Physician Law : Pennsylvania Health Law Lawyer & Attorney : Fox Rothschild LLP : serving Philadelphia, Pittsburgh, Allentown, Erie, Upper Darby Twp

In what should be welcome news for physicians, yesterday the House of Representatives quietly passed a bill which would repeal a long-standing exemption for insurance companies from federal anti-trust laws.  The exemption left anti-trust enforcement against insurance companies in the hands of the states.  If the Senate approves the legislation, health and malpractice insurance companies will be subject to federal prosecution for anti-trust violations.  Read more about the bill here.

• Print
• Comments
• Trackbacks

In anticipation of a much publicized bipartisan meeting with representatives of Congress, President Obama released today a comprehensive health plan which seeks to combine the House and the Senate health care bills. The President’s proposal, which can be read on the Whitehouse.gov website, would not include a public option but would include, among a lot of other things, the following:

• Creating a federal Health Insurance Rate Authority to oversee insurance rate increases and other unfair practices of insurance plans;

• Closing the Medicare prescription drug “donut hole” coverage gap;

• Increasing the threshold for the excise tax on the most expensive health plans from $23,000 for a family plan to $27,500 and starting it in 2018 for all plans;

•  Setting up a competitive health insurance exchange.

• Print
• Comments
• Trackbacks

In a 2008 report, the the Congressional Budget Office estimated that the savings from tort reform would amount to only about $4 Billion over the period from 2010 to 2019.  However, acording to a letter dated December 10, 2009 to Senator Rockefeller, the CBO's original estimate failed to take into consideration that tort reform would result in lower utilization of services.  Based on this previously omitted consideration, the CBO has now revised its estimate and now believes  that tort reform would result in saving of $54 Billion over the same period of time!  

• Print
• Comments
• Trackbacks

Despite efforts by Senator Harry Reid to pass legislation which would have effectively frozen Medicare payment rates for physicians, it looks like Congress will once again look to freeze physician payment rates with a one-year patch. According to an article published by the Wall Street Journal, Senator Reid’s proposed bill would have permanently prevented Medicare payment cuts to doctors. However, the bill was estimated to cost $247 billion over ten years and Senator Reid was unable to secure the votes necessary to get the bill out of the Senate. The bad news for physicians is that there’s no permanent fix for the sustainable growth rate formula in the Medicare Physician Fee Schedule. The good news however is that Senator Reid has indicated an intention to pass a measure which would forestall the projected 21% decease in physician payments expected for 2010.

• Print
• Comments
• Trackbacks

According to the Congressional Budget Office (CBO), the Chairman’s mark for the Healthy Futures Act of 2009 proposed by Senator Max Baucus will be paid for, in part, through a reduction in Medicare payment rates.  Specifically, according to a blog post by the CBO,  the legislation would "substantially reduce the growth of Medicare’s payment rates for most services". 

The CBO also acknowledges that it's estimated cost projections is based on the proposed legislation and legislation currently in effect such as the current Sustainable Growth Rate system pursuant to which physicians are already scheduled to see a major reduction in Medicare reimbursement.  Lower reimbursement means physicians will likely need to see more patients (the bill would result in an estimated 29 million more insured patients) than they are currently seeing to generate the same revenue.  

• Print
• Comments
• Trackbacks

The original Stark II regulations included an 18 month moratorium on an exception to Stark that would have permitted physician to invest in specialty hospitals. Since expiration of that moratorium some physicians seeking more control over their practice environments have embarked on a mission to develop specialty hospitals as an alternative to the traditional acute care hospital setting.  However, hospital groups and certain legislators have also (unsuccessfully so far) attempted to ban physician ownership in these hospitals permanently. 

Efforts to ban physician ownership in these hospitals continue and in fact, if passed, the health care reform bill proposed by the Senate Finance Chairman, Max Baucus, would effectively prohibit physician ownership of specialty hospitals unless those hospitals had a Medicare Provider Agreement in place on November 1, 2009. This means that physicians who have invested money in hospitals that are under development could expect to lose their entire investment.

Support for Mr. Baucus’s ban on physician ownership in hospitals would appear, however, to not be unanimous in the Senate, according to a September 15, 2009 letter from Senator Diane Feinstein to Mr. Baucus.  In that letter, Ms. Feinstein states that “as the federal government continues to spend hundred of billions of dollars in federal funds to create jobs and stimulate the economy, it is nonsensical to approve legislation that will force ongoing construction on desperately needed projects to come to a halt.” Ms. Feinstein concludes her letter by requesting that Mr. Baucus consider changes to his proposed legislation that will allow facilities currently under construction to be brought to completion.

Physicians concerned about these developments should contact their representatives and professional societies.

• Print
• Comments
• Trackbacks

Physician/Medical Device financial arrangements continue to draw scrutiny by regulators. According to an article in the New York Times, Senator Charles Grassley has instituted an inquiry into payments between device-maker Medtronic and Dr. David Polly that Grassley says were not disclosed by Dr. Polly when he testified before Senate Panel in 2006. Specifically, Dr. Polly allegedly failed to disclose during his testimony that Medtronic was paying him $6,000 for his appearance before the committee.

Although the amount not disclosed is small, documents released by Senator Grassley show that between 2003 and 2007, Medtronic paid Dr. Polly in excess of $1.14 million in consulting fees and expenses from Medtronic. The lesson for physicians: As medical costs and quality emerge as the buzzwords for health care reform, financial arrangements which create or which give the appearance of conflicts of interest are increasingly likely to come under scrutiny by regulators and enforcement authorities. Physician contemplating these arrangements must carefully evaluate the benefit of the arrangements and the potential pitfalls.

• Print
• Comments
• Trackbacks

On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (Recovery Act), which, among other things, created financial incentives for physicians and other providers to adopt and utilize electronic health records (EHR) and penalties for those physicians who do not.  The provisions addressing the incentives are known as the Health Information Technology for Economic and Clinical Health Act or the "HITECH Act".  Many physicians remain uncertain about the details of the incentives so CMS has now published a Fact Sheet which is intended to shed some light on the HITECH payment incentives. 

Here are some of the key points from the Fact Sheet:

• Financial incentives will begin in January 2011 for eligible professionals (EPs) who are meaningful EHR users.
• Beginning in 2015, payment adjustments will be imposed on EPs who are not meaningful EHR users by that date.
• Hospital-based physicians who substantially furnish their services in a hospital setting are not eligible for incentive payments.
• Incentive payments will equal to 75 percent of Medicare allowable charges for covered services furnished by the EP in a year, subject to a maximum payment in the first, second, third, fourth, and fifth years of $15,000; $12,000; $8,000; $4000; and $2,000, respectively.
• For early adopters whose first payment year is 2011 or 2012, the maximum payment is $18,000 in the first year.
• There will be no payments for meaningful EHR use after 2016.
• The Medicare fee schedule amount for professional services provided by an EP who was not a meaningful EHR user for the year would be reduced by 1 percent in 2015, by 2 percent in 2016, by 3 percent for 2017 and by between 3 to 5 percent in subsequent years.
• For 2018 and thereafter, if the Secretary finds that the proportion of EPs who are meaningful EHR users is less than 75 percent, then the reductions will be increased by 1 percentage point each year, but by not more than 5 percent overall.

• Print
• Comments
• Trackbacks

According to a June 2, 2009 letter from President Obama to key Democrat Congressman, the President is pushing for major health care reform legislation by October 2009. Given that this is only a few months away, it is remarkable how little detail exists with regard to the President’s plan for reform. Here are some key quotes and a few take away thoughts that might be gleaned from the President’s letter:

“I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans”. Based on this quote it would appear that there will indeed be an expanded national health insurance program. If the Medicare program is any indicator, this is going to mean a lot more regulation.

“I am committed to working with the Congress to fully offset the cost of health care reform by … strengthening Medicare and Medicaid payment accuracy by cutting waste, fraud and abuse; improving care for Medicare patients after hospitalizations; and encouraging physicians to form "accountable care organizations" to improve the quality of care for Medicare patients.” I’m guessing this means more fraud and abuse enforcement and more physician accountability although the President’s definition of an “accountable care organization” remains elusive.

“I am committed to working with the Congress to fully offset the cost of health care reform by reducing Medicare and Medicaid spending by another $200 to $300 billion over the next 10 years, and by enacting appropriate proposals to generate additional revenues.” More taxes?

“These savings will come not only by adopting new technologies and addressing the vastly different costs of care, but from going after the key drivers of skyrocketing health care costs, including unmanaged chronic diseases, duplicated tests, and unnecessary hospital readmissions.” Though it’s pretty vague, this could mean greater rationing of care through mechanisms such as pre-authorization requirements for diagnostic testing.
 

If President Obama has his way, big changes will be coming very soon.  Stay tuned!

• Print
• Comments
• Trackbacks

Several Congressman, including Senator Ted Kennedy, are renewing their efforts to change the way physicians receive information about new prescription drugs.  Re-introduced in Bill form this month, the Independent Drug Education and Outreach Act would put an academic spin on the dissemination of drug information by providing grant money to organizations to produce educational materials on the safety, efficacy, and cost of prescription drugs.  The grants could also be used to train staff to disseminate the educational materials to physicians. The idea behind the Bill is to to give physicians access to unbiased prescription drug information without having to rely on drug company sales reps.  Importantly, grant recipients would be precluded from receiving any financial support from drug manufacturers whose products are under review. Senate Bill 767 can be read here.

• Print
• Comments
• Trackbacks

Massachusetts has joined the small but growing list of states regulating gifts and payments by pharmaceutical and device manufacturers to physicians.  According to a Boston Globe article, Massachusetts regulators have adopted regulations banning gifts to physician and mandating disclosure of consulting/speaking payments to doctors in excess of $50. The regulations apply to any pharmaceutical and device company doing business in Massachusetts and take effect July 1, 2009.

This is yet another indication that the landscape surrounding physician-industry relationships is undergoing major changes.  As regulators push for greater transparency, physicians must be careful to avoid arrangements with pharma and device companies which might not only violate state or federal laws (including the federal anti-kickback statute) but which could attract unwanted public attention and scrutiny. 

• Print
• Comments
• Trackbacks

President Obama's prescription for health reform is beginning to take shape and the early prognosis is that physicians will be on the losing end.  According to an article in the Washington Post, Obama's Budget is going to include a $634 billion reserve fund as a downpayment on a $1 trillion health system overhaul. 

How does Mr. Obama plan on paying for his plan?  According to the Post article "by trimming tax breaks for the wealthy and squeezing payments to insurers, hospitals, doctors and drug manufacturers". (emphasis added)   This may be a double whammy for doctors who are fortunate enough to still be earning household income of $250,000 since that would qualify them as "wealthy" under the Obama plan.  On the other hand, if the intended reimbursement cuts are deep enough, many doctors may not have to worry about being in the top tax bracket.

Stay tuned, this is going to get interesting.

• Print
• Comments
• Trackbacks

Now that Tom Daschle is out of the running for Secretary of HHS, there's been much buzz about who President Obama's next choice will be.  Even Howard Dean's name has come up.  According to a recent New York Times article, however, it looks like it might be Gov. Kathleen Sebelius, the current Governor of Kansas.  Governor Sebelius, you may recall, was considered as a possible VP running-mate by President Obama.  Her experience includes 8 years as the Kansas Insurance Commissioner and 6 years as Governor.  Stay tuned!

• Print
• Comments
• Trackbacks

Yesterday President Obama signed the much touted stimulus bill into law.  Although not much is publicly being said about health care reform yet, sweeping changes to the health care system are quietly taking place. In fact, over $150 billion of the stimulus bill funds are earmarked for health care related projects. In no particular order, these include:

   • Comparative Effectiveness Research to compare treatment effectiveness ($1.1 billion)

   • Support for State Medicaid and Children's Health Insurance Program Programs ($87 billion) 

   • Investment in Health Information Technology ($19 billion) 

   • Medical Research Funding through the U.S. National Institutes of Health ($10 billion) 

   • Federal Support for COBRA ($25 billion)
 

Many of these change can be expected to have an impact on the way physicians practice medicine (and in particular the information technology provisions since they include incentives for physician compliance).  Accordingly Physicians need to keep a sharp eye on the changes that are taking place and should begin retooling to best take advantage of what will undoubtedly be a very different playing field in just a few short years.
 

• Print
• Comments (1)
• Trackbacks

So much has been said and so little done over the last ten or more years about healthcare reform that many of us have stopped listening.  However, with the heavy emphasis placed by President-elect Obama on the issue of healthcare reform, and the astronomical rate at which health care costs are rising, it would seem that the chances of sweeping reform are greater now than ever before. 

Over the last few weeks, many of my physician clients have asked what reform under Mr. Obama will mean for them.  Frankly, it is too early to tell how the proposed Obama plan will impact physicians and other providers.  The weak economy can be expected to occupy much of the Obama administration's time in the coming months, but many anticipate that Mr. Obama will move fairly quickly on his healthcare plan.  Accordingly, physicians should keep a close eye on the plan as it develops.

Here are some of the more substantive reforms promised by Mr. Obama in his initial plan:

• Guarantee affordable, accessible health care coverage for all Americans through new affordable health insurance options by:

1. guaranteeing eligibility for all health insurance plans;
2. creating a National Health Insurance Exchange to help Americans and businesses purchase private health insurance;
3. providing new tax credits to families who can’t afford health insurance and to small businesses with a new Small Business Health Tax Credit;
4. requiring all large employers to contribute towards health coverage for their employees or towards the cost of the public plan;
5. requiring all children have health care coverage;
6. expanding eligibility for the Medicaid and SCHIP programs; and
7. allowing flexibility for state health reform plans.

• Invest $10 billion a year over the next five years to move the U.S. health care system to broad adoption of standards-based electronic health information systems, including electronic health records;

• Require that health plans that participate in the new public plan, Medicare or the Federal Employee Health Benefits Program (FEHBP) utilize proven disease management programs;

• Print
• Comments
• Trackbacks