Kaiser Daily Health Policy Report
Use of Subcutaneous Injections of Epogen for Dialysis Patients Could Save Medicare $537M Annually
Consumer-Driven Health Plans Appear To Reduce Costs, But Some Plan Beneficiaries Forgo Needed Medical Care, RAND Study Finds
New Hampshire Citizens Health Initiative To Promote Electronic Prescriptions
President Bush Says Republicans Should Promote Medicare Prescription Drug Benefit in Campaigns
Many Adults Believe Issue of the Uninsured Should Serve as Top U.S. Health Priority, Poll Finds
Health Officials Announce Physician Quiz Campaign To Help Reduce Medical Errors
Louisiana Panel Endorses Plan To Create 'Medical Homes,' Offer Subsidized Care in New Orleans
Washington Post Special Section Focuses on Health Insurance
Four CDC Officials To Receive Large Cash Awards
Some Veterans Face Waiting Lists for Mental Health Treatment, Report Finds
Mississippi Supreme Court Issues Stay in Court-Ordered $20M Payments to Smoking Cessation Program
The Latest Reports in Health Policy
Medicare Prescription Drug Benefit Cancer Treatment Coverage Examined; Kaiser Family Foundation Study Finds Health Care Is Not Top Voting Issue
Prescription Drugs
PBM Medco Health Solutions Agrees To Settle Medicare Fraud, Kickback Allegations for $155M
[Oct 24, 2006]
Medco Health Solutions, the largest U.S. pharmacy benefit manager, on Monday agreed to pay $155 million to settle fraud allegations brought by the federal government and several former company employees, the Newark Star-Ledger reports (Silverman, Newark Star-Ledger, 10/24). The allegations, which involve mail-order prescriptions provided to members of the Federal Employees Health Benefits Program, include most of a complaint filed by two former company employees under the False Claims Act (Kaiser Daily Health Policy Report, 5/8). The federal government in 2003 amended the complaint. According to the complaint, Medco canceled and destroyed prescriptions to avoid penalties, sought kickbacks from pharmaceutical companies to promote their medications and paid kickbacks to health insurers in exchange for their business (Wisenberg Brin, Dow Jones, 10/23). Medco also switched prescriptions without physician consent, did not fill prescriptions completely and failed to inform physicians about adverse medication interactions, according to the complaint (Bloomberg/Los Angeles Times, 10/24). In addition to that complaint, Medco agreed to settle an investigation that the Department of Justice began in 2004 into allegations of false Medicare claims and a false claims complaint filed in 2003 by a third former company employee. Medco admitted to no wrongdoing in the settlement. Medco officials in May announced that company would take a one-time pretax charge of $163 million in the first quarter to cover the settlement and related legal costs (Dow Jones, 10/24). The settlement primarily covers Medco conduct between 1998 and 2004 (Von Bergen, Philadelphia Inquirer, 10/24). Reaction
Pat Meehan, U.S. attorney for the Eastern District of Pennsylvania, said that the settlement "and others like it represent a sweeping change in the way pharmacy benefit managers do business." Meehan added, "Hidden financial agreements between PBMs and drug manufacturers and health plans, along with the bottom-line pressures of management, can influence which drugs patients receive, the price we all pay for drugs and whether pharmacists serve patients with their undivided professional judgment" (Johnson, AP/Long Island Newsday, 10/23). Jim Sheehan, an assistant U.S. attorney who led the investigation of Medco, said, "We're delighted we were able to reach a resolution," adding, "This is a relatively new industry and we felt there were relatively significant fraud issues that needed to be addressed" (Newark Star-Ledger, 10/24). Sheehan added, "When you open your prescription bottle, you should know what's inside. What's inside should be what's on the label and in the same quantity. If it is a different drug, you should know it before you open the bottle." Medco in a statement said, "After nearly seven years of inquiry, these issues end as they began -- with no finding of wrongdoing by Medco or any of its people. Our business practices today are widely regarded as setting the standard for our industry" (Philadelphia Inquirer, 10/24). Medco spokesperson Soraya Balzac said, "Even though we did nothing wrong, for our company and our clients, it's the right decision to put these aged matters in the past" (Dow Jones, 10/23).
Use of Subcutaneous Injections of Epogen for Dialysis Patients Could Save Medicare $537M Annually
[Oct 24, 2006]
Administering the anti-anemia drug Epogen to kidney dialysis patients by subcutaneous injections rather than intravenously could save the federal government hundreds of millions of dollars annually, the Boston Globe reports. Epogen, which is manufactured by California-based Amgen, is administered to kidney disease patients on dialysis to replenish red blood cells. About 95% of the 325,000 U.S. residents on dialysis receive Epogen intravenously, although studies have found that about 30% less Epogen is required if the drug is injected under the skin, the Globe reports. Medicare spends close to $2 billion per year on Epogen, more than on any other drug. According to a study conducted by researchers at Detroit-based Henry Ford Hospital and published in the American Journal of Kidney Disease, administering Epogen subcutaneously rather than intravenously would save the federal government as much as $537 million annually. The study found that the annual Epogen cost per dialysis patient in 2002 was $6,000. Researchers determined that switching to subcutaneous injections would save up to 30%, or $1,761, per patient. A separate study of dialysis clinics in 2004 found that patients received 21% less Epogen when given subcutaneous injections, the Globe reports. Last year, FDA allowed Amgen to change the label on Epogen to state that intravenous delivery is preferred because of a rare disorder called pure red cell aplasia that developed in 175 patients from 1998 through 2003. Those patients received Eprex, a drug similar to Epogen that is manufactured by a Johnson & Johnson subsidiary. J&J said the cases likely were linked to rubber stoppers in some of its syringes and that the outbreak ended after the stoppers were replaced. Comments
California-based DaVita and Germany-based Fresenius Medical Care, the two leading dialysis clinic chains in the U.S., have said they prefer to administer Epogen intravenously because patients already have IVs inserted while they undergo dialysis, according to the Globe. DaVita chief medical officer Charles McAllister said, "We don't have any opinion on subcutaneous or intravenous" methods, adding that doctors at the company's clinics determine the best way to give Epogen. Fresenius did not comment. Robert Brenner, an Amgen medical director, said, "It is important for patients and physicians to make their own decisions," adding, "Where patients are hooked up to a blood line to a dialysis machine, there would be some logic to have that administration occur intravenously, as opposed to having that patient exposed to an additional injection." Some kidney specialists and patient advocates say DaVita and Fresenius use the intravenous method to boost profits. Noshi Ishak, a kidney specialist who owns an independent dialysis clinic in New Hampshire, said DaVita and Fresenius "give it intravenously" to "milk the system." Ishak, who uses the subcutaneous method, said Amgen sales representatives have told him that he could increase his profits by administering the drug intravenously. Peter Crooks, who oversees dialysis of 3,000 patients for Kaiser Permanente in Southern California, said, "The industry is incentivized to use intravenous because they make a profit margin on every unit they administer," adding, " Many dialysis facilities feel that if it wasn't for the profit margin they make on [Epogen], they would go out of business" (Rowland, Boston Globe, 10/24).
Health Care Marketplace
Consumer-Driven Health Plans Appear To Reduce Costs, But Some Plan Beneficiaries Forgo Needed Medical Care, RAND Study Finds
[Oct 24, 2006]
Consumer-driven health plans can help employers reduce health care costs but might lead some patients to forgo necessary care to save money, according to a study by RAND, the Washington Post reports. For the study, published on Tuesday in Health Affairs, researchers examined dozens of previous studies on consumer-driven plans -- both with and without health savings accounts, which allow consumers to set aside money tax-free for medical expenses. Consumer-driven plans, which account for about 3% of the private health insurance market, have lower premiums than HMOs and PPOs but have higher deductibles -- typically $1,050 to $2,000 for an individual and $2,100 to $4,000 for families, compared with an average $220 deductible for traditional employer-sponsored plans. According to the RAND study, most employers offering consumer-driven plans save at least 10% on health care costs. Some employers save as much as 25%, although the study notes that some of the perceived savings could come from shifting costs to employees. Employees and dependents enrolled in consumer-driven plans without HSAs spend approximately 4% to 15% less on health care than those in traditional plans, while those in plans tied to HSAs spend about 2% to 7% less, the study found. Some of the savings are the result of plan members spending less money on unnecessary care, such as not going to the emergency department when it is not required. Other savings were the result of plan members forgoing necessary care, according to the study. The study also found that employees who switched to consumer-driven plans tend to have higher incomes and better health than those in traditional plans. This disparity was "modest" but "warrants monitoring," according to the study. In addition, the study found that there is a lack of useful and consistent information about the cost and quality of health care. The study recommends that the federal government establish standard quality assessment measures and remove legal barriers to pooling data from private insurers. Comments
Lead author Melinda Beeuwkes Buntin, an economist at RAND, said, "The evidence is really mixed. There are some studies in which people are reporting that they don't fill a prescription or they don't get [a] follow-up that's recommended by a doctor. So those two things would be cause for concern." She added, "I don't think these plans can be a panacea" for rising health care costs, "but they could, if well-designed, be one part of the strategy for rationalizing our system of health insurance." Ron Pollack, executive director of Families USA, said consumer-driven plans discourage patients from getting necessary care, attract the healthiest individuals away from traditional insurance plans and favor wealthy individuals who receive the largest tax breaks from HSAs. Pollack said the plans will do little to reduce costs because 85% of U.S. health care spending is on catastrophic and end-of-life care, which are covered by the plans. "Every few years people are looking for a magic bullet to deal with costs," he said, adding, "And this bullet results in the shooting of a dud" (Lee, Washington Post, 10/24).
 The study is available online.
New Hampshire Citizens Health Initiative To Promote Electronic Prescriptions
[Oct 24, 2006]
New Hampshire Gov. John Lynch (D) and Citizens Health Initiative -- which includes doctors, pharmacists, insurers and representatives from hospitals -- on Thursday announced a goal for all doctors in the state to be able to use electronic prescription systems by 2008, Foster's Daily Democrat reports. According to Phil Boulter, a member of the initiative, about 80% of pharmacies in the state have the technology to accommodate e-prescriptions, and doctors would not need to invest in a particular technology to participate. The New Hampshire initiative also is working with health insurance providers to develop common pay-for-performance standards, including incentives for physicians who adopt e-prescription systems. Gov. Lynch said e-prescribing "will improve health care quality and help save lives, while at the same time reducing health care costs and improving the efficiency of our health care system." Palmer Jones, executive director of the New Hampshire Medical Society, said, "The issue for physicians is not the cost; the issue is making sure the system is compatible with everyone else, and that it will be compatible three or five years from now" (Manning, Foster's Daily Democrat, 10/20).
Election 2006
President Bush Says Republicans Should Promote Medicare Prescription Drug Benefit in Campaigns
[Oct 24, 2006]
President Bush on Friday said that Republicans should promote the Medicare prescription drug benefit during their campaigns prior to the elections in November, the AP/Washington Post reports. "I think this is a fantastic program, but more importantly, so do the seniors," Bush said in an interview, adding, "My own view is our candidates and the people who voted for this ought to be out there traveling to senior centers all over their districts and their state saying, 'Look what we did.'" However, Democrats have said they would seek to revise the Medicare prescription drug benefit in the event that they take control of Congress after the elections. According to Democrats, Medicare should have the ability to negotiate directly with pharmaceutical companies for discounts on medications, a practice currently banned under federal law, and should offer one or more prescription drug plans administered by the federal government, rather than private health insurers. House Minority Leader Nancy Pelosi (D-Calif.) said, "As pharmaceutical companies reap record profits, it's clear the president's flawed prescription drug plan is working better for drug companies than it is for America's seniors," adding, "It is no wonder that the Republican prescription drug bill actually bars Medicare from negotiating lower drug prices for seniors." Bush said, "Obviously there's a group of folks that feel like the government can do a better job than the consumers themselves" about health care decisions. "We strongly believe that empowering consumers is the appropriate way to promote quality in health care," he said, adding, "As a matter of fact, we will resist any changes to weaken" the Medicare prescription drug benefit. Bush on Friday participated in a small roundtable on the Medicare prescription drug benefit with a couple from Springfield, Va.; pharmacy representatives; a caregiver who helped her aunt enroll in the program; and the administrator of a not-for-profit organization that helps low-income beneficiaries enroll in the program (Freking, AP/Washington Post, 10/20).
Many Adults Believe Issue of the Uninsured Should Serve as Top U.S. Health Priority, Poll Finds
[Oct 24, 2006]
About 42% of U.S. adults believe the federal government should make the issue of the uninsured a top health priority over the next two years, according to a new WSJ.com/Harris Interactive poll, the Wall Street Journal reports. The poll, conducted between Oct. 8 and Oct. 10, included responses from a nationally representative sample of 2,384 adults. According to the poll, 42% of respondents cited "reducing the percentage of Americans without health insurance" as one of the top two health care issues, followed by Medicare reform (28%) and moderating out-of-pocket health care costs (26%). Most respondents said that, although health care issues will have some effect on their votes in the November elections, other issues are more important, the poll found. In addition, a plurality of respondents believes by between two and three to one margins that Democrats would address various health care issues more effectively than Republicans, according to the poll. The poll found that 37% of respondents believe Democrats would more effectively address the issue of the uninsured, compared with 11% who believe Republicans would address the issue more effectively. However, one-third of respondents believe there's no difference between the parties in addressing the issue of the uninsured and 22% are uncertain, the poll found (Bright, Wall Street Journal, 10/24).
Coverage & Access
Health Officials Announce Physician Quiz Campaign To Help Reduce Medical Errors
[Oct 24, 2006]
HHS and other health officials on Monday announced a new campaign designed to limit surgical complications by encouraging patients to quiz their doctors about medical procedures, CQ HealthBeat reports. The campaign, which is part of the Surgical Care Improvement Project, aims to reduce surgical complications by 25% by 2010. The campaign features a tip sheet that advises patients on how they can lower their surgical risks by talking with a member of their surgical team, including their doctor, nurse or anesthesiologist. The tip sheet includes advice on asking questions about antibiotic use and hair removal to avoid infections, as well as about blood clots, hand washing and other medications. According to the tip sheet, patients should "speak up" if they have questions or concerns about a procedure. AARP and the National Partnership for Women and Families will distribute the tip sheets. Carolyn Clancy, director of HHS' Agency for Healthcare Research and Quality, said, "Patients need to take an active role in their health care, especially when it comes to having surgery. They need to be well-informed and ask lots of questions, and the materials developed by SCIP will help them know where to get information and what to ask." Thomas Russell, executive director of the American College of Surgeons, said, SCIP "is about bringing all the members of the surgical team together and implementing known measures, which will decrease adverse events that are preventable and no longer acceptable" (Reichard, CQ HealthBeat, 10/23).
Louisiana Panel Endorses Plan To Create 'Medical Homes,' Offer Subsidized Care in New Orleans
[Oct 24, 2006]
The Louisiana Health Care Redesign Collaborative on Thursday proposed a five-year plan for the New Orleans area to create a universal healthcare system; establish a "medical home" network of physicians, medical clinics and hospitals; and reduce the region's reliance on the Charity Hospital System, the New Orleans Times-Picayune reports (Moller, New Orleans Times-Picayune, 10/20). Now that the plan has been endorsed by the collaborative, negotiations can "begin between federal and state health officials on the specifics of implementing universal health insurance," according to the Baton Rouge Advocate. The plan centers on creating a system that would operate similar to a managed-care network. Costs would be reduced by promoting preventive and primary care (Shuler, Baton Rouge Advocate, 10/20). To qualify as a medical home, health care providers would have to meet certain quality standards and use electronic health records (New Orleans Times-Picayune, 10/20). Most area Medicaid beneficiaries would be able to choose enrollment in a medical home or would be able to purchase private insurance coverage with funds currently used for the charity system. Louisiana Gov. Kathleen Blanco (D) and state Department of Health and Hospitals Secretary Fred Cerise said for now, charity hospitals will remain as a safety net for the uninsured. If successful, the plan eventually could take effect statewide, with portions of the plan, including expanded health insurance for children, going into effect sooner. Pilot projects currently are being conducted in Orleans, Jefferson, St. Bernard and Plaquemine parishes (Shuler, Baton Rouge Advocate, 10/20). The plan is expected to cost $366 million over the five-year period. HHS Secretary Mike Leavitt said the federal government will cover some transition costs, assuming that the system yields savings over time. Other funds are expected to accrue from cost-saving care management, federal and state governments, individuals, and businesses. Leavitt said he expects federal and state negotiation on the plan will be completed by the end of the year (New Orleans Times-Picayune, 10/20).
Washington Post Special Section Focuses on Health Insurance
[Oct 24, 2006]
The Washington Post health section on Tuesday included several articles on health insurance. Headlines appear below.
- "Do It Yourself: Online Tools Aren't Perfect, but They Can Help Identify the Best Health Plan" (Gearon [1], Washington Post, 10/24).
- "'Is This an Emergency?'" (Boodman, Washington Post, 10/24).
- "Sites for More Eyes: Online Sources Offer New Information About Doctors and Hospitals and What It Costs To Use Them" (Washington Post, 10/24).
- "Need a New Knee? Click Here" (Gearon [2], Washington Post, 10/24).
- "Many Federal Rates Stay Flat: OPM Action Allows Government Workers To Avoid Higher Premiums" (Barr, Washington Post, 10/24).
Administration News
Four CDC Officials To Receive Large Cash Awards
[Oct 24, 2006]
CDC Director Julie Gerberding on Monday announced that four agency officials will receive Presidential Rank Awards in recognition of their outstanding leadership accomplishments, the Atlanta Journal-Constitution reports. The awards include cash awards valued at 20% to 35% of their annual salaries. Recipients of Presidential Rank Awards require nomination by CDC and HHS. A national panel of citizens makes the final selections, which are approved by the president. According to the Journal-Constitution, the "issue of who gets cash awards and bonuses at the CDC has been the subject of controversy within the agency in recent months and has drawn scrutiny by members of Congress" (Young, Atlanta Journal-Constitution, 10/24). Last month, CDC formed a committee to consider the equitability of the agency cash awards process in response to analyses that found nonscience employees in recent years have received most of the awards (Kaiser Daily Health Policy Report, 9/19). Two of the four CDC officials who received Presidential Rank Awards this year lead scientific centers. According to a CDC statement, the four agency officials who received Presidential Rank Awards are:
- James Seligman, CDC chief information officer, who will receive a "distinguished" cash award valued at 35% of his annual base salary for "extraordinary accomplishments in improving management and operations";
- Janet Collins, director of the National Center for Chronic Disease Prevention and Health Promotion at CDC, will receive a distinguished cash award valued 35% of her annual base salary for "extraordinary accomplishments" in adolescent health, disease prevention and agency management;
- Edward Hunter, deputy director of the CDC office in Washington, D.C., will receive a "meritorious" cash award valued at 20% of his annual base salary for "outstanding dedication, extraordinary judgment and superb knowledge of program administration"; and
- Ronald Valdiserri -- currently with the Veterans Health Administration and former deputy director of National Center for HIV, STD and TB Prevention at CDC -- will receive a meritorious cash award valued at 20% of his annual base salary during his tenure at the agency for "an amazing range of scientific and programmatic accomplishments."
CDC did not disclose the amounts of the cash awards. Senior CDC officials have annual salaries of between $109,808 and $165,200. Based on that salary range, the distinguished awards likely would total between $38,000 and $58,000, and the meritorious awards likely would total between $22,000 and $33,000. Seligman has received more than $100,000 in cash awards since 2000, and Valdiserri has received more than $67,000. Collins and Hunter have both received more than $46,000 in cash awards since 2004. Gerberding in a statement said, "The number of recent awards presented to CDC employees speak very highly of the agency and the caliber of employees that we are fortunate to have working at CDC" ( Atlanta Journal-Constitution, 10/24).
Capitol Hill Watch
Some Veterans Face Waiting Lists for Mental Health Treatment, Report Finds
[Oct 24, 2006]
Nearly half of 60 veteran health centers surveyed have limited mental health services available to veterans because of an influx of new patients who served in Iraq and Afghanistan, according to a report released Thursday by the Democratic staff of the House Veterans' Affairs Committee, CQ Today reports. The centers provide individual and group counseling, mainly for treating post-traumatic stress disorder. According to the report -- which was commissioned by Rep. Michael Michaud (D-Maine), ranking member of the Veterans Affairs Health Subcommittee -- 40% of centers surveyed said an increased workload has negatively affected their patient treatment. In addition, 17% said they had to begin waiting lists for veterans to receive treatment. According to an August VA report, more than one in three veterans returning from Iraq and Afghanistan have reported mental health concerns. VA officials challenged the survey, calling it "unscientific" (Yoest, CQ Today, 10/20). According to the San Diego Union-Tribune, testimony given to the Pentagon's Task Force on Mental Health last week concluded that limited resources, "poor training and staff burnout are frustrating the military's efforts to treat mental illnesses." Mark Russell, a Navy psychologist who testified at the hearing, said, "We are in a crisis situation, and it's going to get worse" (Rogers, San Diego Union-Tribune, 10/20).
The study is available online. Note: You must have Adobe Acrobat Reader to view the report.
State Watch
Mississippi Supreme Court Issues Stay in Court-Ordered $20M Payments to Smoking Cessation Program
[Oct 24, 2006]
The Mississippi Supreme Court on Thursday voted 6-1 to freeze funds to the Partnership for Healthy Mississippi for tobacco cessation programs pending a county court decision to determine how funds from the 1997 tobacco settlement can be distributed, the Jackson Clarion-Ledger reports. In December 2000, former Attorney General Mike Moore (D) obtained a court order for the state to give $20 million of the tobacco settlement funds to PHM, which also provides funding for school nurses. Gov. Haley Barbour (R) maintains that the program is unconstitutional and that legislators, not courts, should decide how public money is spent. Barbour and the state Division of Medicaid and state Health Care Trust Fund are appealing a September ruling by Jackson County Chancery Judge Jaye Bradley that PHM does not have to return any of the money it received. Barbour on Thursday in a statement said that the ruling "is encouraging for those of us who believe it is unconstitutional for a local court to give state taxpayers' money to private organizations." Meanwhile, Barbour said his staff is determining how to continue funding nurses who were paid under the program. He added that he hopes the nurses will continue working until the 2007 state Legislature can appropriate funding (Kanengiser, Jackson Clarion-Ledger, 10/20).
The Latest Reports in Health Policy
Medicare Prescription Drug Benefit Cancer Treatment Coverage Examined; Kaiser Family Foundation Study Finds Health Care Is Not Top Voting Issue
[Oct 24, 2006]
- "Cost-Sharing for Cancer Patients in Medicare: Seven Case Studies," Avalere Health: The study examined Medicare coverage for drugs used to treat breast, colon and non-small cell lung cancers and lymphoma. The study examined Medicare Part B, which covers medications physicians administer intravenously, and 12 Medicare prescription drug plans to determine the differences in out-of-pocket costs. According to the study, costs for beneficiaries' cancer treatments vary greatly from plan to plan. The study will be used to update an American Cancer Society primer that explains how cancer drugs are covered under Medicare. The primer also provides a list of topics cancer patients should consider when choosing a drug plan, such as whether drug prices, formularies or participating pharmacies could change (Harrison/Nguyen, "Cost-Sharing for Cancer Patients in Medicare: Seven Case Studies," October 2006).
- "Health Poll Report Survey: Voters on Health Care and the 2006 Elections," Kaiser Family Foundation: The Kaiser Family Foundation survey, conducted from Oct. 5 through Oct. 10, found that although the cost of health care tops the list of personal worries for voters, Iraq and other factors will figure more prominently in the upcoming election. Overall, 46% of registered voters are "very worried" about having to pay more for health care or insurance, and concern has risen in recent months after declining last year. When asked about the most important election issue, 30% of voters cited the war in Iraq, compared with 15% for health care, 15% for the economy and 13% for terrorism. The survey found that 51% of women and 40% of men are "very worried" about health care costs and that 19% of women and 10% of men consider health care their top voting issue. When asked to focus on health care issues, 20% cited health costs and 18% cited the uninsured as their most important health issues. One-third of voters said no health care issue is critical to their vote in this election. Six in 10 voters said they will vote mainly on the candidates' personal characteristics or a general sense of what is happening in the nation, while 35% said they will vote mainly based on issues (Kaiser Family Foundation, "Health Poll Report Survey: Voters on Health Care and the 2006 Elections," 10/23).
Looking for a Daily Report on a specific date? Click here for instructions on how to find it.
...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... ...... ...... ...... ...... ...... ...... ......
...... .....
|
