Copyright: Jeanne Scott Matthews, 2008
Jeanne’s speaking schedule is filling up.
Catch her at one of these important public
events in 2008: Kentucky HFMA, Louisville,
July 17-18; Oklahoma HFMA, Tulsa, July 24;
Association of Healthcare Internal
Auditors, Denver, September 8; Western
Medicaid Pharmacy Administrators, San
Antonio, September 14; California HFMA
Managed Care Conference, Newport Beach,
September 16; Michigan Patient Accounting
Association, Lansing, September 18;
Michigan HFMAs Fall Conference, Plymouth,
September 27; Iowa HFMA, Des Moines,
October 24-25; Tennessee HFMA, Gatlinburg,
October 28; Region 9 HFMA, New Orleans,
December 4; and Illinois AAHAM,
Bloomington, December 5. In addition,
Jeanne is in demand for many private
conferences, board retreats, sales
meetings and political consulting.
HIGHLIGHTS IN THIS ISSUE
HEADLINE NEWS
1.
Battling Budgets: The Democratic Counter
Budget - No Cuts in Medicare and Medicaid
2.
Physician Medicare Reimbursement Cuts: Now
Up to 10.6% and Scheduled for 7/1/ 2008
3.
GAO, CRS: Bush Administration Didn’t Limit
S-CHIP In the Right Way
4.
Employers Passing More and More Health
Insurance Costs on to Employees
5.
Bush Administration Reneges on Transparency:
All Power to the AMA
HIPAA: NOW AND FOREVER
6.
Senators Agree on Privacy Rule Changes
7.
Obituary: Jerome H. Grossman
8.
AMA Agrees on Standards for E-Prescribing
UNIVERSAL HEALTH CARE
9. Handy-Dandy Pocket-Size Summary of the
Candidate Positions
THE PHARMACY CORNER
10. Direct-to-Consumer Advertising Comes
Under Attack
***
Editor: Jeanne
Schulte Scott
(480) 983-5586
jeanne.scott@health-politics.com

Quotes of the
Week
***
"Our budget moves to balance by 2012 with
balanced priorities… It rejects, for
example, the huge cuts proposed in Medicare
and Medicaid by the president and
congressional Republicans."
-- House Budget Committee Chaircritter John
Spratt (D-S.C.) describing the Democratic FY
2009 budget they expect to pass this week as
opposed to President Bush’s earlier budget
plan.[See, Report #1, below]
***
"If they pass it, it will be a major
accomplishment that we weren't able to
achieve when we were in the majority… But
the proof is in the pudding as to whether
this blueprint will be implemented. The
chances are not very good."
--
G. William Hoagland, who served as a senior
budget aide to former Senate Majority Leader
Bill Frist (R-Tenn.), commenting on the
Democrats budget effort. [Report #1, below]
***
"There are lots of different options on the
table. Just don't know yet."
-- Senate Finance Committee Chaircritter Max
Baucus (D-Mont, on alternatives that might
be used to offset the costs of giving
physicians back the scheduled 10.6% cut in
their Medicare reimbursement. [See, Report
#2, below]
***
"The August 17 directive would impose strict
new requirements on states and beneficiaries
that are not only impossible to achieve but
make little, if any, sense."
-- House Energy and Commerce Health
Subcommittee Chaircritter Frank Pallone (D-N.J.)
on hearings that he hopes will lead to
reversing a Bush administration rule
limiting the expansion of state S-CHIP
programs. [See, Report #3, below]
***
“This is the second consecutive year
employees' share of spending will increase
by double digits.… [The report] is likely to
increase pressure on the next presidential
administration to address health care
costs."
-- Lorraine Mayne, co-author of a new study
that reports that employers will continue to
shift health care insurance costs to their
employees, 10.5% in 2008. [See, Report #4,
below]
***
"The study adds to the existing gloom
and doom related to medical costs as
projections by federal analysts show that
health spending in the United States will
double by 2017."
-- From a CQ HealthBeat editorial comment on
the new study. [Report #4, below]
***
“I know the government was under a lot of
pressure from the AMA in particular, arguing
that the government should appeal. Whether
that's the reason the government appealed, I
don't know."
-- Robert Krughoff, president of Consumers'
CHECKBOOK, suggesting that DHHS decision to
appeal a court decision ordering the public
release of Medicare physician payment
information was perhaps the result of AMA
lobbying. [See, Report #5, below]
**********************
HEADLINE NEWS
(1)
DUELING BUDGETS: CONGRESSIONAL DEMOCRATS
REACH AGREEMENT ON $3.3T BUDGET BLUEPRINT
FOR FY 2009 THAT DOES NOT INCLUDE GOP
PROPOSED CUTS TO MEDICARE, MEDICAID
Congressional Democrats last week announced
that they have reached a tentative agreement
on a $3.3 trillion fiscal year 2009 budget
resolution that rejects reductions in
spending for Medicare and Medicaid proposed
by President Bush.
Bush has estimated
that his legislative proposals over five
years would reduce spending for Medicare by
$178 billion and spending for Medicaid by
$17 billion. According to Senate
Budget Committee Chaircritter Kent Conrad
(D-N.D.), the agreement also would provide
about $20 billion more for military and
domestic programs than the $991.6 billion
requested by Bush. House Budget Committee
Chaircritter John Spratt (D-S.C.) declined
to disclose additional details about the
agreement.
The House and Senate might approve the
budget as early as this week, Conrad said.
Spratt said that
lawmakers should be able to pass the budget
resolution before Congress goes home for
Memorial Day. If it is approved,
it will mark the first time since 2000 that
Congress has been able to agree on a budget
blueprint in an election year.
Just Between You and Me:
The budget blueprint is a nonbinding
resolution that sets targets for separate
spending bills that are normally approved
later in the year and sent to the president.
This year, however, Democratic leaders have
said they are likely to avoid sending most
spending bills to Bush, who has again
threatened to veto measures that exceed his
requests. What they are trying to do is
create campaign issues for the fall. Among
the Democratic actions:
Medicare and Medicaid:
Rejects Bush’s 6-year proposed $178 billion
and $17 billion cuts in Medicare and
Medicaid. Most of Bush’s Medicare cuts had
been directed at hospitals, nursing homes
and home health agencies.
Tax Changes:
Extends the tax cuts that target the middle
class, including a child tax credit, a
reduction in the penalty for married couples
and adds a new lower 10 percent tax bracket,
but sunsets the Bush administration’s higher
income tax (above $250,000) cuts starting in
2010.
Alternative Minimum Tax:
Revises the AMT formula which would have imp
acted as many as 20 million more middle
income Americans in 2009 but leaves open the
issue of counterbalancing the $70 billion in
revenues lost by changing the formula until
after the 2998 elections.
New Spending:
The Dems budget comes in at $20 billion more
in domestic spending than President Bush’s
but says it will result in a balanced budget
by 2012, three years earlier than Bush says
his budget will achieve, through the sunset
of higher income tax cuts.
*************************************
Legal Quote of the Week
|
Such poor folk as to law do go
are driven oft to curse:
But in mean while, the Lawyer thrives,
the money in his purse. |
-- Isabella Whitney, A Sweet Nosegay or
Pleasant Posye
Containing a Hundred and Ten Phylosophicall
Flowers, 1573
*************************************
(2)
MEDICARE PHYSICIAN PAYMENT
CUTS, WHAT TO DO, WHAT TO DO?
SENATE FINANCE COMMITTEE
DISCUSSES OFFSETS FOR ESTIMATED $15M TO $18M
COST OF GIVINBG DOCS BACK THEIR MEDICARE
PAY; BUSH ADMINISTRATION REQUESTS JUNE 16
DEADLINE
Senate Finance Committee Chaircritter Max
Baucus (D-Mont.) said
a Medicare package
that would delay for 18 months a 10.6% cut
to physician fees would cost between $15
billion and $18 billion over five years,
prompting committee members to begin
discussions on how to offset those costs.
Senatecritters Olympia Snowe
(R-Maine) and Kent Conrad (D-N.D.) said that
committee
members continue to examine reducing
payments to private insurers that administer
Medicare Advantage plans as a potential
offset for the bill. MA plans, on average,
are paid an estimated 113% of what
traditional Medicare pays per patient.
Last year, when Congress passed a six-month
delay for the Medicare fee cuts, Republicans
objected to cuts to the MA program.
House Ways and Means Health Subcommittee
Chaircritter Pete Stark (D-Calif.) said he
expects Baucus to
cut indirect
medical education payments under MA that are
given to insurers that provide coverage in
areas with teaching hospitals.
Baucus said no decisions were made on
Wednesday, but he did not rule out cutting
IME payments.
June 16 Deadline:
The Bush administration has asked Congress
to approve legislation delaying the fee cuts
(which are scheduled to take effect on July
1) by June 16 to avoid delays in payments
that would result in additional
administrative costs. CM2
estimated that passing legislation by June
16 would help reduce the possibility of
disrupted payments or reprocessed claims
that would result in extra administrative
costs.
Just Between You and Me:
Baucus and Senate Majority Leadercritter
Harry Reid (D-Nev.) have pledged floor time
for discussion of the legislation in early
June. Baucus said that he would "try" to
meet the June 16 deadline but would
"certainly" be finished by the end of the
month. However, House members are nervous
regarding the Senate's timing.
"The concern
here is if the Senate acts so late and sends
us a bill in late June and expects us to
rubber-stamp it, they're in for a rude
awakening," Housecritter Shelley
Berkley (D-Nev.) said. Congress could go
beyond the deadline, but some doctors have
vowed to see fewer Medicare beneficiaries if
payments are reduced, and a disruption in
payments could have a similar effect. And no
Democrat wants to take the blame for that in
an election year.
*************************************
Jeanne's Lawyer Joke of the Week
The impressionable new associate at the big
city law firm was talking to three senior
associates about their preferred marital
status.
The estate planning associate extolled the
virtues of married life. “You have a lot
more secure home life,” he said; “you can
start your family now and have someone to
discuss the ups and downs with . . . ”
The litigation associate explained how he
preferred to play the field. “I like the
thrill of the chase, getting to know someone
new . . . ”
The tax associate discussed his preference,
“You really need a wife and a mistress.
That way, when your wife calls and asks
where you are, you can tell her you're with
the other woman. When the mistress calls,
tell her you're at home with your wife. In
the meantime you can spend all of your time
at the office billing hours.”
*************************************
(3)
GAO, CONGRESSIONAL RESEARCH SERVICE SAYS
BUSH ADMINISTRATION IMPROPERLY ISSUED
DIRECTIVE THAT LIMITS STATES' ABILITIES TO
EXPAND S-CHIP
According to testimony delivered by the
Government Accountability Office and the
Congressional Research Service during a
House Energy and Commerce Health
Subcommittee this past week, the Bush
administration improperly issued a policy
directive last year that restricts states'
abilities to expand their S-CHIP programs,
hearing. The
August 17, 2007, policy directive requires
states to enroll 95% of children in families
with incomes up to 200% of the federal
poverty level before expanding coverage to
children in families with incomes greater
than 250% of the poverty level.
During the hearing, the GAO and CRS
spokespersons said the Bush directive
amounted to a regulation and should have
been vetted in Congress using the same
process as other administrative rules.
The opinions from GAO and CRS lend weight to
Democrats' efforts to nullify the directive,
something they have promised to do since it
was issued. Subcommittee Chaircritter Frank
Pallone (D-N.J.) is sponsoring legislation
(HR
5998)
that would reverse
the directive.
States have argued that meeting the
enrollment requirement is impossible, and
several states have filed lawsuits against
the federal government to block the
directive. The Bush administration says the
directive is aimed at preventing families
from dropping private health coverage to
enroll in S-CHIP.
Just Between You and Me:
While a bill reversing the Bush
administration’s S-CHIP policy could
possibly pass the House, too many
Republicans support the principle behind the
directive, so Pallone's bill stands little
chance of passage in the Senate, where it
would be filibustered.
But there is an option if the Democratic
Congressional leadership really wants to do
something. A “disapproval resolution”
probably could still be passed by Congress
to nullify the directive. Unlike stand-alone
bills, disapproval resolutions cannot be
filibustered in the Senate. But nyah, they
don’t have the will.
The GAO opinion is available
online,
http://www.gao.gov/docsearch/abstract.php?rptno=GAO-08-785T
*************************************
A judge in a semi-small city was hearing a
drunk-driving case and the defendant, who
had both a record and a reputation for
driving under the influence, demanded a jury
trial. It was nearly 4 p.m. and getting a
jury would take time, so the judge called a
recess and went out in the hall looking to
impanel anyone available for jury duty. He
found a dozen lawyers in the main lobby and
told them that they were a jury. The lawyers
thought this would be a novel experience and
so followed the judge back to the
courtroom. The trial was over in about 10
minutes and it was very clear that the
defendant was guilty. The jury went into
the jury-room, the judge started getting
ready to go home, and everyone waited.
After nearly three hours, the judge was
totally out of patience and sent the bailiff
into the jury-room to see what was holding
up the verdict. When the bailiff returned,
the judge said, "Well have they got a
verdict yet?" The bailiff shook his head and
said, "Verdict? Hell, they're still doing
nominating speeches for the foreman's
position!"
*************************************
(4)
EMPLOYEE OUT-OF-POCKET COSTS
FOR FAMILY HEALTH CARE TO INCREASE 10.5% IN
2008, Says Milliman
The cost of health care for the average U.S.
family with employer-sponsored health
coverage will increase 7.6% this year,
due in part to rising prescription drug
prices, according to a Milliman study. The
fifth annual Milliman Medical Index analyzed
historical claims data and trends in
provider contracting and examined the
drivers and components of medical spending.
According to the study,
the cost of medical
services, including premiums, will increase
by $1,109, from $14,500 in 2007 to $15,609
in 2008 for an average family of four
enrolled in an employer-sponsored PPO.
The study also found that the cost of
pharmacy services is expected to increase by
10.6% to $2,302, compared with single-digit
increases for physician services, inpatient
and outpatient care. Drug spending has
slowed the past two years, according to the
study. However, this year's increase is a
trend that Milliman believes will continue.
According to the study, employers are
expected to pass on more of the cost to
their employees.
Employers will
shift around 10.5% more of the cost to
workers through higher premiums and
out-of-pocket costs, such as deductibles,
copayments and coinsurance, the study found.
Of the total $15,609 cost, employers will
pay $9,442, while employees will spend
$3,492 on premiums and $2,675 in
out-of-pocket costs. In 2008, employers will
pay roughly 60% of medical costs, while
employees will pay 40%.
*************************************
Two of the top partners of a top Houston
personal-injury law firm were wooing a hot,
young, Ivy League, law school graduate, whom
they wanted to recruit very badly.
The firm flew him down, gave him the grand
tour, showed him the fabulous suite he'd
have, as well as the car and other perks.
The grad took all this in, was duly
impressed, and told the two partners, "This
is all very impressive, and quite generous,
but before I could commit to you I have to
know one thing: what kind of pro bono
program does the firm have?"
The two partners looked at each other, back
at the grad, and asked for a minute to
confer. In the corner of the conference
room, they huddled briefly, then seemed to
come to a consensus. They walked back over
to the young graduate; whereupon the older,
very distinguished partner said, "What's pro
bono?"
*************************************
(5)
SO MUCH FOR TRANSPARENCY:
DHHS APPEALS COURT ORDER TO RELEASE
PHYSICIAN DATA
DHHS has appealed to the U.S. Court of
Appeals for the District of Columbia from an
August 2007 court decision that
requires the
department to release Medicare claims data
on more than 40 million beneficiaries and
700,000 physicians. In August
2007, the U.S. District Court for the
District of Columbia ruled that DHHS must
release Medicare physician claims data for
Illinois, Maryland, Virginia, Washington
state and Washington, D.C. In the case,
Consumers' CHECKBOOK/Center for the Study of
Services filed a lawsuit to obtain access to
the data. DHHS
argued that the release of the data would
violate the privacy of physicians.
However, the court rejected that
argument because Medicare claims account for
only a portion of the incomes of physicians.
According to the court, the release of the
data would
"help the
public make more informed Medicare
decisions" and provide "more information of
how government funds are spent."
Consumers' CHECKBOOK plans to
post the data
online for public use. Researchers could
analyze the data to determine the number of
times physicians perform certain procedures
and to compare the mortality rates among
patients of certain physicians, and health
insurers could use the data to improve their
analyses of physician quality.
Consumer groups, employers and health
insurers support the decision, and physician
groups oppose the decision. The American
Medical Association, which has petitioned to
join the DHHS appeal, maintains that the
data could be misleading because they do not
take into account differences in patients
treated by different doctors.
Just Between You and Me:
In filing this appeal, the Bush
administration and GOP candidate John McCain
find themselves caught on their own petard.
On the one hand, transparency for both price
and quality has been until now, a
cornerstone of the Republican drive to
privatize health care, especially Medicare.
DHHS Secretary Leavitt has given literally
dozens of speeches calling for more not less
health care transparency. Indeed, without
greater pricing and quality transparency,
the Bush administration’s call for greater
consumer control over its proposed
high-deductible health savings accounts, and
John McCain’s call promise to move the
nation away from employment-based health
insurance to individually controlled
coverage, would be an exercise in futility.
How can the consumer make the choices such a
system would impose on them when they don’t
know the prices they will be charged, have
no idea about the quality of the services
they are buying, and have no basis to make a
comparison or a reasonable choice regarding
their care?
The DHHS appeal is further evidence of the
enormous power of the Medical industry’s
lobby. The AMA and many affiliate medical
specialist societies and state and local
medical groups have long balked at making
their prices public. They have been
absolutely adamant in their opposition to
quality reporting. Bush and his people have
buckled. Trailing the Democrats by more than
two- to-one in fund-raising, the GOP feels
that it cannot afford to alienate the
deep-pocketed medical lobby. Thus
transparency goes out the window. Who says
money doesn’t talk?
*************************************
The hypochondriac lawyer was convinced he
was near death, finally dragging himself to
yet another physician, he pleaded with the
doctor:
“Give it me straight, doc, how many more
billable hours do I have left?”
*************************************
HIPAA, NOW AND FOREVER:
HEALTH CARE I.T. STUFF
(6)
SENATE LEADERS AGREE ON
PRIVACY PROTECTIONS AMENDMENT TO HEALTH CARE
INFORMATION TECHNOLOGY BILL
Senate Judiciary Committee Chaircritter
Patrick Leahy (D-Vt.) last week announced
that sponsors of a bill (HR
1693) that would promote the use
of health care information technology have
agreed to include an amendment Leahy
proposed to help protect patient privacy.
Senate Health, Education, Labor and Pensions
Committee Chaircritter Ted Kennedy (D-Mass.)
and ranking membercritter Mike Enzi (R-Wyo.)
introduced the legislation last October.
Leahy had raised
concerns that the bill, which would extend
the medical privacy rule issued after the
passage of the Health Insurance Portability
and Accountability Act to electronic medical
records, did not include adequate privacy
protections. The rule allows some
health care providers to distribute medical
records for marketing purposes.
Under the amendment,
providers could not
distribute medical records for marketing
purposes, and patients would have the right
to request electronic copies of their
records. The amendment also would require
DHHS to develop recommendations for Congress
on privacy and security and establish a
patient notification system in the event of
a breach of their medical records.
Just Between You and Me:
Senatecritter Leahy plans to hold a
hearing in June on the privacy protections
in the legislation. After nearly eight years
of virtual silence on the health care
privacy issue, the matter is heating up once
again. We’re seeing some progress in this
draft legislation buy it is far from a done
deal. The Bush administration has requested
some technical revisions to the bill, and
the Congressional Budget Office has not
determined a cost estimate for the
amendment. All of this could spell doomsday
for anything this year.
*************************************
A man goes into a pet shop to buy a parrot.
The shop owner points to three
identical-looking parrots on a perch and
says, "The parrot on the left costs $500."
"Why does the parrot cost so much?" asks the
customer.
The owner says "Well, the parrot knows how
to do legal research."
The customer then asks about the next
parrot, to be told that this one costs
$1,000 because it can do everything the
other parrot can do plus it knows how to
write a brief that will win any case.
Naturally, the increasingly startled
customer asks about the third parrot, to be
told that it costs $4,000. Needless to say,
this begs the question, "What can it do?"
To which the owner replies, "To be honest,
I've never seen him do a darn thing, but the
other two call him 'Senior Partner.'"
*************************************