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Teaching Hospital Update - March 23-27, 2009


Email Alert

By Clinton Mikel*

March 27, 2009

HHS Names Former Harvard University Professor Blumenthal as National Health Care Information Technology Coordinator

Department of Health and Human Services (HHS) announced the appointment of former Harvard Medical School professor David Blumenthal as the national coordinator for healthcare information technology (IT). Among other responsibilities, Blumenthal, who has conducted a number of studies related to healthcare IT, will have a large role in the process used to determine how HHS spends the $19 billion for healthcare IT included in the economic stimulus package.

Blumenthal previously served as director of the Institute for Health Policy at the Massachusetts General Hospital/Partners HealthCare System and as a senior adviser to President Obama during his campaign. In addition, he worked on the staff of Massachusetts Democratic Senator Edward Kennedy in the late 1970s and served as chief health adviser to former Democratic Massachusetts Governor Michael Dukakis during his presidential campaign in 1988.

Kaiser Daily Health Policy Report, HHS Names Former Harvard University Professor Blumenthal as National Health Care Information Technology Coordinator, Henry J. Kaiser Fam. Fdn. (March 20, 2009).

Houston Hospital to Pay $10 Million Settlement

Methodist Hospital in Houston agreed to pay the U.S. government $10 million to resolve alleged abuse of Medicare's outlier program between 2001 and 2003. In a settlement agreement, the 941-bed hospital denies the government's contentions and stipulates that the settlement does not imply an admission of liability. The government alleged that Methodist Hospital increased charges without respect to the actual costs in order to get bigger payments from the outlier program, which is intended to compensate hospitals for unusually expensive care.

Dozens of hospitals in the past several years have faced similar allegations, often initiated by whistle-blower lawsuits. That was not the case with Methodist, Methodist's Chief Legal Officer Mick Cantu said. He speculated that the Justice Department is working through a list of hospitals that received the highest outlier payments, which was given to Congress during 2003 testimony by the then presiding CMS Administrator Thomas Scully.

Gregg Blesch, Houston Hospital to Pay $10 Million Settlement, Modern Healthcare's Daily Dose (March 26, 2009) (note: registration is required to view this content).

$268 Million in Stimulus Funds to Help DSH Hospitals Cover Uninsured

States can access an additional $268 million under the American Recovery and Reinvestment Act of 2009 to help hospitals that treat a disproportionate share of low-income and uninsured individuals, the HHS announced. The Centers for Medicare & Medicaid Services will notify states about the availability of the increased portion of allotments for hospitals.

States receive an annual allotment to make payments to disproportionate share hospitals to account for their higher costs treating low-income and uninsured patients. The allotment is calculated by law and includes requirements to ensure that payments do not exceed a hospital's actual costs of providing uncompensated care. The American Recovery and Reinvestment Act of 2009 increased the amount of allotments available for 2009 from $11.06 billion to $11.33 billion.

Acting HHS Secretary Charles E. Johnson said that the additional money will help hospitals "keep their doors open to the people who need care [the] most." The President of the National Association of Public Hospitals, Larry S. Gage, said "Public and other safety net hospitals in communities across the country are reporting increases in uninsured care of between 10 percent and 20 percent . . . NAPH applauds the Obama Administration and Congress for making $268 million in additional funding available today for states to help safety net hospital systems who are meeting our nation's health care needs during the current economic crisis."

States Can Access $268 Million in Stimulus Funds to Help DSH Hospitals Cover Uninsured, BNA'S HEALTH L. REP. (March 26, 2009) (note: registration is required to view this content).

In IVF, One Embryo Is Better Than Two

For in vitro fertilization (IVF), single embryo transfer is more effective and less expensive than double embryo transfer, researchers said. Over the course of the study period, use of single embryo transfer was increased and the live birth rate per woman remained unchanged while the multiple birth rate decreased substantially, Hannu Martikainen, MD, and colleagues reported online in Human Reproduction.

"The present study provides evidence for the superiority of single embryo transfer over the traditional transfer of two embryos," the researchers said. "These data should encourage clinics to evaluate their embryo transfer policy and adopt single embryo transfer as their everyday practice." The practice of implanting a single embryo has not been widely adopted because of fears that it will lower pregnancy rates per embryo transfer, increase the cost of treatments, and extend the time needed to achieve pregnancy. There is, however, "universal agreement" that multiple pregnancies, often a result of double embryo transfer, pose the biggest health risks from IVF—mainly from complications related to prematurity.

Incremental cost-effectiveness calculations showed that 19,889 Euros were saved per live birth using single embryo transfers. The researchers concluded that with single embryo transfer, "outcome is improved, overall costs are decreased because of the incorporation of frozen embryo transfer cycles, and the incidence of multiple births is reduced more than twofold."

Kristina Fiore, In IVF, One Embryo Is Better Than Two, MedPage Today (March 25, 2009).

NIH to Spend $60 Million in Stimulus Funds on Autism Research

The National Institutes of Health (NIH) announced it will devote $60 million of its $10 billion in economic stimulus money to fund research on autism. The research dollars will be split into four grants to support broad research into autism spectrum disorder. Topics of research might include developing and testing screening tools for various populations; assessing risk from prenatal or early life exposures; and treatments for older children, teens, and adults with autism.

All money allocated from the stimulus bill must be spent within two years, but most clinical trials on autism will likely take longer than that. The NIH wants the funding to "jump-start" longer-term autism research efforts. The money comes at an opportune time, said Thomas R. Insel, MD, director of the National Institutes of Mental Health, which will lead the research effort. "We have a growing sense of urgency to help the increasing number of children being diagnosed with autism spectrum disorders," said Dr. Insel, who also chairs the NIH's Interagency Autism Coordinating Committee.

Emily P. Walker, NIH to Spend $60 Million in Stimulus Funds on Autism Research, MedPage Today (March 25, 2009).

Significantly Fewer Hospitals Have Implemented Electronic Health Records Systems Than Previously Estimated, Report Finds

Just 1.5% of U.S. hospitals have implemented facility-wide, comprehensive healthcare information technology systems, while another 8% to 11% of hospitals have at least one unit fitted with basic health IT systems, according to a study published in the New England Journal of Medicine (NEJM). Medical experts say health IT implementation would help save lives by reducing medical errors and improving quality and cost efficiency of healthcare.

The survey had a 63% response rate and is considered to be the first comprehensive and reliable study on health IT implementation.

To determine if facilities with health IT met the standards for comprehensive systems, hospitals were surveyed on various key functions of their systems, such as gathering nurse and physician notes, ordering patient tests, helping physicians make patient care decisions, and being available in all medical units. Systems that provided the functions in at least one major clinical unit were considered basic. The study found that hospitals most often cited cost as the main barrier to adopting electronic health record (EHR) technology. Implementing health IT technology could cost as much as $20 million for small hospitals and up to $200 million for large medical research centers. According to the researchers, the survey results "suggest that policymakers face substantial obstacles to the achievement of health care performance goals that depend on health information technology." The researchers recommended increased financial support, interoperability between hospitals, and staff training to help hospitals make the switch to the new technology.

In related news, an analysis published in NEJM on Thursday said that it would be a costly mistake for policymakers to allocate billions of dollars in federal funds to spur the adoption of current forms of EHR technology. The article's authors, health IT experts and physicians, say that current health record suppliers offer pre-Internet era software that is costly and uses proprietary technology standards, all of which make it difficult to switch software vendors and to make upgrades and improvements. The authors recommend that the federal government should instead encourage the use of open software platform, such as the World Wide Web or the Apple iPhone, on which innovators could design EHR applications. Such an approach would increase competition and flexibility among innovators to design the most cost-efficient and patient-safe health IT systems.

Kaiser Daily Health Policy Report, Significantly Fewer Hospitals Have Implemented Electronic Health Records Systems Than Previously Estimated, Report Finds, Henry J. Kaiser Fam. Fdn. (March 26, 2009).

American Medical Association, Other Groups File Lawsuit Alleging That WellPoint Underpaid Physicians

The American Medical Association (AMA) and several state medical groups filed a class action lawsuit in federal court in Los Angeles on Wednesday against WellPoint, alleging that the insurer took part in an industry-wide effort to set artificially low reimbursement rates for out-of-network care. The suit claims that the insurer failed to disclose flaws in the database known as Ingenix, which many insurers used to calculate "usual and customary" payments for out-of-network medical services. The database is designed to use claims information from participating insurers to establish rates. However, doctors say that in addition to physician claims, the database used claims from other types of health providers that resulted in lower reimbursement rates.

The class action suit alleges that the insurer violated federal racketeering, antitrust, and employee benefit laws. According to the suit, WellPoint's use of the maligned data forced doctors "to expend significant time and resources toward identifying, disputing and then appealing WellPoint's improper reimbursement determinations, oftentimes still resulting in underpayment." It also states that the underpayments could have resulted in higher medical bills for patients, who often were left to fill the gap between what their doctor charged for a service and what Ingenix listed as the "usual and customary" rate.

The plaintiffs are seeking to reform the payment system, operated by UnitedHealth, and to obtain financial reimbursement for doctors harmed by WellPoint's use of the database. No dollar amount has been specified yet. A similar suit filed on behalf of patients last week in the Los Angeles federal court names UnitedHealth, Ingenix, WellPoint, and BlueCross as defendants. The California Medical Association, the Connecticut State Medical Society, the Medical Association of Georgia, and the North Carolina Medical Society joined AMA in filing the suit on Wednesday.

Use of the database has prompted other lawsuits and an investigation by New York State Attorney General Andrew Cuomo. UnitedHealth in January agreed to close the database and pay $20 million toward the development of a new database. Aetna also agreed to pay $20 million toward the new database, and Cuomo's office says WellPoint agreed to pay $10 million. AMA President Nielsen will testify Thursday before a Senate panel that is scheduled to begin examining charges of price-fixing practices by insurers.

Kaiser Daily Health Policy Report, American Medical Association, Other Groups File Lawsuit Alleging That WellPoint Underpaid Physicians, Henry J. Kaiser Fam. Fdn. (March 26, 2009).

Specter to Oppose Bill Bolstering Unionization

The man whose vote Democrats and labor supporters were counting on for passage of the Employee Free Choice Act said on the Senate floor that he would support his party's efforts to block it. Senator Arlen Specter (R-PA), was one of only three Senate Republicans to vote for President Barack Obama's economic stimulus bill. Specter was seen as a possible ally in a Democratic push to pass the labor legislation, which is opposed by the American Hospital Association and would eliminate the secret ballot from the path of unions attempting to form new bargaining units.

"Card check," the best-known provision of the bill, would allow organizers to bypass a secret-ballot election in favor of collecting signed cards from workers. Specter said the provision was decisive for him, calling the secret ballot "the cornerstone of how contests are decided in a democratic society." He also was critical of the bill's requirement that parties enter binding arbitration if a contract isn't reached within 120 days. Specter expressed sympathy for unions and the cuts in jobs, pay, and pensions their members have suffered. The composition of the Senate left him in the "anguishing position" of deciding whether the bill would get the sixty votes necessary to survive a filibuster.

Gregg Blesch, Specter to Oppose Bill Bolstering Unionization, Modern Healthcare's Daily Dose (March 25, 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.

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

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