We use cookies to better understand how you use our site and to improve your experience by personalizing content. Please review our updated Privacy Policy and Terms of Use. If you accept the use of cookies, please click the "I accept" button.I acceptI declineX
Skip navigational links

Teaching Hospital Update - September 29 – October 3, 2008


By Leah Voigt Romano*

Senate Approves Financial Bailout Legislation That Includes Mental Health Parity Provisions

Mental health parity legislation was included in the $700 billion bailout of Wall Street firms passed this Wednesday by the Senate. The legislation would require group health plans of 51 or more employees to cover mental illnesses at the same level as physical ailments. It does not require the plans to offer such coverage but must be equivalent if they do. Health plans violating the requirement could be subject to federal excise taxes. The bailout bill now goes before the House, which earlier this week voted against a previous package that did not include parity legislation.

According to CQ Today, the mental health provisions were added to the larger package as a means of enticing House members who voted against the previous bailout measure but support parity legislation, including Rep. Jim Ramstad (R-MN). A Ramstad aide said the inclusion of parity language has "caused him to reconsider his position" on the bailout. However, inclusion of the parity bill "has not translated into a visible new groundswell of House support for the larger bill."

Mental health advocates will increase pressure on House members before the vote, which is scheduled for Friday. If the package is defeated in the House, a parity bill still could be passed this session. However, proponents of the legislation are "running out of time" because the bailout bill could be the last major bill of the year before lawmakers return to their home states for the November 4 election.

Kaiser Daily Health Policy Report, Senate Approves Financial Bailout Legislation That Includes Mental Health Parity Provisions, Henry J. Kaiser Fam. Fdn. (Oct. 2, 2008).

University of Minnesota Task Force Seeks Greater Transparency in Faculty Conflicts of Interest With Pharmaceutical Companies

A task force that examined conflicts of interest at the University of Minnesota Medical School has recommended that the university expand its disclosure policy regarding relationships between the school's faculty and the drug industry. An unreleased task force report suggested the school disclose all financial ties between faculty and the drug industry, ban gifts from medical companies, and establish a website that would report all conflicts of interest. The task force also recommended new limits on gifts to its physicians from drugmakers. In addition, the task force recommended that physicians disclose all relationships with pharmaceutical companies before prescribing drugs to patients. The recommendations, which the task force will forward to Dean Deborah Powell, are based on a one-year study.

Task force Co-Chair said, "We think there's no place in medical education and the delivery of care for gifts to physicians." According to Public Citizen, drugmakers paid the university and its medical faculty nearly $1.5 million between 2002 and 2004. Earlier this year, the American Medical Student Association gave the medical school a "D" grade for its current conflict-of-interest policies in part because of a guideline that allows some financial relationships with drugmakers without review from a school committee.

Kaiser Daily Health Policy Report, University of Minnesota Task Force Seeks Greater Transparency in Faculty Conflicts of Interest With Pharmaceutical Companies, Henry J. Kaiser Fam. Fdn. (Oct. 2, 2008).

CMS Issues Guidance on Medicare Payment for Routine Costs in a Clinical Trial

In a recent special edition MLN Matters article, Clarification of Medicare Payment for Routine Costs in a Clinical Trial, the Centers for Medicare & Medicaid Services (CMS) issued guidance on Medicare payment routine costs in a clinical trial. The article cites chapter 16, section 40 of the Medicare Benefit Policy Manual, which states that "payment may not be made for items or services which neither the beneficiary nor any other person or organization has a legal obligation to pay for or provide."

According to the MLN Matters article, if the routine costs of a clinical trial are furnished gratuitously—that is, without regarding to ability to pay and without expectation of payment from another source—then Medicare payment cannot be made and the beneficiary cannot be charged.

Conversely, the article indicates, if the routine costs of the clinical trial are not billed to indigent non-Medicare patients because of their inability to pay (but are billed to other patients in the trial who have the financial means to pay, even when his or her private insurer denies payment), then a legal obligation to pay exists. Medicare payment may be made and a beneficiary (who is not indigent) will be responsible for the applicable Medicare deductible and coinsurance amounts.

Washington State Supreme Court Clarifies Law on Organ Donations

Late last week, the Washington Supreme Court unanimously ruled that the Washington Uniform Anatomical Gift Act provides that hospitals are to be recipients of organ donations when the donor does not specifically name the recipient of the donation (Adams v. King County, Wash., No. 81028-1, Sept. 25, 2008). The court also ruled that the statute does not create a private right of action. However, "unauthorized use of an organ is actionable under common law theories of recovery," the court said.

The court found that the law did not authorize the Stanley Medical Research Institute to receive an undesignated anatomical gift from the body of Jesse Adams, whose mother, Nancy Adams, sued the institute and King County under the Washington organ donation law. Issues to be sent to trial in the case are Adams' claims that the defendants committed tortious interference with a dead body and engaged in a conspiracy to procure body tissue without consent, the court said.

As stated by the Washington Supreme Court, the primary goal of the state law is to increase the number of anatomical gifts for donation. The Legislature noted, in enacting the law, that the number of organs available for transplant does not meet the need, the court said. The law allows donors to make such gifts for research and medical education, but the Legislature did not mention those purposes, according to the court.

Nancy Netherton, Washington State Supreme Court Clarifies Law on Organ Donations, BNA HEALTH L. REP., Oct. 25, 2008 (note: registration is required to view this content).

FDA Okays Test to Quickly Identify Flu Strains

The FDA has approved a fast influenza test along with an instrument that can be used together to quickly diagnose seasonal and avian flu. The test, Human Influenza Virus Real-Time RT-PCR Detection and Characterization Panel (rRT-PCR Flu Panel) and the diagnostic instrument, Applied Biosystems 7500 Fast Dx, can identify influenza virus in four hours and can test multiple samples concurrently.

Secretary of Health & Human Services Mike Levitt called the FDA approval of the test panel a "significant achievement for public health surveillance." He said the rapid flu test would allow his department to better support laboratories on the front line of influenza testing here and overseas, adding that the fast assay would be especially important in "the early stages of a pandemic."

The test panel isolates and amplifies viral genetic material present in secretions from the nose or throat and labels it with fluorescent molecules, which are then scanned and analyzed by the diagnostic instrument. Levitt said the test would be available for use this fall at CDC-qualified laboratories. Some laboratories will be able to obtain reagents "at no cost," he said.

Peggy Peck, FDA Okays Test to Quickly Identify Flu Strains, MedPage Today, October 1, 2008.

News Media Lax on Disclosing Funding of Drug Trials

According to a report published in the October 1 issue of Journal of the American Medical Association (JAMA) the news media often fail to report the fact that drug trials are funded by pharmaceutical companies. Of 306 news stories about company-funded drug trials, 42% did not identify the funding source, the study's authors found. In addition, 67% of the articles used the brand names of medications in at least half of the references.

"For patients and physicians to evaluate new research findings, it is important that they know how the research was funded so they can assess whether commercial biases may have affected the results," the researchers said.

"Additionally," they continued, "the use of generic medication names by the news media is preferable so that physicians and patients learn to refer to medications by their generic names, a practice that is likely to reduce medication errors and may decrease unnecessary healthcare costs." Little had been known about how the news media report study funding from pharmaceutical companies and how often generic drug names are used in stories, the researchers said.

They reviewed articles from newspapers and online news sources reporting on studies of drug safety and efficacy found in five major medical journals—JAMA, New England Journal of Medicine, The Lancet, Annals of Internal Medicine, and Archives of Internal Medicine—from April 2004 through April 2008.

The researchers identified 117 studies that had been funded by a pharmaceutical or biotechnology company, and 306 news stories in 26 newspapers and seven online sources referring to them. In stories that reported the funding source for the studies, only 18% included the information in the first 150 words.

M. Hochman et al., News Media Coverage of Medication Research: Reporting Pharmaceutical Company Funding and Use of Generic Medication Names, 300 JAMA 1544-1550 (2008).

Todd Neale, News Media Lax on Disclosing Funding of Drug Trials, MedPage Today, Sept. 30, 2008.

Cephalon to Plead Guilty, Pay $425 Million

Drugmaker Cephalon will pay a previously disclosed sum of $425 million and plead guilty to a misdemeanor criminal charge in order to resolve allegations of off-label marketing levied by the U.S. Justice Department and in civil lawsuits by former employees.

According to the government, Cephalon actively promoted three of its drugs to physicians for uses that were not approved by the Food and Drug Administration: Actiq, approved for cancer pain, was encouraged as a treatment for other sources of pain; anti-epilepsy drug Gabitril, was offered as a remedy for anxiety, insomnia, and pain; and Provigil, a drug approved to treat sleepiness associated with a few specific sleep disorders such as narcolepsy, was promoted as an answer to general sleepiness and fatigue.

Cephalon has agreed to plead guilty to a single count of distribution of misbranded drugs and pay a total of $50 million to cover a criminal fine and asset forfeiture associated with the charge. The rest of the payment—$375 million—will go to the U.S. government and several state Medicaid, programs to settle False Claims Act lawsuits initiated by former employees who alleged Medicare, Medicaid, and other programs paid for drugs that were prescribed as a result of the company's misconduct. The settlement agreement, in which Cephalon does not concede liability or the government's version of the facts, also calls for a five-year corporate integrity agreement with HHS' Inspector General's Office, which includes a means for physicians to report the conduct of sales representatives and for the company to publicly disclose payments to physicians.

Gregg Blesch, Cephalon to Plead Guilty, Pay $425 Million, Modern Healthcare's Daily Dose (Sept. 29, 2008) (note: registration is required to view this content).

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

© 2019 American Health Lawyers Association. All rights reserved. 1620 Eye Street NW, 6th Floor, Washington, DC 20006-4010 P. 202-833-1100 F. 202-833-1105