Kaiser Daily Health Policy Report
Witnesses Debate Effectiveness of HSAs at House Committee Hearing
Consumers File Class-Action Lawsuit Over New Proof-of-Citizenship Medicaid Requirement
Mississippi To Tax Public, Private Hospitals 1.5% of Gross Revenue To Offset Medicaid Funding Shortfall
83,000 Louisiana Medicaid Beneficiaries Overdue for Annual Eligibility Interview
Tenet To Pay $725M To Settle Charges of Medicare Overbilling
Most Employers Plan To Cut Medical Benefits for Current, Future Retirees, Study Shows
GM Aims To Reduce Costs By Switching To Generic Zocor
About 20% of Federally Funded Transplant Programs Do Not Meet CMS Standards, Los Angeles Times Reports
Authorized Generics Increase Competition, Lower Prices, Study Finds
FDA Approval of Eye Medication Expected Amid Controversy Over Cost
The Latest Reports in Health Policy
NEJM Perspective Examines Sales of Physicians' Prescribing Data
Medicare Rx Drug Benefit a 'Planned Looting,' Opinion Piece States
Medicare
CMS Releases Details on Efforts To Regulate Medicare Prescription Drug Benefit Plans
[Jun 29, 2006]
CMS on Wednesday for the first time released details about agency efforts to regulate health insurers for service problems related to Medicare prescription drug plans and said agency officials have sanctioned plans more than 1,000 times this year, the AP/Seattle Post-Intelligencer reports. According to CMS, agency officials have sent warning letters -- the most common sanction -- 651 times and have ordered health insurers to submit plans for service improvements in areas such as response times at call centers 318 times. In addition, CMS officials imposed more serious sanctions, which involved temporary restrictions on marketing of prescription drug plans on the Medicare plan finder tool, 75 times. CMS officials also have sought to remove one health insurer, America's Health Choice of Florida, from the Medicare prescription drug benefit for continued "marketing violations." CMS Administrator Mark McClellan said that AHCF has demonstrated "a recurrent pattern of failure to comply," adding that "the plan ... may well be terminated from the program." McClellan also said, "When problems do occur, we want to make sure we resolve them quickly. And if they aren't resolved quickly, if our beneficiaries aren't getting the service Medicare requires, then we are taking action to make sure the situation is resolved or we take steps to get the plan out of the program." However, Ron Pollack, executive director of Families USA, said, "CMS is clearly trying to make sure these private plans stay in the program." He added, "The administration has bent over backwards to privatize the drug benefit. It's for this reason that the insurance companies and private plans know the Bush administration is very reluctant to impose strong and effective remedies to cure ongoing problems" (Freking, AP/Seattle Post-Intelligencer, 6/28).
Capitol Hill Watch
Witnesses Debate Effectiveness of HSAs at House Committee Hearing
[Jun 29, 2006]
Witnesses at a House Ways and Means Committee hearing on Wednesday debated whether health savings accounts have improved health insurance and reduced costs, CQ HealthBeat reports. Health insurers and employers testified that HSAs offer new options for affordable health insurance and recommended that lawmakers pass several reforms to help increase enrollment. Karen Ignagni, president and CEO of America's Health Insurance Plans, said, "HSAs are helping a substantial number of previously uninsured consumers purchase coverage, accumulate savings for their future medical needs and access preventative care services." Jeffrey Cava, executive vice president for human resources and administration at Wendy's International, said company health insurance claims decreased by 14% during the first year HSAs became available to employees. In addition, 75% of employees received annual physicals during that time, up 25% from the previous year, and more employees used online information to help manage their health care, Cava said. Some Concerns
However, other witnesses testified that HSAs might prompt employees to avoid seeking preventive care. They also said many employees cannot afford the high deductibles and out-of-pocket costs associated with the accounts. Jean Therrien, executive director of Neighborhood Family Practice in Cleveland, said, "The patients who seek care at our health center who are enrolled in high-deductible plans and those that are uninsured are indistinguishable from one another in their inability to pay for needed services." Therrien added, "They do not have first dollar coverage for preventative care, office visits, lab testing and prescription drugs." According to Sara Collins, assistant vice president of the Commonwealth Fund, studies indicate that few employees have enrolled in high-deductible health plans associated with HSAs and that those who have enrolled are less satisfied than those enrolled in traditional health plans. She also said that employees enrolled in high-deductible health plans associated with HSAs are "far more likely to delay, avoid or skip health care because of cost." Rep. Charles Rangel (D-N.Y.), ranking member of the committee, said, "The expansion of HSAs is yet another step toward the Republican goal of dismantling employer-provided health and pension benefits." However, Rep. Eric Cantor (R-Va.) said that HSAs offer "one more option in the buffet of health care options being chosen by employers" (Carey, CQ HealthBeat, 6/28).
Medicaid
Consumers File Class-Action Lawsuit Over New Proof-of-Citizenship Medicaid Requirement
[Jun 29, 2006]
A class-action lawsuit filed Wednesday over a new law requiring Medicaid beneficiaries and applicants to provide proof of citizenship to receive benefits beginning July 1 alleges that the law is unconstitutional and should not be implemented, the New Orleans Times-Picayune reports (Moller, New Orleans Times-Picayune, 6/29). Under the law, individuals seeking care through Medicaid will be required to show proof of U.S. citizenship, such as a birth certificate, passport or other form of identification. The law's intent is to prevent undocumented immigrants from claiming to be citizens in order to receive benefits provided only to legal residents (Kaiser Daily Health Policy Report, 6/28). The lawsuit was filed in U.S. District Court in Chicago against HHS Secretary Mike Leavitt on behalf of nine plaintiffs who say they cannot document their citizenship and might lose their Medicaid benefits if the law is implemented. Plaintiffs are seeking to eliminate the requirement (New Orleans Times-Picayune, 6/29). The suit alleges that the new rules violate the Fifth Amendment of the U.S. Constitution regarding due process of law (Reichard, CQ HealthBeat, 6/28). States that fail to enforce the new law will lose federal matching funds, according to a guidance sent by CMS to states on June 9, The Hill reports (McCormack, The Hill, 6/29). Ron Pollack, executive director of Families USA, said an estimate by the Center on Budget and Policy Priorities shows that three to five million current Medicaid beneficiaries who are U.S. citizens could lose coverage. Mary Kahn, spokesperson for the federal Medicaid program, declined comment on the lawsuit but said "states must afford applicants or current enrollees a reasonable opportunity to secure the required documents. If a beneficiary is having difficulty, we have instructed states to assist the beneficiary" (CQ HealthBeat, 6/28). Broadcast Coverage
 NPR's "All Things Considered" on Wednesday reported on the lawsuit. The segment includes comments from Stephanie Altman, staff attorney with Health and Disability Advocates; Rep. Charlie Norwood (R-Ga.), who wrote the requirement; and Elaine Ryan, deputy director of the American Public Human Services Association, which represents state Medicaid directors (Rovner, "All Things Considered," NPR, 6/28). The complete segment is available online in RealPlayer.
Mississippi To Tax Public, Private Hospitals 1.5% of Gross Revenue To Offset Medicaid Funding Shortfall
[Jun 29, 2006]
Mississippi this week will begin taxing all hospitals 1.5% of gross revenue to address a $360 million budget shortfall resulting from changes in federal Medicaid funding rules, the Jackson Clarion-Ledger reports. Only public hospitals pay the current tax, which is about 0.35%. In previous years, Mississippi used $90 million in public hospital funding to draw about $270 million in matching federal funds for the state Medicaid program. However, increased federal oversight of states' accounting tactics for obtaining federal Medicaid funds led the state to discontinue the strategy, according to the Clarion-Ledger. The state Legislature did not account for the decreased funding when approving the state budget, and the state now faces a $360 million shortfall in the state Medicaid budget. In a recent letter to hospitals, Robert Robinson, executive director of the state Medicaid program, said, "We believe this action must be taken to ensure Mississippi hospitals do not lose $360 million in revenue in the future." Pete Smith, a spokesperson for Gov. Haley Barbour (R), said the plan will help shift the tax burden from public hospitals to all hospitals. However, Dan Harrison, executive vice president of Rush Health Systems, said the tax is unfair because it is based on the cost of services and does not take into account that some patients do not pay their hospital bills. Hospitals lose about 50% of gross revenue on indigent care, according to Harrison. Gerald Wages, executive vice president of North Mississippi Medical Center, said the tax "will diminish the health care available to our citizens," adding, "A sizable number of hospitals are operating at a deficit." State Attorney General Jim Hood (D) is examining the governor's legal authority to levy the tax, a spokesperson for Hood said (Hipp, Jackson Clarion-Ledger, 6/27).
83,000 Louisiana Medicaid Beneficiaries Overdue for Annual Eligibility Interview
[Jun 29, 2006]
More than 83,000 Medicaid beneficiaries from Louisiana are overdue for required annual interviews to determine whether they are still eligible for the program, according to the state Department of Health and Hospitals, the New Orleans Times-Picayune reports. Between 40,000 and 45,000 of those beneficiaries are from the New Orleans area, and DHH does not have the current addresses for many beneficiaries who have relocated because of Hurricane Katrina. DHH spokesperson Kristen Meyer said no beneficiaries will be removed from the rolls until CMS sends guidance about "the best way to ... come up with a set of procedures for putting people off and keeping people on Medicaid." Meyer added, "To date, the only ones disenrolled are those who have been enrolled in other states' Medicaid programs, and those other states have sent us information verifying that." She said individuals who previously received Medicaid from Louisiana before Katrina and have not had an eligibility interview since Hurricane Katrina should contact DHH to conduct one (Finch, New Orleans Times-Picayune, 6/27).
Health Care Marketplace
Tenet To Pay $725M To Settle Charges of Medicare Overbilling
[Jun 29, 2006]
Tenet Healthcare on Thursday said it has agreed to pay $725 million to settle several federal investigations into whether the company overbilled Medicare, the AP/San Francisco Chronicle reports (AP/San Francisco Chronicle, 6/29). The settlement covers a Department of Justice investigation into inflated outliers -- payments hospitals receive from Medicare for treating the sickest patients -- that were first questioned in October 2002. Outlier payments, which were implemented to encourage hospitals to accept very sick patients, are based on a hospital's "chargemaster," or list of prices that most patients do not pay fully. Tenet raised chargemaster prices "sharply," bringing the company "big supplemental payments from its managed care customers," the Wall Street Journal reports. The settlement also resolves a DOJ civil suit that accused Tenet of improper Medicare coding, as well as allegations from U.S. attorneys of improper physician recruitment in El Paso, Texas; Los Angeles; Memphis, Tenn.; New Orleans; St. Louis; and San Francisco (Rundle, Wall Street Journal, 6/29). Tenet will pay $725 million over four years and also will waive its claim on $175 million in past Medicare payments. The settlement does not include any findings that Tenet broke the law. Trevor Fetter, president and CEO of Tenet, said, "Regulators depend on providers to be trustworthy and to set and abide by their own high ethical standards. Some of this company's past actions did not measure up to the high standards that we have imposed on ourselves since these issues first arose" (AP/San Francisco Chronicle, 6/29).
Most Employers Plan To Cut Medical Benefits for Current, Future Retirees, Study Shows
[Jun 29, 2006]
Many U.S. companies are planning to reduce medical and pension benefits for current and future employees, according to two separate studies released Wednesday by consulting firm Watson Wyatt Worldwide, Long Island Newsday reports (Luhby, Long Island Newsday, 6/29). For the studies, researchers surveyed 163 mostly Fortune 500 companies (Dixon, Reuters, 6/28). The study on health benefits finds that most employers plan to reduce medical plans for current and future retirees within the next five years (Long Island Newsday, 6/29). Fourteen percent of employers said they plan to eliminate the benefit entirely for future retirees older than age 65, and 6% plan to eliminate the benefit for current retirees in the same age group. Only 5% of the 163 companies surveyed said they do not expect to place any additional restrictions on their medical benefits over the next five years, and 7% said they do not expect to implement further restrictions for current retirees, the study finds. In addition, out of the 77% of employers who this year took a Medicare prescription drug subsidy -- a plan aimed at encouraging employers to continue to offer retiree drug coverage -- 64% plan to accept it in the future (CQ HealthBeat, 6/28). Cara Jareb, director of retiree medical services at Watson Wyatt, said, "There is definitely more change in the air now that Medicare Part D has come into play. There are fewer companies that are not planning on doing anything at all" (Reuters, 6/28).
 The health benefits survey is available online. Domestic Partner Benefits
In other employer health benefits news, 253 Fortune 500 companies provide equal benefits to same-sex couples, according to data expected to be released Thursday by the Human Rights Campaign, USA Today reports. Duke Energy, Harrah's Entertainment, 3M, Lowe's and Clear Channel Communications are among those that began offering such benefits in 2006. Joe Solmonese, president of HRC, said, "The (study) is important and significant, particularly the number (of companies) offering domestic-partner benefits, because it shows real growth and a trend toward equity and tolerance in the workplace." Steve Crampton, chief counsel for the American Family Association's Center for Law & Policy, said the increase in benefits to same-sex employees is the result of "political pressure." The group opposes domestic-partner benefits, USA Today reports (Armour, USA Today, 6/29).
The HRC report is available online.
GM Aims To Reduce Costs By Switching To Generic Zocor
[Jun 29, 2006]
General Motors, the largest private provider of health insurance in the U.S., is seeking to reduce its health care costs by encouraging its beneficiaries to switch from brand-name statins to newly available generic versions of Merck's Zocor, Bloomberg/Chicago Tribune reports. Generic Zocor tablets are priced at about 90 cents each, compared with $3.33 per pill for Pfizer's Lipitor. GM currently spends $200 million dollars annually for cholesterol drugs. Its expenditures could be reduced by 59% to $82 million if the 250,000 GM employees taking cholesterol medications switch to the generic option. Cynthia Kirman, GM's corporate pharmacist, said, "This is one of the biggest opportunities GM has ever had in lowering our costs for treatment." If GM and other employers and insurers continue this trend by substituting generic drugs for the 70 brand-name drugs that will lose their patent within five years, total savings could reach $49 billion by 2011. Such switches also could reduce beneficiaries' out-of-pocket payments for prescription drugs (Bloomberg/Chicago Tribune, 6/29).
Coverage & Access
About 20% of Federally Funded Transplant Programs Do Not Meet CMS Standards, Los Angeles Times Reports
[Jun 29, 2006]
About 20% of federally funded transplant programs do not meet minimum CMS standards, according to a Los Angeles Times investigation. CMS funds most U.S. transplant programs and requires medical centers to perform a minimum number of procedures and maintain a minimum survival rate to receive certification. The Times examined the number of procedures performed by medical centers as part of the 236 federally funded heart, liver and lung transplant programs from 2002 to 2004, as well as survival rates, based on information available to the public on the Web sites of the United Network for Organ Sharing and the Scientific Registry of Transplant Recipients. According to the Times, 48 of the transplant programs continue to operate "despite sometimes glaring and repeated lapses." Nine lung transplant programs and 36 heart transplant programs did not meet CMS standards. Those 48 transplant programs accounted for 71 more deaths within one year of transplants than expected under normal conditions, based on a government analysis of survival rates. CMS has the authority to revoke the certification of transplant programs that fail to meet agency standards but "rarely does," the Times reports. CMS has revoked the certification of 11 transplant programs since 2000, but, in "nearly all of those cases, it moved only after the programs had voluntarily ceased operations," according to the Times. However, after CMS received detailed questions from the Times, agency officials in March sent letters to all of the transplant programs that requested information about staffing and performance. An anonymous CMS official said that the agency to date has identified 25 transplant programs "seriously out of compliance." Reaction
Mark Barr, president of the International Society for Heart and Lung Transplantation and a surgeon at the University of Southern California, said, "The bottom line message is that there are too many programs in the United States that need to be shut down." Barry Straube, chief medical officer for CMS, said, "In areas where there is a concern, whether it's because they are not meeting certain volume standards or outcome standards, at a minimum, that is going to trigger a review of that specific program." He added that CMS might reduce the number of the minimum number of procedures that transplant centers must perform. However, Michael Acker, a heart transplant surgeon and chief of cardiac surgery at the Hospital of the University of Pennsylvania, said that heart transplant programs should have to perform more, not fewer, procedures. Acker said, "It's not just doing the transplant. ... There are so many reasons for why you need a vigorous team." Officials from transplant programs that do not perform the minimum number of procedures said patients in many cases would have to travel long distances in the event they had their certification revoked. Officials from transplant programs that did not maintain minimal survival rates "uniformly say they should be given more time to ... fix problems that led to unexpected patient deaths," the Times reports (Weber/Ornstein, Los Angeles Times, 6/29).
Prescription Drugs
Authorized Generics Increase Competition, Lower Prices, Study Finds
[Jun 29, 2006]
Authorized generics -- which are distributed by generic drug makers under agreements with brand-name manufacturers -- can boost competition and lower prices for consumers, according to a study commissioned by the Pharmaceutical Research and Manufacturers of America and conducted by IMS Health, CQ HealthBeat reports. The first generic drug maker to successfully challenge a patent on a brand-name drug receives six months of market exclusivity, but generic versions that are authorized by the brand-name drug's manufacturer are permitted on the market during that period as well. Researchers used case studies to compare the prices of generic drugs that had competition from authorized versions with those that did not. The study finds that when authorized generics were available, generic drug discounts were an average of 15.8 percentage points greater than when authorized versions were not marketed. Health care savings in the nine case studies that included authorized generics totaled $212.8 million. "That's a win-win for patients," Lori Reilly, PhRMA vice president for policy and research, said (CQ HealthBeat, 6/27).
FDA Approval of Eye Medication Expected Amid Controversy Over Cost
[Jun 29, 2006]
FDA this week is expected to approve Genentech's Lucentis for the treatment of wet age-related macular degeneration, but the approval will "pose a conundrum" for physicians, patients and insurers because the treatment is expected to cost 10 to 100 times more than a similar Genentech product that also can treat the condition and is already on the market, the New York Times reports. The older drug, Avastin, is approved to treat cancer, but some doctors since late 2005 have been using the injectable medication to treat wet macular degeneration. Avastin costs about $50,000 per year to treat cancer, but because the amount needed for eye injections is small, the cost for treating wet macular degeneration is about $1,000 or less per year. Lucentis is expected to cost at least $10,000 per year. According to the Times, "Genentech has no interest in getting Avastin approved for macular degeneration, because that would undermine the sales of Lucentis, which some analysts predict will have annual sales of several hundred million dollars" (Pollack, New York Times, 6/29). The drugs share some components, and both were designed to block vascular endothelial growth factor -- a molecular signal Genentech discovered in 1989 -- which controls abnormal blood vessel growth. Lucentis was designed to be a smaller drug that more effectively penetrates the eye and concentrates its effects, minimizing side effects, according to Susan Desmond-Hellmann, president of product development at Genentech (Tansey, San Francisco Chronicle, 6/29). Concerns
"Use of Avastin instead of Lucentis could save patients and insurers hundreds of millions of dollars a year," and it is unclear whether they will consider the new treatment "worth" the price, according to the Times. However, many specialists already plan to switch to Lucentis after it is approved because, unlike Avastin, there are clinical trials to support the drug's safety and efficacy as a treatment for macular degeneration, the Times reports (New York Times, 6/29). In addition, Avastin has a risk of serious side effects, including heart failure, high blood pressure, kidney problems and stroke. Some doctors -- including Philip Rosenfeld, an associate professor of ophthalmology at the University of Miami and one of the first doctors to use Avastin for macular degeneration -- say the risk of serious side effects from Avastin is much lower when used in small doses in the eye than in the large doses needed to treat cancer. Rosenfeld and a group of doctors hope to conduct their own study to prove the safety and efficacy of the treatment. Rosenfeld said they hope to obtain funding from NIH for the research. Comments
Desmond-Hellmann said Lucentis is superior to Avastin for treating macular degeneration because it was designed specifically to target the eye. In addition, she said, Lucentis clears out of the body within days, while Avastin remains in the body for weeks (San Francisco Chronicle, 6/29). Desmond-Hellmann said Lucentis would save the health care system money by preventing blindness, which can lead to other injuries and the need for nursing home care. Rosenfeld said, "The whole experience really opens your eyes to how our whole health care system is operating," adding, "We could be incentivized to use the most effective therapy at the most reasonable cost. But that's not how our system is set up" (New York Times, 6/29).
The Latest Reports in Health Policy
NEJM Perspective Examines Sales of Physicians' Prescribing Data
[Jun 29, 2006]
"For Sale: Physicians' Prescribing Data," New England Journal of Medicine: In a perspective piece for NEJM, Robert Steinbrook, a doctor and NEJM correspondent, discusses how physicians' prescribing data are sold to pharmaceutical manufacturers and examines several issues surrounding the practice. According to Steinbrook, the American Medical Association's "best practice guidelines" include warnings that the pharmaceutical industry should keep prescribing data confidential and that sales representatives should not use a physicians' prescribing data to pressure them into prescribing a certain drug. However, the practice continues despite the warnings, and physicians increasingly are growing concerned, Steinbrook writes. He notes that AMA recently implemented a Prescribing Data Restriction Program that allows physicians to deny sales representative access to their prescribing data, and some states are considering enacting legislation banning the use and sale for most commercial purposes of prescribing data that identifies the prescriber. Steinbrook concludes that many physicians still are unaware they can restrict access to their prescribing data, and programs allowing physicians to compare their data to that of other physicians -- along with educational materials -- are not currently available, so the controversy "is likely to remain uncertain for at least several years" (Steinbrook, NEJM, 6/29).
Opinion
Medicare Rx Drug Benefit a 'Planned Looting,' Opinion Piece States
[Jun 29, 2006]
The Medicare prescription drug benefit, which will cost an estimated $1.2 trillion over the first 10 years, was "premeditated taxpayer rape" and "a planned looting of the public on behalf of corporate interest," syndicated columnist Froma Harrop writes in a Seattle Times opinion piece. "To understand the enormity of the crime, note that $1.2 trillion is three times the $400 billion the president declared the benefit would cost when Congress voted on it," according to Harrop. She adds that the benefit "forbids the federal government to negotiate prices with drug companies," although "no one demanded that the Department of Veterans Affairs stop negotiating drug prices, which it has been doing for years." In addition, Harrop writes that the Medicare prescription drug benefit "forced the 6.4 million poor and elderly then getting drugs through Medicaid to shift into the Medicare program," although Medicaid "paid up to 30% less for drugs than do the private Medicare insurers." According to Harrop, "As an appalling piece of legislation, the Medicare drug benefit is a legend in the making" (Harrop, Seattle Times, 6/27).
Looking for a Daily Report on a specific date? Click here for instructions on how to find it.
...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... .....
|
