humani nil a me alienum puto

random rants about news, the law, healthcare law, economics and anything I find amusing

Variations in Healthcare Spending – Anchor-Tenant Theory and Fraud and Abuse?

The New Yorker recently had a very interesting expose discussing one of the fundamental economic challenges of healthcare reform.  (Gawande, Atul, The Cost Conundrum: What a Texas town can teach us about health care, June 1, 2009).  Peter Orszag gave a presentation last year at the American Health Lawyers meeting in San Franscisco that I was able to hear.  Mr. Orszag, President Obama’s budget director and formerly head of the Congressional Budget Office, has observed repeatedly (and is quoted in this article as saying) that “[n]early thirty per cent of Medicare’s costs could be saved without negatively affecting health outcomes if spending in high- and medium-cost areas could be reduced to the level in low-cost areas.”  He, and many healthcare economists’ observe, that there is a tremendous amount of variation in healthcare spending throughout various regions of the country that simply cannot be explained after controling for demographics, illness indexes/cases mixes, cost indexes and other similar factors.  And, most importantly, outcomes are no better in higher spending areas.

This New Yorker article paints a narrative story surrounding this frequent observations by looking at case of McAllen, Texas.  McAllen has the particular notoriety of having the highest per capital Medicare spending in the nation.   I think it is an important read for healthcare counsel because of some of the author’s tangential commentary linking McAllen’s higher per capita spending with a culture that could have support higher incidents of fraud and abuse.

According to the article, McAllen spends (using 2006 data) approximately $15,000 per Medicare enrollee.  This is more than twice of what El Paso, Texas, with very similar demographics and population factors, pays.  It is also more than twice what the region surrounding the Mayo Clinic spends.  Ironically, the per capital Medicare spending is more than McAllen’s per capita income.

The New Yorker author discusses this fact with some local physicians who have no idea of this distinction for their community:

One night, I went to dinner with six McAllen doctors. All were what you would call bread-and-butter physicians: busy, full-time, private-practice doctors who work from seven in the morning to seven at night and sometimes later, their waiting rooms teeming and their desks stacked with medical charts to review.  Some were dubious when I told them that McAllen was the country’s most expensive place for health care. I gave them the spending data from Medicare. In 1992, in the McAllen market, the average cost per Medicare enrollee was $4,891, almost exactly the national average. But since then, year after year, McAllen’s health costs have grown faster than any other market in the country, ultimately soaring by more than ten thousand dollars per person. “Maybe the service is better here,” the cardiologist suggested. People can be seen faster and get their tests more readily, he said.  Others were skeptical. “I don’t think that explains the costs he’s talking about,” the general surgeon said. “It’s malpractice,” a family physician who had practiced here for thirty-three years said. “McAllen is legal hell,” the cardiologist agreed. Doctors order unnecessary tests just to protect themselves, he said. Everyone thought the lawyers here were worse than elsewhere. That explanation puzzled me. Several years ago, Texas passed a tough malpractice law that capped pain-and-suffering awards at two hundred and fifty thousand dollars. Didn’t lawsuits go down? “Practically to zero,” the cardiologist admitted. “Come on,” the general surgeon finally said. “We all know these arguments are bullshit. There is overutilization here, pure and simple.” Doctors, he said, were racking up charges with extra tests, services, and procedures.  The surgeon came to McAllen in the mid-nineties, and since then, he said, “the way to practice medicine has changed completely. Before, it was about how to do a good job. Now it is about ‘How much will you benefit?’ ”

via Annals of Medicine: The Cost Conundrum: Reporting & Essays: The New Yorker.

What is the basis for the higher per capita Medicare spending?

To determine whether overuse of medical care was really the problem in McAllen, I turned to Jonathan Skinner, an economist at Dartmouth’s Institute for Health Policy and Clinical Practice, which has three decades of expertise in examining regional patterns in Medicare payment data. I also turned to two private firms—D2Hawkeye, an independent company, and Ingenix, UnitedHealthcare’s data-analysis company—to analyze commercial insurance data for McAllen. The answer was yes. Compared with patients in El Paso and nationwide, patients in McAllen got more of pretty much everything—more diagnostic testing, more hospital treatment, more surgery, more home care.  The Medicare payment data provided the most detail. Between 2001 and 2005, critically ill Medicare patients received almost fifty per cent more specialist visits in McAllen than in El Paso, and were two-thirds more likely to see ten or more specialists in a six-month period. In 2005 and 2006, patients in McAllen received twenty per cent more abdominal ultrasounds, thirty per cent more bone-density studies, sixty per cent more stress tests with echocardiography, two hundred per cent more nerve-conduction studies to diagnose carpal-tunnel syndrome, and five hundred and fifty per cent more urine-flow studies to diagnose prostate troubles. They received one-fifth to two-thirds more gallbladder operations, knee replacements, breast biopsies, and bladder scopes. They also received two to three times as many pacemakers, implantable defibrillators, cardiac-bypass operations, carotid endarterectomies, and coronary-artery stents. And Medicare paid for five times as many home-nurse visits.

The author discusses the high utilization and costs with various hospital executives, who, like the physicians interviewed, also do not know that McAllen is the most expensive place in the country for Medicare beneficiaries.  The executives of the hospitals, to the author’s belief, authentically did not know their peculiar notariety and, not even recognizing it as an issue, had no truly thoughtful responses as to why it might be.

Local executives for hospitals and clinics and home-health agencies understand their growth rate and their market share; they know whether they are losing money or making money. They know that if their doctors bring in enough business—surgery, imaging, home-nursing referrals—they make money; and if they get the doctors to bring in more, they make more. But they have only the vaguest notion of whether the doctors are making their communities as healthy as they can, or whether they are more or less efficient than their counterparts elsewhere. A doctor sees a patient in clinic, and has her check into a McAllen hospital for a CT scan, an ultrasound, three rounds of blood tests, another ultrasound, and then surgery to have her gallbladder removed. How [are the hospital executives] to know whether all that is essential, let alone the best possible treatment for the patient? It isn’t what they are responsible or accountable for.  Health-care costs ultimately arise from the accumulation of individual decisions doctors make about which services and treatments to write an order for. The most expensive piece of medical equipment, as the saying goes, is a doctor’s pen. And, as a rule, hospital executives don’t own the pen caps. Doctors do.

The article suggests, with only a little explanation, that the variation between communities such as McAllen and, in contrast, El Paso or other lower cost regions (with at least the same if not better quality institutions) might be due to an  “anchor tenant theory of economic development.”  Certain markets develop their own economic character, similar to how a mall may be defined by its anchor tenant.  So, the theory goes, certain “anchor tenants” in a market may allow, for example, the development of regional specialization (e.g., biotechnology development in certain cities – Boston, San Franscisco and not in others with similar apparent resources).   Twisting this model a bit, the author posits that the entrepenurial focus of physician medicine in McAllen, changing from the 1990s to present, may be a significant part of the increase in costs.  McAllen was near the median in per capita spending a decade ago.  Importantly, the author then goes on to point out anecdotal evidence of some serious antikickback statute violations — solicitation by certain unnamed physicians of medical directorships in exchange for referrals to hospitals and home health agencies.

This linkage — which is not well developed by the author — is nonetheless a beware moment.   If higher per capita Medicare spending is linked by government enforcement agencies as a proxy for potential higher rates of fraud and abuse behavior, one might see a new horizon for focusing fraud enforcement .  Perhaps this is a stretch – but an interesting linkage is being made here by the author.  It is all the more important due to the prestige of the publication and that the fundamentals of this story find their genesis in the economic theory of healthcare inflation that is the focus of leaders within the current administration.

The author goes on to make a fairly classical example of the challenges of asymetical information in healthcare coupled with the fee-for-service basis of physician payments:

Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coördination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later? Getting the country’s best electrician on the job (he trained at Harvard, somebody tells you) isn’t going to solve this problem. Nor will changing the person who writes him the check.

The author aruges that changing the payor (i.e., government plan competitor, single payor system) will not change this problem.  Even putting the consumer on the hook through medical savings accounts or high deductible plans won’t solve it (if a physician recommends a cardiac bypass, is the patient going to negotiate with the cardiologist, radiologist, anesthesiologist, cardiothoracic surgeon and hospital over expense or the scope of the procedure?).

Then the author suggest that only flipping the economic model might fix this.  The author isn’t quite specific in how this might be accomplished, although he goes to length to contrast the McAllen “anchor-tenant” model with other “anchor-tenant” models of healthcare (e.g., Mayo), suggesting this is the crux of the problem – what kind of medical care provision culture the United States will be developing based upon the economic incentives that are established by insurance payor systems we perpetuate or change through reform.  Not by who cuts the check.

This is worth the read because it sets a story narrative for the harder data Mr. Orszag and others have frequently discussed as healthcare reform is debated.

Filed under: AKS, Comparative Effectiveness Rearch, Health Law, Reform, , , , ,

Sunshine in Vermont… Again. Vermont Senate Bill (S-048)

As reported in the NY Times Blog yesterday, the State of Vermont, which already had fairly strict provider financial arrangement reporting requirements for pharmaceutical companies doing business in the state, is slated to significantly limit gifts to providers by both pharmaceutical and medical device companies.  The new law, which, according to the NYT blog, will be signed by the governor, will prohibit all but certain enumerated gifts, revise reporting requirements by pharmaceutical companies and expand the reporting requirements to medical device manufactures.

The legislative bodies findings and intent, obviously influenced by the reporting thus far provided under the previous version of the law, outline its concerns, stating its belief that marketing practices can influence the rise in health care spending and that “state of Vermont has a substantial interest in cost containment and the protection of public health.” The legislature cites a number of findings leading to its adoption of the legislation:  (i) an IOM study linking gifts to prescribing behavior, (ii) recent federal crackdowns on medical device manufacturers’ alleged antikickback  violations (see my related post on the federal Sunshine Act), (iii) significant spending in the relatively small state of Vermont on pharma marketing (“[i]n fiscal year 2008, pharmaceutical manufacturers reported spending $2,935,248.00 in Vermont on fees, travel expenses, and other direct payments to Vermont physicians, hospitals, universities, and others”), (iv) the pharma industry’s focus on 100 physician opinion leaders for almost two-thirds of pharma’s spend (“approximately $2.1 million in payments went to physicians…[with the] top 100 individual recipients received nearly $1,770,000.00 in fiscal year 2008”) and prevalence of pharma’s spend throughout Vermont’s 4,573 licensed health care professionals, with 2,280 being recipients.   Based upon the legislation, the Vermont lawmakers certainly are frowning on the nearly $1M spent on food, noting that many food recipients received $1,000 or more spent on them.  One individual recipient, in fact, apparently receive over $15,000 in food.

The legislature concludes that the “act is necessary to increase transparency for consumers by requiring disclosure of allowable expenditures and gifts to health care providers and facilities providing health care [in order] to reduce real or perceived conflicts of interest which undermine patient confidence in health care providers and increase health care costs by influencing prescribing patterns.  Limitations on gifts and increased transparency are expected to save money for consumers, businesses, and the state by reducing the promotion of expensive prescription drugs, biological products, and medical devices, and to protect public health by reducing sales-oriented information to prescribers.”

The new law prohibits “any manufacturer of a prescribed product or any wholesale distributor of medical devices, or any agent thereof, to offer or give any gift to a health care provider.”  It provides that the  attorney general “may bring an action in Washington superior court for injunctive relief, costs, and attorney’s fees and may impose on a manufacturer that violates this section a civil penalty of no more than $10,000.00 per violation. Each unlawful gift shall constitute a separate violation.”

Permitted items that are not deemed prohibited gifts include:  (i) samples, (ii) limited short term evaluation use loaners of medical devices not exceeding 90 days, (iii) reasonable quantities of medical device demonstration or evaluation units to a health care provider to assess the appropriate use and function of the product, (iv) provision, distribution, dissemination, or receipt of peer-reviewed academic, scientific, or clinical articles or journals and other items that serve a genuine educational function, (v) scholarship or other support for medical students, residents, and fellows to attend a significant educational, scientific, or policy-making conference or seminar of a national, regional, or specialty medical or other professional association if the recipient of the scholarship or other support is selected by the association, (vi) rebates and discounts for prescribed products provided in the normal course of business.  Certain items are not prohibited and are considered “allowable expenditures.”  These include (i) certain limited sponsorship of a significant educational, medical, scientific, or policy-making conference or seminar, (ii) certain limited honoraria and payment of the expenses of a health care professional who serves on the faculty at a bona fide significant educational, medical, scientific, or policy-making conference or seminar, (iii) bona fide clinical trial arrangements, (vi) certain limited bona fide research projects, (v) expenses relating to technical training of individual health care professionals on the use of a medical device pursuant to a written agreement.

Manufactuers need to report “any allowable expenditure or gift … to any health care provider” or “to an academic institution or to a professional, educational, or patient organization representing or serving health care providers or consumers” in the following categories:

  • “The loan of a medical device for a short-term trial period, not to exceed 90 days, to permit evaluation of a medical device by a health care provider or patient.”
  • “The provision of reasonable quantities of medical device demonstration or evaluation units to a health care provider to assess the appropriate use and function of the product and determine whether and when to use or recommend the product in the future.”
  • “The provision, distribution, dissemination, or receipt of peer-reviewed academic, scientific, or clinical articles or journals and other items that serve a genuine educational function provided to a health care provider for the benefit of patients.”
  • “Scholarship or other support for medical students, residents, and fellows to attend a significant educational, scientific, or policy-making conference or seminar of a national, regional, or specialty medical or other professional association if the recipient of the scholarship or other support is selected by the association.”
  • “Labels approved by the federal Food and Drug Administration for prescribed products.”

Manufacturers must report, on form specified by the attorney general, the value, nature, and purpose of each allowable expenditure, and permitted gift along with (i) the name of the recipient, (ii) the recipient’s address, (iii) the recipient’s institutional affiliation, (iv) prescribed product or products being marketed, if any; and (v) the recipient’s state board number.

Failure to manufacturer of prescribed products that fails to disclose as required by the law subjects the manufacturer to a civil penalty of no more than $10,000.00 per violation. Each unlawful failure to disclose, however, constitutes a separate violation.

The legislation also directs the attorney general’s office to conduct a review, in consultation with the commission on health care reform, of the advisability of modifying the law to require the disclosure of information about the provision of pharmaceutical samples to health care providers.   At present, samples are expressly excluded from the reporting regime.

If signed into law, the law will take effect July 1, 2009, but reporting activities under new regime will be implemented in 2010 reporting period.

Clearly the legislature had cost on its mind in enacting the law, as it also has tasked a state workgroup to explore generic alternative formularie recommendationss.   The workgroup is to report to the legislature by January 15, 2010 on the list generated.

Filed under: AKS, Conflicts of Interest, Health Law, , , , ,

Factors Influencing Physicians Prescribing NAIDs

In his Healthcare Economist blog, Jason Shafrin, Ph.D. (just recieved – congrats) reported on a recent study in The American Journal of Managed Care concerning the prescribing habits of Nonsteroidal Anti-Inflammatory Drug (NAIDs) among physicians.  The study, entitled Pharmaceutical Company Influence on Nonsteroidal Anti-Inflammatory Drug Prescribing Behaviors, describes, through interviews with academic medical center physicians from a variety of specialities, their prescribing habits in order to elicit the general themes that influence their behavior.  As Jason summarizes from the article, they are mostly influenced by the following:

  1. Direct Marketing by pharma detailers.
  2. Patient requests for medication, often driven by direct-to-consumer pharmaceutical advertising.
  3. Habits formed during medical school. Often, these habits are influenced by drug rep visits while the physician was in medical school.
  4. Journals, electronic peer-reviewed literature, and professional meetings.
  5. Local physician expert opinion and practice guidelines.
  6. The physician’s own experience prescribing drugs to patients.

The purpose of the study was to “describe the taxonomy of methods used by pharmaceutical companies to influence physicians’ nonsteroidal anti-inflammatory drug (NSAID) prescribing behaviors and to elicit physicians’ perceptions of and counterbalances to these influences” since there was a recognized poor adherence to prescribing guidelines for NSAIDs.  The study recognized that physicians describe detailing and direct contact with pharmaceutical representatives, requests from patients inspired by direct-to-consumer advertisements, and marketing during medical school and residency training as primary influences.  The study also reports that physicians described practice guidelines, peer-reviewed evidence, and opinions of local physician experts as important counterweights to pharmaceutical company influence.

The study concludes that the “social and communicative strategies used by pharmaceutical companies can be adapted to improve physicians’ adoption of guidelines for safer NSAID prescribing. Communicative interactions between local experts and other physicians who prescribe NSAIDs may be the critical target for future interventions to promote safer NSAID prescribing.”

Aanand D. Naik, MD and Aaron L. Woofter, MD et al,  (2009) “Pharmaceutical Company Influence on Nonsteroidal Anti-Inflammatory Drug Prescribing Behaviors,” Am J Manag Care. 2009 (published online April 1, 2009 and found online April 18, 2009 at http://www.ajmc.com/web-exclusives/managed-care/AJMC_09Apr_Naik_Exclusiv_e9toe15?utm_source=Listrak&utm_medium=Email&utm_term=%2fweb-exclusives%2fmanaged-care%2fAJMC_09Apr_Naik_Exclusiv_e9toe15&utm_content=jshafrin%40ucsd.edu&utm_campaign=AJMC+e-Table+of+Contents+(April+Web+Exclusive)).

via [AJMC] – American Journal of Managed Care.

Filed under: AKS, Conflicts of Interest, Drug Policy, Health Law, Pharmacy, , ,

Johns Hopkins Bans Free Drug Samples, Gifts from Industry – Health Blog – WSJ

As reported in the April 8, 2009 WSJ Health Blog, John Hopkins is the latest to adopt a restrictive policy on ‘on interaction with industry.’  the new policy “bans free drug samples and says doctors can’t participate in consulting gigs in which they’re essentially paid for not doing anything…”  The ban “applies to Hopkins’s medical school, hospitals and clinics”.   It also “prohibits gifts, entertainment or food — regardless of value — from drug and medical device companies.”

As for consulting relationships, the policy says that payments that are “without commensurate associated duties are considered gifts and are prohibited.”

According to the Health Blog, Hopkins representatives do not “believe it has a problem with …’sham’ consulting arrangements, but they’ve been a subject of concern around the country.”  For there doctor’s sake, one would hope not since that might be a bit more problematic than a meal or gift, no?

From the policy:

[On Gifts:]To avoid the risk of conscious or subconscious bias in decision-making, it is the Johns Hopkins Medicine policy that faculty and staff, employees, students, trainees, and volunteers may not accept gifts or entertainment (see below for food and meals), regardless of value ***

[On Consulting Arrangements:] Consulting arrangements involving personal compensation without commensurate associated duties are considered gifts and are prohibited. Specific policies regarding outside consulting are set forth in the School of Medicine’s policy on conflict of commitment and in JHM organizations’ personnel policies. ***

[On Food/Meals]: With certain exceptions, outlined below, industry-supplied food and meals are considered personal gifts and will not be permitted and may not be accepted at any JHM member organization site, in connection with activity conducted under the auspices of or using the name of any JHM member organization or in the context of professional activity off-site. ***

[On Unrestricted Gifts to Instituti0n:] Through unrestricted gifts, industry generously supports the educational, research, and patient care missions of Johns Hopkins. Gifts must be made to the University or JHHS and deposited in a departmental account.  There may be no quid pro quo, nor any limitations nor conditions placed on gifts that are inconsistent with Fund for Johns Hopkins Medicine policies and applicable regulations.***

[On Samples:] The practice of accepting free pharmaceutical samples risks interference with one’s prescribing practices since industry representatives often provide the newest and most costly drugs. Therefore, free pharmaceutical samples and vouchers for free pharmaceutical samples may not be accepted.***

[On Access by Pharma Reps:] [A]ccess by pharmaceutical, medical testing and other industry representatives to individual physicians must be restricted to non-patient care areas. Access will be permitted only on invitation from a physician, nurse, pharmacist, respiratory therapist, or other professional healthcare staff member.***

[On Speaking Gigs:] Faculty members may speak at an industry-sponsored program only if the faculty member retains full control and authority over professional material the faculty member presents and does not allow such communications or presentations to be subject to prior approval by any commercial interest other than approval for the use of proprietary information.

via Johns Hopkins Bans Free Drug Samples, Gifts from Industry – Health Blog – WSJ.

Filed under: AKS, Compliance Programs, Conflicts of Interest, Health Law, , ,

Health Law Reporter – Economy Increases False Claims Risk, Requiring Greater Focus on Compliance

In the most recent BNA Health Law Reporter, Health Law Reporter. 18 HLR 387, there was an article opining that harder economic times increases FCA qui tam and, in general, healthcare compliance risks.  I found the following notable summary of reasons that compliance programs do not work as well as intended (taken from the BNA article, which, in turn takes from a February 11, 2009 presentation to the AHLA by Patrick S. Coffey, Chris J. Mollet, University of Illinois at Chicago, and Linda A. Wawzenski, assistant U.S. attorney for the Northern District of Illinois):

• Compliance is not a business priority;
• Programs do not operate as written and do not focus on heading off claims;
• Employee training is dull and ineffective;
• There is a lack of ongoing and meaningful risk assessment;
• Hotlines are not sufficiently promoted;
• Employees do not trust the compliance commitment so do not report concerns, while managers do not understand why this is so;
• Significant enforcement settlements are ignored or quickly forgotten;
• Organizations are not prepared to handle internal investigations and routinely mishandle internal reports;
• Disgruntled employees are dismissed and whistleblowers are not protected; and
• Difficult economic times are allowed to undercut compliance efforts.

Filed under: AKS, CMP, Compliance Programs, Fraud and Abuse, Health Law, Physician Self Referral/Stark, Risk Management,

The Washington Independent » Rick Scott on His Health Care Record

The NY Times did an article on Mr. Rick Scott recently. Also of note, The Washington Independent interviewed Rick Scott on March 31, 2009.  You’ll recall him as the ousted CEO of Columbia/HCA after their trillion dollar fraud settlement with the federal government.  He’s back in the headlines as a ‘conservative’ voice against a potential Obama healthcare reform initiative.  I note only due to his comments on Columbia/HCA at the time.

RICK SCOTT: There’s no grudge. First off, if you go back and look at what we accomplished at Columbia/HCA, it was the lowest prices and best outcomes. I left and nothing happened to me. I can’t do anything about what people want to complain about. But if you look at what we’re doing, we’re doing the right things.

TWI: What, specifically?

RICK SCOTT: If you go look at Solantic [which Scott co-founded in 2001], we have transparency on prices, we’re dramatically less expensive than everyone else and we have a great service. Or go back and look at Columbia, look at all the objective measures. Go look at joint commission, accommodation, at accreditation. If you look at the top 100 hospitals, we started with less than seven percent of them. My last year, we had 27 percent of those hospitals. If you look at my management team, all of my management team went on and ran hospital companies.

TWI: People can still say, “Look, this was the guy who resigned in the biggest fraud settlement in American history.”

RICK SCOTT: But, you know, we were the biggest company. If you go back and look at the hospital industry, and the whole health care industry since the mid-1990s, it was basically constantly going through investigations. Great institutions, like ours, paid fines. It was too bad.

via The Washington Independent » Rick Scott on His Health Care Record.

Filed under: AKS, CMP, Drug Policy, Executive Compensation, Health Law, Reform, Risk Management, , ,

Physician Payments Sunshine Act of 2009

Interesting bill introduced in the 111th Congress (SB 301) by Mr. Grassley.  After recent settlements involving Medtronics and then a host of other medical device manufacturers in late 2007 (Johnson & Johnson subsidiary DePuy Orthopaedics, Zimmer, Biomet and Smith & Nephew) who provided lavish trips and sometimes sham consulting and IP royalty payments to physicians allegedly to induce their ordering of the firms’ devices, the Congress is considering forcing pharma and medical device manufacturers to disclose all financial arrangements with physicians and medical groups greater than $100/year.  The financial arrangements would be posted in a manner that would be accessible to the public.  Failure to disclose would subject the companies to up to $150,000 (if innocent) or $1m Civil Monetary Pentalties if knowingly.  It is of note that disclosure was used by the OIG in the deferred prosecution agreements with these companies.   See, for example, Zimmer’s home page at www.zimmer.com.

Search Results – THOMAS (Library of Congress).

Filed under: AKS, CMP, Conflicts of Interest, Health Law, , , , ,

Glaxo Expands List of Public Payments to Doctors – Health Blog – WSJ

In its Health Blog, the WSJ reports on March 25, 2009:

GlaxoSmithKline last year promised to publish payments to U.S. docs for consulting and other services starting in 2010, and to cap those payments at $150,000 per doctor a year. Now, the company is expanding on its promise.For clinical trials starting in 2010 and after, Glaxo said yesterday it will publicly report the money it pays U.S. doctors and their institutions to carry out the studies*** Disclosing more and more about payments to health-care professionals is a trend du jour in the industry. The list of drug companies and device makers that have said they’ll start reporting payments to docs includes Pfizer, Eli Lilly, Merck and Medtronic. Exactly what payments get reported varies from company to company.  All those self-imposed reporting plans could soon be moot. The Physician Payment Sunshine Act, which has been kicking around for a while, would create national rules for what payments drug and device makers have to publicly disclose.

via Glaxo Expands List of Public Payments to Doctors – Health Blog – WSJ.

Filed under: AKS, Conflicts of Interest, Drug Policy, Fraud and Abuse, Health Law, , ,

HHS OIG Open Letter March 24, 2009 – SDP Guidance

OpenLetter3-24-09.pdf (application/pdf Object).

Today, March 24, 2009, the HHS OIG published and Open Letter informing us that providers can no longer used the Self-Disclosure Protocol (SPD) for the physician self-referal (“Stark”) law and will limit SPD submissions to those with a minimum $50,000 settlement.

OIG will no longer accept disclosure of a matter that involves only liability under the physician self-referral law in the absence of a colorable anti-kickback statute violation. We will continue to accept providers into the SDP when the disclosed conduct involves colorable violations of the anti-kickback statute, whether or not it also involves colorable violations of the physician self-referral law… To better allocate provider and OIG resources in addressing kickback issues through the SDP, we are also establishing a minimum settlement amount. For kickback-related submissions accepted into the SDP following the date of this letter, we will require a minimum $50,000 settlement amount to resolve the matter.

The Open Letter casts this as necessary to ensure resources are focused on antikickback violations.  These  “remain[] a high priority for OIG.”  OIG does caution that providers should not read this decision to “draw any inferences about the Government’s approach to enforcement of the physician self-referral law.”

This is a rather remarkable position given the challenges that health systems face with technical (and sometimes  potentially costly) Stark violations without any antikickback component.   And, notwithstanding the OIG’s caution, it is clear that the OIG, recognizing resource limitations, wants to focus on anti-kickback violations rather than purely Stark law violations.   And what about civil monetary penalties SDPs associated with inducement of patients?  One must conclude that if there is not a significant antikickback component, it is not now appropriate for the SDP due to limitations with OIG resources.   Probably more to come.

Filed under: AKS, CMP, Fraud and Abuse, Health Law, Physician Self Referral/Stark

New York Medicaid Provider Self-Disclosure Process

As reported in the March 13, 2009 BNA Health Law Reporter, The New York State Office of the Medicaid Inspector General (OMIG) on March 12 announced the release of the Provider Self-Disclosure Guidance.  According to the the OMIG, this will “enabling health care providers to identify, reveal, and return to the OMIG overpayments they have received from the Medicaid program.”  BNA reports that the guidance is significantly more expansive in scope than the Department of Health and Human Services Office of the Inspector General’s Self-Disclosure Protocol.   OMIG reports that it hopes to save up to $820 million in Medicaid costs in the 2009-2010 fiscal year.  The OMIG also “highly discourages” providers from attempting to avoid the self-disclosure process when circumstances warrant its use and it will not accept full and final payments for self-disclosed violations before the investigatory process is finalized. See  http://www.omig.state.ny.us/data/images/stories/self_disclosure/omig_provider_self_disclosure_guidance.pdf for the new guidelines and http://www.omig.state.ny.us/data/images/stories/self_disclosure/voluntary_disclosure_form.pdf for the disclosure form.

Filed under: AKS, Fraud and Abuse, Health Law, Medicaid, , , , ,

OIG Finds No Grounds for Penalties on SNF’s Transportation Proposal for Residents’ Family

Health Law Reporter.  As reported in 3/19/2009 BNA Health Law reporter and published by the OIG on 3/13/2009, the OIG granted a favorable advisory regarding transportation program for friends and families of SNF residents, where the SNF is located in a geography difficult for such individuals to reach.  According to the OIG, “[m]any arrangements involving free transportation have important and beneficial effects on patient care, especially where such arrangements are narrowly tailored to address issues of financial need, limited transportation resources, treatment compliance, or safety.”  But the OIG cautions that transportation programs may also be “schemes” to lead to “inappropriate steering of patients, overutilization, and provision of medically unnecessary” services.  The OIG lists some examples:

• Providers offering out-of-state patients free transportation to receive services at their facilities;
• Van drivers soliciting, and offering free transportation services to, Medicaid patients for health care providers who compensate the drivers on a per patient or per service basis;
• Providers offering residents of nursing facilities and other congregate care facilities free transportation services to and from their offices for services of questionable necessity;
• Providers offering patients free limousine services;
• Hospitals or other providers offering patients free ambulance services without making individual determinations of financial need; and
• Hospitals or other providers inducing referrals from physicians by offering the physicians’ patients free transportation to the physicians’ offices or to a facility where the physician furnishes services.

The OIG indicated that it will look at factors such as (i) whether transportation is offered in a manner related to referrals; (ii) the type of transportation and if it is luxury or specialized; (iii) whether the transportation is within or outside of the primary service area of the provider; (iv) the availability of other forms of transportation; (v) how the program is marketed or advertised; (vi) who bears the cost of the transportation — whether the provider itself or beneficiaries or the federal healthcare programs through cost reporting; (vii) whether the destination is to the primary provider or if the transportation is to other providers of care; (viii) whether there is a healthcare provision nexus between the provider and those receiving the transportation — particularly in this case where it is not the patient, but family and friends receiving it.

It goes without saying, but the gating issue also is if the transportation can fit into the other unofficial safe harbor that the OIG has set out — that is, services at less than $10/instance, $50/annually.  Here the program would likely exceed at least the $50/annual guideline.

What the OIG liked about the program:

(A) It was not for or related directly to the patient receiving care and it was not about the patient going to another healthcare provider;

(B) The program is open to all friends and family members of patients, regardless of payor source, means or other potentially problematic factors.

(C) Transportation is reasonable – a van running between public pick-up locations – not a limo or specialized transit.

(D) Marketing is local, limited to local papers and patient/family/friends themselves.

(E) There truly is limited public transportation and the cost to access the facility is hampered by a large “toll-bridge” toll.

(F) It’s good for patients to have the companionship of friends and family and, therefor, supports the SNF’s mission.

(G) The costs will not be on the provider’s cost report.

This is a reasonable and good opinion on a practice that I have a feeling is widespread in the industry and that can be structured in a manner that is good for the patients and the care that they receive and structured in a way that does not increase risks to the Medicare program.

Filed under: AKS, CMP, Health Law, Transportation, , , , ,

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