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Teaching Hospital Update – March 2-6, 2009


Email Alert

By Jennifer Viegas*

March 6, 2009

Crackdown on Doctors Who Take Kickbacks

Federal health officials and prosecutors—frustrated that they have been unable to stop illegal kickbacks to doctors from drug and device companies—are investigating doctors who take money for using these products.

For years, prosecutors rarely pursued doctors because they believed that juries would sympathize with respected clinicians. But within a few months, officials plan to file civil and criminal charges against a number of surgeons who they say demanded profitable consulting agreements from device makers in exchange for using their products.

"What we need to do is make examples of a couple of doctors so that their colleagues see that this is not worth it," said Lewis Morris, chief counsel to the inspector general of the Department of Health and Human Services (HHS). "We want to send the message to the physician community—particularly surgeons—that you cannot do this."

The move against doctors is part of a diverse campaign to curb industry marketing tactics that enrich doctors but increase healthcare costs and sometimes endanger patients. Taken together, the new measures are likely to transform the relationship between medicine and industry.

Several prosecutors have opined that the strategy of looking at the companies alone was not completely successful in terms of our objective to deter healthcare fraud. Thus, the government has enlarged their scope of investigation to include criminal wrongdoing by doctors.

Besides jail time and fines, doctors convicted in the cases could lose their licenses for a time and be excluded from the federal Medicare and Medicaid programs, severely limiting their potential pool of patients.

Also, as part of plea bargains, federal health officials are forcing a growing number of drug and device makers to post publicly all payments made to doctors who serve as consultants or speakers. Manufacturers have repeatedly used consulting payments in illegal schemes to persuade doctors to prescribe drugs or devices in inappropriate and unapproved ways, according to federal charges.

Prosecutors are hoping that public disclosures of the details of these agreements will make criminal conduct more difficult to conduct and easier to spot, and that they will discourage doctors from taking money and gifts from manufacturers at all.

Gardiner Harris, Crackdown on Doctors Who Take Kickbacks, N.Y. TIMES, Mar. 4, 2009.

President Obama Taps Kansas Governor Sebelius and Former Clinton Administration Official DeParle to Lead Healthcare System Overhaul

President Obama on Monday nominated Kansas Gov. Kathleen Sebelius (D-KS) as Health and Human Services (HHS) secretary and named Nancy-Ann DeParle as director of the White House Office for Health Reform. Sebelius served as Kansas' insurance commissioner before becoming governor. DeParle previously served as commissioner of the Tennessee Department of Human Services and worked in the Office of Management and Budget during the Clinton administration. Also during the Clinton administration, DeParle oversaw Medicaid and Medicare as the administrator of the Health Care Financing Administration, now the Centers for Medicare & Medicaid Services (CMS). Currently, DeParle is the managing director of private equity firm CCMP Capital, and she serves on the boards of several companies related to healthcare. A White House spokesperson said that DeParle is in the process of resigning those posts.

Sebelius and DeParle will be charged with helping to craft and sell the administration's ambitious effort to revamp the nation's healthcare system and extend access to the forty-six million people in the country who lack coverage, while attempting to rein in runaway costs. While Sebelius will lead the day-to-day administration of Medicare, Medicaid, and other federal social and healthcare programs, DeParle will be the president's health policy counselor. Roll Call reports that DeParle will lead the White House lobbying effort, serving as the chief interface with lawmakers in the House and Senate—running the show internally. Sebelius' nomination is subject to Senate approval.

Kaiser Daily Health Policy Report, President Obama Taps Gov. Sebelius, Former Clinton Administration Official DeParle to Lead Health Care System Overhaul, Henry J. Kaiser Fam. Fdn. (Mar. 3, 2009).

Nurse Awarded $15 Million in Lawsuit Against Flushing Hospital in New York

A New York City jury has awarded a registered nurse $15 million in damages in a sexual harassment lawsuit alleging that Flushing Hospital Medical Center failed to act against a physician's sexual misconduct (Bianco v. Flushing Hospital Medical Center, N.Y. Sup. Ct., No. 18702/04, verdict 2/18/09).

The February 18 jury verdict for plaintiff Janet Bianco in the New York Supreme Court for Queens County attributed fault for the sexual harassment evenly between the hospital and the physician, Matthew Miller. The award consisted of $8 million for past emotional distress, $5.5 million for future emotional distress, and $1.5 million in punitive damages.

It appears to be the largest award to one plaintiff in a New York sexual harassment case and one of the largest in the United States. It was filed under the New York state and city human rights laws, and the city statute has no damages cap. The trial began February 2, and the jury deliberated separately on questions of liability, the amount of the emotional damages award, and whether punitive damages should be awarded, and the amount of the punitive damages.

In a brief February 26 statement, the hospital said it intends to appeal the award in the case, which it said involved a physician in private practice with admitting privileges to the hospital who was not on the hospital staff. The hospital added that it believes the jury's decision in the case was incorrect and intends to present its arguments on appeal.

Unwelcome Advances

In an August 2004 complaint, Bianco alleged that the hospital had negligently retained Miller, even though it knew that the physician had engaged in pervasive sexual harassment. Bianco, who started working at the hospital in 1992, claimed that she had been subjected to unwelcome sexual advances and touching by Miller for many years leading up to a series of incidents in July, August, and September 2001.

In the 2001 incidents, Miller asked Bianco to go on dates with him, ran his hands through her hair, and grabbed her shoulders from behind, and tried to forcibly kiss her, all of which she rejected. The kissing incident was witnessed by the hospital's medical director, who failed to discipline Miller, despite Bianco's expressions of disgust, the complaint alleged. Bianco also complained to her charge nurse that she was uneasy and fearful after Miller's repeated sexual advances, according to the complaint.

Bianco wrote to the hospital's assistant director of risk management the same day, detailing the events, and in subsequent weeks learned from others at the hospital that Miller had previously engaged in sexual misconduct while at work. Additionally, Miller lost his privileges at the hospital in October 2001 but allegedly returned to the hospital on at least three occasions.

In July 2004, Miller consented to an order by the state Board of Professional Misconduct finding that his pattern of behavior toward Bianco was evidence of moral unfitness to practice medicine. He already had been on probation from a prior determination that he had engaged in a sexual relationship with a patient in 1998.

The 2004 board proceeding resulted in a three-year license suspension that was reduced to two months of license suspension, followed by three years' probation and 300 hours of public service.

Nurse Awarded $15 Million in Lawsuit Against Flushing Hospital in New York , BNA'S HEALTH L. REP. (Mar. 5, 2009) (note: registration is required to view this content).

Budget Aims to Improve Quality of Hospitals, Cut Readmission Rates

The fiscal 2010 budget proposal unveiled February 26 by President Obama says that it would save close to $26 billion over ten years by encouraging hospitals serving Medicare beneficiaries to reduce readmission rates and by bundling payments for certain post-acute care.

According to the text of the budget plan, nearly 18% of hospitalization of Medicare beneficiaries resulted in the readmission of patients who had been discharged from the hospital within thirty days. Sometimes the readmissions could not have been prevented, but many were avoidable, the text says.

In an effort to lower readmission rates, President Obama's budget calls for hospitals to receive bundled payments that cover not just the hospitalization, but also care from certain post-acute providers during the thirty days after the initial hospitalization. Under this plan, hospitals with high rates of readmission will be paid less if patients are readmitted to the hospital within the same thirty-day period.

According to the budget, "This combination of incentives and penalties should lead to better care after a hospital stay and result in fewer readmissions—saving roughly $26 billion of wasted money over 10 years." The money saved will be contributed to the ten-year, $630 billion reserve fund for healthcare reform.

Medicare Accountability

The plan to reduce hospital readmission was similar to one laid out by Senate Finance Committee Chairman Max Baucus (D-MT) in his "white paper" on healthcare reform. Baucus' proposal would create new financial incentives in Medicare to encourage providers to take greater responsibility for the coordination of care for hospital inpatients, including reduced payment rates for hospitals with readmission rates above a certain benchmark. It also would involve testing other models to improve patient care related to hospitalizations, including the idea of allowing Medicare to pay bundled or global payments for all services provided a patient during hospitalization and for some amount of time post-discharge.

Pay for Performance

The budget also proposed linking a portion of Medicare payments for acute inpatient hospital services to the hospitals' performance on specific quality measures. It states that $12 billion will be saved over ten years, and a higher quality of care will be delivered to Medicare beneficiaries.

Budget Aims to Improve Quality of Hospitals, Cut Readmission Rates, BNA'S HEALTH L. REP. (Mar. 5, 2009) (note: registration is required to view this content).

Radiation Exposure Up Via Medical Scans

Americans were exposed to seven times more radiation from medical procedures in 2006 than was the case during the early 1980s, according to a new National Council on Radiation Protection & Measurements study called Ionizing Radiation Exposure of the Population of the United States.

The increase was due mostly to the higher utilization of computed tomography and nuclear medicine scans. These two imaging modalities alone contribute 36% of the total radiation exposure and 75% of the medical radiation exposure of the U.S. population. Overall, medical imaging procedures accounted for nearly half of the U.S. population's total radiation exposure in 2006, the study found. Other sources included radon gas, natural radiation in soil and rocks, and radiation from industrial activities.

In a news release responding to the study, the American College of Radiology and three other imaging societies sought to downplay the findings, noting that the report failed to provide a measurement of the increased health risks associated with the greater levels of exposure.

Some researchers say it is essential that this report not be interpreted solely as an increase in risk to the U.S. population without carefully considering the tremendous and undeniable benefits of medical imaging. Further, the rising numbers of imaging referrals by nonradiologist providers who own imaging equipment may be significantly responsible for the increase in medical-related radiation exposure and the number of patients referred for inappropriate imaging procedures.

Shawn Rea, Radiation Exposure Up Via Medical Scans, Modern Healthcare's Daily Dose (Mar. 3, 2009) (note: registration is required to view this content).

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.

*AHLA wishes to thank Jennifer Viegas, Esquire (Hall Render Killian Health & Lyman PC, Troy, MI) for writing this email alert.


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