Recently in Legislation Category

Yesterday federal judge Royce Lamberth, the judge who ruled that government funding of research on human embryonic stem cells (hESCs) violates federal law, denied the Obama administration's motion for a stay of his order. "Defendants are incorrect," he wrote in his latest decision, "about much of their 'parade of horribles' that will supposedly result from this Court's preliminary injunction." (For background on this story, go here and here.)

Lamberth continued:

In this Court's view, a stay would flout the will of Congress, as this Court understands what Congress had enacted in the Dickey-Wicker Amendment. Congress remains perfectly free to amend or revise the statute. This Court is not free to do so.

Congress has mandated that the public interest is served by preventing taxpayer funding of research that entails the destruction of human embryos.

Lamberth's ruling also confirmed that "projects previously awarded and funded are not affected by this Court's order," an opinion conceded by the plaintiffs.

However, there appear to be at least 2 sources of confusion regarding Lamberth's ruling, both raised by the plaintiffs:

• Whether the order exempts intramural (ie, on-site) NIH projects.
• Whether the order prevents the NIH from reviewing research applications or maintaining the hESC Registry.

Lamberth advises that motions to clarify these issues "can be expeditiously briefed and decided."

The judge also reveals that plaintiffs will likely file a motion of summary judgment by the end of this week (September 10). Recourse for the Obama administration consists of an appeal and, of course, asking Congress to revise the law.

N.B.—The Nature blog ("The Great Beyond") is all over this ongoing story and provides easy access to relevant court documents.

Image of undifferentiated hESCs from http://www.nih.gov/catalyst/2007/07.01.01/page1.html.

Two looming factors are set to ring the death knell for the small medical practice: 1) the sustainable growth rate formula; and 2) the Patient Protection and Affordable Care Act.

The former, set to kick in in December after numerous Congressional stays,* now dictates a 20-something percent drop in Medicare reimbursement to physicians. That alone could put the kibosh on many small physician practices that don't have the financial reserve to withstand such a precipitous drop in revenue. And while the Obama administration supports a financially responsible (if one exists) repeal of the SGR formula, Congress is unlikely to act. Repeal of the 12-year-old legislation would be viewed as an untenable increase in spending. Consequently Congress has repeatedly suspended the formula, while keeping the law "on the books" to avoid a monstrous increase in the already monstrous deficit. 

Whether Congress will suspend the SGR formula yet again is a mystery, albeit a short-term one. General opinion appears to be swinging in the direction of allowing the legislated cuts to begin. In fact, Medicare's trustees recently issued a rosy financial report on the program's Part B service, which assumed the SGR-defined cut.

The second impending factor for small-practice physicians, PPACA, heavily promotes the consolidation of healthcare providers into large groups to withstand the number of legislated reforms, including investment in information technology. In fact, buried in an opinion/cheerleading piece for PPACA, newly published in the Annals of Internal Medicine, is the following forecast from White House health-policy advisors.

These reforms will unleash forces that favor integration across the continuum of care. Some organizing function will need to be developed to track quality measures, account for and manage shared financial incentives, and oversee care coordination. Consequently, the health care system will evolve into 1 of 2 forms: organized around hospitals or organized around physician groups. These coordinating functions, to the extent that they currently exist, traditionally have been managed by hospitals or health plans. Only hospitals or health plans can afford to make the necessary investments in information technology and management skills.

But the advisors spin not-so-different alternatives: 

This is not inevitable. As physicians organize themselves into increasing larger groups—patient-centered medical home practices and accountable care organizations—they are, out of necessity, investing in information technology tools that are becoming both cheaper and more capable and investing in the acquisition or development of management skills that could provide these organizing functions efficiently for physicians groups.

They then make a promise or threat, depending on your viewpoint:

Physicians who embrace these changes and opportunities are likely to deliver the greatest benefits to their patients, the health system, and themselves. Physician practices that accept the challenge will be rewarded in the future payment system.

It's a spoonful of PPACA medicine that not everyone's willing to swallow, however. Over at Medscape, reporter Robert Lowes found several physicians and/or health-policy leaders who argue against the seemingly inevitable vertical integration of healthcare. For some, like Dennis Smith, former Medicaid director under George W., the push is an "example of big government meddling," Lowes reported. Lowes also obtained a nice quote from Smith: "If a physician's only choice is to join a large corporation, we're going down the wrong path." There are plenty of physicians still around who remember not-particularly-happy experiences with large HMO-led practices in the 80s and 90s. 

* Five or 6 in the last year; I've lost count.

Still from Black Narcissus trailer. Here Kathleen Byron (in a sinful red dress) plays the role of PPACA, and Deborah Kerr (in a nun's habit) is the physician in a small medical practice.

Former Duke med classmate Chuck Murry, co-director of U Washington's Institute for Stem Cell and Regenerative Medicine, was featured last night in an NBC Nightly News piece on embryonic cell research (video here). Veteran science reporter Robert Bazell said that what Murry has done, converting embryonic cells to beating cardiac tissue, is "remarkable."

But Murry's work and others' like it are now threatened by Monday's decision from a federal judge, Royce C. Lamberth, which blocks President Obama's 2009 order to expand funding for embryonic cell research. Lamberth ruled that the executive order conflicts with a legislated ban on using federal funds to destroy embryos (first contained in the Dickey-Wicker Amendment to the Balanced Budget Downpayment Act of 1996).

According to NIH director Francis Collins, by way of USA Today, the effects of Lamberth's ruling are chilling. A total of 167 grants, representing $149 million, will be frozen in the very near future. However, another 131 awarded grants, which are already "out the door," will not be affected until they're up for renewal next year.

Yesterday the US Department of Justice announced that it will appeal Lamberth's ruling. A profile of the judge, a Reagan appointee, is provided by the Washington Post.

The NYT and the WSJ are also, predictably, all over the story. According to the NYT, a Clinton* administration lawyer tried to circumvent the Dickey-Wicker Amendment in 1999, by arguing that federal money could support research on stem cell colonies, or lines, that had already been produced with private funding. (The idea being: use private funds to destroy the embryonic cell as it differentiates; then use federal funding to support research on the created stem-cell line.) The Bush administration adopted the lawyer's argument "with severe restrictions," and Obama attempted to lift the Bush restrictions last year. 

* BTW, Clinton signed the Balanced Budget Downpayment Act of 1996 with the Dickey-Wicker Amendment. 

P.S. Go Chuck.

Yesterday Missouri voters, assumed to be mostly Republican, tried to nullify the federal mandate to purchase insurance or pay a tax penalty, as dictated by the Patient Protection and Affordable Care Act. But the approved state measure, known as Proposition C, is largely seen as an empty Republican nose-thumbing to the Obama presidency and PPACA.* By the time the insurance mandate goes into effect in 2014, courts will have already decided on the constitutionality of the federal law. And federal law usually trumps state law, when the challenge arises.

Voters in 2 other Republican-heavy states, Arizona and Oklahoma, will vote on similar paper tigers this year.

The NYT has a limited story. The St. Louis Post-Dispatch reports that Proposition C passed by a margin of 3 to 1 and that the Missouri Hospital Association attempted last-minute opposition.

* Pronounced fondly as puh-PACK-uh.

Seal of the state of Missouri from http://www.sos.mo.gov/symbols/default.asp, where it can be learned that the state fossil is the crinoid.

As predicted

, more or less, by Yale's Jack Balkin in January's NEJM, the T word is hauled out to defend the constitutionality of ObamaCare's health-insurance mandate.

In fact, in one of the many legal cases protesting the insurance mandate (and the associated penalty for not having insurance), Balkin and others rebutted with an amicus brief that argues the T point. The NYT has the story.

Okay, maybe it's a cloying move by Pfizer to protest the absurdity of government oversight. But it's also kind of funny.

The world's largest drug company is advising US physicians who visit its exhibit booth at the ongoing ASCO meeting that they will have to swipe their registration cards if they want a freebie latte, reports Reuters. And oh no, you di'int: MDs from Minnesota and Vermont can't have one at all, thanks to their state laws that prohibit all swag—no matter how trivial.

Moreover, if you do accept a latte from Pfizer, the company may provide your name to US regulators and post the fact that you received caffeinated remuneration at its disclosure website. God knows, you could end up scribbling scores of prescriptions for Aromasin during your 20-minute Pfizer-propagated caffeine buzz.

At least the oversight measures are keeping somebody employed...and amused.

ASCO = American Society of Clinical Oncology.

"angry latte" by Chris Barkeley at Flickr.

06/10/10 addendum: It's hard to keep up, but Vermont recently amended its existing, relevant law to allow the "provision of coffee and other snacks or refreshments at a booth at a conference or seminar." The bill became effective on March 27th (without the governor's signature, according to the FDA Law Blog).

More from Medscape's Rob Lowes on the House amendment to alter Medicare reimbursement rates.

If the bill, American Jobs and Closing Tax Loopholes Act, in its present form passes, Medicare reimbursement will actually increase by 1.3% for the rest of this year; in 2011, another reimbursement increase of 1% will take place.* Then a confusing purgatory emerges, as the reimbursement rates for 2012 and 2013 are determined by using "a complicated formula that favors primary care physicians," Lowes writes; but, he also maintains, reimbursement rates would not decline.

According to Sec. 523 of the amendment text, "separate conversion factors" (which, by my reading, are 0.02 or 0.01, with a reference rate established on June 1st of this year) will be used to determine reimbursement for "each service category of physicians' services." I'm inferring that these service categories are defined in the original bill and that, per Lowes's reporting, they favor primary care services.

Then, after a short reign of confusion, a great hellish maw of earth known as Restored Legislation sends most physicians** to the 9th circle of "Why bother?" In 2014, the SGR formula for calculating Medicare rates kicks back in with a time-sensitive vengeance, demanding a precipitous drop in reimbursement—somewhere in the neighborhood of 30% or more.

Lowes also reports that Congress will hold votes on the bill before the upcoming Memorial Day weekend.

* But these rate increases, Lowes reports, are well below the expected annual inflation rates (between 2% and 3%).

** According to Lowes, via the Center for Studying Health System Change, about 30% of physician revenue is derived from Medicare. For internists, the percentage exceeds 40%.

Photo of weathered can from magannie at Flickr.

An extended punt to the can we call "SGR-defined cuts in Medicare reimbursement" is now proposed by Congressional Democrats Max Baucus of the Senate and Sandy Levin of the House. The punt, or delay, in Medicare reimbursement cuts is defined in the new bill, "American Jobs and Closing Tax Loopholes Act," a summary of which is provided at Levin's website.

In the section, "Maintaining Access to Affordable Health Care," the bill provides "reasonable updates in physician payment rates" for the rest of the year and 2011. In 2012 and 2013, the rates could actually increase "if spending growth on physician services is within reasonable limits," particularly in the contexts of primary and preventive care. The provision further stipulates that Medicare reimbursement rates would "return to their current law levels" after 2013. According to Medscape's coverage, that means Medicare reimbursement could fall by more than 30% in 2014.

Of course, God or the devil is in the details. The text of the bill was reportedly released yesterday as the House Amendment to the Senate Amendment to HR 4213, aka the "American Workers, State, and Business Relief Act of 2010." However, my web search is coming up empty.

The current stop-gap measure to delay the 21% SGR-defined cut in Medicare reimbursement is scheduled to expire in 11 days (June 1st). Some Republicans (eg, Jim Bunning) have balked at passage of these stop-gap bills, arguing that they add substantially to the federal deficit.

For background reading on this subject, here are previous posts in reverse chronological order:

On Medicare Cut: Congress Once Again Gives Itself Little Time to Grow a Pair

On Medicare Cut, Senate Kicks the Can Again

Bunning Still Blocking Extension of Medicare Reimbursement

Senator Bunning: Persona Non Grata Among Practicing Physicians

SGR = sustainable growth rate.

Photo of weathered can from magannie at Flickr.

05/22/10 addendum: More on this story from Rob Lowes at Medscape (who's doing a superior job, BTW, of covering this issue.) According to Lowes, professional groups like the American Academy of Family Physicians (AAFP) and the American College of Physicians (ACP) give qualified thanks to Baucus and Levin for the proposed freeze and the potential raise in Medicare reimbursement rates. But both groups, along with the AMA, urge Congress to step up and repeal the mandated use of the SGR formula to define Medicare reimbursement—which the latest amendment doesn't do. Instead, in 2014, the proposed legislation portends a precipitous drop of more than 30% in Medicare reimbursement rates.

Repeal of the SGR formula, however, is a nearly impossible fight. According to Lowes, who cites the CBO, freezing Medicare reimbursement rates through 2020 would cost the government $276 billion. SGR-repealing bills proposed by the House and Senate last year had price tags of more than $200 billion. They died because of lack of bipartisan support.

The full text of the Baucus-Levin amendment is now available here.

And the tired can-kicking game continues.

Last night, the House, in a 289-to-112 vote, passed a bill that will again delay the SGR-mandated 21% cut in Medicare reimbursement to physicians. But the new deadline, June 1, echoes the same old brevity of previous stop-gap measures.*

The House voted almost immediately after the Senate approved the Democrat-favored bill in a 59-to-34 vote. The bill also contains provisions to extend unemployment benefits, COBRA subsidies, and state funding through the American Recovery and Reinvestment Act of 2009. An earlier version of the bill, passed by the Senate in March, would have extended the Medicare cut to October 1st.

If my count is correct, this is the 4th time in 5 months that Congress has acted to delay the mandated cut in the Medicare reimbursement rate. Unfortunately the current 45-day postponement gives Congress little time to produce a permanent (and commonsensical) fix to the perpetually looming drop in Medicare reimbursement.

For more coverage, visit Medscape.

COBRA = Consolidated Omnibus Budget Reconciliation Act; SGR = sustainable growth rate.

* The 21% cut officially began April 1st, but Medicare again stepped in to delay the processing of physicians' claims for 2 weeks.

Photo of weathered can from magannie at Flickr.

A big HT to the DCMB for citing the latest Calvalcade of Risk roundup at Political Contributions. Yesterday's edition provides an intriguing online calculator—based on income and the cost of and need for health insurance—to determine whether it's cheaper to buy coverage or suffer the IRS penalty* for not having it.

The big question answered (sort of): Should I retain or drop health insurance under "ObamaCare"?

Because the new act prohibits insurance companies from denying coverage to anyone with a preexisting illness, an essential loophole is created that allows some citizens to game the system. In these cases, the cheaper option—to purchase insurance or to suffer the tax—can be determined.

For instance, for a person with an annual income of $40,000 who pays $4824 annually for an individual policy and has a 1-in-4 chance of being hospitalized, the formula spits out the following like a carnival fortune teller: "It makes more sense to drop your health insurance, buying it only when you need it, then drop it again if your health allows."

That's because the annual penalty for not being insured,** $1000, is much lower than the likely accumulated savings from dropping coverage over 3 years, $11,472 ([$4824 x 3] – $3000). However, if someone loses the gamble (meaning that she fails to get health insurance and then find that she needs it, the basic cost is $5824—or the tax penalty plus the cost of insurance for 1 year).

Major caveats to the formula must be noted, however. Insurance premiums are based on current rates (eg, the average annual premium for an individual in 2009 was $4824, according to USA Today). The hospitalization odds provided are for Australia (see table below); it is assumed that the odds are similar for Americans. Also the odds of needing outpatient and prescription coverage, which are much more likely than hospitalization, are not considered. Another big caveat: out-of-pocket costs for necessary hospitalization, whether insured or not, are ignored.

According to one report, gaming the system has already occurred in Massachusetts, where a health insurance mandate has been in effect since 2006. The consequence: soaring insurance rates. 

Age, years	Female	Male
<1	1 in 3	1 in 2
1-10	1 in 10	1 in 8
10-20	1 in 9	1 in 10
20-30	1 in 4	1 in 8
30-40	1 in 3	1 in 6
40-50	1 in 4	1 in 4
50-60	1 in 3	1 in 3
60-70	1 in 2	1 in 2
≥70	4 in 5	4 in 5

* Which goes into effect in 2016.

** In that income bracket.