January | February | March | April | May Web Classifieds | Advertising Information Texas Stars

Health Notes

MedWatch News

* FYI--Glaxo Wellcome voluntarily withdraws Lotronex tablets from the market. A copy of the FDA Talk Paper may be found at: http://www.fda.gov/bbs/topics/ANSWERS/ANS01058.html

* The FDA informs health professionals that an informational page on Bovine Spongiform Encephalopathy [BSE] has been posted to the CBER web site. The URL's are: http://www.fda.gov/cber/bse/bse.htm and http://www.fda.gov/cber/whatsnew.htm

* The FDA has alerted all health care providers and patients to a potential safety concern involving an unapproved experimental product for HIV (human immunodeficiency virus, the AIDS virus)/AIDS. The FDA is advising health care providers and patients that goat antiserum to treat HIV/AIDS is not currently approved for the treatment of HIV/AIDS or for any human clinical study. This unapproved product, produced in goats as an antiserum against HIV/AIDS, was the subject of a "clinical hold" by FDA, prohibiting its use until previously existing safety questions are resolved. Please see the FDA Talk Paper at http://www.fda.gov/bbs/topics/ANSWERS/ANS01061.html.

* FYI-- The FDA is notifying pharmacists and other healthcare professionals about an urgent class I recall of injectable colchicine and other injectable pharmaceuticals distributed by Phyne Pharmaceuticals of Scottsdale, Arizona. Phyne has issued a recall due to the lack of Current Good Manufacturing Practice (CGMP) compliance at its contract manufacturing site in Rathdrum, ID (Amram, Inc). The lack of CGMP's includes, but is not limited to, the lack of assurance of sterility in these injectable products and super-potency of its Colchicine product labeled as .5 mg/mL, but actually formulated at 5 mg/mL. It is important that you immediately examine your drug supplies for any of these products and if found, discontinue dispensing or use and return them to Phyne Pharmaceuticals. If you have further distributed any of these products, immediately contact your accounts and advise them of the recall situation. Please refer to the complete recall notice at http://www.fda.gov/medwatch/safety/2000/colchi.htm for the full list of recalled products.

* FYI-- Fatal lactic acidosis has recently been reported in pregnant women treated throughout gestation with the combination of stavudine and didanosine. Based on these cases, the combination of Zerit (stavudine) and Videx (didanosine) should be used with caution during pregnancy and is recommended only if the potential benefit clearly outweighs the potential risk, such as when there are few remaining treatment options. A copy of the health professional letter may be found at: http://www.fda.gov/medwatch/safety/2001/safety01.htm#zerit

Survival Rates of Hospitalized Heart Attack Patients Improved Between 1990 and 1999, According to a Study Published in the Journal of the American College of Cardiology

According to a study of 1.5 million heart attack patients treated at over 2,000 hospitals nationwide, survival rates improved from 89 percent to 91 percent during that time, while average hospital stays shortened from eight days to four days. The study noted that, over the nine years, there was a marked decrease in the use of clot-busting drugs; a threefold increase in the percentage of patients receiving angioplasty; a decrease in the time between arrival in the emergency room and receipt of treatment from more than 1 hour to just under 38 minutes; and an increase in the likelihood of receiving currently recommended drug treatments such as aspirin, beta-blockers and ACE inhibitors within the first 24 hours after heart attacks and upon hospital discharge. (Journal of the American College of Cardiology, 12/2000; Yahoo News, 12-2-2000)

Alcohol-related Illness and Injury in the U.S. Costs an Estimated 100,000 Lives and $184.6 Billion Annually, According to a Report by the National Institutes of Health (NIH)

The first NIH report on alcohol use and abuse since 1997 noted that alcohol misuse is implicated in diseases such as cancer, liver disease and heart disease, and is linked to domestic violence, child abuse, fires and other accidents, falls, rape, robbery and assault. The report also summarizes psychological and drug-based treatments for alcoholism and efforts to reduce drunk driving. (Yahoo News, 12-2-2000)


The FDA has Concluded that the American Red Cross is Failing to Ensure the Safety of the Nation's Blood Supply

The FDA is seeking a multimillion-dollar fine against the Red Cross, as inspections of Red Cross safety controls continue to find serious problems that put blood transfusion recipients at risk of being infected with viruses and bacteria. Problems found by FDA inspections include contaminated blood being stored with blood for distribution, an inadequate system for preventing the release of potentially harmful blood products, and improper distribution of some blood with cytomegalovirus, which is harmful to newborns and people with impaired immune systems. (Washington Post, 12-2-2000)


Heart-reduction Surgery does not Produce Expected Long Term Benefits, According to a Study Published in the Journal of the American College of Cardiology 

A study of 59 patients concluded that the partial left ventriculectomy procedure, in which part of the heart's left ventricle is removed and the heart is reshaped, does temporarily improve some symptoms, but that most patients died or relapsed into heart failure. The procedure, developed by a Brazilian heart surgeon, was originally hoped to be a viable alternative to heart transplant. (Journal of the American College of Cardiology, 12/2000; Yahoo News, 12-5-2000)

FDA Approves New Treatment for Eczema

The Food and Drug Administration has approved a new treatment for atopic dermatitis. The drug is Protopic (tacrolimus) Ointment (0.1% and 0.03% for adults and 0.03% for children two years and older). The drug is for patients with moderate to severe eczema, for whom standard eczema therapies are deemed inadvisable because of potential risks, or who are not adequately treated by or who are intolerant of standard eczema therapies. Common side effects associated with this drug include temporary stinging or burning sensations which may lessen if the diseased skin heals. There was also evidence that Protopic Ointment may accentuate the adverse effects of ultraviolet light on the skin. The drug should not be used by patients who are allergic to its active ingredient, tacrolimus, or to its inactive ingredients. Protopic will be marketed by Fujisawa Healthcare Inc., of Deerfield, Illinois. (FDA Talk Paper, 12-8-2000)


Physician Labeling Proposal

The Food and Drug Administration has proposed a new format for prescription drug labeling that will help reduce medical errors. An FDA study showed that practitioners found drug product labeling to be lengthy, complex, and hard to use. The proposed new format would provide user-friendly labeling that would allow practitioners to quickly find the most important information about the product. One major change is inclusion of a new introductory "Highlights" section of bulleted prescribing information. This section would include the information that practitioners most commonly refer to and view as most important, and it would provide the location of further details elsewhere in the labeling. The proposed new labeling is expected to reduce practitioners' time spent looking for information, decrease the number of preventable medical errors, and improve treatment effectiveness. Because these labeling revisions represent considerable effort and are most critical for newer and less familiar drugs, the proposal will apply only to relatively new prescription drug products. (HHS release, 12-21-2000)

Certain Drug Therapies are Effective in Prolonging Pregnancies of Women in Preterm Labor

A new evidence report from the Agency for Healthcare Research and Quality (AHRQ) found that certain drug therapies and diagnostic tools can have a positive outcome on the treatment of preterm labor. The Research Triangle Institute-University of North Carolina Evidence-based Practice Center found evidence proving that the use of tocolytics, drugs that stop uterine contractions, during an episode of preterm labor is an effective means of extending the length of the pregnancy. In contrast, continued use of these medications, after contractions have subsided, offers no apparent further benefit. Hidden infections of the upper genital tract are believed to be a significant risk factor for preterm labor. The AHRQ evidence report also found that antibiotics prolong the length of the pregnancy and the infant's gestational age at birth, suggesting that hidden infections do play a role in preterm labor but that their potentially harmful impact can be moderated. The report also found that two diagnostic tools, fetal fibronectin tests and endovaginal ultrasound, are effective in predicting which women with symptoms of preterm labor are at low risk of preterm birth. The summary of the evidence report, "Management of Preterm Labor," is available online at http://www.ahrq.gov/clinic/pretermum.htm. (AHRQ press release, 12-18-2000)


Afternoon Blood Test May Miss Diabetes

Doctors who give their afternoon patients the fasting plasma glucose test are likely to miss half of the diabetes cases in this group, according to research published in the December 27 "The Journal of the American Medical Association." The American Diabetes Association currently recommends the fasting plasma glucose test for detecting type 2 diabetes. The test is diagnostic for diabetes if a person has a blood glucose level of 126 milligrams per deciliter (mg/dl) or higher, and a second test on another day confirms the same high level of blood glucose. The recommendation is based on studies of plasma glucose measured in the morning after an 8-hour fast. However, many patients are seen in the afternoon after variable periods of fasting. In the JAMA study, researchers from the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) and Social and Scientific Systems, Inc., found that fasting plasma glucose levels were consistently higher in the morning group compared to the afternoon, with an overall mean difference of 5 mg/dl. Moreover, the afternoon patients had blood glucose levels suggestive of diabetes at half the rate of the morning group. "If the current recommended criteria for diagnosing diabetes were applied to the afternoon patients, about half the cases of diabetes would be missed," said NIDDK's Dr. Maureen Harris.

To accurately detect diabetes in afternoon patients, the researchers suggest that the diagnostic standard of glucose levels for this group should be lower - 114 mg/dl or greater instead of the current standard of 126 mg/dl or greater. In any case, the researchers advise physicians to confirm the diagnosis by repeat testing on a different day, preferably in the morning. (NIH news release, 12-26-2000)



Medicare Expands Coverage of PET Scans

The Health Care Financing Administration announced on December 15 that it is expanding Medicare coverage of positron emission tomography (PET) to improve the care of patients who have or may have one of six types of cancer. Additional coverage is also provided for some patients with refractory epilepsy or who may be candidates for coronary revascularization. This science-based coverage decision provides expanded coverage of dedicated full circular ring PET scanners and some partial ring systems for any clinically appropriate use for six types of cancer - lung, colorectal, lymphoma, melanoma, esophageal, and head and neck (but not brain or thyroid) cancer - and new coverage of the neurologic and cardiac applications. The effective date is expected to be announced shortly. 

Consideration of requests for coverage of three additional applications - myocardial viability, dementia, and breast cancer - will be referred to the Medicare Coverage Advisory Committee. HCFA had received an external request for broad coverage of PET for a multitude of cancers, one cardiac application, and two neurological applications. The conditions not covered under this decision remain noncovered, and HCFA is inviting interested parties to submit new formal requests for coverage for individual cancers or for broad coverage. 

This change is a significant modification in HCFA's approach to PET scans and a step toward broad coverage. HCFA will now cover diagnosis, staging and re-staging for any covered cancer for which there is empirical evidence for at least one clinically appropriate indication. For example, HCFA previously covered PET scans for colorectal cancer for one narrow indication - in the case of recurrent colon cancer evidenced by a rising carcinoembryonic antigen level. Now, HCFA has expanded coverage of PET for colorectal cancer for all other diagnostic, staging and re-staging reasons.

For coverage of PET in primary cancer diagnosis, PET must be used to potentially avoid or direct an invasive diagnostic procedure. For use in staging or re-staging of disease, PET is only covered if the stage of the cancer remains uncertain following a conventional imaging work-up and if the clinical management of the patient may differ according to the stage of the disease. Where the evidence demonstrates PET is not clinically useful, that use in a specific cancer type will be explicitly excluded from coverage. (HCFA news release, 12-15-2000)


HHS News


The Department of Health and Human Services (HHS) has Proposed New Whistleblower Protection Rules

Published in the November 28 Federal Register, the proposed regulation would protect from retaliation whistleblowers who disclose apparent or actual misconduct in public health research projects supported by federal funds. The regulation would require institutions to establish procedures for preventing retaliation against good faith whistleblowers and require the institution to make an administrative proceeding available to the whistleblower if the dispute is not resolved by the end of the negotiation period. The proceeding would be required to allow the whistleblower to be represented by counsel and have a qualified, objective decision maker who is allowed to authorize appropriate remedies, such as reinstatement, back pay, rehabilitation of reputation or compensation, if retaliation has occurred. (Delaware Valley Healthcare Council, 12-1-2000)


The U. S. Department of Health and Human Services will soon Allow Medicare Beneficiaries to Gain Peer Review Organization Findings without the Consent of the Investigated Practitioner

The new policy comes in response to a lawsuit filed against the federal government by the son of a Medicare patient who died in a Jacksonville, Florida, hospital six days after being admitted because of an asthma attack. Patients could use such information in malpractice lawsuits and other actions against doctors and hospitals. (New York Times, 1-2-2001) 


HHS Issues Final Rule Addressing Physician Self-referrals

HHS Secretary Donna E. Shalala announced on January 3, 2001, final regulations addressing self-referrals by physicians. The self-referral law prohibits physicians from referring Medicare patients for certain health care services to entities with which the physicians or their immediate family members have a financial relationship. A financial relationship can be either an ownership interest or a compensation arrangement, and can be direct or indirect. The law also contains a number of exceptions.

Consistent with the proposed rule, the final rule prohibits physicians from making referrals for the targeted services to most entities which the physicians own in whole or in part. In contrast, the final rule generally permits physicians to refer to entities with which they have a compensation relationship, as long as the compensation paid to the physician is no more than would be paid to someone who provided the same services but was not in a position to generate business for the entity.

The final rule also clarifies some of the exceptions to the self-referral prohibition and offers clear guidance regarding how to structure financial arrangements to comply with the exceptions. To give physicians time to adjust existing business arrangements that would not previously have triggered the referral prohibition, the rule will be effective on Jan. 4, 2002-one year after its publication in the Federal Register.

The final rule also substantially reduces the potential financial liability of hospitals and other entities that provide any of the targeted services and submit claims for prohibited referrals, if they neither knew nor had reason to suspect that they had an indirect financial relationship with a referring physician. Under the proposed rule, any claim submitted by an entity for services rendered pursuant to a prohibited referral would have been denied, even if the entity had no reason to suspect that it had an indirect financial
relationship with the referring physician.

In defining what practices the law exempts from the self-referral prohibition, the final rule expands the law's exceptions for services provided in a physician's office and for services provided by managed-care plans. In addition, it allows exceptions to permit certain indirect compensation arrangements, to allow small, non-monetary gifts, and to protect financial arrangements between academic medical centers and their faculties if certain criteria are met.

The self-referral law, as enacted in 1989, prohibited a physician from referring a patient to a clinical laboratory with which he or she (or an immediate family member) has a financial relationship. Effective Jan. 1, 1995, Congress extended the law to prohibit a physician from referring patients to providers of 10 other categories of health care services if the physician (or an immediate family member) has a financial relationship with the service provider. The 10 affected services are: physical therapy services; occupational therapy services; radiology services and supplies; radiation therapy services and supplies; durable medical equipment and supplies; parenteral and enteral nutrients, equipment, and supplies; prosthetics, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services. The law also prohibits an entity from billing for services provided as the result of a prohibited referral.

The provisions in the physician self-referral rule complement other laws designed to combat waste, fraud, and abuse, including the anti-kickback law. Potentially abusive financial relationships that may be permitted under the physician self-referral law could be addressed through other laws.

HCFA published a final rule covering physician self-referrals for clinical laboratory services on Aug. 14, 1995. The agency then published a proposed rule to implement the expanded law in 1998 and received almost 13,000 comments from the public. The new final rule modifies the proposed rule, addressing the most contentious issues raised in the proposal.

HCFA intends to address in another final rule comments received on provisions of the proposed rule that are not addressed in the January 3 final rule. The second final rule also will address public comments on this week's final rule. HCFA intends to move as quickly as possible on the second rule. (HHS news release, 1-3-2001; for further information, log on to http://www.hss.gov/search/press.html) 


HHS Report Finds Emerging Shortage of Licensed Pharmacists

The supply of licensed pharmacists needed for the delivery of quality health care is being strained by the sharp increases in demand for pharmacist services, according to a report by HHS. The study, "The Pharmacist Workforce: A Study of the Supply and Demand for Pharmacists," was mandated by Congress in December 1999. Conducted by the HHS' Health Resources and Services Administration, it concluded that the number of unfilled full- and part-time drug store pharmacist positions nationally rose sharply from about 2,700 vacancies in February 1998 to nearly 7,000 vacancies by February 2000. Such vacancies are expected to continue to grow. There are 196,000 licensed pharmacists in the U. S. Although the demand is increasing, active pharmacists are expected to only grow by 28,500 over this decade - 800 less than the 29,300 over the last decade. There also is a decline in pharmacy school applications, with the number of 1999 applicants 33 percent lower than 1994, the high point of the past decade. Retail prescriptions dispensed in the U. S. rose by 44 percent between 1992 and 1999, from 1.9 to 2.8 billion. The estimated annual number of prescriptions filled by each retail pharmacist grew by 32 percent, from 17,400 in 1992 to 22,900 in 1999. (HRSA News release, 12-12-2000)


HHS Issues Upper Payment Limit Regulation

The U.S. Department of Health and Human Services on January 5 finalized a rule closing a loophole in Medicaid regulations costing federal taxpayers billions of dollars without commensurate increases in coverage or improvements in the care provided to Medicaid beneficiaries.

The final regulation revises Medicaid's "upper payment limit" rules, ending certain accounting techniques to inappropriately obtain extra federal Medicaid matching funds that are not necessarily spent on health-care services for Medicaid beneficiaries. The announced changes will be phased in to allow states time to adjust their Medicaid programs to meet the new requirements. The final rule also allows a higher limit on payments for public hospitals in recognition of the higher costs that these facilities incur. The final rule is projected to save an estimated $55 billion over the next 10 years.

On December 21, 2000, the President signed the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000, which directed the Secretary of Health and Human Services to publish this final rule. The law further stipulated that the final rule include a longer transition period for certain states. The final rule, which incorporates that change, was scheduled to be published during the week of January 8 in the Federal Register and will take effect in 60 days.

States have broad flexibility in setting the Medicaid rates that they pay to nursing homes, hospitals and other providers. Under previous Medicaid regulations, some states have used this flexibility to pay excessive rates to a few county or municipal facilities. After a state claimed federal matching funds based on those payments, it could require those facilities to return some or all of the extra money to the state's general fund for other uses in the state, often unrelated to Medicaid and in some cases unrelated to health care at all.

The use of this loophole had grown rapidly in the past year. Currently, 25 states have approved plans that implement programs supporting the loophole, accounting for nearly $2 billion in increased Medicaid costs in fiscal year 2000 alone.

The new final rule makes clear that it is simply closing a loophole that has allowed some states to draw down extra federal matching Medicaid funds inappropriately.

The final rule sets out three timeframes to allow adequate time for states that have come to rely on the practice to phase out their use of the loophole. States that used the practice before Oct. 1, 1992, will have eight years to come into compliance with the new upper payment limits, as stipulated in the Benefits Improvement and Protection Act. States that started using the practice after Oct. 1, 1992, but before Oct. 1, 1999, have five years to come into compliance. Other states with plans that have lapsed into approval would have a shorter two-year transition period. The final rule will not reduce federal Medicaid funding for any state during its 2001 budget year.

In addition, recognizing the financing challenges facing hospitals that serve large numbers of low-income and uninsured patients, the administration supported the increase in Medicaid disproportionate share hospital payments recently passed by Congress. The administration also supported the increase in the hospital-specific limits on DSH payments to 175 percent of net uncompensated care costs beginning in 2002. Under current law, Medicaid disproportionate share payments to these hospitals are capped at 100 percent of their costs for treating uninsured patients plus any costs for treating Medicaid patients that are not covered by the Medicaid reimbursements that they receive. These increases will help ensure the viability of large urban safety-net hospitals. (HHS news release, 1-5-2001. For further information, log on to www.hss.gov/search/press.html)


Compliance Programs for Physician Offices
Hugh M. Barton & Jeanine Lehman, Attorneys, Austin, TX

On September 25, 2000, the Office of Inspector General (OIG) of the U. S. Department of Health and Human Services issues final guidance for compliance programs for individual and small group physician practices. "The intent of the guidance is to provide a roadmap to develop a voluntary compliance program that best fits the needs of that individual practice," Inspector General June Gibbs Brown said.

There are seven elements: (1) implementing written policies; (2) designating a compliance officer; (3) conducting training; (4) developing lines of communication; (5) conducting internal monitoring; (6) enforcing standards of conduct; and (7) taking corrective action. 

The OIG urges physicians to assess the following potential risk areas: 

* Coding and billing
* Reasonable and necessary services
* Documentation
* Improper inducements, kickbacks and self-referrals.

Strict adherence to all elements is likely to be difficult for small practices. For this reason, the OIG recognizes that full implementation of all elements may not be feasible for all practices. Participating in the other compliance programs, such as those used by hospitals, is encouraged. This would be appropriate for obtaining training and education.

Designation of a compliance officer is likely to be the most difficult area administratively. This is the person responsible for the program, and who may have additional duties. While this person may be the office manager, he or she should be sufficiently independent so as to protect against conflicts of interest. It is acceptable to the OIG, however, to designate more than one employee with compliance duties. These are persons known as "compliance contacts" such as where one person is responsible for written policies and another is responsible for conducting periodic audits. Another possibility is that practices can share a compliance officer or even out-source the function.

The final guidance also provides direction to larger practices in developing compliance programs by recommending that they use both this guidance and previously issued guidance, such as the "Third-party Medical Billing Company Compliance Program Guidance" or the "Clinical Laboratory Compliance Program Guidance," to create a compliance program that meets the needs of the larger practice.

The final guidance contains appendices outlining additional risk areas, as well as information about criminal, civil and administrative statutes related to the Federal health programs, including the Stark Laws. (Office of Inspector General web site at www.dhhs.gov/progorg/oig)

(Reprinted with permission from the "Texas Medical-Legal Report," Vol. 2, Issue 4, December 2000)

In Brief


New Web Page for Kids

A new page has been added to the Healthfinder.Gov web site. The new web page is intended for kids 8-12 years old. The web page brings together kids-related health, safety, and science information from many federal government agencies and nonprofit organizations. Topics include: Cool & Uncool Stuff; Safe Surfing; Games; and Art Contests. The web address is http://www.healthfinder.gov/kids/. (Healthfinder.Gov news release) 


Information Contained in the National Practitioner Data Bank (NPDB) is Flawed, According to a Review by the General Accounting Office (GAO)

A recent GAO study concluded that NPDB information "may not be as accurate, complete or timely as it should be," and that some data "could confuse or mislead." The finding comes amidst a debate over whether to make the database public to allow patients to track information about their physicians' malpractice histories, lost hospital privileges or revoked state licenses. The GAO noted that one-third of NPDB reports on loss of hospital privileges contained inaccurate data, while malpractice settlements can be more for financial reasons than for admission of a mistake. (USA Today, 12-1-2000)


A Proposed Merger has been Called Off Between Health Insurance Association of America (HIAA) and the American Association of Health Plans (AAHP)

HIAA, which represents private insurance companies, said it could not find sufficient common ground to justify moving forward with a merger with AAHP, which represents managed-care plans. Larger insurance companies, particularly Cigna and Wellpoint, pushed the merger, while smaller insurance companies without managed-care interests were reportedly concerned about losing their voice in a larger trade association. (Washington Post, 12-14-2000)


The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) Sent a Safety Bulletin to 5,000 Hospitals Nationwide Warning that They Could Lose Accreditation for Medicaid if They Cannot Document the Safe Use of Infusion Pumps

An estimated one-third of infusion pumps in use nationally lack a safety feature that automatically applies a clamp to an intravenous line if the pump is turned off. Registered nurses have fatally overdosed at least 39 patients and injured 373 others since 1995 while incorrectly operating infusion pumps. The JCAHO plans to conduct a comprehensive survey of the use of pumps lacking free-flow protection, while the FDA in 1994 recommended placing adhesive warning stickers on pumps outlining potential free-flow hazards and maintains that the number of deaths and injuries linked to free flow do not justify a recall. (Chicago Tribune, 12-6-2000)


The American Medical Association Called on the FDA to Consider Making the Morning-after Pill Available Over the Counter

The AMA's House of Delegates approved the resolution without discussion, while AMA members suggested that some women might not otherwise be able to get the pill in time to prevent a pregnancy. Planned Parenthood believes that widespread use of the pill could prevent 1.7 million unplanned pregnancies and 800,000 abortions annually, while anti-abortion groups said the pill causes abortions and that its over the counter status would make it available to teenage girls without parental involvement, even in states that require parents to be notified when their daughters have abortions. (Associated Press, 12-6-2000)


A Federal Appeals Court Upheld a $1.8 Million Jury Award Against Aetna U. S. Healthcare and One of its Executives

The 3rd U.S. Circuit Court of Appeals upheld the award in a suit brought by a competing insurance administrator, Brokerage Concepts Inc., alleging that Aetna interfered with its contracts by using its economic clout and pressure tactics to steal away a big client. The suit alleged that Aetna caused Brokerage Concepts to lose a contract to administer self-insurance for a pharmacy chain by threatening to cut the pharmacy chain off from customers with Aetna prescription plans. (Legal Intelligencer, 12-11-2000)


President Clinton Plans to Order Federal Officials to Study the Immunization Status of the Five Million Children Under Age Five Who Receive Government Assistance

An executive memorandum to be issued by Clinton in the hope of increasing child vaccination rates requires the Department of Agriculture to conduct an assessment of the children participating in the Women, Infants and Children (WIC) program. The memorandum also directs USDA and the Centers for Disease Control to develop a national strategic plan to improve immunization rates among at-risk children. 
(Houston Chronicle, 12-10-2000)



PacifiCare Health Systems is Cutting Six Percent of its Work Force and Expects a Significant Restructuring Charge in the Fourth Quarter

PacifiCare expects a fourth-quarter restructuring charge of $15 million to $17 million, primarily for severance and employee benefits, and will terminate 550 jobs at its corporate headquarters and regional HMO operations, beginning January 2. PacifiCare, citing rising health care costs and insufficient federal funding, also plans to limit new enrollment in about 40 percent of its Medicare markets. (TheStreet.com, 12-13-2000) 


The U.S. Justice Department Reached an $840 Million Fraud Settlement with HCA-The Healthcare Co.

Under the federal government's largest-ever fraud settlement, capping a seven-year investigation of the nation's largest hospital company, HCA will plead guilty to 13 criminal counts, pay a $95.3 million fine, and pay $745 million in civil penalties. Among the criminal charges were: submitting false Medicare cost reports, upcoding claims and paying kickbacks to business partners and doctors. The Justice Department is continuing an investigation of civil allegations of kickbacks to physician and inflated cost reports submitted to Medicare. (Dallas Morning News, 12-15-2000)



HCFA has Delayed its New Medicare Ambulance Fee Schedule Startup, Originally Scheduled for January 1, because of the Volume of Comments Received on the Proposed Rule

While analysts believe it could be three months before the final Medicare ambulance fee schedule will be announced, HCFA will make payments based on the current year rate plus a 1.7 percent inflation factor for 2001. Among the changes delayed are use of the transition formulas, mandatory assignment and use of new mileage codes. Starting January 1, an ambulance company will be required to bill using a single billing method for all claims and carriers are instructed to ask suppliers to use a single carrier-wide billing method. (AHA News, 12-11-2000) 


Reports of Medical Errors in U. S. Hospitals are Strongly Influencing Where Americans Choose to go for their Health Care

According to a survey of 2000 Americans by the Kaiser Family Foundation and the federal Agency for Healthcare Research and Quality (AHRQ), physician and hospital error rates were ranked by respondents at the top of their lists in deciding which hospitals or health plans deliver quality care, while 70 percent said that medical error rates tell them "a lot" about the quality of care a hospital or health plan can deliver. The survey said that half of all American adults fear that a medical error will affect them or their families when receiving general health care services, and noted that consumers are not receiving more useful measures of health care quality. (Yahoo News, 12-11-2000) 


Health Resources and Services Administration (HRSA) Releases New Guide to Help Communities Identify Emerging Shortages of Health Care Professionals

States facing potentially critical shortages of health care professionals now have an "early warning system" with the release of the "State Health Workforce Profiles" - a comprehensive guide on the status of health care employment nationwide. These first-ever "State Health Workforce Profiles" provide detailed data on the supply and demand for physicians, nurses, dentists, and some 20 other health care professionals in the 50 states and the District of Columbia. Each profile includes the number of health care professionals working in the state, their education, the communities they work in, and the range of services they deliver. Profiles are on the Web at: http://www.bhpr.hrsa.gov/healthworkforce/profiles. Funded by the HRSA's National Center for Health Workforce Information and Analysis, these profiles were prepared by researchers at the Center for Health Workforce Studies at the State University of New York-Albany.
(HRSA news release, 12-11-2000)


Aetna Inc., Announced a Major Cost-cutting Initiative, Including a 12.5 Percent Reduction in its Workforce

Aetna said it would cut 5,000 jobs, significantly increase premiums and take a $565 million charge in the fourth-quarter, including $100 million for restructuring and $235 million for dropping its Medicare product in 11 markets. Aetna recently completed the $7.7 billion sale of its financial services and international businesses to ING Group, N.V., and said it hopes to use its sole focus on health care and related benefits to regain its leadership position in the industry. (Philadelphia Inquirer, 12-18-2000)


Congress Approved $35 Billion in Medicare, Medicaid and State Children's Health Insurance Funding, which is Intended to Restore some of the Damage to Health Care Providers Caused by the 1997 Balanced Budget Act

Part of a large Labor-Health and Human Services spending bill, the relief package will give hospitals $11.5 billion over five years and $11 billion in direct and indirect funding to Medicare managed care plans, while allowing the government to impose a $100,000 penalty on Medicare HMOs that terminate contracts in the middle of a year. Health plans would also receive a payment adjustment if Congress decided to add a new benefit. The bill also increases funding for a number of health programs, including a 14 percent increase in the National Institutes of Health budget, $235 million to independent children's teaching hospitals for training pediatricians and pediatric specialists, and a five percent across-the-board increase in base rates for hospice care providers. The bill calls on the General Accounting Office to study Medicare's prescription drug coverage and report back to Congress with recommendations. (Medical Industry Today, 12-19-2000)


A Federal Rule that Took Effect in December is Increasing the Number of Studies of the Impact of Medicines on Children

The rule gives the FDA power to require pediatric studies for drugs that might benefit children and a new program created by Congress grants pharmaceutical companies an extra six months of market exclusivity before entry of generic competitors for each product they study in children. In response, drug makers have so far proposed about 200 pediatric studies that could involve more than 20,000 children ranging from newborn to adolescence for medications for AIDS, allergies, asthma, depression and other pediatric illnesses, compared to a total of only 11 such studies on children conducted from 1991 to 1997. (Yahoo News, 12-15-2000) 

The Average Annual Out-of-pocket Cost for Services not Covered by Medicare will Increase from $3,142 to $5,248 by 2025, According to the Report by the Urban Institute

Low-income elderly women in poor health now spend on average nearly 52 percent of their incomes on out-of-pocket health care costs. That will increase to nearly 72 percent by 2025, without changes to the program. (Associated Press, 1-2-2001)


Doctors, Pharmacists and Federal Regulators are Increasingly Concerned About what they say is a Growing Number of Drug Shortages, Particularly at Hospitals

Where a few years ago a hospital might experience a shortage of one or two critical drugs a year, the number in the last year has been closer to two dozen at some hospitals. The problem has been attributed to the drug industry's rapid consolidation, problems at some factories, and the practice at some companies of discontinuing production of older drugs in favor of newer drugs that bring higher profits. (New York Times, 1-3-2001) 



The Final Version of the So-called Stark II Regulations Limiting Physicians' Ability to Refer Patients to Facilities in which They have a Financial Interest have been Promulgated

Doctors cannot refer patients to entities they fully or partly own, but they are allowed to refer patients to entities where they are paid. In such cases, however, their arrangements cannot provide more payment than doctors receive who do not refer patients. Further, the regulations make clear that hospitals and other entities are not guilty of self-referral if they did not know or had no reason to suspect that they had an indirect financial relationship with a referring doctor. Under the proposed rule, Medicare claims in these situations would have been denied. Another change: services provided inside a doctor's office and those provided by managed care plans are exempted. Exceptions also are made for small gifts, such as tickets to sporting events, which will not be considered compensation. The new regulation becomes effective in January 2002. (Associated Press, 1-3-2001)


Eighty-three U. S. HMOs Ceased Operations in 1999 as HMOs Lost more than 400,000 Enrollees, According to the Latest Interstudy HMO Industry Report

The good news for HMOs was the shift back toward financial stability and a slightly brighter profitability picture -- not across the board but in several HMOs that were seriously in the red in recent years. National average monthly premiums for family coverage increased to $493 last year, from $464 a year earlier, and to $168 for individuals. The Northeast continued to claim the country's highest average premium rates -- $712 for families and $217 for single coverage. (WebMD, 1-3-2001)


By 2004 More Than 20 Percent of Physicians in the U. S. will Use Handheld Computer Devices to Access Patient Information, Reference Medical Information Databases and Even Send claims to Insurers, According to a New Report

Less than one percent of physicians currently uses such technology. The report was issued by the San Francisco-based banking firm W.R. Hambrecht & Co. (Baltimore Business Journal, 1-1-2001)



Texas FYI

New Provider Toll-free Telephone Number for Medicare

Medicare Part B has a new toll-free provider line which may be used for both inquiries and appeals. The Automated Response System (ARS) will still be available when calling the new toll-free number, and you will have the ability to transfer to a service representative during normal business hours, Monday through Friday, from 8:00 a.m. - 4:00 p.m. Eastern Time. The ARS capabilities regarding your inquiries are unlimited; however, a service representative may answer only three inquiries or handle three appeals per call to ensure sufficient availability of representatives. 

The new toll-free number for Texas is 877-392-9865. At this time, the local number and the ARS toll-free number 800-863-9755 in Texas are still available, but will be disconnected in the near future. (Medicare Part B Newsletter No. 01-012, 11-27-2000)


A Corpus Christi Physician was Awarded $20 Million by a State District Court Jury After Bringing a Lawsuit Alleging Wrongful Termination from Humana's Provider Panel

John Paul Schulze, M.D., alleged that Humana Health Plans of Texas and its peer review committee had slandered him, canceled his contract and interfered with his relationship with his patients after he complained about Humana's hospitalist program. The Corpus Christi lawsuit succeeded in getting records from Humana's peer review committee admitted in the trial, while the verdict removed some immunity privileges from the committee.

Baylor Medical Center at Grapevine Hopes to Initiate a $40 Million Expansion and Renovation Plan, Although its Governing Board has yet to Approve the Project's Funding

The expansion would increase the number of beds at the hospital to 200 from 104 and add a new, five-story tower that includes an intensive care unit; women's services; and medical-surgical, operating room and emergency department beds. The project would be completed in 2003 if Baylor Health Care System's board of directors approves funding in the spring. (Dallas Business Journal, 12-4-2000; Fort Worth Star-Telegram, 12-4-2000)


Medicare HMO Withdrawals from Texas may Leave 60,000 Elderly and Disabled People in Harris County with Gaps in their Medical Coverage Unless They Join Another Managed Care Program Before March 4

U.S. Rep. Ken Bentsen (D-Houston) co-sponsored a town hall meeting with state Insurance Commissioner Jose Montemayor to discuss the aftermath of the withdrawals, which would leave seniors with a basic Medicare package with high deductibles for physician visits and absence of coverage for most outpatient prescription drugs. Montemayor noted that no senior acting before the March 4 date can be denied the right to purchase Medicare supplement policies despite any pre-existing condition nor can they be charged a higher rate because of health status. Bentsen said he would like to see HMOs that enter Texas sign two-year contracts, rather than the one-year contract they currently have. (Houston Chronicle, 12-11-2000)


St. Luke's Episcopal Health System Plans to Begin Construction of a $100 Million Hospital in The Woodlands in February

Part of St. Luke's effort to expand into suburban communities, the 263,000-square-foot medical center will be the health care system's only hospital outside the Texas Medical Center. The 82-bed medical center will offer a range of services, including surgery, emergency care and diagnosis, while Texas Children's Hospital will collaborate with St. Luke's on pediatric care at the new facility. (Houston Chronicle, 12-12-2000) 


Turnaround Efforts at Palo Pinto Hospital have Turned a $2.2 Million Loss in 1999 into a $2.3 Million Profit in Fiscal 2000

A three-year strategic plan developed by the 99-bed county hospital west of Fort Worth included cutting 90 employees, freezing wages, restructuring management, recruiting physicians to increase revenue from needed services in the community, renegotiating physician and vendor contracts, outsourcing its pharmacy department, freezing external expansion projects, developing full-time equivalency standards for all departments in line with similarly sized hospitals, and leveraging a tax increase from its hospital district. The hospital recruited two cardiologists; an orthopedist and an ear, nose and throat doctor to the community, nearly doubled its outpatient revenues in one year and increased inpatient revenues by more than 17 percent. (AHA News, 12-11-2000)

Texas will Spend an Additional $4 Million to Increase Enrollment in its CHIP Program

Currently 200,000 low income children in the state are enrolled in the program. The state hopes to increase that number to 428,000 by September 1. A family of four can make up to $34,000 and qualify for CHIP. If a family makes up to $38,000 and has child care or other qualified expenses, they may still qualify for the program. (San Antonio Express-News, 1-2-2001) 


Lawyers Accusing Texas of Failing to Provide Adequate Health Care for Children Enrolled in the State's Medicaid Program have Added Two More Complaints to the Class-action Lawsuit

In the complaints filed January 3 in U.S. District Court in Tyler, plaintiffs claimed the state has not
enrolled enough dentists in the Medicaid program and that ill children are not treated in a reasonable amount of time as federal law requires. The state is appealing an August order by Judge William Wayne Justice that said Texas does not adequately provide dental care, regular checkups, transportation to doctors or information about what services are available to children in Medicaid, despite a 1996 agreement in which the state promised to make major improvements. (Associated Press, 1-3-2001)


A State Task Force Recommended that Kidneys Reserved for Patients in a Nine-county Fort Worth Region be made Available to Patients in a Region that Includes Dallas and Nearly 50 Other North Texas Counties

The task force also recommends making every Texan a potential donor unless he or she stipulates otherwise and having the state pay for some of the donor's funeral expenses. The proposals, which require state or federal approval, were made by a 13-member task force -- formed by the Legislature last session to examine organ transplantation. (Fort Worth Star-Telegram, 1-4-2001)