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Teaching Hospital Update - October 6–10, 2008


By Reesa N. Benkoff*

Lawsuit Against HHS and SSA Challenges Mandatory Part A Enrollment

A new lawsuit against the Department of Health and Human Services (HHS) and the Social Security Administration challenges a rule requiring that retirees forfeit Social Security income if they withdraw from Medicare Part A. The three men who have filed the lawsuit in U.S. District Court in Washington claim that they are able to buy superior health insurance in the private market. Payroll taxes fund Medicare Part A, and retirees pay no premiums for it. The automatic enrollment in the program, the men argue, limits healthcare choices.

The lawsuit argues the policy is illegal because the statutes enacting the programs describe them as voluntary—and because the administrations of Presidents Clinton and George W. Bush neglected to follow appropriate rulemaking procedures in establishing and revising the policy. Center for Medicare and Medicaid Services (CMS) spokesman Jeff Nelligan said in a written statement, "the law is clear here—if an individual receives a Social Security check, that person must accept the Part A benefit."

The plaintiffs in the case are Brian Hall, a former employee of the Department of Housing and Urban Development; Lewis Randall, a private investor and board member of E*Trade; and Norman Rogers, founder and retired chief executive officer of Rabbit Semiconductor. Randall also serves on the board of the Cato Institute.

Gregg Blesch, Lawsuit Challenges Mandatory Part A Enrollment, Modern Healthcare's Daily Dose (Oct. 9, 2008) (note: registration is required to view this content).

Arizona Hospital Begins Joint Venture in Vietnam

John C. Lincoln North Mountain Hospital, a 266-bed provider in Phoenix, has signed a joint-venture agreement with Envita Asia Hospital in Ho Chi Minh City, Vietnam. The agreement calls for John C. Lincoln to provide stateside care to Envita's seriously ill patients and to train doctors and surgeons at the Vietnamese hospital, said John C. Lincoln spokeswoman Susan Fuchs. Fuchs noted that 60% of Vietnamese citizens have no access to care and the country recently approved private-sector development of the healthcare system in an effort to expand services.

Le Thanh Cat Van, chairman and president of Envita Asia Hospital, is leading an effort to upgrade and expand the Ho Chi Minh City facility, Fuchs said. "They plan to open a 70-bed facility by February and eventually expand to 250 beds," she said. Vietnamese patients will pay out-of-pocket for the care at John C. Lincoln, Fuchs said, and will travel with a care coordinator/interpreter during their stay. Details of the training agreement are still being determined, Fuchs added.

Shawn Rhea, Ariz. Hospital Starts Joint Venture in Vietnam, Modern Healthcare's Daily Dose (Oct. 7, 2008) (note: registration is required to view this content).

FDA Says No Safe Level of Melamine in Baby Formula

The Food and Drug Administration (FDA) recently announced that any level of melamine in baby formula, no matter how small, is a safety concern. However, the precise level of risk cannot be quantified. The agency added in an interim safety and risk assessment that in food products other than baby formula, melamine concentrations of less than 2.5 parts per million "do not raise concerns." For baby feeding, confounding factors—such as infant size, maturity, and whether formula was the sole source of nutrition—complicate risk assessments, the FDA stated. But while there was "too much uncertainty to set a level in infant formula and rule out any public health concern," the FDA added that it was important to understand "that this does not mean that any exposure to any detectable level of melamine and melamine-related compounds in formula will result in harm to infants."

The FDA's Center for Food Safety and Applied Nutrition and the Center for Veterinary Medicine performed the assessment in response to public health concerns raised by reports of melamine contamination of milk-derived ingredients and finished food products containing milk manufactured in China. After reviewing scientific literature on melamine toxicity, the FDA stated, however, that there were significant "gaps in our scientific knowledge about the toxicity of melamine and its analogues in infants." The agency noted that there are questions about continual use of melamine-contaminated infant formula as the sole source of nutrition—and whether more than one melamine analog could be ingested.

Moreover, the FDA suggested that risks might be greater for premature infants who have immature kidney function. Because preemies are smaller than full-term infants, they might, on "a body-weight basis, experience greater levels of intake for a longer time than is experienced by term infants."

In other food products, the FDA concluded that "levels of melamine and melamine-related compounds below 2.5 parts per million (ppm) do not raise concerns." That conclusion assumed a "worst-case exposure scenario in which 50% of the diet is contaminated at this level, and applies a 10-fold safety factor to the Tolerable Daily Intake (TDI) to account for any uncertainties. The TDI is an estimate of the maximum amount of an agent to which an individual could be exposed on a daily basis over the course of a lifetime without an appreciable health risk."

In the past week, the FDA announced recalls of instant coffee and tea products imported from China due to suspected melamine contamination.

Peggy Peck, FDA Says No Safe Level of Melamine in Baby Formula, MedPage Today (Oct. 3, 2008).

CMS Announces RAC Program Companies

CMS has begun the initial phase-in of its Recovery Audit Contractor (RAC) program by announcing the four new contractors that will administer the program. Each contractor will be responsible for identifying overpayment and underpayments in approximately one-quarter of the country, according to the agency. Specifically, the contractors are:

  • Diversified Collection Services, Livermore, CA, which will initially cover the states of Maine, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont;
  • CGI Technologies and Solutions, Fairfax, VA, which will cover Indiana, Michigan, and Minnesota;
  • Connolly Consulting Associates, Wilton, CT, which will cover Colorado, Florida, New Mexico, and South Carolina; and
  • HealthDataInsights, Las Vegas, NV, which will cover Arizona, Montana, North Dakota, South Dakota, Utah, and Wyoming.

Additional states will be added to each RAC region in 2009, according to CMS. The RAC program, initially pilot-tested in several states, was created to identify and correct improper Medicare payments paid to healthcare providers in fee-for-service Medicare. In July, the CMS reported that the demonstration project recovered $1 billion in improper payments made since 2005. HHS is required to make the RAC program a permanent, national program in all fifty states by January 1, 2010. In the meantime, hospitals and lawmakers are concerned this program will result in legal and administrative woes. Don May, vice president for policy with the American Hospital Association (AHA), said in an interview that the AHA plans on working with the CMS and new contractors through training programs and other modes of communication "to make sure this is implemented in a methodical and fair way."

Jennifer Lubell, CMS Announces RAC Program Companies, Modern Healthcare's Daily Dose (Oct. 6, 2008) (note: registration is required to view this content).

Eli Lilly Agrees to Pay $62 Million to 33 States to Settle Allegations of Improper Marketing of Zyprexa

Eli Lilly has agreed to pay $62 million to thirty-three states to settle allegations that the company marketed the antipsychotic Zyprexa for unapproved uses in violation of state consumer protection laws. The settlement will end an eighteen-month investigation led by the offices of the Illinois and Oregon attorneys general. According to the allegations, internal documents and emails indicate that Lilly marketed Zyprexa—which the FDA has approved as a treatment for schizophrenia and mania associated with bipolar disorder in adults—as a treatment for dementia and milder forms of bipolar disorder. Lilly also marketed Zyprexa for use in children, according to the allegations.

As part of the settlement, Lilly for six years will have to follow certain ethical marketing guidelines under which medical staff, rather than marketing staff, must write medical letters sent to physicians. Lilly will not admit wrongdoing under the settlement agreement.

Kaiser Daily Health Policy Report, Eli Lilly Agrees to Pay $62 Million to 33 States to Settle Allegations of Improper Marketing of Zyprexa, Henry J. Kaiser Fam. Fdn. (Oct. 7, 2008).

Senators Propose Bill to Require Employers to Disclose
Amount Spent on Health Insurance Premiums for Employers

A bipartisan group of senators this week proposed a bill to require employers that offer health insurance to disclose to employees the amount spent on their premiums. Under the legislation—sponsored by Senate Finance Committee Chair Max Baucus; ranking member Chuck Grassley; Senate Health, Education, Labor and Pensions Committee ranking member Michael Enzi; and Senators Ron Wyden and Ben Nelson—employers would have to disclose on annual W-2 tax forms the amount spent on health insurance premiums for employees and their families, as well as the amount spent on dental and vision coverage.

Many employees are not aware of what their health insurance costs because their employers pay half or more of their premiums, without always saying exactly how much. Also, many healthcare experts claim that consumers might make more efficient health spending decisions, taking costs into account, if they knew the full cost of their health insurance.

Grassley said that "as long as people are insulated from the cost and just think someone else is paying for it, then it's easy to overlook expenses. . . . [B]ut once they realize they themselves are paying for it, it should spark a genuine conversation about what to do." In addition, he said that "some employees might want to receive different compensation in the form of a higher salary, additional vacation, or more child care instead of more health coverage than they need." The senators will accept public comments on the bill through December 31, 2008.

Kaiser Daily Health Policy Report, Senators Propose Bill to Require Employers To Disclose Amount Spent on Health Insurance Premiums for Employees, Henry J. Kaiser Fam. Fdn. (Oct. 8, 2008).

New Census Report Provides Detailed Geographic and Demographic Analysis of the Uninsured in the U.S.

A new report from the U.S. Census Bureau provides a detailed analysis of the uninsured population in the U.S., providing breakdowns by state, county, and demographic groups. For the study, researchers at the bureau's Small Area Health Insurance Estimates division used 2005 data from all states across gender, age, and income. The report is the most wide-ranging estimate the Census Bureau has published on the rates of uninsured U.S. residents.

According to the report, approximately 16% of U.S. residents did not have health insurance in 2005. Nationally, Minnesota and Hawaii had the lowest uninsured rates in 2005 at 9.5% and 9.7%, respectively, followed by Wisconsin at 10.3%. The study also found Florida, New Mexico, and Texas had the three highest rates of uninsured residents younger than age 65. In addition, the report found that states have wide variances between racial–ethnic groups. Mississippi and Texas had greater shares of uninsured Hispanic residents, while Montana and Oklahoma had higher rates of uninsured white residents.

The Census Bureau noted that previous data gathered in 2000 were not applicable because the researchers used a different method to gather the data in 2005.

Kaiser Daily Health Policy Report, New Census Report Provides Detailed Geographic and Demographic Analysis of the Uninsured in the U.S., Henry J. Kaiser Fam. Fdn. (Oct. 9, 2008).

Brain Scan Shows Patients in Minimally Conscious State Feel Pain

According to a recent study, patients in a minimally conscious state appear to have brain activity that indicates that they have the ability to feel pain. Positron emission tomography (PET) scans detected activation of regions of the brain known collectively as the pain matrix that was no different than the activity observed in control patients. The findings, the researchers concluded, "might be objective evidence of a potential pain perception capacity in patients [in a minimally conscious state], which supports the idea that these patients need analgesic treatment."

The researchers used PET to measure the effect of bilateral stimulation of the median nerve in five minimally conscious state patients ages 18–78 compared with the effect in fifteen age-matched healthy controls and fifteen patients in a persistent vegetative state. They also investigated the functional connectivity of the primary somatosensory cortex in patients and controls.

Control patients said they felt pain in response to the stimulation and their scans showed "increased regional cerebral flow in several areas, including the thalamus, striatum, contralateral SI, secondary somatosensory or insular cortices, superior temporal, posterior, parietal, posterior cingulated, prefrontal, and anterior cingulate cortices," the researchers reported. The minimally conscious patients "showed significant activation in all the areas activated in the controls," they wrote. Minimally conscious patients showed greater activation in all areas of the cortical pain matrix than did those in a persistent vegetative state, the researchers said. And the minimally conscious patients had preserved functional connectivity between the primary somatosensory cortex and a wide cortical network, while those in a persistent vegetative state did not.

Some argue that the better option for assessing pain in an individual patient would be functional magnetic resonance imaging (MRI). The researchers noted that PET did not "enable us to identify reliably activation maps in individual patients. Functional MRI can tackle this problem because many more scans would be acquired per patient; these studies are ongoing." But the authors said their findings did make a case for use of analgesia in patients who are in a minimally conscious state.

Peggy Peck, Brain Scans Show Patients in Minimally Conscious State Feel Pain, MedPage Today (Oct. 7, 2008).

*We would like to thank Reesa N. Benkoff, Esquire (Hall Render Killian Heath & Lyman PLLC, Troy, MI) for providing this week's Teaching Hospital Update.

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