Kaiser Daily Health Policy Recent Reports

Frist, Breaux and Jeffords to Introduce New Patients' Rights Bill Today with Bush's Backing

[May 15, 2001]

Sen. Bill Frist (R-Tenn.), with support from Sens. John Breaux (D-La.) and James Jeffords (R-Vt.,) on May 15 will introduce a new bipartisan patients' rights bill endorsed by President Bush that would "safeguard patients without unleashing excessive lawsuits or undermining states that have adopted similar protections," the Washington Post reports. The new bill permits suits against managed care companies but with two constraints -- "in most cases," the bill would require patients to first bring their complaints to a new outside review panel, and patients would be allowed to sue only if the panel "rejected" their complaint. In addition, while the legislation would not "expand" patients' rights to sue in state court, it would allow patients to win more money in federal court than under current law -- an "unlimited sum" in economic damages and up to $500,000 in "other injuries." The new bill also "omits" exemptions that would allow states to "skirt" the federal law (Goldstein, Washington Post, 5/15). These constraints "generally follo[w]" principles for patients rights' legislation set forth by Bush earlier this year, the New York Times reports (Pear, New York Times, 15).

'Truer' Compromise?
The new bill, however, stands in "contrast" to the patients rights bill (S 283) sponsored by Sens. John McCain (R-Ariz.), Edward Kennedy (D-Mass.) and John Edwards (D-N.C.) that Bush "rejected immediately." Unlike the Frist bill, the McCain-Kennedy-Edwards measure would allow patients more flexibility to sue in state courts, where they could win up to $5 million in penalties. But the Frist and McCain-Kennedy-Edwards bills are similar in "less controversial areas," including emergency room treatment coverage, prescription drug access, and access to obstetrician/gynecologists without prior approval. Although Bush favors the Frist bill, it "remains unclear" whether Senate Republican leaders, "who have resisted any expansion of lawsuits against health plans," or Democrats and House Republicans, "many of whom" have voted for more expansive rights, will support the bill (Washington Post, 5/15). But the new bill's sponsors say it represents a "truer" compromise than previous proposals. "My hope is that this bill encourages both sides to leave their entrenched, intransigent position and come to the middle," Frist said, adding, "This bill is aimed to achieve balance in terms of liability and scope" (Washington Post, 5/15).

McCain, Edwards Push Bill Through Senate
Meanwhile, Edwards and McCain are "frustrated" that White House officials "won't sit down and discuss ... reservations about" their bill, McClatchy Newspapers/Washington Times reports. In a recent interview, Edwards said, "Up until now, we've seen no indications they're interested." Because of the "lack of dialogue" on the bill, McCain and Edwards are trying a "new strategy," McClatchy/Times reports (Wagner, McClatchy Newspapers/Washington Times, 5/14). McCain -- who "has vowed all year to force a vote on [his] measure by Memorial Day" -- last Wednesday filed the bill as a "potential amendment to the education bill currently under debate in the Senate" (Kaiser Daily Health Policy Report, 5/11). CongressDaily reports that the debate could come up as early as this week on the Senate floor if McCain pushes the amendment (Fulton, CongressDaily, 5/14). McCain and Edwards hope this effort "quickly" lands the bill on Bush's desk, forcing Bush to "[e]mbrace it or veto it." Edwards said, "I think the president needs to decide where he stands on this thing: whether he stands with the big HMOs or whether he stands with patients and families" (McClatchy Newspapers/Washington Times, 5/14). However, if McCain successfully pushes the amendment, Frist may also present his bill as a "second-degree amendment," sources say (CongressDaily, 5/14).

Op-Eds Say Bush Stance 'Undermines Patient Protection' ...
Bush's "apparent insistence" that he will veto a patients' bill of rights that does not enforce "reasonable" caps on awards won by patients in HMO lawsuits "will derail any chance for agreement," Rep. Rob Andrews (D-N.J.) writes in a Philadelphia Inquirer op-ed. Even though the McCain-Kennedy-Edwards bill includes a $5 million cap on punitive damages in state court, Andrews says that this amount "is evidently too high for the president's liking." Andrews adds that the liability limits Bush has advocated "undermin[e] patient protection" by "undercut[ting] the deterrent power of patient protections." Andrews concludes, "The position the president has taken shuts the courthouse door for many patients, denies complete compensation for many others, and fails to turn the tables in favor of patient protection in the daily decision-making practices of health insurers" (Andrews, Philadelphia Inquirer, 5/14).

... And Is 'Bad Policy,' 'Bad Politics'
In an accompanying Inquirer opinion piece, Craig Dimitri, a 1999 Villanova University School of Law graduate, writes, "Bush's stance on [patients'] right to sue is both bad policy and bad politics." Dimitri, describing himself as a "conservative Republican" who campaigned heavily for Bush last year, warns that Bush's stance is "bad strategy" because it could "trigger an unpleasant civil war within the GOP," thereby giving the Democrats "a gift-wrapped opportunity to thwart Bush's political momentum and sap his high approval ratings." In addition, Bush's opposition to the McCain-Kennedy-Edwards bill is "bad policy," noting that HMOs are currently "blissfully protected from being held responsible for their negligence -- which often results in death for patients." Dimitri concludes, "The president has an opportunity to sign historic legislation, a vivid example of 'compassionate conservatism.' He should not squander this chance" (Dimitri, Philadelphia Inquirer, 5/14).

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Medicare

Medicare Commission Head Wilensky Replaced as Concerns Grow over Health Care Investments; Other Commission Members Announced

[May 15, 2001]

Gail Wilensky, chair of the Medicare Payment Advisory Commission, which advises Congress on Medicare issues such as reimbursement rates, is being replaced over concerns about her "substantial investments" in health care companies, the New York Times reports. Wilensky has been chair of the committee and its predecessor panel since 1995 and she is a former head of HCFA. As comptroller general of the United States and head of the General Accounting Office, David Walker is responsible for appointing the commission's 17 members. Walker said he opted to replace Wilensky, who's term expired last month, because she owned more than $4 million in stock and stock options in eight health care firms. Walker also said he wanted to see some "turnover" in the leadership of the commission. Glenn Hackbarth, currently a MedPAC commissioner, has been named as Wilensky's successor (Pear, New York Times, 5/15). Hackbarth is also an independent health consultant and is formerly Chief Executive Officer of Harvard Vanguard Medical Associates, a multispecialty group practice in Boston, MA (GAO release, 5/15). The Times reports that Wilensky had attempted to keep her position but had "irritated" Rep. Bill Thomas (R-Calif.), chair of the House Ways and Means Committee, whose health subcommittee has jurisdiction over he health care programs of the Social Security Act -- including Medicare. Wilensky said, "My independence was troublesome" for some lawmakers, adding, "I say what I think." Wilensky also said that her work on the commission was not influenced by her investments. While members of the commission are required to disclose any financial interests they have in the health care industry, Walker said the chair should be held to a "higher standard" because of the "additional power and responsibilities" associated with the position. Walker also announced this morning that three new members have been appointed to the commission: Sheila Burke, undersecretary of the Smithsonian Institution and chief of staff to former Sen. Bob Dole (R-Kan.); Allen Feezor, health benefits administrator of the California Public Employees' Retirement System; and Ralph Muller, president of the University of Chicago Hospitals and Health System (New York Times, 5/15). In addition, the following MedPAC members have been reappointed: Joseph P. Newhouse, Ph.D., John D. MacArthur Professor of Health Policy and Management, Harvard University; Alice F. Rosenblatt, Chief Actuary and Senior Vice President, Merger and Acquisition Integration Team, Wellpoint Health Networks; and John W. Rowe, M.D., President and Chief Executive Officer, Aetna US Healthcare (GAO release, 5/15).

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Media and Society

NPR 'Morning Edition' Interviews Georgetown's Janlori Goldman on Health Care Privacy

[May 15, 2001]

Janlori Goldman, director of Georgetown University's Health Privacy Project, discussed the need for health care privacy rules this morning on NPR's "Morning Edition." Goldman "salutes" new rules implemented in April by the Bush administration, which she said will prevent consumers from becoming "unwitting victims." Under the new rules -- which are expected to "take hold" in two years, though administration officials have said they will likely make some changes -- patients will have access to their own medical records and be "able to put a limit on other peoples' access" to those records. Doctors and patients "have lost control over" medical records, Goldman said, adding that although physicians "for thousands of years" have taken an oath of confidentiality, today it is difficult for them to limit who has access to records because they must provide health plans with medical records to receive reimbursement. Goldman said that health plans do not have the same "confidentiality duty" to patients and often use the information for marketing or research purposes. Health plans, hospitals and drug stores also may sell patient information to other organizations. But Goldman said that the real concern for most consumers is employer discrimination and that there are "many, many stories" about employees being fired or otherwise discriminated against because of health information. Goldman cited a recent case before the Equal Employment Opportunity Commission, in which a North Carolina woman was fired after she a test found she had a genetic predisposition for a disease. Goldman said, "The sad thing [about cases like this] is that people are already afraid to get genetic testing and counseling" or to talk to their doctor about sensitive conditions. "We don't want privacy to be a barrier to getting health care," she said.

Privacy For the Rich?
Mental health information is a particular concern for many patients, Goldman said, adding that mental health professionals must share "very detailed patient data" with insurers to receive reimbursement. Goldman said that almost "20% of people in this country either pay out of pocket or lie to their doctors or keep information out of their record" if they receive treatment for mental health, sexually transmitted diseases, reproductive health or genetic counseling. Those who can't afford to pay out of pocket may also avoid getting treatment altogether. Asked if "secrets belong to the rich," or those who can afford to get treatment without going through an insurance company, Goldman said, "Yes, people who have money can better protect their privacy. They can get the health care they need" (Stanberg, "Morning Edition," NPR, 5/15). To hear this report, which will be posted to the "Morning Edition" Web site after noon ET, click here. Note: You will need RealAudio.

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Prescription Drugs

Alleging Conspiracy to Block Heart Drug Generics, 15 States File Suit Against Aventis, Andrx

[May 15, 2001]

The attorneys general of 15 states and the District of Columbia yesterday filed a federal lawsuit in U.S. District Court in Detroit charging French pharmaceutical maker Aventis S.A. and generic drug manufacturer Andrx Corp. with violating anti-trust laws by "conspiring" to keep a generic form of the blood pressure drug Cardizem CD off the market, the AP/New York Times reports. Michigan Attorney General Jennifer Granholm (D) said Aventis sued Andrx in early 1996 for infringing the patent and trademark of Cardizem, but rather than asking the generic firm to pay damages, Aventis settled by paying $89 million to keep Andrx's cheaper version off drug store shelves for 11 months beginning in July 1998. However, the AP/Times reports that the deal was later "cancelled" after a federal investigation began. Cardizem costs approximately $73 per month, compared to the $32 per month that generics, such as Andrx's Cartia XT, would have cost. Granholm added that the average consumer taking Cardizem "probably paid an extra $400 a year as a result of this monopoly." Aventis made $700 million in the 11 months the generic drug was prevented from entering the market, Granholm said (AP/New York Times, 5/15). Led by Michigan and New York, the states -- Arizona, California, Idaho, Indiana, Maine, Minnesota, New Mexico, North Carolina, Oklahoma, Utah, Vermont, Washington, West Virginia and the District of Columbia -- seek at least $100 million in restitution. They argue that the drug makers' "arrangement" created higher prescription drug costs in state-run health plans such as Medicaid (Gold, Wall Street Journal, 5/15). The federal suit is the consolidation of more than 20 civil lawsuits filed by patients and insurance companies, including Aetna U.S. Healthcare.

Hatch-Waxman Abuses Charged
The federal suit also is the first by the states to charge abuses of the 1984 federal Hatch-Waxman Act, which aims to "ease introduction of generics." But government investigators say that the law's loopholes have permitted brand-name drug makers to "delay competition." Last month, the Federal Trade Commission settled a civil antitrust complaint against the firms over Cardizem, preventing the companies from making other deals that would "restrict introduction of lower-cost generic medications." Aventis and Andrx have denied those allegations (Gellene, Los Angeles Times, 5/15).

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Illinois Lawmakers Introduce Plan to Encourage Generic Drug Use, Require Drug Copayments

[May 15, 2001]

In response to rising Medicaid drug costs, Illinois lawmakers are considering a proposal to encourage physicians to prescribe generic drugs to and to require prescription drug copayments for Medicaid beneficiaries, the Chicago Tribune reports. According to the Tribune, rising drug costs factor largely into the state Medicaid budget's predicted $270 million shortfall for FY 2002, as drug costs for the program are rising by at least 15% per year. Officials estimate that the state could reduce costs by "at least" $50 million per year, or 5%, by encouraging generic drug use and requiring copays. The plan, sponsored by state Sen. Frank Watson (R) and Rep. Jay Hoffman (D), would require doctors to obtain state approval prior to prescribing brand-name drugs for "common conditions for which numerous generic substitutes exist." For example, physicians would be required to prescribe generic antibiotics, anti-inflammatories, antihistamines or anti-ulcer treatments. Watson said, "It doesn't take a big shift in the prescribing habits of physicians in this state to save money. These are not necessarily life-saving drugs. Why not start out on a generic drug and then move to a brand name if necessary?" In addition, the proposal would require Medicaid beneficiaries to contribute an undisclosed amount for brand-name drugs. However, lawmakers said that Medicaid patients who cannot afford copays would be exempted, and generic drugs would not require a copay.

Drug Companies, Patient Advocates Oppose Plan
Drug companies call the proposal "ill-advised," saying that the newest brand-name drugs "do a good job" of preventing costly hospital or nursing home stays. In addition, consumer advocates say requiring prior authorization could "be dangerous" for patients with certain conditions. Randy Wells, executive director of the National Alliance for the Mentally Ill in Illinois, said, "The Watson-Hoffman proposal would impose restrictions that could prevent Medicaid patients from receiving new medicines. That's worse than shortsighted. It is medically and financially irresponsible." Drug industry representatives added that the state could further reduce costs by "educating doctors and cracking down on health care fraud." But Watson said the proposal does not aim "to be punitive and take things away. We're trying to hold down costs and we need to change the prescribing habits of the medical community." The Tribune reports that the state Department of Public Aid, which runs the Medicaid program, could enforce aspects of the proposal "at any time, without a vote of the full legislature." However, Gov. George Ryan's office requested proposals before the FY 2002 budget is finalized. Ryan has already "sliced" $60 million in Medicaid dispensing fees to pharmacists. Ryan spokesperson Dennis Culloton said, "We've taken the Watson-Hoffman report and Public Aid is folding this into their efforts to come up with recommendations for the governor on how to fill the $270 million Medicaid gap with which we are faced" (Japsen, Chicago Tribune, 5/14).

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Coverage and Access

New York City Public Hospital Agency Seeks to Close 27 Community Clinics, Citing Budget Deficit

[May 15, 2001]

The New York City Health and Hospitals Corporation, which administers the city's public health system, is seeking state permission to close 27 school-based and community clinics, citing "huge" budget deficits, the New York Times reports. The targeted clinics -- mainly located in New York's "most densely populated immigrant neighborhoods" -- include nine of the city's 42 neighborhood children's health clinics; three "so-called extension clinics," which serve both adults and children; and 15 of 109 city school-based clinics. Agency officials said they are facing a $300 million budget deficit this year, due in part to the impact of falling reimbursements from Medicaid and managed care organizations. As a result, the hospitals corporation "effectively subsidizes" the cost of patient care, by about $58 for an outpatient hospital visit and roughly $104 for a community clinic visit. At the same time, the agency has seen the number of uninsured patients seeking treatment rise 30% in the past four years. "We are deeply committed to our mission to provide health care services to all New Yorkers regardless of their insurance status. The challenge that we face is financing that mission," agency spokeswoman Jane Zimmerman said. The agency hopes to save $2 million to $3 million a year with the clinic closings. Child health advocates "criticized the plan sharply," saying that restricting access to preventive care would ultimately result in higher emergency room use. State health officials, who must approve the closings, said they needed to review "more detailed information about the impact of the proposal" before making a decision. The Times notes that the agency's request comes as Gov. George Pataki's (R) administration has stepped up efforts to recruit children into Medicaid and the state's CHIP program, known as Child Health Plus. The paper adds that the proposed closings are the "latest incident in the crisis facing primary health care for the poor" in New York, reporting that family health clinics that "sprouted in the city's poorest neighborhoods in the early 1990s" are now "struggling" and that the Health and Hospitals Corp. has recently begun charging a $10 copayment for prescription drugs at public pharmacies (Sengupta, New York Times, 5/15).

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Behavioral Health

Maryland Brain-Injury Confinement Case Tests Scope of ADA

[May 15, 2001]

In a case that could have "national import," advocates for the disabled are awaiting a ruling in a federal class-action lawsuit alleging that Maryland improperly confined people with brain injuries in state psychiatric hospitals in violation of the American with Disabilities Act, the Washington Post reports. The case, which has been running for more than seven years without a decision, was filed in the U.S. District Court in Baltimore in 1994 on behalf of 11 plaintiffs representing a class of about 60 people "with brain injury or some developmental disability unrelated to mental retardation." All were housed in state mental institutions, "despite their non-psychiatric diagnoses, and, in numerous instances, despite recommendations by treatment staff that they be transferred to less restrictive, more integrated residential settings," the Post reports. The case is expected to "further define" the ADA in light of a 1999 Supreme Court ruling that stated that the act "prohibits needless segregation of those with mental disabilities." Maryland has said that "it has met its ... obligation" to that ruling by having a "comprehensive, effectively working plan for community placement" of all mentally disabled patients, adding that it is "not required to address each kind of disability separately;" the state attorney general's office said that the state "may spread its dollars as it sees fit." But the Maryland Disability Law Center, the organization charged by state law with advocating for the mentally disabled, has said that the state has not adequately funded efforts to move brain-injured individuals out of psychiatric hospitals. Stanley Herr, a professor at the University of Maryland School of Law, said, "Olmstead had several significant caveats ... so disability rights advocates and state officials around the country are very interested in seeing how the lower courts will interpret those." The judge in the case said last week that she "hopes" to render a decision "by this summer" (Levine, Washington Post, 5/15).

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California Community Mental Health Program Shows Success; New Hampshire, Ohio and Oklahoma Consider System Changes

[May 15, 2001]

Since its creation by the California Legislature in November 1999, the Community Mental Health Treatment Program has reduced hospitalizations, incarcerations and homelessness for those with mental illnesses in Los Angeles County by offering community-based treatment, the Los Angeles Times reports. The program uses "aggressive outreach," housing and job training to "induce" participation, and offers medical attention, group therapy and "intensive counseling." The Times reports that a new legislative report found that since the implementation of the program, hospitalizations for patients dropped 77% from the previous year, while the number of days spent in jail or homeless fell 84.6% and 69%, respectively. According to the legislative report, homelessness dropped 55% and jail time fell 82% among the more than 800 participants in Los Angeles County. In addition, full-time employment for participants increased by 155%. The report also found that the money saved from reduced jail time and avoidable hospitalizations "exceeded $7.3 million." In response to the success, state officials are expanding the program to 32 other cities and counties and increasing funding from $14 million to $55 million. Assembly member Darrel Steinberg (D), who sponsored the legislation that created the program, said, "What we're doing is beginning to fulfill a promise of a generation ago to actually build a community based mental health care system" (Rivera, Los Angeles Times, 5/12).

Increases in Treatment and Funding
Other mental health news from New Hampshire, Ohio and Oklahoma is summarized below.

New Hampshire: The state House may consider a bill (HB 672) to establish insurance coverage parity for mental health and medical services. Current state law requires insurers to pay for mental illness treatments, but only eight types of biological mental illnesses must be covered. State Sen. Katie Wheeler (D) is sponsoring a corollary measure to HB 672 that would increase coverage for substance abuse as well. Also pending in the House is legislation that would cut funding increases for state subsidized mental health treatments proposed in Gov. Jeanne Shaheen's (D) budget. But Wheeler, chair of the state Senate Public Institutions/Health and Human Services Committee, said she will work to restore some of those cuts (Morin, Foster's Daily Democrat, 5/11).
Ohio: The Cincinnati Psychoanalytic Institute, one of 27 facilities nationwide that teaches how to provide "in-depth" mental health therapy, has received $2.75 million to increase training of child psychiatrists and to provide services to low-income families. The funding will also be used to open a community clinic that will offer care for the indigent and underinsured and to construct a new wing at the institute's offices to provide more space for treatment and training (Bonfield, Cincinnati Enquirer, 5/8).
Oklahoma: The state House on May 10 voted in favor of a bill (HB 1518) that would appropriate an additional $12 million to the state Mental Health Department, part of which would go toward a mobile crisis intervention team in Oklahoma County. The team would be on call 24 hours per day. In addition, the measure earmarks $2 million for the Programs for Assertive Community Treatment (PACT) teams, which help keep people with mental illnesses "in the community and out of prison" (Hinton, Daily Oklahoman, 5/11).

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Children's Health

Virginia's New CHIP Program Expands Income Limits, Revises Application Process

[May 15, 2001]

In the third and final part of the Richmond Times-Dispatch series on Virginia's Children's Health Insurance Program, the paper examines the differences between the current program, called the Children's Medical Security Insurance Plan, and the new program, called the Family Access to Medical Insurance Security plan, which the state will implement this summer. The "hallmark" of the new plan is that parents can apply at the Richmond-based "central processing unit" instead of local social services agencies, which state officials have say give "inconsistent" determinations. But some health experts and advocates worry about "how well the central processing unit will coordinate with local social services departments when families are found to qualify for Medicaid," the Times-Dispatch reports. Currently, the state uses one application to determine eligibility for both its CHIP and Medicaid programs. But the central unit will handle only FAMIS enrollment, while Medicaid enrollment will continue to be administered at the local level.

Other Improvements
Among other simplifications, the new application process requires parents to provide less documentation, such as pay stubs and birth certificates, to apply. The state also has created a toll free telephone number that parents can call to apply. The new plan increases the income eligibility limits from 185% of the poverty level to 200% of the poverty level, or $35,300 annually for a family of four. But under the new plan, families making more than 150% of the poverty level will have to pay monthly premiums of between $15 and $45. Parents with children enrolled in the current program pay no fees. The new program also cuts in half the current 12-month waiting period that children must be uninsured before receiving state insurance. State officials see a provision allowing parents to receive FAMIS insurance for their children through their employer as the "biggest incentive" of the new program. Under that provision, employers must agree to participate and pay 40% of the premium cost to cover the child. The state would cover the remaining cost (Adams, Richmond Times-Dispatch, 5/15). Today's Richmond Times-Dispatch also reports on the concerns of parents applying for the program. One parent, Dawn Henderson, suggested that state officials could reduce the program's stigma by not referring to it as a program for the "working poor" (Adams, Richmond Times-Dispatch, 5/15).

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