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Breaking News: HHS Names Acting CMS Administrator

Modern Healthcare has reported the following: "HHS Secretary Mike Leavitt named Leslie Norwalk as acting administrator for the CMS effective Oct. 15. Norwalk has served as deputy administrator for the agency that oversees $740 billion in federal spending on Medicare and Medicaid. She replaces Mark McClellan, who resigned from the CMS on Sept. 5."

Juvan's Seven Day Recap--9/24/2006

It's time to reflect back on last week's noteworthy stories:

• E-Prescribing, E-Patient Records, but No E-mail? Recently, the federal government has centered its efforts around allowing physicians to move their practices into the Twenty-First Century by encouraging the adoption and use of e-prescribing and e-patient records systems. Though current trends strive to connect physicians to the internet, the Centers for Studying Health Systems Change released results from the HSC Community Tracking Study Physician Survey and concluded that physicians were generally very slow to adopt e-mail as a form of physician-patient communication. Only approximately 24% of physicians reported that they use e-mail to communicate with patients about clinical issues. The report indicated that the lack of reimbursement for e-consultations, the high cost of implementing a secure messaging system, the possibility that the use of e-mail will increase physicians' workload and the inability for some patients to access e-mail have all served as an impediment for the adoption of such communication methods. Some states also have onerous regulatory requirements that scare physicians off from using e-mail. See, for example, the Texas Medical Board telemedicine rules.
• U.S. Health System Receives a Failing Grade. The Commonwealth Fund Commission on a High Performance Health System reported that "across 37 indicators of performance, the U.S. receives an overall score of 66 out of a possible 100 when comparing actual national performance to achievable benchmarks." Among other reported findings, the study concluded that the U.S. is "one-third worse than the best country on mortality from conditions 'amenable to health care'" and that the "average adult disability rate is one-fourth worse than the best five U.S. states." Click here to view the report.
• Two High Profile Health Agencies Continue to Lack Leaders. America's health system is constantly under attack. Critics launch multiple charges, including that the current system is inefficient, fails to provide quality services and does not focus on patient outcomes. But the so-called health crisis in this country is exacerbated by the fact that two integral governmental agencies--The Centers for Medicare and Medicaid Services ("CMS") and the Food and Drug Administration ("FDA")--are without confirmed leaders. Mark McClellan, the CMS administrator, is scheduled to leave his post in only a few weeks. Additionally, the FDA has been without a confirmed chief thoughout most of President Bush's tenure. Though the Senate Health, Education, Labor and Pensions Committee approved the nomination of Andrew von Eschenbach to lead the FDA on Wednesday, Senators David Vitter and Jim DeMint have promised to block the appointment.

Malpractice Claims Are Only the Beginning of Physicians' Worries...

Just a few days ago (and not long after the announcement of a possible 5.1% cut in Medicare payments to physicians was announced), the Institute of Medicine released a report calling for an across the board reduction in Medicare payments to providers and the creation of a fund that pays "bonuses" for strong performances. The committee chair and a professor of health care at the University of California, San Francisco, Steven A. Schroeder, offered his support of the proposal when he stated that "Medicare beneficiaries are not getting the highest possible quality of care because the program's payment system encourages volume rather than efficiency and quality." The comittee acknowledged, however, that there is little data available suggesting that pay-for-performance systems have a positive impact on patient care.

In and of itself, this proposal seems like a sound, logical solution to the so-called problem. The logic goes something like this: (1) The prospect of the receipt of a monetary benefit encourages all human beings to perform at their highest levels. (2) Providers are human beings. (3) Therefore, offering providers a monetary benefit will encourage them to perform at their highest levels.

This logic may not take into consideration the current climate, however. Given that providers are already under a substantial amount of pressure to avoid malpractice suits and already face another cut to their Medicare payments, such quality measures accompanied by an across the board cut may only serve to drive an even stronger wedge between those providers who care about patients and patients who deeply desire to have a good relationship with those responsible for providing their medical care.

When proceeding with reforms, care should be taken to ensure that the divide between physicians and patients is not strengthened and that changes made do not lead to increased resentment between the parties.

HHS to Appoint Robert Kolodner to Act as National HIT Coordinator

Modern Healthcare just announced the following: "Officials are expected to announce that Robert Kolodner, chief health informatics officer at the Veterans Health Administration, has been named HHS' acting national coordinator for health information technology, sources said. Kolodner would replace David Brailer, the first occupant of the post, who resigned in May."

Juvan's Seven Day Recap--9/17/06

Here's a look back at a few important headlines from last week:

• Stanford Bans Gifts from Pharmaceutical Companies. The New York Times reported that Stanford University has announced that it will, following the lead of Yale and the University of Pennsylvania, ban its physicians from accepting gifts from pharmaceutical sales representatives. The new policy prohibits not only the receipt of large gifts, but also the receipt of small gifts such as pens and mugs. Apparently, an article published in the Journal of the American Medical Association prompted the creation of this new policy.
• Cleveland Clinic to Build Specialty Hospital and Clinic in Abu Dhabi. Modern Healthcare's Daily Dose reports that the Cleveland Clinic, which often works with medical centers in other countries, has recently revealed a new joint venture with an investment firm in the United Arab Emirates for the development of a new specialty hospital and clinic in Abu Dhabi. The Clinic plans to open the doors to the new facility in three years.
• Tenth Circuit Rules FDA May Enforce Ephedra Ban. The Tenth Circuit overturned a federal trial court ruling enjoining the FDA from implementing a ban on ephedrine-alkaloid dietary supplements (also known as "Ephedra"). The court rejected an argument presented by Nutraceutical Corporation that the FDA acted outside of the scope of the authority granted to it under the Dietary Supplement Health and Education Act when it banned the supplement. The Tenth Circuit also stated that the FDA was not arbitrary or capricious in determining that any dose of ephedra poses an unreasonable risk.
  
  

Attention HHAs and SNFs

Please see the comment under NPI Roundtable post noting a change to an open door forum scheduled on September 26.

Question of the Day: Is Medicare the "Monster in Our Future"?

An anonymous blogger alerted me to an interesting article published by Robert J. Samuelson in The Washington Post. In the article, Samuelson asserts that Medicare is the "monster in our future." He takes to task economists who believe that increased health care spending is worthwhile and nonthreatening. Essentially, Samuelson questions whether Americans really ought to prefer health care spending, which purportedly results in longer lifespans, to "a third car [or] yet another television." After citing a few of the benefits of health care spending, including advances in Alzheimer's disease, Parkinsons and cancer, Samuelson writes, "But the present explosion in health spending is increasingly wasteful and socially corrosive. It may ultimately lower economic growth--a side effect of the high taxes needed to pay for Medicare and Medicaid--and already depresses take-home pay, squeezes other public services and redistributes income from the young to the old."

Is Samuelson correct? Is Medicare really the "monster in our future?" By helping those who are elderly to live longer lives, are we depriving the young? Is such spending "wasteful" and "socially corrosive?" How do we overhaul the system, but still nevertheless ensure that those needing health care receive high quality care and that research and development continues on effectively so that we find more cures to debilitating and life threatening diseases?

Post Speculates McClellan Will Step Down

Yesterday, the Washington Post reported that Mark McClellan, the administrator of the Centers for Medicare and Medicaid Services, may soon announce his resignation. Despite the chatter, when asked about his impending resignation, McClellan dodged questions, stating, "I'll be happy to talk to you when I have something to say."

Before assuming this position, McClellan was the commissioner at the Food and Drug Administration, a member of the White House Council of Economic Advisors and a health policy advisor to President Bush. The Post speculates that McClellan will leave his post to either return to academia or to work in the private sector.

Moratorium on Doctor-Owned Specialty Hospitals Expires, But Big Brother Will Continue to Monitor These Arrangements Closely

Recently, the moratorium prohibiting Medicare payments for services rendered pursuant to a referral to specialty hospitals in which the referring physician has a financial interest expired. Responding to the lifting of the ban, the Department of Health and Human Services ("HHS") released a strategic and implenting plan that called for revisions to payment schedules and increased transparency to address concerns raised by critics that specialty hospitals focus more on the profitability of patients than on providing high quality care. Specialty hospitals provide care for patients with cardiac conditions, orthopedic conditions or patients in need of surgical procedures.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 created the moratorium. Though the moratorium was originally scheduled to last for eighteen months, upon expiration, CMS announced a new policy that prohibited regional offices and contractors from enrolling these hospitals in the Medicare program. Subsequently, the Deficit Reduction Act of 2005 extended the moratorium for an additional six months.

The lifting of the moratorium is not a complete victory for physicians. The plan released by HHS calls for improvements to the accuracy of the hospital payment system and increased transparency. Discussing the plan, Mark B. McClellan, quoted in a CMS press release, stated, "We are bringing transparency to physician investments in hospitals, to help ensure that investment and compensation are appropriate, and to make sure that any such financial arrangements are disclosed to patients." CMS believes that the implementation of major changes to the current hospital inpatient prospective system and the ambulatory surgical center payment systems will eliminate improper incentives. Additionally, the plan calls for increased disclosure of physician investments and compensation arrangements.

Before physicians enter into this type of an arrangement, they should contact an experienced health care attorney to ensure that the proposed arrangement does not violate any state or federal fraud and abuse laws.

CMS to Hold National Provider Identifier Roundable

On Tuesday, September 26, the Centers for Medicare and Medicaid Services ("CMS") will host a roundtable to discuss the transition to the National Provider Identifier system. To participate, call 1-877-203-0044 and enter pass code 4795739.

Juvan's Seven Day Recap -- 8/26/06

Here's a quick look back at a few noteworthy stories from last week:

• Buying Years of Life: Health Care Spending to Drive the Economy. "What do people think a life is worth?" pondered Robert E. Hall, an economist at Stanford University. Apparently quite a lot, as health care spending will account for approximately 25% of the GDP by 2030, predicts Nobel laureate Robert W. Fogel in a New York Times article. Fogel suggests that health care spending will drive the economy just as railroads did at the beginning of the 20th century. View the article from the New York Times.
• Modernized E-Health Care. The federal government is actively promoting the shift from paper records and databases to e-records and e-databases. Only a day after President Bush signed an executive order to increase transparency and promote quality by, in part, requiring that federal agencies use improved health information technology systems, the FDA proposed to require the electronic registration of drug firms and drug products. Commenting on the electronic submission of data, HHS Secretary Michael Leavitt stated, "Having drug makers submit drug information electronically will help to keep an accurate, up-to-date inventory of drugs on the market."
• Stem Cell Research Debate Over? Not So Fast. Though researchers report that they have, for the first time, "grown colonies of prized human embryonic stem cells using a technique that does not require the destruction of embryos", the White House responded by stating that "[a]ny use of human embryos for research purposes raises serious ethical concerns". View the article from the Washington Post.

Bush Signs Executive Order to Promote Health Care Transparency

On Tuesday, President Bush signed an executive order entitled "Promoting Quality and Efficient Health Care in Federal Government Administered or Sponsored Health Care Programs." The Bush administration reports that this executive order aims to provide consumers with increased access to information about their doctors, hospitals and the prices of their procedures. The executive order requires federal agencies that administer health care programs to publish the costs paid for treatment, implement pay-for-performance reimbursement models and develop quality measurements. The executive order also requires federal agencies to use interoperable health information technology systems to facilitate the exchange of health information.

To view the executive order, visit http://www.whitehouse.gov/news/releases/2006/08/20060822-2.html.

NPI Compliance Deadline Nears

The Centers for Medicare and Medicaid Services ("CMS") recently announced that "getting an NPI is free--not getting one can be costly."

The Health Insurance Portability and Accountability Act of 1996 ("HIPAA") mandates the adoption of a standard unique identifier number system. In a January 2004 final rule, the Secretary of the Department of Health and Human Services announced that HIPAA covered providers must obtain a National Provider Identifier ("NPI") by May 23, 2007. As of August 23, 2006, providers only have nine months to obtain their NPIs. Medicare will delay or reject claims submitted without an NPI after this compliance deadline. Small health providers have an additional year--until May 23, 2008--to obtain their NPIs.

Medicare will begin accepting NPIs starting October 1, 2006. CMS highly recommends, however, that providers submit both their legacy identifiers and their NPI on claims.

To obtain an NPI, visit https://nppes.cms.hhs.gov. Alternatively, call to request a paper application at 1-800-465-3203. Do not wait until the last minute to submit your application, as application processing could take several weeks or even months.

FDA, MIT to Create New Safety Monitoring Devices

The Food and Drug Administration ("FDA") recently announced that it entered into an agreement with the Massachusetts Institute of Technology to develop a new safety monitoring system designed to more quickly identify problems with drugs and medical devices. The Associated Press reports that this new system will “scour federal and private health care databases in real time for unusual and emerging patterns that could indicate potential safety concerns.” In further attempt to improve patient safety, the FDA also intends to regularly issue reports to physicians that inform them of potential risks associated with drugs and devices.

Currently, the FDA manually assesses reports submitted voluntarily. The FDA has stated that this safety monitoring system leaves many known problems unreported.