Kaiser Daily Health Policy Report
Medicare Beneficiaries Could Face Large Part B Premium Increases Next Year, Actuary Says
House Ethics Committee Names Members of Panel Investigating Bribery Allegations Related To Medicare Vote
House Passes $2.41 Trillion Budget Largely Along Party Lines
U.S. Attorney's Office in Philadelphia Investigating Sales, Promotion Tactics by Eli Lilly
Massachusetts House Votes To Stop Cost Recovery From Estates of Deceased Medicaid Beneficiaries
Florida Hospital Agrees To Pay HHS $40,000 After Allegedly Denying Care to Uninsured Patient
Supervision of Pediatric Research Needs Improvement, IOM Says
Kaiser Daily Health Policy Report Rounds Up Coverage of Malpractice Developments in Eight States
Editorials, Opinion Piece Respond to Medicare Trustees' Report
Medicare
HHS Announces 28 Companies Have Received Approval To Offer Medicare-Approved Prescription Drug Discount Cards
[Mar 26, 2004]
The Bush administration has given approval to 28 private firms -- mostly large health insurers and pharmacy benefit managers -- to offer prescription drug discount cards to Medicare beneficiaries, officials announced Thursday, USA Today reports. The cards, intended as a temporary prescription drug assistance measure until the Medicare prescription drug benefit takes effect in 2006, are expected to offer seniors discounts of 10% to 25% on medications (Appleby, USA Today, 3/26). The 28 firms will offer a total of 49 different drug card programs, 30 of which will be available nationwide and 19 of which will be offered on a regional basis (HHS release, 3/25). Companies that have been approved to offer the discount cards include Aetna, WellPoint, Caremark Rx, Medco and Express Scripts (USA Today, 3/26). The Medicare-approved card United Healthcare will offer also was endorsed by AARP. HHS declined applications from 29 companies, most commonly because the potential sponsors could not demonstrate adequate financing, would not have offered discounts on enough medications or did not have contracts with enough pharmacies (Pear, New York Times, 3/26). HHS also announced 43 sponsors representing 84 Medicare Advantage plans will be eligible to offer drug discount cards to beneficiaries enrolled in their plans (HHS release, 3/25). Medicare Advantage plan members will be automatically enrolled in the drug discount card program if their plan offers one (Dalrymple, AP/Las Vegas Sun, 3/26). Card Details
The discount cards will be available to all beneficiaries who do not have prescription drug coverage through Medicaid. Companies offering the cards can charge an annual enrollment fee of up to $30 (HHS release, 3/25). About 25% of sponsors will not charge enrollment fees, according to Timothy Trysla, a Medicare official. The discounts will vary by card, and many drug card sponsors have established preferred-drug lists under which they will offer savings on at least one drug in each of 209 categories of medicines commonly used by Medicare beneficiaries. Roberta Milman, a vice president of AARP Services, said United Healthcare's card will provide discounts on all FDA-approved drugs (New York Times, 3/26). HHS Secretary Tommy Thompson said that CMS would impose "strict monitoring" of card sponsors to prevent "bait-and-switch" operations under which sponsors change the drugs that are discounted after beneficiaries enroll (Kemper, Los Angeles Times, 3/26). Thompson said that savings generated by the cards will be "much closer to 25%" than 10% (New York Times, 3/26). The Pharmaceutical Care Management Association, a trade group for PBMs, predicted that savings on some drugs could be as high as 50% (Lueck, Wall Street Journal, 3/26). Under the discount program, beneficiaries with annual incomes less than $12,569 per year for individuals or $16,862 for couples will be eligible for a $600 annual subsidy for their prescription drug costs and will not have to pay any enrollment fees (HHS release, 3/25). The Social Security Administration plans to notify low-income beneficiaries who might be eligible for the subsidies (AP/Las Vegas Sun, 3/26). About 7.3 million beneficiaries are expected to apply for a card. Enrollment will begin in May, and beneficiaries can begin using the cards in June. Public Education Campaign
Details and pricing information for the discount card program will be available on the CMS Web site beginning next month or by calling 1-800-MEDICARE (Loyd, Philadelphia Inquirer, 3/26). HHS soon will launch a "major outreach program" to educate seniors on how the drug cards work and help them choose which card is best for them, according to the Washington Post (Kaufman, Washington Post, 3/26). The education campaign will include television, radio and print ads, a brochure to be mailed to beneficiaries and efforts to coordinate with state programs. In addition, beneficiaries will be able to use an "interactive tool" available on the CMS Web site or the toll-free Medicare hotline to list the medications they take and receive a comparison of cards according to drug prices, enrollment fees and participating pharmacies, the Los Angeles Times reports. Reaction
Thompson said that the discount card program represents "only the beginning of the benefits seniors are going to see from this wonderful bill. There has been so much misinformation. ... This is a very good law" (Kemper, Los Angeles Times, 3/26). Thompson also said that the drug discount card program could lower drug costs for all U.S. residents, because the advertised discounts might create competition that would "inevitably drive prices down," according to the Post (Washington Post, 3/26). Mark McClellan, the new CMS administrator, said, "My first priority as administrator is to use the new Medicare law to lower drug prices (New York Times, 3/26). Rep. Steve Buyer (R-Ind.), who wrote the Medicare law's drug discount card provision, "praised" the new program but said that "clearing up confusion among beneficiaries would pose a challenge," according to CongressDaily (Heil, CongressDaily, 3/26). But Sen. Edward Kennedy (D-Mass.) said, "The administration's discount cards are no substitute for a meaningful program to reduce the exorbitant prices American patients pay for prescription drugs," adding that price increases on many drugs "in just the last 12 months have already wiped out any savings that these cards may provide" (Los Angeles Times, 3/26). Senate Minority Leader Tom Daschle (D-S.D.) on Thursday introduced legislation that would require card sponsors to pass along to beneficiaries 90% of discounts they receive from pharmaceutical companies. He said, "The Bush administration is promising seniors discounts in order to convince them to pay private companies a $30 fee. My bill would ensure that these private companies pass the discounts along to those seniors" (CongressDaily, 3/26). A full list of companies that will offer the prescription drug discount cards is available online. HealthCast, Broadcast Coverage
 A HealthCast of the HHS briefing to announce the card sponsors is available online.
 MPR's "Marketplace" Thursday reported on the Medicare prescription drug discount cards. The segment includes comments from Diane Archer, founder of the Medicare Rights Center; Ron Pollack, president of Families USA; and Thompson (Gardner, "Marketplace," MPR, 3/25). The complete segment is available online in RealPlayer.
NPR's "Morning Edition" Friday also reported on the Medicare drug cards. The segment includes comments from Pollack and Thompson (Silberner, "Morning Edition," NPR, 3/26). The complete segment is available online in RealPlayer.
Medicare Beneficiaries Could Face Large Part B Premium Increases Next Year, Actuary Says
[Mar 26, 2004]
Medicare beneficiaries who participate in Part B, which covers most outpatient services, could face premium increases of 17% next year, CMS chief actuary Richard Foster said at a discussion sponsored by the American Enterprise Institute on Thursday, Cox News/St. Paul Pioneer Press reports. According to the estimate, included in an appendix to the annual Medicare trustees report released on Tuesday, Medicare Part B premiums could increase from $66.60 to $78.10 next year, the largest increase since the program began. CMS will announce the official premium increase this fall. Foster attributed the estimated premium increase "primarily" to a decision by Congress last year to eliminate a scheduled 4.5% reduction in Medicare reimbursement rates for physicians in 2004 and 2005, according to Cox/Pioneer Press. As part of the new Medicare law, Congress approved a 1.5% reimbursement rate increase for physicians in 2004 and 2005. The trustees report also estimates that Medicare Part B premiums will increase to $80 in 2006, $82 in 2007 and $85.60 in 2008. However, Foster said that because Congress likely "will again intervene to prevent" a provision in the Medicare law that would reduce reimbursement by 5% each year between 2006 and 2012, Part B premium increases could prove "far greater than predicted in the report," Cox/Pioneer Press reports (Lippman, Cox News/St. Paul Pioneer Press, 3/16). Concerns Over Medicare Financial Problems
During the AEI discussion, Foster "hammered home" some of the potential financial problems for Medicare predicted in the trustees report, CongressDaily reports (Rich, CongressDaily, 3/25). According to the report, the Medicare hospital trust fund will become insolvent by 2019, seven years earlier than the estimate last year. The trust fund no longer has a surplus, and payroll tax income for the fund currently meets only 98% of expenditures, according to the report. As a result, Medicare will have to begin to pay for hospital expenses directly from the trust fund at some time this year. The report also found that Medicare, which last year accounted for 2.6% of the gross domestic product, will account for 3.7% of GDP in 2010, 7.7% in 2035 and almost 14% by 2079. Over the next 75 years, Medicare will have an unfunded liability of $27.7 trillion, the report found (Kaiser Daily Health Policy Report, 3/24). Foster said that "even under modest growth assumptions," Medicare costs will "rise substantially" over the next few years, CongressDaily reports. Gail Wilensky, a senior fellow at Project HOPE, added that the trustees report indicates "we have promised benefits that exceed" available funds. Robert Reischauer, president of the Urban Institute, said that Medicare is "just part of a larger problem of the rise in spending for health care," CongressDaily reports. The issue of increased costs in Medicare and other public health programs likely will prove "a central domestic challenge of our time," Congressional Budget Office Director Douglas Holtz-Eakin said (CongressDaily, 3/26).
A HealthCast of the AEI discussion -- "Has the Drug Benefit Changed Medicare's Long-Term Outlook?" -- is available online at kaisernetwork.org. More Investigation Into Foster Allegations
Meanwhile, some House and Senate Democrats on Thursday called for more congressional hearings to investigate whether former CMS Administrator Tom Scully ordered Foster to withhold from lawmakers certain cost estimates for the Medicare legislation, CQ Today reports. Foster testified before the House Ways and Means Committee on Wednesday about his cost estimates (Carey, CQ Today, 3/25). Foster said that his office did not complete an official cost estimate for the enacted legislation until Dec. 23. However, Foster said that as early as June, he shared with Doug Badger, health policy adviser for President Bush, and James Capretta, associate director of the Office of Management and Budget, his estimate that the Medicare legislation would exceed the target cost. According to OMB estimates released after Congress passed the legislation, the Medicare law will cost $534 billion over the next 10 years, $134 billion more than estimated by CBO. In an e-mail to colleagues at CMS in June, Foster indicated that he believed he could lose his job if he released his cost estimates for the Medicare legislation. Scully has said that he did not threaten to fire Foster if he released the higher cost estimates. Scully also said that he "curbed Foster on only one specific request" made by Democrats at the time of the first House vote on the Medicare legislation. White House spokesperson Trent Duffy on Wednesday said that Badger had no recollection that he issued an order to withhold from Congress cost estimates for the Medicare legislation. Last week, HHS Secretary Tommy Thompson and 18 Senate Democrats requested that the HHS Office of Inspector General and the General Accounting Office examine the issue. Senate Democrats on Wednesday also asked the Department of Justice to conduct an investigation (Kaiser Daily Health Policy Report, 3/25). According to CQ Today, 10 Democrats on the House Ways and Means Committee have asked to call Scully and other additional witnesses at a future hearing. In addition, Democrats on the Senate Finance Committee have asked committee Chair Chuck Grassley (R-Iowa) to call a hearing on the issue (CQ Today, 3/25).
A HealthCast of the Ways and Means hearing is available online at kaisernetwork.org. Foster Profile
The Baltimore Sun on Friday published an article that profiled Foster (Zaneski, Baltimore Sun, 3/26). The complete article is available online. Broadcast Coverage
ABCNews' "Nightline" Thursday reported on the process of passing the Medicare legislation, including the cost estimate discrepancies and allegations that that some House Republicans offered Rep. Nick Smith (R-Mich.) money for his son's election campaign if he voted for the Medicare legislation. The program includes comments from Cybele Bjorklund, Democratic staff director for the House Ways and Means Subcommittee on Health; Senate Minority Leader Tom Daschle (D-S.D.); Senate Majority Leader Bill Frist (R-Tenn.); Sen. Chuck Hagel (R-Neb.); House Minority Whip Steny Hoyer (D-Md.); Robert Moffit, director of the Center for Health Policy Studies at the Heritage Foundation; Norm Ornstein of the American Enterprise Institute; Rep. Pete Stark (D-Calif.); Rep. Pat Toomey (R-Pa.); and Rep. Henry Waxman (D-Calif.) (Morris/Tapper, "Nightline," ABCNews, 3/25). The complete transcript of the program is available online. A video excerpt of the program is available online in RealPlayer.
House Ethics Committee Names Members of Panel Investigating Bribery Allegations Related To Medicare Vote
[Mar 26, 2004]
The House Committee on Standards of Official Conduct on Thursday appointed four members to a subcommittee that will investigate whether Rep. Nick Smith (R-Mich.) was offered a bribe last November in exchange for his vote in favor of the Medicare legislation, CongressDaily reports (CongressDaily, 3/26). In December, Smith, who plans to retire this year, said that unnamed Republican lawmakers promised to donate $100,000 to his son's congressional campaign in exchange for his support on the Medicare bill. However, Smith later retracted the comment and said that allegations of bribery are "technically incorrect." According to Smith, some Republican lawmakers had said that they would oppose his son's campaign if he did not vote in favor of the Medicare legislation, but they did not offer to donate funds to the campaign, as previous reports had indicated. Smith voted against the Medicare legislation. Last week, the House ethics committee announced that the subcommittee will "conduct a full and complete inquiry" into the case. FBI and the Department of Justice also have launched investigations into the case (Kaiser Daily Health Policy Report, 3/22). The House panel will include Reps. Kenny Hulshof (R-Mo.), who will chair the panel, Mike Doyle (D-Pa.), who will serve as vice chair, John Shadegg (R-Ariz.) and Bill Delahunt (D-Mass.). Of the panelists, Hulshof is the only one who voted in favor of the Medicare legislation (Ferrechio, CQ Today, 3/25). The panel members were selected from a pool of 20 lawmakers (CongressDaily, 3/26). House Speaker Dennis Hastert (R-Ill.) and House Minority Leader Nancy Pelosi (D-Calif.) each named 10 representatives to the pool (CQ Today, 3/25). Broadcast Coverage
Slate senior writer Timothy Noah addressed the alleged bribe Thursday in a commentary on NPR's "Day to Day." According to Noah, Smith has become a "tarnished hero" who should tell the FBI and House ethics committee the truth or he "risks becoming a whistleblower who morphs into a criminal through lack of nerve -- a sad coda to this squalid tale" (Noah, "Day to Day," NPR, 3/25). The complete segment is available online in RealPlayer.
Capitol Hill Watch
House Passes $2.41 Trillion Budget Largely Along Party Lines
[Mar 26, 2004]
The House on Thursday approved on a 215-212 vote a $2.41 trillion budget proposal for the 2005 fiscal year, which begins Oct. 1, the Los Angeles Times reports (Curtius, Los Angeles Times, 3/26). Ten Republicans joined all of the House Democrats in voting against the bill, the AP/Philadelphia Inquirer reports. The proposal calls for $369 billion in domestic spending, the same level as last year and $1.3 billion less than what President Bush called for in his budget proposal (Fram, AP/Philadelphia Inquirer, 3/26). In addition, the budget proposal calls for an unspecified five-year $13 billion cut in entitlement programs such as Medicaid and welfare, the Washington Post reports (Babington, Washington Post, 3/26). The budget proposal includes $30.7 billion for veterans' services, mostly for health care, the AP/Inquirer reports. The figure is $1.2 billion more than what Bush proposed but $1.2 billion less than what some Republican lawmakers wanted, according to the AP/Inquirer (AP/Philadelphia Inquirer, 3/26). Reaction
Democrats said that budget measure "shortchang[es] seniors, veterans, medical research, environmental programs and transportation," according to the Times. Rep. Edward Markey (D-Mass.) accused Republicans of "slashing spending" for Medicaid and medical research to finance tax cuts for high-income U.S. residents, the Times reports (Los Angeles Times, 3/26). However, Republicans said that the measure is "a careful mix of: spending increases for the military and homeland defense; a spending cut or freeze in most other areas; and continued tax reductions to stimulate the economy," the Post reports (Washington Post, 3/26). Rep. Jim Nussle (R-Iowa) said, "Tax cuts didn't cause the deficits. It's spending, it's spending, it's spending that gets us into deficit." Bush praised the House for passing the budget proposal and called for the House and Senate "to reach agreement quickly" on their budget proposals for fiscal year 2005. According to the Times, informal negotiations are already underway between the two chambers to reconcile their budgets, and Republican leaders hope to have a compromise bill ready by April 15 (Los Angeles Times, 3/26). The congressional budget does not become law, but it sets some limits on tax and spending bills that follow, the AP/Inquirer reports (AP/Philadelphia Inquirer, 3/26).
Prescription Drugs
U.S. Attorney's Office in Philadelphia Investigating Sales, Promotion Tactics by Eli Lilly
[Mar 26, 2004]
Philadelphia U.S. District Attorney Patrick Meehan has launched a civil investigation into Eli Lilly's marketing and promotional practices for some of its products, the Wall Street Journal reports (Hovey, Wall Street Journal, 3/26). Lilly officials said they expect investigators to examine sales practices for schizophrenia and bipolar disorder drug Zyprexa, its best-selling product; antidepressant Prozac, its former top-selling drug; and osteoporosis drug Evista. The pharmaceutical company has not yet received subpoenas for information, according to company spokesperson Terra Fox (Swiatek, Indianapolis Star, 3/26). She added that the investigation is separate from an ongoing Justice Department probe of Evista promotions to consumers and physicians that began in July 2002 (Jewell, AP/Idaho Statesman, 3/25). Lilly officials said they will cooperate with the new investigation. In the company's annual report, filed March 15 with the Securities and Exchange Commission, Lilly officials said they believed it was "possible that other Lilly products, including Zyprexa, could become subject to investigation" considering that "several pharmaceutical companies have received subpoenas from government agencies with respect to a variety of products, including a number of neuroscience products" (Wall Street Journal, 3/26). Companies under such investigations include Wyeth, Forest Laboratories, GlaxoSmithKline and Janssen (AP/Idaho Statesman, 3/25). A Lilly spokesperson said the company was not "aware of this specific investigation until a few days ago," the Journal reports (Wall Street Journal, 3/26).
Medicaid
Massachusetts House Votes To Stop Cost Recovery From Estates of Deceased Medicaid Beneficiaries
[Mar 26, 2004]
The Massachusetts House on Wednesday voted to override Gov. Mitt Romney's (R) veto of a bill that would stop for three months efforts to recover from the estates of deceased Medicaid beneficiaries the cost of medical care, the Boston Globe reports. Massachusetts legislators last July expanded assets collection, after the Legislature passed a budget that required an additional $8.5 million for Medicaid. Language in the budget allowed state officials to collect not only on assets owned by the deceased beneficiary, but also to those owned jointly with family members, according to the Globe. Following the budget changes, Medicaid officials collected $327,135 from 36 families and placed 105 claims on separate families for $7.2 million, the Globe reports. According to state Rep. Peter Koutoujian (D), the vote to halt recovery efforts will give lawmakers more time to consider the issue. Jeannette Lynch, a Medicaid official in charge of estate recovery, said, "There's a lot of tax money going out the door to fund long-term care." She added, "I don't think it's an unfair practice to ask them to pay back what was paid out by the taxpayer." Susan Levin, an official of the Massachusetts chapter of the National Academy of Elder Law Attorneys, said, "The lien [Massachusetts] places on seniors' homes and personal property can limit their ability to secure home equity loans or use assets for other purposes," the Globe reports. The state Senate Thursday is expected to vote similarly (Dembner, Boston Globe, 3/25).
Coverage & Access
Florida Hospital Agrees To Pay HHS $40,000 After Allegedly Denying Care to Uninsured Patient
[Mar 26, 2004]
St. Mary's Medical Center, the largest hospital in Palm Beach County, Fla., has agreed to pay the HHS Office of the Inspector General $40,000 to settle allegations that it refused emergency care to an uninsured patient, the AP/Miami Herald reports. In April 2002, a patient who came to the hospital seeking treatment for "suicidal thoughts" and alcohol abuse was told by a nurse that he had to prepay to receive care. According to the AP/Herald, the nurse's request, termed "dumping," violates a federal law requiring hospitals receiving federal funds to treat all patients requesting emergency care regardless of their ability to pay. The hospital settled with federal authorities last week, three days before receiving a notice from CMS saying that the hospital would lose its Medicare certification in April "if it did not fix procedures that led to the hospital refusing to provide emergency neurosurgical care to another patient" in February, the AP/Herald reports. St. Mary's had sent that patient to a hospital in Orlando although they had a neurosurgeon available to treat the patient. St. Mary's Chief Executive Officer Peter Marmerstein said Wednesday that federal authorities have accepted the hospital's plan to improve its emergency care (AP/Miami Herald, 3/25).
Supervision of Pediatric Research Needs Improvement, IOM Says
[Mar 26, 2004]
Pediatric medical research is "supervised in a disorganized and sometimes contradictory way, which could increase hazards for some pediatric subjects," according to an Institute of Medicine report released on Thursday, the Baltimore Sun reports. The report found large differences in the review of proposed pediatric studies by institutional review boards -- committees of experts established by universities, hospitals, federal agencies and private organizations to determine whether research is ethical -- in part because members of the boards may not have expertise in pediatric health. In response, the report recommended that HHS Office for Human Research Protections take "more aggressive" efforts to enforce federal regulations on pediatric studies and called for the rules "to be extended to all privately funded pediatric research," the Sun reports. The regulations currently apply only to studies that use federal funds or involve medications that require FDA approval. The report also called for at least three pediatric experts to review pediatric studies and increased communication among IRBs. Pediatric Studies Increase
Marilyn Field, lead author of the report, estimated that the number of children in pediatric studies has more than tripled over the past seven years, in large part because of a 1997 federal law that provides pharmaceutical companies with incentives to test their medications on children (Kohn, Baltimore Sun, 3/26). Richard Behrman, chair of the IOM committee that prepared the report, said that "involving more children in clinical research today will benefit the health and well-being of countless children in the future." However, he said that "children usually lack the legal right and the intellectual and emotional maturity to consent to research participation on their own behalf." Dr. Charles Prober, of the Elizabeth Glaser Pediatric AIDS Foundation, added, "Children are physiologically different than adults. They are developing day by day and year by year and you cannot extrapolate" the proper dosages of medications that they require (AP/Long Island Newsday, 3/26).
State Watch
Kaiser Daily Health Policy Report Rounds Up Coverage of Malpractice Developments in Eight States
[Mar 26, 2004]
Kaiser Daily Health Policy Report highlights recent medical malpractice developments in eight states. Summaries are provided below.
- Connecticut: About 300 physicians met with lawmakers at the state Capitol Tuesday to lobby for caps on awards in medical malpractice lawsuits, the Connecticut Post reports (Brown, Connecticut Post, 3/24). The event, Doctors' Day at the Capitol, was organized by the Connecticut State Medical Society, which is advocating legislation that would limit noneconomic damages in malpractice cases to a total of $750,000 -- $500,000 for hospitals and $250,000 for doctors. On Monday, the state Legislature's Judiciary Committee approved a "flexible" cap of $1 million in damages for victims of malpractice; judges would be required to provide an analysis of noneconomic damages over $1 million and would determine whether the jury award was "excessive under ordinary rules of law," according to the Post (Brown/Dixon, Connecticut Post, 3/23). Gov. John Rowland (R) said it is "indisputable" that limits on damages hold down malpractice costs (Hathaway, Hartford Courant, 3/24).
- Florida: State House Speaker Johnnie Byrd (R) is pushing a "wide-ranging" bill that seeks additional fixes to the state's malpractice crisis. Last year, the Florida Legislature imposed a $500,000 cap for physicians and a $750,000 cap for hospitals on noneconomic damages in malpractice cases. The new bill would limit hospitals' liability when they provide care to elderly and low-income patients; end the responsibility hospitals have to cover lawsuits against their doctors who have no malpractice insurance; implement restrictions on advertising for lawyers; and create new restrictions on expert witness who testify in malpractice cases. The House Judiciary Committee voted to force Byrd to withdraw a separate bill that would have placed a constitutional amendment on the November ballot to limit attorney's contingency fees in malpractice cases (Klas, Miami Herald, 3/19). In related news, the state has granted a license to not-for-profit Healthcare Underwriters Group of Florida, a new company owned and governed by Florida doctors that will provide malpractice liability coverage to providers in the state. The company, which already has about 140 policyholders, hopes to provide doctors with a "stable market" in part by taking an "aggressive approach to defending malpractice cases" and filtering out frivolous claims, according to CEO Steven Salman (McVicar, Orlando Sentinel, 3/25).
- Illinois: In separate meetings on Tuesday, state Sens. Frank Watson (R) and William Haine (D) assured doctors, nurses and Alton-area residents that they have begun "moving legislation" "to rein in medical malpractice insurance costs," which could get initial passage this week, the St. Louis Post-Dispatch reports. However, differing accounts from Democrats and Republicans over whether the solution is caps on "pain and suffering" lawsuit awards or regulation of the insurance industry "indicat[ed] a continuing partisan gulf over how to address what both sides now agree is a crisis," the Post-Dispatch reports. According to the Post-Dispatch, the legislation's details are still being debated and will probably not be finalized until the end of the legislative session in May. Both Republicans and Democrats say the final bill likely will include new restrictions on lawsuits filed and the insurance industry. State Sen. James Clayborne (D) said, "We are all committed to something of substance. Nothing has been taken off the table" (McDermott, St. Louis Post-Dispatch, 3/24).
- Kansas: The Kansas Supreme Court last week ruled unconstitutional a retroactive provision of a law that "sheltered" Wesley Medical Center and the Wichita Center for Graduate Medical Education from two pending lawsuits filed by families of injured children, the Wichita Eagle reports. The suits can now proceed. The families of the injured children said that the retroactive law was intended "to sabotage their cases," in which one family seeks $8 million and the other $20 million for "lifelong care of the girls" who suffered brain injuries when they were delivered by the resident services' doctors, the Eagle reports. After the families filed the suit against the doctors, the resident program and Wesley, the resident group discovered that it was not covered by the state agency which provides doctors and hospitals malpractice insurance, exposing the group and Wesley to potential liability. During the 2001 legislative session, legislators passed a bill to extend coverage from the Kansas Healthcare Stabilization Fund to the resident group and to define the program as a health care provider, which shields it from liability for doctors' negligence. Further, at the requests of Wesley and the resident program, the legislators made the law retroactive to July 1, 1997, four months before the birth and subsequent injury of one of the patients (Sylvester, Wichita Eagle, 3/23).
- Minnesota: State Rep. Fran Bradley (R) last week during a House Health and Human Services Finance Committee meeting requested the removal from a health care reform bill of a "controversial" provision to cap medical malpractice awards, the St. Paul Pioneer Press reports. Bradley said he requested the change because he was unable to gather sufficient support for the provision in the House Civil Law Committee. In earlier meetings, proponents had argued that high awards for noneconomic damages in malpractice cases had "prompted insurers to significantly boost malpractice insurance premiums or discontinue writing coverage for emergency room physicians," the Pioneer Press reports. However, opponents to the caps say that Minnesota's malpractice premiums are some of the lowest in the nation and that Minnesota malpractice insurers paid only $19 million in such awards in 2003. According to the Pioneer Press, Bradley said he currently does not plan to address medical malpractice again until 2005 (Majeski, St. Paul Pioneer Press, 3/19).
- New Jersey: A state Senate committee on Monday approved a plan to change a funding formula to create a $26-million-per-year subsidy fund to offset malpractice insurance premium rate increases for health care providers, the Asbury Park Press reports. All doctors, dentists, chiropractors and attorneys would be assessed $75 per year to pay for the fund for a total of $26 million per year; previously, lawmakers had proposed a $50-per-year fee. Doctors whose premiums have increased significantly would receive a share of $17 million of the subsidies, while hospitals would be eligible for $6.9 million. In addition, the fund would provide $1.2 million for extra care for uninsured pregnant women and New Jersey medical students specializing in obstetrics would receive $1 million to help pay medical school loans. The legislation is scheduled for a vote in the full state Senate on March 29 before it returns to the state Assembly for consideration (Stainton, Asbury Park Press, 3/23).
- North Carolina: Legislative staff last week presented drafts of eight separate bills to members of the state House Blue Ribbon Task Force on Medical Malpractice. One of the bills would require more malpractice insurers to inform the insurance commissioner about rate changes and provide details to demonstrate that increases are not "excessive, inadequate or unfairly discriminatory." Another bill would cap noneconomic damages in malpractice cases at $250,000, while remaining bills would reduce awards for malpractice victims who also receive Social Security or insurance benefits and allow judges to reduce noneconomic damages at a hearing following a civil trial. The task force hopes to recommend legislation before the General Assembly reconvenes in May (AP/Winston-Salem Journal, 3/19). Any bill that receives a majority of votes will be included in the recommendations of the task force, according to state House Republican leader Joe Kiser (R) (Bonner, Raleigh News & Observer, 3/19).
- Pennsylvania: The number of malpractice lawsuits filed in the state decreased by more than 26% in the past four years, from 2,686 in 2000 to 1,989 in 2003, according to a state Supreme Court study. In addition, in the past four years, there were only four cases in which malpractice payouts exceeded $10 million (Gazarik, Pittsburgh Tribune-Review, 3/19). Chief State Supreme Court Justice Ralph Cappy on Dec. 31 sent a memo to county court administrators calling for counties to begin tracking the number of medical malpractice cases filed annually in each of the districts, the Pittsburgh Tribune-Review reports. The tracking is part of an ongoing analysis ordered by Gov. Ed Rendell (D) and the General Assembly (Kaiser Daily Health Policy Report, 1/16). The numbers "appear to refute claims" made by providers and the Pennsylvania Medical Society that a growing number of lawsuits and increasing jury awards are to blame for the rising cost of malpractice insurance in the state, according to the Tribune-Review. Cappy said the statistics should help Gov. Ed Rendell (D) and state lawmakers find a solution to the state's malpractice problems (Pittsburgh Tribune-Review, 3/19). In related news, Rendell is advocating malpractice reform legislation that would force Pennsylvania hospitals whose doctors are accused of negligence to offer a pretrial settlement to patients before going to court. The legislation would also expand judges' authority to limit excessive jury awards, extend a program that pays catastrophic liability premiums for state surgeons and cap attorneys' fees. The legislation could be introduced in the next few weeks, according to the Pittsburgh Post-Gazette (Toland, Pittsburgh Post-Gazette, 3/25).
Opinion
Editorials, Opinion Piece Respond to Medicare Trustees' Report
[Mar 26, 2004]
Several newspapers recently published editorials and an opinion piece in response to the 2004 annual report that Medicare trustees released on Tuesday. The report found that the Medicare hospital trust fund will become insolvent by 2019, seven years earlier than the estimate last year. The report attributed the new estimate to increased health care costs, lower-than-expected revenue from payroll taxes and revisions to the program enacted in the new Medicare law (Kaiser Daily Health Policy Report, 3/25). Summaries of the editorials and opinion piece appear below. Editorials
- Charleston Post and Courier: The report indicates that "in their zeal to keep a political promise," President Bush and lawmakers in both parties "have produced seriously flawed -- and seriously mislabeled -- 'reform' legislation based on unrealistic statistics," according to a Post and Courier editorial. Leaders of both parties "should re-examine and fix this bill -- using legitimate actuarial figures in the process," the editorial states, adding, "Otherwise, the ill-advised rush to improve Medicare could destroy it" (Charleston Post and Courier, 3/25).
- Contra Costa Times: "It is nothing short of political farce for our elected leaders to feign surprise at" the results of the report, a Times editorial states. According to the editorial, "Medicare has been on track for a collision with fiscal reality for years," and "Congress' contribution to avoiding that train wreck was to speed up the train." The Medicare law included a "bizarre prescription drug benefit" that "added more than $500 billion worth of liability to an already-overburdened system," but the law did not include adequate revisions to the program "because to do so would take a stiff political spine, and that seems to be a scarce commodity in our nation's capital," the editorial states (Contra Costa Times, 3/26).
- Greensboro News & Record: Medicare currently is not "on life support," but to "stave off disaster, the Bush administration and Congress must stop shirking their responsibility and shore up underfunded federal entitlements," a News & Record editorial states. Although the report "doubts that privatization will save money, it's worth a debate," the editorial states, adding that if Medicare becomes insolvent, "the long-term ramifications would be enormous" (Greensboro News & Record, 3/25).
- Las Vegas Review-Journal: The report "should give a wake-up call to lawmakers and senior advocates who presume that we can continue to ignore the fiscal meltdown that will occur when the baby boomers begin retiring," a Review-Journal editorial states. In addition, the report should "force policymakers to rethink the welfare state and entertain reforms which empower individuals and enhance free market alternatives," according to the editorial (Las Vegas Review-Journal, 3/25).
- Manchester Union Leader: Both parties have "irresponsibly exploited" the report as "a political tool," a Union Leader editorial reports. The report indicates that Congress and the White House should "get serious about fixing or replacing" Medicare, but based on the actions of lawmakers, "that point won't arrive until the program is already out of money," the editorial concludes (Manchester Union Leader, 3/26).
- New York Times: The future of Medicare is "worrisome," but the financial problems of the program are "clearly manageable if political leaders will only address them, the sooner the better," a Times editorial states. Congress should "take a first step in dealing with the looming entitlement shortfalls by rebuffing the administration's efforts to extend its tax cuts for wealthy Americans," the editorial states. However, without legislation to address the issue of increased health care costs, "Medicare will inevitably require higher taxes or be forced to reduce benefits," according to the editorial (New York Times, 3/26).
- Pittsburgh Post-Gazette: U.S. residents "have a right to count on" Medicare when they retire, and the "idea that people cannot be sure" that the program will exist in the future "is simply intolerable," a Post-Gazette editorial states. Political candidates this year "should be called to task firmly on the subject," and voters should base their decisions on whether candidates offer a "categoric commitment" to address the financial problems of Medicare, the editorial concludes (Pittsburgh Post-Gazette, 3/26).
- San Jose Mercury News: The report "underscores the president's and Congress' obligation to fully fund Medicare and the prescription drug benefit," a Mercury News editorial states. "If they can't, then they need to come clean with the American public about the level of benefits they can expect to receive," the editorial continues. The editorial concludes, "Every day the president and Congress wait to address the problem is another day that threatens to turn the issue into an even more expensive problem" (San Jose Mercury News, 3/26).
Opinion Piece
- Paul Krugman, New York Times: The report provides "one more reason to hate" the Medicare law: the legislation "squanders taxpayer money on HMOs" through "an even bigger subsidy to private plans," columnist Krugman writes in Times opinion piece. The subsidies, in large part in the form of higher reimbursements for HMOs, account for two years of the seven-year reduction in the estimated time before the Medicare hospital trust fund becomes insolvent. In addition, Krugman writes, "Even with a heavy subsidy," HMOs "can't compete with traditional Medicare" (Krugman, New York Times, 3/26).
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