactor dressed in a costume from the Revolution. "People are fed up. They've had enough of big government."

Kaiser Daily Health Policy Report, Tea Party Protestors Rally Against Health Bills at Capitol, Henry J. Kaiser Fam. Fdn. (Dec. 16, 2009).

Medical Device Makers Divided Over Reduced Tax

Medical device makers are still split over a reduced tax in the Senate healthcare bill.

In the fall, congressional Democrats proposed adding $40 billion in new taxes over ten years on medical device companies, claiming that they had refused to offer concessions on their own to help pay for healthcare reform. Industry officials noted that they were already taking a hit because of likely hospital cuts that would affect device makers' bottom lines. They stated that new taxes would mean steep job losses.

But now, as the Senate moves closer to consideration of the massive healthcare bill, some in the medical device industry appear closer to reaching a truce. Both the Senate and House versions include $20 billion in new taxes on the industry. At the same time, the negotiations have exposed a rift within the medical device community between larger companies and smaller firms.

Kaiser Daily Health Policy Report, Medical Device Makers Divided Over Reduced Tax, Henry J. Kaiser Fam. Fdn. (Dec. 16, 2009).

*We would like to thank Clinton R. Mikel, Esquire (Hall Render Killian Heath & Lyman PLLC, Troy, MI), for providing this week's update.

AHLA Teaching Hospital Updates are intended to provide quick summaries of cutting-edge issues of interest to teaching hospitals and their counsel. Additional information and more in-depth coverage on these topics may be available from AHLA Health Lawyers Weekly and appropriate AHLA Practice Groups.

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