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Teaching Hospital Update - February 2-6, 2009


Email Alert

By Leah Romano and Clinton Mikel*

February 6, 2009

Obama Signs Measure Broadening SCHIP

President Obama signed a $32.8 billion bill this week to reauthorize the State Children's Health Insurance Program (SCHIP) for the next four and a half years. The bill was sent to him after the House approved it by a vote of 290 to 135. The bill aims to cover at least 4.1 million additional children—funded primarily by a sixty-two cent increase in the federal tax on cigarettes, with proportional increases for other tobacco products. This would bring coverage to a total of about 11 million children under the $25 billion program.

House Republicans were angered over the fact that the bill proceeded to the floor under a closed rule, without the chance to offer amendments. "There was no opportunity for Republican leadership or members to craft any part of this 280-page bill," said Representative Pete Sessions (R-TX).

The House ultimately decided to take up the Senate's version of the bill, which excluded a controversial funding provision that would have banned physician self-referral to hospitals in which they have an ownership interest. Experts believe that the contentious issue will resurface in other legislation this year.

Jennifer Lubell, Obama Signs Measure Broadening SCHIP, (Feb. 4, 2009) (note: registration is required to view this content).

Daschle Withdraws Nomination as HHS Secretary

On Tuesday, former Senate Majority Leader Tom Daschle (D-SD) withdrew his nomination as Secretary of Health and Human Services (HHS), citing the disclosure of his recent payments of back taxes and interest on his unreported income. In a statement, Daschle said he did not want to be "a distraction."

President Obama accepted Daschle's decision to withdraw and in a statement said, "This morning, Tom Daschle asked me to withdraw his nomination," adding, "I accept his decision with sadness and regret." According to Obama, Daschle has "devoted his life to public service and health care reform, so that every American has access to health care they can afford."

Kaiser Daily Health Policy Report, Daschle Withdraws Nomination as HHS Secretary, Head of White House Office of Health Reform, Henry J. Kaiser Fam. Fdn. (Feb. 3, 2009).

Former Co-Owner of Los Angeles Hospital Arrested in Fraud Scheme Using Homeless

The U.S. Attorney's Office announced that a former co-owner of a Los Angeles-area hospital was arrested January 30 on charges of defrauding the Medicare and Medi-Cal programs by paying illegal kickbacks to recruit homeless persons from the city's "Skid Row" area to receive unnecessary health services.

Robert Bourseau, who was co-owner and a former executive at City of Angels Medical Center, was arrested without incident at his downtown Los Angeles residence. He made his initial court appearance January 30, and was detained. He remains in custody. Bourseau and Dante Nicholson, a former City of Angels vice president, were indicted under seal January 29 by a federal grand jury in U.S. District Court for the Central District of California in Los Angeles. Also named in the indictment was Intercare Health Systems, the company through which Bourseau and his partner operated City of Angels.

The twelve-count indictment, which was unsealed January 30 after Bourseau's arrest, alleges that Intercare, Bourseau, Nicholson, and others conspired to recruit homeless people to receive unnecessary health services for the purpose of committing healthcare fraud, the U.S. attorney noted in a statement.

Former Co-Owner of Los Angeles Hospital Arrested in Fraud Scheme Using Homeless, BNA'S HEALTH L. REP. (Feb. 5, 2009) (note: registration is required to view this content).

OIG Finds Insurers Overcharged Beneficiaries, Taxpayers by Billions for Medicare Part D

According to a report recently released by the HHS Office of Inspector General (OIG), private health insurers that operate plans under the Medicare prescription drug benefit have overcharged beneficiaries and the program by several billion dollars since the program began in 2006, but CMS remains unaware of the total impact of the practice because of a failure to perform required audits. For 2006, 80% of health insurers that operate plans under the Medicare prescription drug benefit overcharged the program by about $4.4 billion.

CMS must audit at least one-third of all health insurers that operate plans under the Medicare prescription drug benefit. However, of the 165 audits that CMS should have conducted for 2006, the agency had begun only seven as of April 2007, the OIG found. The report states that CMS likely will not address the problems found with the audits before 2010. "Delaying financial audits increases the risk that (the companies) will use inaccurate and unsupported . . . data to estimate the cost of providing Part D benefits in future plan years," according to the report.

In response, CMS officials said that the agency had begun or completed 103 of the 165 audits for 2006. Senator Claire McCaskill (D-MO) said of the report, "It shows a mindset that could care less about wasting taxpayer money, that has no problem with padding profits of drug companies with hard-earned taxpayer dollars."

Kaiser Daily Health Policy Report, HHS Inspector General Finds Insurers Overcharged Beneficiaries, Taxpayers by Billions for Medicare Part D, Henry J. Kaiser Fam. Fdn. (Feb. 2, 2009).

Harvard Plans to Strengthen Conflict-of-Interest Policies

Harvard Medical School plans to fortify its conflict-of-interest rules for physicians and researchers. The move comes amid a U.S. Senate investigation of several faculty members and a new Massachusetts law that will publicize certain payments physicians receive from medical device and pharmaceutical companies.

Harvard Medical School has been criticized over its conflict-of-interest policy. The American Medical Student Association gave Harvard an 'F' on its conflict-of-interest policy because it does not address company gifts or meals. Also, a group of students last year succeeded in making a new policy requiring lecturers, faculty members, and visiting professors to reveal financial interests in a company or treatment they discuss.

The school's current policy focuses on limiting research conflicts by enforcing certain practices such as barring faculty or family members from holding more than $30,000 worth of stock in publicly traded companies, or any equity in privately held companies that sponsor their research. In addition, faculty and family cannot receive more than $20,000 a year in consulting or other fees. The policy also requires physicians to account for their relationships with companies on paper. Harvard's teaching hospitals—including Massachusetts General, Brigham and Women's, and Beth Israel Deaconess Medical Center—have separate conflict-of-interest rules from Harvard Medical School, despite some overlap.

Top medical schools at Stanford University, University of Pennsylvania, University of California-Los Angeles, University of California-San Francisco, and University of Massachusetts have adopted stricter policies over the course of the last two years. However, David Korn, Harvard's vice provost for research, who is in charge of the review of the university's conflict-of-interest policy, said the university has a bigger challenge than other schools because the medical school does not own or control its affiliated teaching hospitals, and more clinical faculty are employees of the hospitals than the medical school.

Kaiser Daily Health Policy Report, Harvard Set To Strengthen Conflict-of-Interest Policies at Medical School, Affiliated Hospitals, Henry J. Kaiser Fam. Fdn. (Feb. 3, 2009).

Immediate Treatment of Minor Stroke Reduces Costs and Disability

Researchers have found that specialty outpatient treatment of transient ischemic attack or minor stroke cut the risk of recurrent stroke and reduced hospital admissions, lengths of stay, costs, and disability. Compared with patients receiving more delayed treatment, those who received treatment within twenty-four hours had a significantly reduced rate of fatal or disabling stroke after ninety days. Urgent treatment reduced hospital admissions for recurrent stroke, number of bed-days due to vascular causes.

In addition, a smaller proportion of patients who received immediate care became newly disabled at six months. Urgent care was associated with an estimated savings of about $890 per patient. Researchers also concluded that "the reductions in disability rates at six months might lead to a reduction in the long-term usage of the health service in the community."

Although urgent treatment was associated with lower costs per patient, the researchers did not account for the costs of setting up urgent-care outpatient clinics for patients with transient ischemic attack and minor stroke. Additional limitations of the study included the fact that patients were not randomized, the potential influence of external biases, and the short time frame for follow-up.

Todd Neale, Immediate Treatment of TIA or Minor Stroke Reduces Costs and Disability, MedPage Today (Feb. 4, 2009).

University of California, Nurses Reach Tentative Accord on Contract Reopener

The University of California (UC) and the California Nurses Association, which represents more than 10,000 UC nurses, have reached a tentative accord on a reopener agreement that would address some of the union's longstanding staffing concerns and provide a 4%, across-the-board increase, effective February 8, with a September 2009 reopener on the issue of wages.

In addition, the agreement will preserve the nurses' current health and pension benefits, although employee health premiums will increase slightly. The union's membership will vote on ratification of the tentative contract February 6 and February 7. The negotiating team is recommending ratification, she said. The union regards the staffing language in the reopener, which provides that the university will take meals and breaks into account when assessing staffing needs, as the most important aspect of the agreement.

Under the agreement, the university said UC nurses will receive "market-competitive" wage increases totaling approximately $32 million through September 30, 2009. Wages for medical center nurses are supported by hospital revenues, not state funds, UC noted.

University of California, Nurses Reach Tentative Accord on Contract Reopener, BNA'S HEALTH L. REP. (Feb. 5, 2009) (note: registration is required to view this content).

*We would like to thank Leah Voigt Romano, Esquire, and Clinton Mikel, Esquire, (Hall Render Killian Heath & Lyman PLLC, Troy, MI) for writing this email alert.

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