MedPAC has released its June 2010 Data Book on “Healthcare Spending and the Medicare Program.” The Data Book provides information on national health care and Medicare spending, Medicare beneficiary demographics, Medicare quality and access, and Medicare beneficiary and other payer liability. It also includes data on various provider types, such as data on Medicare spending, beneficiary utilization of the service, number of providers, volume, length of stay, and margins.
The Department of Justice’s Civil Rights Division and the HHS OCR have issued technical assistance guidance for medical providers on requirements for providing accessible medical services to people with mobility disabilities. Specifically, “Access to Medical Care for Persons with Mobility Disabilities” describes how the Americans with Disabilities Act and Section 504 of the Rehabilitation Act of 1973 apply to providers, including an overview of requirements, answers to, commonly asked questions, and illustrated examples of accessible facilities, exam rooms, and medical equipment.
On June 29, 2010, the Drug Enforcement Administration (DEA) published a notice requesting public comment on whether revisions to the DEA regulations are feasible and warranted to facilitate residents of long-term care facilities to receive controlled substance medications, while adhering to the framework of the Controlled Substances Act. Comments will be accepted until August 30, 2010.
On June 15, 2010, the Medicare Payment Advisory Commission (MedPAC) issued a report to Congress on “Aligning Incentives in Medicare.” Among other things, the report addresses: Medicare payment accuracy and moving away from volume incentives in fee-for-service Medicare; the Stark law in-office ancillary exception policy and options to change incentives that induce physicians to provide more ancillary services; performance-based payments; impediments to coordinated care for beneficiaries dually eligible for both Medicare and Medicaid; improvements to graduate medical education; ways to redesign Medicare benefit to encourage beneficiaries to seek higher value services; informing beneficiaries about their health care choices; and the role of CMS in a reformed delivery system.
This post was written by Brad Rostolsky.
On May 28, 2010, just shy of the June 1st compliance deadline, the Federal Trade Commission (FTC) announced that it would again be postponing enforcement of the Red Flags Identity Theft Prevention Rule through December 31, 2010. This delay comes at the request of Congress, which has been considering legislation that would affect the scope of entities covered by the Rule. The FTC "urges Congress to act quickly to pass legislation that will resolve any questions as to which entities are covered by the Rule and obviate the need for further enforcement delays." If Congress passes legislation that limits the scope of the Red Flags Rule with an effective date earlier than December 31, 2010, the Commission will begin enforcement as of the legislation's effective date.
Deputy Attorney General Gary G. Grindler addressed the National Institute on Health Care Fraud on May 13, 2010 to discuss Obama Administration efforts to combat health fraud. In addition to discussing health reform legislation and the Health Care Fraud Prevention and Enforcement Action Team, he highlighted other ways DOJ “is seeking to combat crimes relating to the healthcare and pharmaceutical industries.” For instance, according to Mr. Grindler, the DOJ expects to increase the use of the Foreign Corrupt Practices Act (FCPA) to prosecute kickbacks and bribes paid to foreign government officials by pharmaceutical companies, given that “in some foreign countries, nearly every aspect of the approval, manufacture, import, export, pricing, sale and marketing of a drug product may involve a “foreign official” within the meaning of the FCPA.” He warned that DOJ “will not hesitate to charge pharmaceutical companies and their senior executives under the FCPA if warranted to root out foreign bribery in the industry.” The DOJ also will continue to focus on intellectual property theft involving the pharmaceutical industry, including efforts to combat the sale of counterfeit and dangerous drugs.
The Occupational Safety and Health Administration (OSHA) is soliciting comments on strategies being used to mitigate the risk of occupationally-acquired infectious diseases in health care settings (e.g., hospitals, outpatient clinics, and laboratories that handle potentially infectious biological materials). Specifically, OSHA seeks data on: the facilities and the tasks potentially exposing workers to this risk; successful employee infection control programs; control methodologies being utilized; medical surveillance programs; and training. OSHA will use such information to determine whether it should take action to further limit the spread of occupationally-acquired infectious diseases in these types of settings. OSHA will accept comments until August 4, 2010.
The Medicare Payment Advisory Commission (MedPAC) has released its March 2010 Data Book on the Medicare Part D Program. Among other things, the report includes data on Part D enrollment, spending and utilization, Part D risk scores, top therapeutic classes, generic dispensing levels, and pharmacy participation levels.
On March 1, 2010, the Medicare Payment Advisory Commission (MedPAC) issued its recommendations to Congress regarding Medicare provider payment updates for 2011. Among other things, MedPAC recommends:
The MedPAC report also reviews the status of MA plans and Part D prescription drug plans, and it provides recommendations on comparing quality among MA plans and between MA and fee-for-service providers. Note that while MedPAC’s recommendations are not binding, policymakers often consider MedPAC’s assessments when updating Medicare payment policies.
On March 10, 2010, the White House released a “Presidential Memorandum Regarding Finding and Recapturing Improper Payments.” Under this initiative, all federal departments and agencies are directed to expand and intensify their use of “payment recapture audits” under their current authority to combat fraud and abuse in federal programs. As under the Medicare Recovery Audit Contractor program, private auditors will review government payments and receive compensation based on the amount of improper payments they identify and are reclaimed. The White House estimates that using payment recapture audits will save at least $2 billion over the next three years. The President also is calling for enactment of legislation to expand the government’s authority to use such audits to additional circumstances.
The Medicare Payment Advisory Commission (MedPAC) recently voted on recommendations it will make to Congress regarding Medicare payment updates for 2011. At the meeting, MedPAC voted to recommend increasing acute inpatient and outpatient prospective payment system reimbursement in 2011 by the projected rate of increase in the hospital market basket index (MBI). This rate increase would be coupled with implementation of a quality incentive payment program, along with an offset in 2011 through 2013 to recover payments attributable to hospital documentation and coding improvements. MedPAC also recommends that Congress increase payments for physician services in 2011 by 1.0%. For ambulatory surgical centers (ASCs), MedPAC recommends a 0.6% increase in rates, together with a requirement that ASCs to submit cost and quality data. MedPAC recommends updating the end stage renal disease (ESRD) composite rate by the ESRD MBI increase minus a productivity growth adjustment. MedPAC approved a series of recommendations regarding home health services, including elimination of the inflation update for 2011, rebasing of home health rates with provisions to protect quality of care, development of quality outcomes measures, and implementation of certain program integrity safeguards. With regard to other post-acute services, MedPAC recommends no payment update in 2011 for skilled nursing facilities, inpatient rehabilitation facilities, or long-term care hospitals. MedPAC also recommends updating hospice rates by the projected MBI for 2011, minus an adjustment for productivity gains. These recommendations will be included in MedPAC's March 2010 report to Congress. While the recommendations are not binding, MedPAC’s assessments often help shape federal policy.
The Federal Trade Commission has released a “staff study” entitled “Pay for Delay: How Drug Company Pay-Offs Cost Consumers Billions.” The report examines agreements in patent litigation settlements in which a brand-name pharmaceutical company compensates a generic pharmaceutical company for delays in generic entry. According to the study, over the past six years, such agreements delayed generic entry by an average of 48 months. Over the next 10 years, the study concluded that pay-for-delay agreements will cost American consumers an estimated $35 billion ($3.5 billion per year). While the FTC intends to continue litigating pay-for-delay cases under antitrust laws, the report contends that “a legislative solution offers the quickest and clearest way to deter these agreements and obtain the benefits of generic competition for consumers.”
The Medicare Payment Advisory Commission (MedPAC) has issued a report to Congress on “Measuring Regional Variation in Service Use.” The report is designed to help policymakers compare differences in the use of health care services in Medicare across the country, adjusted to remove the effects of differing wages, payment rates, and health status among geographic areas. Among other things, MedPAC found that while regional variation in service use is smaller than regional variation in Medicare spending, it is substantial: Service use in higher use areas (90th percentile) is about 30% greater than in lower use areas (10th percentile); according to MedPAC, “fraud and abuse may drive some of the highest reported service use.”
The Congressional Budget Office has issued an Economic and Budget Issue Brief on "Promotional Spending for Prescription Drugs." The report discusses trends in how pharmaceutical manufacturers market to consumers and prescribers, in such areas as detailing, sponsorship of meetings, direct-to-consumer (DTC) advertising, and journal advertising. The report also discusses how market factors (e.g., size of the market, current competition in that market, and the time that has elapsed since FDA approval) affect a manufacturer’s decision to use marketing tools, particularly DTC advertising and detailing. The report does not make formal recommendations for policy changes.
The Federal Trade Commission (FTC) has announced it is extending its enforcement date for its Red Flag identity theft rules from November 1, 2009 until June 1, 2010. This extension, which was made at the request of members of Congress, will provide affected industries – including certain health care providers and suppliers -- with additional time to develop identity theft protection programs. Additional background information is available on our web site.
The Medicare Payment Advisory Commission (MedPAC) met on October 8 and 9, 2009 to discuss a variety of Medicare payment and policy issues, including the in-office ancillary exception to the physician self-referral law, provider consolidation, physician fee schedule prices, and medical education.
The Federal Trade Commission (FTC) has announced that it is delaying until November 1, 2009 enforcement of its Identify Theft Red Flags Rule. According to the FTC, this three-month delay will “give creditors and financial institutions more time to review this guidance and develop and implement written Identity Theft Prevention Programs.” The FTC staff also will "redouble" its education efforts and seek to ease compliance by providing additional resources and guidance to clarify whether businesses are covered by the Rule and what they must do to comply.
The Agency for Healthcare Research and Quality (AHRQ) has announced plans to solicit contracts for comparative effectiveness research projects with $300 million in ARRA funding. Separately, AHRQ has added two new chapters to its "Methods Guide for Comparative Effectiveness Reviews" under the AHRQ Effective Health Care Program: (1) Principles for Developing Guidance for Comparing Medical Interventions; and (2) Grading the Strength of a Body of Evidence when Comparing Medical Interventions. Other topics under development include: Avoiding Potential Biases when Comparing Medical Interventions; Updating Reports Comparing Medical Interventions; and Comparing Diagnostic Technologies.
The Medicare Payment Advisory Commission (MedPAC) has released its June 2009 Data Book on Healthcare Spending and the Medicare Program, which includes detailed data for various provider settings .
The Agency for Healthcare Research and Quality (AHRQ) has announced the availability of funding for the development of a clinical registry of orthopedic devices, drugs, and procedures, with an initial focus on hip and knee replacements. The initiative seeks to enable comparative effectiveness and safety studies regarding various orthopedic procedures and devices.
The American Recovery and Reinvestment Act (ARRA) included a major expansion of federal efforts to compare the effectiveness of different medical treatments, including more than $1 billion in funding for comparative effectiveness research (CER). Two federal panels recently released reports on CER priorities under the ARRA. First, the Federal Coordinating Council for Comparative Effectiveness Research issued its recommendations for a strategic framework for CER activity and investments. The Council recommended that the primary investment for CER funding should be data infrastructure (e.g., linking current data sources to enable answering CER questions, development of distributed electronic data networks and patient registries, and partnerships with the private sector). Other key areas for research identified by the Council are:
Separately, on June 30, 2009, the Institute of Medicine (IOM) released its ARRA-mandated report on "Initial National Priorities for Comparative Effectiveness Research," which identifies 100 heath topics that should get priority attention and funding under federal comparative effectiveness efforts. Priority topics include health delivery, health disparities, cardiovascular care, geriatrics, psychiatry, endocrinology, and oncology/hematology, among many others. The IOM cautions, however that comparative effectiveness research “will not yield real improvements unless the results are adopted by health care providers and organizations and integrated into clinical practice.” A Washington Legal Foundation “Critical Legal Issues Working Paper Series” article by Reed Smith attorneys Areta Kupchyk and Kathleen McGuan entitled “Comparative Effectiveness: Refining the Standards for FDA Approval & CMS Coverage,” is available here.
The Federal Trade Commission (FTC) has issued an interim report on the impact of authorized generic drugs on competition in the prescription drug marketplace. Authorized generics are drugs sold by a pharmaceutical manufacturer under both a brand-name and generic label. In short, the FTC found that retail drug prices average 4.2% lower when authorized generics are marketed against a single generic drug during the 180-day marketing exclusivity period than when they are not. Authorized generic entry during this period also reduces the revenues of a first-filer generic firm by 47% to 51% – much greater than the price decline for consumers. To prevent this loss of revenue, generic firms may agree to delay entry in return for a brand manufacturer’s agreement not to launch an authorized generic during the 180-day marketing exclusivity period. According to the report, between fiscal years 2004-08, about 25% of the final patent settlements reviewed by the FTC contained provisions related to authorized generics.
MedPAC has issued its June 2009 "Report to the Congress: Improving Incentives in the Medicare Program." Among other things, the report addresses follow-on biologicals, chronic care management, physician self-referrals involving imaging services, physician resource use measurement, graduate medical education, accountable care organizations, Medicare benefit design, and Medicare Advantage payment policy.
A lengthy new FTC report on “Follow-on Biologic Drug Competition" issued June 10, 2009 concludes that:
The FTC paper will be the subject of a June 11 Energy and Commerce Health Subcommittee hearing.
AHRQ has posted a draft chapter 5 of the "Methods Guide for Comparative Effectiveness Reviews." The topic of the chapter is "Using Existing Systematic Reviews to Replace de Novo Processes in CERs," in which AHRQ proposes a five-step process to standardize the approach that Evidence-based Practice Centers use to decide whether existing systematic reviews might provide value. Comments will be accepted until June 26, 2009.
The May 2009 National Supplier Clearinghouse (NSC) newsletter includes DMEPOS supplier accreditation and surety bond information (including a chart comparing the different exemptions for the two requirements), a review of the supplier appeals process, and the requirements for completing the revised CMS-855S enrollment application, among other things.
The Department of Defense (DoD) has published a notice that it is proceeding with implementation of its December 10, 2008 final rule establishing a prospective payment system (PPS) for TRICARE hospital outpatient services, similar to the Medicare hospital outpatient PPS (OPPS). The effective date had been extended from February 9, 2009 until May 1, 2009 as part of the Obama Administration's broader regulatory review. After review of public comments, the DoD is making no changes to the final rule and the effective date continues to be May 1, 2009. Background material is posted here.
On May 12, 2009, the Social Security and Medicare Boards of Trustees released their annual assessment of the financial condition of the Social Security and Medicare trust funds. According to the report, Medicare’s Hospital Insurance (HI) Trust Fund is expected to pay out more in benefits and other expenditures this year than it receives in taxes and other dedicated revenues. HI reserves are expected to be exhausted in 2017, two years earlier than projected last year. For the third consecutive year, a “Medicare funding warning” is being triggered, signaling that non-dedicated sources of revenues (primarily general revenues) will soon account for more than 45% of Medicare’s outlays. Federal law requires the President to submit a plan in response to this warning. Balancing the HI Trust Fund over the next 75 years would require changes equal to an immediate 134% increase in the payroll tax or an immediate 53% cut in program outlays, or combination of the two, with larger changes needed to make the program solvent beyond 75 years. Part B of the Supplementary Medical Insurance Trust Fund and Part D are both projected to remain adequately financed indefinitely, but rising costs will result in rapidly growing general revenue financing needs (rising from 1.3% of gross domestic product in 2008 to about 4.7% in 2083) and substantial increases in beneficiary premiums.
On April 28, 2009, the Institute of Medicine (IOM) issued a report endorsing new voluntary and regulatory measures to strengthen protections against financial conflicts of interest in medicine. The report addresses conflicts of interest in a number of settings, including biomedical research, clinical care, physician training, and continuing medical education. Among other things, the IOM recommends improving disclosure of financial ties between the medical community and the pharmaceutical, biotechnology, and medical device industry; limiting company payments and gifts; stemming industry influence in medical education and the development of practice guidelines; and adopting safeguards pertaining to consulting arrangements.
This post was written by Carol Loepere.
On April 30, 2009 the Federal Trade Commission (FTC) issued a News Release announcing that it is granting industries under the FTC's jurisdiction an additional 3 months to develop and implement their identity theft prevention programs as required under the FTC's so-called Identify Theft Red Flag Rule. The FTC also stated that that some entities, particularly those that are small, non-traditional creditors, would benefit from the availability of a template Red Flags program in developing their programs. The Commission staff intends to publish such a template for low-risk entities shortly. The FTC said that the extension, coupled with the release of the template, should be sufficient to enable low-risk entities to prepare their programs without undue burden. The announcement of the extension is also available at www.ftc.gov.
To promote transparency, HHS has established a new searchable database of communications with registered lobbyists on ARRA issues. HHS is reporting verbal and written communications within three business days of their occurrence.
On April 8, 2009, President Obama signed an Executive Order establishing a White House Office of Health Reform within the Executive Office of the President. The goal of the office is to provide leadership to the executive branch in establishing policies, priorities, and objectives for the federal government's comprehensive effort to improve access to health care, the quality of such care, and the sustainability of the health care system. The order also directs the HHS Secretary to establish within HHS an Office of Health Reform to coordinate closely with the White House Office of Health Reform.
The NIH is highlighting a new funding opportunity under the ARRA that will support approximately $200 million in large-scale research projects that have a high likelihood of enabling growth and investment in biomedical research and development, public health, and health care delivery. The purpose of this new program, the Research and Research Infrastructure "Grand Opportunities" (GO), is to support high-impact ideas that lend themselves to short-term funding and may lay the foundation for new fields of scientific inquiry. Grant applicants may propose to address either a specific research question or the creation of a unique infrastructure/resource designed to accelerate scientific progress in the future. NIH examples of the types of projects that could be funded under this program include the identification and validation of biomarkers in human genetics and biology that indicate the risk for disease or that could serve as a marker of disease progression and/or responsiveness to treatment, or research on information technology to enable physicians to share radiological images across health care institutions.
The “Federal Health Architecture” within HHS has announced the availability of “CONNECT” software to help public and private health information technology systems communicate to the Nationwide Health Information Network (NHIN), a federal initiative to facilitate the electronic exchange of health information.
On April 10, 2009, the Agency for Healthcare Research and Quality (AHRQ) announced that it is seeking nominations of individuals qualified to serve as members of the U.S. Preventive Services Task Force (USPSTF). The USPSTF is a standing panel of outside experts that makes evidence-based recommendations to the health care community and the public regarding the provision of clinical preventive services. Nominations are due by May 15, 2009.
The Federal Trade Commission (FTC) issued sweeping regulations in 2007 aimed at preventing identity theft. Two provisions of these rules, known as the “Red Flag Rules,” can apply to health care entities. The first provision, requiring address checks for anyone who uses “consumer reports” for employment, insurance or credit purposes, became effective November 1, 2008. A second major component of the Red Flag Rules requires any business that is a “creditor or financial institution” to have written processes and procedures in place to detect, prevent, and mitigate identity theft in relation to accounts covered under the regulations. Enforcement of this provision has been delayed until May 1, 2009. Health care providers can be impacted by this provision if they do not require payment at the time services are provided, or if they are paid by an insurer after services are rendered. The FTC has issued a “How-To-Guide for Business” with information on how to determine if the Red Flag rule applies to your business; tips on compliance; and information on how to put in place a written identity theft prevention program.
The GAO has announced the appointment of 13 members to the Health Information Technology Policy Committee, a new advisory body established by the ARRA. The panel is charged with making recommendations on creating a policy framework for the development and adoption of a nationwide health information technology infrastructure, including standards for the exchange of patient medical information. Note that additional members will be appointed by HHS, Congress, and the President.
On February 26, 2009, the Office of Management and Budget (OMB) published a notice announcing that it is developing a set of recommendations to the President for a new Executive Order on Federal Regulatory Review. The recommendations are expected to address:
OMB invites public comments on how to improve the process and principles governing regulatory review; comments will be accepted until March 16, 2009.
The Internal Revenue Services (IRS) has issued a final report on its tax-exempt hospital project, which was designed to ascertain how nonprofit hospitals benefit their communities. The project also reviewed executive compensation practices of nonprofit hospitals. The final report is based on the responses to questionnaires the IRS received from almost 500 hospitals.
This post was written by Lorraine Mullings Campos.
On March 4, 2009, the White House ordered what some believe are significant changes in federal contracting practices. The White House memorandum shows an intent to reduce federal outsourcing and the use of cost-reimbursement contracts. However, federal acquisition policy already embraces the values set forth in the memorandum. For example, the Federal Acquisition Regulation (FAR) requires agencies to issue written findings to support the use of “other than full and open competition” (i.e. sole source contracts) in awarding contracts. Similarly, cost-reimbursement contracts are to be used only where, for example, “the work to be performed is such that it is neither feasible nor effective to devise predetermined objective incentive targets applicable to cost, technical performance, or schedule . . . .” Thus, the FAR already implements the policy objectives expressed in President Obama’s memorandum. A Reed Smith alert regarding the policy is available here.
On February 27, 2009, MedPAC released its March 2009 Report to the Congress: Medicare Payment Policy. The report includes a series of recommendations for Medicare payments designed to assure beneficiaries’ access to care and preserve Medicare’s long-term sustainability, particularly through reductions in payment updates for 2010. The report also includes recommendations to increase transparency of physician financial relationships. A listing of key recommendations follows after the jump.
Continue Reading...On February 6, 2009, the Department of Defense published a notice delaying the effective date of its December 10, 2008 final rule implementing a prospective payment system (PPS) for TRICARE hospital outpatient services, similar to the Medicare hospital outpatient PPS. The effective date has been extended from February 9, 2009 until May 1, 2009 as part of the Obama Administration's broader regulatory review. A new comment period also has been announced; comments will be accepted until March 9, 2009.
On December 5, 2008, the Internal Revenue Service (IRS) issued a proposed rule to implement a tax withholding requirement of the Tax Increase Prevention and Reconciliation Act of 2005 that requires federal, state, and local government entities to withhold income tax when making payments to persons providing property or services. The tax withheld will equal 3% of payments made after December 31, 2010. The statute provides an exception for payments made in connection with a public assistance/welfare programs for which eligibility is determined based on needs or income, but not based on age. Therefore, while Medicaid payments are exempt, Medicare payments would be subject to the withholding requirements. The withholding requirement also would not apply to payment amounts below a $10,000 threshold. Multiple payments made to a person generally would not be aggregated for determining if the threshold has been met, but an anti-abuse rule would be established to prevent payment manipulation to avoid required withholding. The IRS will accept comments on the proposed rule until March 5, 2009.
CMS is soliciting nominations of five new members to the Advisory Panel on Ambulatory Payment Classification (APC) Groups to fill five vacancies that will exist as of August 16, 2009. Nominations will be accepted until March 13, 2009.
On December 18, 2008, the Congressional Budget Office (CBO) released a major report entitled “Budget Options, Volume 1: Health Care,” which sets forth 115 policy options for Congress to consider as it addresses health care system reform. The CBO points out that Medicare is expected to grow from 2.8 percent of gross domestic product (GDP) in 2008 to nearly 9 percent of GDP in 2050. This spending growth will be fueled primarily by growth in per capita medical costs, according to the CBO, with the aging of the population playing a secondary role. In light of these trends, the CBO offers specific options addressing such areas as: health insurance (market reforms, tax treatment, access to federal programs); health care quality and efficiency; geographic variation in Medicare spending; paying for Medicare services (including hospital, physician, imaging, and post-acute care, and Medicare Advantage plan services, among others); financing and paying for services in Medicaid (including drug payment revisions) and SCHIP; premiums and cost sharing in federal health programs; long-term care; health behavior and health promotion; and closing the gap between Medicare’s spending and receipts. The CBO also issued a separate report focusing on insurance reform, “Key Issues in Analyzing Major Health Insurance Proposals.” The CBO warns that without changes in policy, a substantial and growing number of nonelderly people are likely to be without health insurance. This issue cannot be addressed without making major changes in the financing or provision of health insurance and health care, which will involve "difficult trade-offs between the objectives of expanding insurance coverage and controlling both federal and total costs for health care." The report describes the assumptions that CBO would use in estimating the effects of key elements of proposals to modify the health insurance system on federal costs, insurance coverage, and other outcomes. In particular, it considers the types of issues that would arise in estimating the effects of proposals to: provide tax credits or other types of subsidies to make insurance less expensive to the purchaser; require individuals to purchase health insurance; require firms to offer health insurance to their workers or pay into a fund that subsidizes insurance purchases; replace employment-based coverage with new purchasing arrangements or provide strong incentives for people to shift toward individually purchased coverage; and provide individuals with coverage under, or access to, existing insurance plans such as the Medicare program, either as an additional option or under a “Medicare-for-all” single-payer arrangement.
On December 5, 2008, the Department of Defense released a final rule implementing a prospective payment system (PPS) for TRICARE hospital outpatient services, similar to the Medicare hospital outpatient PPS. The official version of the rule will be published on December 10, 2008.
The U.S. Department of Justice recently announced that the federal government had secured $1.34 billion in settlements and judgments in federal fraud and abuse cases in FY 2008, with almost 78% were associated with False Claims Act whistleblower suits. Health care fraud accounted for the bulk of the settlements and judgments, totaling $1.12 billion. The largest recoveries were associated with pharmaceutical companies, including cases involving "off-label" marketing, kickbacks, marketing drug “spreads,” and knowingly failing to report a company’s true "best price" for a drug to reduce Medicaid rebates.
On October 27, 2008, the GAO published a notice soliciting nominations for Medicare Payment Advisory Commission (MedPAC) members for appointments effective May 1, 2009. Letters of nomination should be submitted between January 1 and March 31, 2009.
CMS is encouraging hospitals and other health care providers to review a new publication, “Community Pan-Flu Preparedness: A Checklist of Key Legal Issues for Healthcare Providers," which is the result of a public interest dialogue session convened by the American Health Lawyers Association, the HHS Office of Inspector General, and the U.S. Centers for Disease Control. The guide is designed to assist providers and public health communities as they consider the legal impediments and implementation challenges to community pan-flu preparedness, and it offers practical solutions to such challenges.
The Department of Justice (DOJ) has revised its Principles of Federal Prosecution of Business Organizations, which govern how federal prosecutors investigate, charge, and prosecute corporate crimes, including health care fraud. A number of the revisions address the area of cooperation credit, including providing that credit for cooperation will not depend on a corporation’s waiver of attorney-client privilege or work product protection, but rather on the disclosure of relevant facts. The guidelines also instruct prosecutors not to consider a corporation’s advancement of attorneys’ fees to employees when evaluating cooperativeness, and specify that the mere participation in a joint defense agreement will not render a corporation ineligible for cooperation credit. Moreover, prosecutors may not consider whether a corporation has sanctioned or retained culpable employees in evaluating whether to assign cooperation credit to the corporation.
MedPAC met on September 4 and 5, 2008 to discuss a range of Medicare policy issues, including physician financial relationships, MIPPA provisions on DME bidding and ESRD payment, imaging policy, Medicare Advantage, and Part D. Details regarding the meeting, including a transcript, are available at the MedPAC web site.
On June 13, 2008, the Medicare Payment Advisory Commission (MedPAC) released its June 2008 report to the Congress on "Reforming the Delivery System." MedPAC discusses a variety of payment and delivery reforms to improve Medicare quality, coordinate care, and reduce cost growth.
Continue Reading...The Federal Trade Commission (FTC) issued a report May 21, 2008 summarizing agreements filed with the FTC in FY 2007 by generic and branded drug manufacturers, as mandated by the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003. During this period, there were 33 final settlements, nearly half of which included both compensation to the generic company (such as through an agreement by the branded firm not to sponsor or compete with an authorized generic product for some period of time) and a restriction on the generic’s ability to market its product.
On March 25, the Medicare Trustees released their annual report on the financial status of the Medicare program. The Trustees report that Medicare Hospital Insurance (HI) Trust Fund and Supplementary Medical Insurance Trust Fund expenditures were $432 billion in 2007, or 3.2% of gross domestic product (GDP), and are projected to increase to nearly 11% of GDP in 75 years. They also project that the HI Trust Fund will become insolvent earlier in 2019 than reported last year. On the other hand, expenditures for Part D continue to be lower than projected, primarily due to a significant reduction in bids, although costs are still expected to increase an average of about 11.1% annually through 2017.
On April 1, the Department of Defense (DOD) published a proposed rule to implement an outpatient prospective payment system (OPPS) for the TRICARE military health care program. The system will be based on the Medicare OPPS, with certain modifications to reflect existing TRICARE benefit structure and claims processing procedures and to mitigate the financial burden on beneficiaries. Comments will be accepted until June 2.
The Medicare Payment Advisory Commission (MedPAC) has issued its annual report to Congress on Medicare payment policy. Key recommendations include the following:
While MedPAC’s recommendations are not binding on Congress, lawmakers are expected to consider the recommendations as they seek to develop a plan to avert the 10.1% Medicare physician reimbursement cut now scheduled to go into effect July 1, 2008.
The HHS Office of Inspector General (OIG) has issued a report entitled “Los Angeles County Suppliers’ Compliance with Medicare Standards: Results from Unannounced Visits,” which found that many suppliers inspected did not meet basic Medicare supplier standards (see ). While recognizing recent CMS steps to address vulnerabilities in the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) benefit, the OIG recommends more unannounced site visits, expanded background checks, increased prepayment review of DMEPOS claims, more frequent reenrollment of high-risk suppliers, and minimum hours of operation. In addition, the OIG endorsed supplier enrollment fees to finance inspections and background checks, along with legislative authority to impose temporary moratoriums on supplier enrollment in high-fraud areas.
On February 20, the Food & Drug Administration (FDA) proposed guidelines for manufacturers of drugs and devices who would like to distribute scientific and medical articles that discuss off-label uses of approved products. The draft guidance is entitled “Good Reprint Practices for the Distribution of Medical Journal Articles and Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices." The document proposes that distribution be limited to peer-reviewed scientific or medical articles that are published by an with an editorial board that has a policy of disclosure of conflicts of interest. The publication should not be written for, edited by, or funded by the manufacturer, and it cannot be false or misleading or pose a significant risk to public health. Letters to the editor, abstracts of a publication, reports of Phase 1 trials in healthy subjects, or reference publications that contain insufficient substantive discussion of the data would not be acceptable. The draft guidance also proposes guidelines on the manner in which companies should distribute scientific and medical information. For instance, a company should not abridge, highlight, or summarize the article. In addition, FDA would expect that the article be accompanied by numerous disclosures and addendums, including: the approved labeling of the drug or medical device; a comprehensive bibliography of related information; a disclosure about the unapproved use being discussed, a disclosure of the manufacturer's interest in the product, a disclosure of any financial interest held by the author, and, a representative publication of any articles that call into question the conclusions of the article being disseminated. The journal article should also be distributed separately from promotional materials. Comments on the guidance are due April 21, 2008. The draft guidance document is posted here; details regarding comment submission are available here. Reed Smith has prepared a bulletin analyzing the draft; the bulletin is available here.
The HHS Office of Inspector General (OIG) has released its annual analysis of the top HHS management and performance challenges. For FY 2007, areas of significant challenge for HHS include: oversight of Medicare Part D; integrity of Medicare payments; appropriateness of Medicaid and SCHIP payments; quality of care; public health emergency preparedness/response; oversight of food, drug, and medical device safety; grants management; integrity of information technology systems; and ethics program oversight. In addition, the OIG has released the Health Care Fraud and Abuse Control Program Annual Report for FY 2006. During FY 2006, the federal government won or negotiated approximately $2.2 billion in judgments and settlements, and U.S. Attorneys' Offices opened 836 new criminal health care fraud investigations and 915 civil health fraud investigations. Separately, the OIG has analyzed payments for outpatient hospital, laboratory, and radiology services made on behalf of beneficiaries in skilled nursing facility (SNF) stays covered under Medicare Part A. The OIG found Medicare Part B made almost $107 million in potential overpayments for these services during 2001 and 2002. While payment edits implemented in 2003 reduced potential overpayments to $22.7 million, most of the overpayments have not yet been recovered.
The Government Accountability Office (GAO) has released a report entitled "Medicare Part D: Plan Sponsors' Processing and CMS Monitoring of Drug Coverage Requests Could Be Improved," which recommends that CMS and Part D drug plan sponsors take steps to improve the appeals process for beneficiaries seeking coverage for a drug not included in their plan. In addition, another GAO report reviewed the results of the Physician Group Practice (PGP) Demonstration, which is testing hybrid payment methodology for physician groups that combines Medicare fee-for-service payments with new incentive payments for achieving cost savings and meeting quality targets. The GAO found that few participating plans have been eligible for bonus payments because they did not achieve the required cost savings.
The Congressional Budget Office (CBO) has released a report on “Technological Change and the Growth of Health Care Spending." The CBO warns that if Medicare spending per beneficiary grows at the rate currently projected, “future budget deficits will rise to levels that could severely jeopardize long-term economic growth unless policymakers sharply reduce other projected spending, substantially increase revenues as a share of gross domestic product (GDP), or do some of both." Since the CBO has determined that about half of all growth in health care spending in the past several decades was associated with changes in medical care associated with advances in technology, future spending growth will depend largely on how the health care system responds to future technological changes.
The OIG has issued a report on Medicare Part D payments to community pharmacies. Among other things, the OIG found that Medicare Part D payments (excluding dispensing fees) exceeded the pharmacies’ drug acquisition costs by about 18.1 percent when drug wholesalers rebates to pharmacies were included. Excluding rebates, Part D payments exceeded drug acquisition costs by an estimated 17.3 percent, with a much larger difference for generic drugs than for brand-name drugs. A separate OIG report addresses the ability of physician-owned specialty hospitals to manage medical emergencies. The OIG found that about half of all physician-owned specialty hospitals have emergency departments, with the majority having one emergency bed. Not all physician-owned specialty hospitals had nurses on duty and physicians on call during the review period, and 66 percent use 9-1-1 as part of their emergency response procedures. In addition, the OIG has issued a report entitled "National Institutes of Health: Conflicts of Interest in Extramural Research," which includes a series of recommendations to increase oversight of grantee institutions to ensure their compliance with federal financial conflicts-of-interest regulations.
CMS has released detailed health care spending statistics for 2006. Health care spending growth in the United States increased 6.7 percent in 2006, reaching a total of $2.1 trillion, or $7,026 per person, and equaling 15 percent of the nation’s Gross Domestic Product. Medicare spending grew 18.7 percent in 2006, compared to 9.3 percent in 2005, fueled in part by the Medicare Part D drug benefit. Total Medicaid spending declined for the first time ever, falling 0.9 percent, which is attributable to the shift of drug coverage for dual eligibles from Medicaid to Medicare Part D, state cost-containment efforts, and slower enrollment growth. For details, click here.
The FDA Center for Biologics Evaluation and Research (CBER) is inviting biologics facilities to participate in its Regulatory Site Visit Training Program, which is intended to allow CBER staff to directly observe routine biologics manufacturing practices. Interested parties should contact CBER by February 21. For details, click here.
HHS has announced its recognition of certain Healthcare Information Technology Standards Panel Interoperability Specifications as interoperability standards for health information technology. For details on recognized interoperability standards, click here.
The HHS Office of Inspector General (OIG) has issued a report profiling Medicare patients receiving Medicare hospice care in the nursing home setting. Among other things, the OIG points out that beneficiaries in nursing facilities typically spend more time in hospice care and are associated with higher Medicare reimbursements for hospice care than beneficiaries in other settings. The OIG also released a report comparing prescription drug ASPs and average manufacturer prices for the second quarter of 2007.
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