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Teaching Hospital Update - January 26-30, 2009


Email Alert

By Reesa Benkoff*

January 30, 2009

Computers Reduce Odds of In-Hospital Deaths

When computers replace paper, patient mortality rates drop 15% during hospitalization, according to a study of forty-one Texas hospitals by Baltimore-based Johns Hopkins School of Medicine researchers that was published in the Archives of Internal Medicine.

The researchers divided hospital clinical information technology systems into four categories: medical notes and records, test results, order entry, and clinical decision support. Physicians from the forty-one hospitals ranked their hospitals in each of the categories; researchers then examined the relationship between those rankings and the rates of inpatient death, complications, costs, and length of stay for 167,233 patients—all older than age fifty—who were admitted to the participating hospitals in 2005 and 2006.

In addition to lower overall mortality rates, hospitals with higher scores for computerized order-entry systems posted 55% lower odds of death for patients undergoing surgery for coronary artery bypass grafts, and 9% lower odds of death for patients with myocardial infarction. Higher scores for computerized order entry were associated with lower average costs per admission, and 16% lower odds of developing complications across all reasons for admission.

Joseph Conn, Computers reduce odds of in-hospital deaths: study, Modern Healthcare Alert (Jan. 26, 2009) (note: registration is required to view this content).

John Gever, Electronic Health Records with Decision Support Can Save Big Bucks, MedPage Today (Jan. 26, 2009).

Acting Director Named at CDC

Richard Besser, MD, the head of the CDC's terrorism preparedness office, has been named acting director of the agency. He replaces Julie Gerberding, MD, who left the director post when President Barack Obama took office.

Dr. Besser, 49, is a career CDC employee. After completing a pediatric residency at Johns Hopkins, he worked in CDC's Epidemic Intelligence Service on food-borne disease issues. He also has experience in infectious diseases and antibiotic resistance. Most recently, Dr. Besser was director of the Coordinating Office for Terrorism Preparedness and Emergency Response. The Obama administration gave no hint as to when a permanent appointment would be made or whether Dr. Besser was a candidate.

John Gever, Acting Director Named at CDC, MedPage Today (Jan. 23, 2009).

Medicare Rule Expands Coverage of Off-Label Cancer Treatments

A November 2008 change in Medicare policy to expand coverage of drugs for off-label uses to treat cancer patients has sparked questions about rising healthcare costs and the influence of drugmakers. The new rule expanded from one to four the number of guides—also known as compendiums—Medicare relies on to authorize a drug for use on a certain form of cancer.

The authors of the compendiums, who are not affiliated with the federal government, evaluate medical literature to make their recommendations. Under previous rules, Medicare representatives were to consult reference guides or compendiums and use their own discretion to interpret recommendations in determining which treatments were covered. The decision now, however, is based solely on the compendiums; if one of the compendiums recommends a cancer treatment, Medicare is essentially obliged to pay for it—unless one of the other guides specifically advises against it. The new guides consider more drugs effective for more cancers than the previous guide did. Medicare officials will review the choice of compendiums annually.

Several issues have arisen with the new rules. There are possible conflicts of interest because some of these new compendiums have close financial ties to the drug industry. In addition, while the American Society of Clinical Oncology has said its doctors will ensure that the appropriate off-label uses are covered, some cancer specialists have said that the ability to offer more off-label drugs could let physicians avoid difficult discussions with patients regarding poor prognoses. Medicare is giving "carte blanche in treatment for cancers," said Steven Findlay, a health policy analyst for Consumers Union, adding that the expanded coverage could encourage doctors to use patients as test subjects for unproven treatments. Furthermore, while oncologists "had clamored for the changes," claiming that some of the off-label treatments are essential, "there is scant clinical evidence" of the efficacy of some of the drugs, which can cost as much as $10,000 monthly.

Kaiser Daily Health Policy Report, Medicare Rule Expands Coverage of Off-Label Cancer Treatments, Henry J. Kaiser Fam. Fdn. (Jan. 27, 2009).

House Passes Stimulus Bill

The Democratic-controlled House approved an $819 billion stimulus bill Wednesday night with spending increases and tax cuts, including more than $80 billion for state Medicaid budgets and more than $20 billion to help doctors and hospitals adopt health information technology. The vote was 244-188, with Republicans unanimous in opposition. The vote sent the bill to the Senate, where debate could begin as early as next Monday on a companion measure already taking shape. Democratic leaders have pledged to have legislation ready for Obama's signature by mid-February.

Democrats said the legislation was desperately needed with unemployment at its highest level in a quarter-century, the banking industry wobbling despite the infusion of staggering sums of bailout money, and states struggling with budget crises. Republicans said the bill was short on tax cuts and contained too much spending, much of it wasteful and unlikely to help laid-off Americans. The party's leader, Republican John Boehner of Ohio, said the measure "won't create many jobs, but it will create plenty of programs and projects through slow-moving government spending." A GOP alternative, comprised almost entirely of tax cuts, was defeated, 266-170, moments before the final vote.

House Passes Stimulus Bill, ASSOC. PRESS VIA MODERN HEALTHCARE ALERT (Jan. 28, 2009) (note: registration is required to view this content).

Democrats Introduce Bill to Let Medicare Negotiate Drug Prices

House Democrats have introduced a bill to establish a government-controlled prescription drug plan which would compete with private plans that provide Medicare prescription drug coverage. The bill would permit the HHS Secretary to directly negotiate drug prices with pharmaceutical companies. The proposed Medicare-run drug plan is modeled after a similar plan in the VA.

The VA has reaped massive savings by negotiating drug prices for veterans, said Jan Schakowsky, a co-sponsor of the bill. She said the VA has negotiated drug prices that were 20% to 30% lower than the price of drugs available through the fifty or so private plans that provide Medicare Part D coverage. The government-run plan or plans would compete with current Medicare Part D providers by offering Medicare beneficiaries a potentially cheaper option, said Marion Berry (D-AR), another co-sponsor of the bill.

Although there is no Senate companion measure yet, Senator Dick Durbin (D-IL), who supports the House bill, said the Obama administration favors allowing Medicare to negotiate drug prices. Durbin said he would consider offering the bill as an amendment to a larger healthcare reform bill that is expected later this year. Democrats tried and failed to add an identical provision into the original Part D legislation, and tried again in the last congress, but both attempts gained little traction given the Bush administration's opposition.

Schakowsky said a government-run plan would also be a simpler option than the private plans now available. Medicare Part D offers too many plans, all of which make frequent changes to formularies so the result is confusion for Medicare beneficiaries. But Robert Zirkelbach, a spokesman for America's Health Insurance Plans, said most Medicare Part D users were satisfied with the coverage and were not confused by the numerous plans. Rather than a government plan, "seniors want a choice of programs," Zirkelbach said.

Emily P. Walker, Democrats Introduce Bill to Let Medicare Negotiate Drug Prices, MedPage Today (Jan. 28, 2009).

At Least Twenty-Five States Have Cut, Plan To Cut Health Insurance Programs for Low-Income Residents

Officials and lawmakers in at least twenty-five states have enacted or plan to propose cuts to various state public health services and insurance programs for low-income residents as part of efforts to reduce budget deficits, according to a report released on Wednesday by Families USA. According to the report, some states already have reduced their budgets for Medicaid, and twelve states have planned cuts to SCHIP. The report estimates that more than 250,000 people will lose their insurance coverage due to the cuts that already have been instituted, and "millions more" could be affected by the planned cuts. Some states, including Nevada, are attempting to prevent cuts by reducing payments to physicians and hospitals.

The states are hoping funds from a federal economic stimulus package will restore some of the funding. The stimulus package could include as much as $87 billion over twenty-seven months to help states with their Medicaid programs. It is "unclear" if the federal help will be enough to offset Medicaid cost increases, as more state residents lose their jobs and enroll in state programs.

Kaiser Daily Health Policy Report, At Least 25 States Have Cut, Plan To Cut Health Insurance Programs for Low-Income Residents, Report Finds, Henry J. Kaiser Fam. Fdn. (Jan. 28, 2009).

Eli Lilly to Pay $1.4 Billion to Resolve Allegations It Sold Zyprexa for Off-Label Uses

Eli Lilly and Co. agreed to pay $1.4 billion—the largest ever in a healthcare case and the largest criminal fine for an individual corporation imposed in a criminal prosecution of any kind—to resolve criminal and civil allegations that it promoted its antipsychotic drug Zyprexa for off-label uses, the Department of Justice (DOJ) announced on January 15, 2009.

"Settlements like Eli-Lilly's have an impact on patient access because they tell other drug manufacturers that they operate at their own peril when it comes to sharing information about emerging off-label uses of their products," Kirsten V. Mayer, an attorney with Ropes & Gray, Boston, told BNA on January 27, 2009. She said that "while the government clearly does not want to bar patient access to off-label treatments (doctors may prescribe drugs for off-label uses and insurance may cover those prescriptions), the current regulatory and enforcement environment severely restricts what manufacturers can share with the public about off-label uses, and that has an impact on access."

Mayer noted that Medicare has just expanded its coverage of off-label uses for cancer drugs. "In the government's efforts to protect the public, the Federal Drug Administration is not the only agency that has a role to play on off-label issues" she said. "When government enforcement in this complex area of the law makes it so costly for manufacturers to err, the danger is that the flow of scientific information from manufacturers to treating physicians will be shut down, even information that the FDA itself says may be shared," Mayer said. "DOJ and the FDA, when enforcing the prohibitions on off-label marketing, need to bear in mind the impact on access. The goal is not to shut down the availability of promising off-label drug treatments."

A criminal information filed in the district court January 15, 2009, alleged that from September 1999 through at least November 2003, Eli Lilly promoted Zyprexa for off-label treatment of uses that were not approved by the Food and Drug Administration, including aggression, dementia, Alzheimer's, depression, and generalized sleep disorder. Under the FDCA, a company must specify the intended uses of a product in its new drug application to FDA, the DOJ release said. Before approving a drug, FDA must determine that the drug is safe and effective for the proposed use and, once approved, the drug may not be marketed or promoted for off-label uses, the DOJ release said.

The information charged Eli Lilly with promoting Zyprexa in nursing homes and assisted-living facilities, primarily through its longterm care sales force. The information further alleged that Eli Lilly executives decided to market Zyprexa to primary care physicians based on the unlawful promotion and success in the longterm care market. Eli Lilly also agreed to enter into a five-year corporate integrity agreement with the HHS OIG. Under the CIA, a board of directors' committee will conduct an annual review of the company's compliance program and certify its effectiveness, and certain managers will certify annually that their departments are compliant, the DOJ release said.

Eli Lilly also agreed in a civil settlement agreement to pay $800 million to the federal government and various states to resolve four False Claims Act qui tam lawsuits filed by former company sales representatives in the U.S. District Court for the Eastern District of Pennsylvania, and related state claims by Medicaid and other federal programs. The federal programs include TRICARE, the Federal Employees Health Benefits Program, and the Department of Veterans Affairs, DOJ said.

Under the civil settlement agreement, the federal government will receive $438.2 million, and the state Medicaid programs will share $361.8 million, depending on the number of states participating in the settlement, DOJ said. The four FCA qui tam relators will receive almost $78.9 million from the federal share of the settlement amount, the DOJ press release said.

Eli Lilly's guilty plea and sentence is not final until accepted by the court, DOJ said. Further, Eli Lilly said the settlement agreement is subject to approval by the court, and the company anticipates a hearing on the settlement to occur within the next few weeks.

Eli Lilly to Pay $1.4 Billion to Resolve Allegations It Sold Zyprexa for Off-Label Uses, BNA'S HEALTH L. REP. (Jan. 29, 2009) (note: registration is required to view this content).

*We would like to thank Reesa Benkoff, Esquire (Hall Render Killian Heath & Lyman PLLC, Troy, MI) for contributing this email alert.

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