Alicia Ault

WASHINGTON — Staggering growth in the popularity of hospice services—and in the rise of for-profit hospice providers—has caught the attention of the Medicare Payment Assessment Commission.

At their recent meeting, MedPAC commissioners debated the potential impact of rising hospice costs on the Medicare program. The hospice benefit began in 1983 with the idea that it would cost Medicare less to provide hospice than conventional end-of-life treatment, which is usually delivered in the hospital, said MedPAC staff member James Mathews, Ph.D.

But there is some evidence indicating that hospice use may actually result in higher spending, said Dr. Mathews.

According to MedPAC's analysis of Medicare claims data, hospice spending tripled from 2000 to 2007, when Medicare spent $10 billion on hospice services. The mean length of hospice stay increased 30% from 2000 to 2005. It's not clear why length of stay is increasing, although data have shown that some illnesses—such as Alzheimer's disease and ischemic heart disease—tend to result in longer stays, said Dr. Mathews.

One explanation may be that hospice care tends to be more expensive at the beginning and the end of the service; interim days are more profitable, so there is an incentive to lengthen stay, he said.

But it appears that much of the growth in costs and length of stay is due to the huge increase in for-profit hospice facilities in the market. From 2000 to 2007, very few nonprofit hospices entered the market, while the for-profit sector grew 12% a year, Dr. Mathews said. There were a little more than 1,600 for-profit hospices in 2007, compared with about 1,200 nonprofit and 400 government-run facilities, according to the MedPAC analysis.

In addition, the analysis determined that profit margins are also much higher at for-profit hospice facilities. In 2005, the last year in the analysis, for-profit margins were about 12%, while nonprofits had negative margins. MedPAC also found that hospices that entered the market since 2000 had higher margins—and these were mostly for-profit operations.

Some hospices, only about 9%, are subject to a cap that limits the length of stay, but even those facilities have found a way to profit from Medicare, said Dr. Mathews.

“Clearly, people see an opportunity—a financial opportunity—here,” commented MedPAC chairman Glenn Hackbarth, a health care consultant based in Bend, Ore. He said that the commission needed to find a way to keep the hospice program from spiraling out of control.

Commissioner Jack Ebeler suggested that Medicare “may need blunter instruments for slowing the growth,” but also added that the health program should not do anything to lose “an extraordinarily valuable benefit.”

MedPAC vice chairman Robert Reischauer, Ph.D., suggested that Medicare payment could be refined to buy more appropriate care. “It strikes me that there's probably an easy way to do this,” said Dr. Reischauer, who is also president of the Urban Institute.

WASHINGTON — Staggering growth in the popularity of hospice services—and in the rise of for-profit hospice providers—has caught the attention of the Medicare Payment Assessment Commission.

At their recent meeting, MedPAC commissioners debated the potential impact of rising hospice costs on the Medicare program. The hospice benefit began in 1983 with the idea that it would cost Medicare less to provide hospice than conventional end-of-life treatment, which is usually delivered in the hospital, said MedPAC staff member James Mathews, Ph.D.

But there is some evidence indicating that hospice use may actually result in higher spending, said Dr. Mathews.

According to MedPAC's analysis of Medicare claims data, hospice spending tripled from 2000 to 2007, when Medicare spent $10 billion on hospice services. The mean length of hospice stay increased 30% from 2000 to 2005. It's not clear why length of stay is increasing, although data have shown that some illnesses—such as Alzheimer's disease and ischemic heart disease—tend to result in longer stays, said Dr. Mathews.

One explanation may be that hospice care tends to be more expensive at the beginning and the end of the service; interim days are more profitable, so there is an incentive to lengthen stay, he said.

But it appears that much of the growth in costs and length of stay is due to the huge increase in for-profit hospice facilities in the market. From 2000 to 2007, very few nonprofit hospices entered the market, while the for-profit sector grew 12% a year, Dr. Mathews said. There were a little more than 1,600 for-profit hospices in 2007, compared with about 1,200 nonprofit and 400 government-run facilities, according to the MedPAC analysis.

In addition, the analysis determined that profit margins are also much higher at for-profit hospice facilities. In 2005, the last year in the analysis, for-profit margins were about 12%, while nonprofits had negative margins. MedPAC also found that hospices that entered the market since 2000 had higher margins—and these were mostly for-profit operations.

Some hospices, only about 9%, are subject to a cap that limits the length of stay, but even those facilities have found a way to profit from Medicare, said Dr. Mathews.

“Clearly, people see an opportunity—a financial opportunity—here,” commented MedPAC chairman Glenn Hackbarth, a health care consultant based in Bend, Ore. He said that the commission needed to find a way to keep the hospice program from spiraling out of control.

Commissioner Jack Ebeler suggested that Medicare “may need blunter instruments for slowing the growth,” but also added that the health program should not do anything to lose “an extraordinarily valuable benefit.”

MedPAC vice chairman Robert Reischauer, Ph.D., suggested that Medicare payment could be refined to buy more appropriate care. “It strikes me that there's probably an easy way to do this,” said Dr. Reischauer, who is also president of the Urban Institute.

WASHINGTON — Staggering growth in the popularity of hospice services—and in the rise of for-profit hospice providers—has caught the attention of the Medicare Payment Assessment Commission.

At their recent meeting, MedPAC commissioners debated the potential impact of rising hospice costs on the Medicare program. The hospice benefit began in 1983 with the idea that it would cost Medicare less to provide hospice than conventional end-of-life treatment, which is usually delivered in the hospital, said MedPAC staff member James Mathews, Ph.D.

But there is some evidence indicating that hospice use may actually result in higher spending, said Dr. Mathews.

According to MedPAC's analysis of Medicare claims data, hospice spending tripled from 2000 to 2007, when Medicare spent $10 billion on hospice services. The mean length of hospice stay increased 30% from 2000 to 2005. It's not clear why length of stay is increasing, although data have shown that some illnesses—such as Alzheimer's disease and ischemic heart disease—tend to result in longer stays, said Dr. Mathews.

One explanation may be that hospice care tends to be more expensive at the beginning and the end of the service; interim days are more profitable, so there is an incentive to lengthen stay, he said.

But it appears that much of the growth in costs and length of stay is due to the huge increase in for-profit hospice facilities in the market. From 2000 to 2007, very few nonprofit hospices entered the market, while the for-profit sector grew 12% a year, Dr. Mathews said. There were a little more than 1,600 for-profit hospices in 2007, compared with about 1,200 nonprofit and 400 government-run facilities, according to the MedPAC analysis.

In addition, the analysis determined that profit margins are also much higher at for-profit hospice facilities. In 2005, the last year in the analysis, for-profit margins were about 12%, while nonprofits had negative margins. MedPAC also found that hospices that entered the market since 2000 had higher margins—and these were mostly for-profit operations.

Some hospices, only about 9%, are subject to a cap that limits the length of stay, but even those facilities have found a way to profit from Medicare, said Dr. Mathews.

“Clearly, people see an opportunity—a financial opportunity—here,” commented MedPAC chairman Glenn Hackbarth, a health care consultant based in Bend, Ore. He said that the commission needed to find a way to keep the hospice program from spiraling out of control.

Commissioner Jack Ebeler suggested that Medicare “may need blunter instruments for slowing the growth,” but also added that the health program should not do anything to lose “an extraordinarily valuable benefit.”

MedPAC vice chairman Robert Reischauer, Ph.D., suggested that Medicare payment could be refined to buy more appropriate care. “It strikes me that there's probably an easy way to do this,” said Dr. Reischauer, who is also president of the Urban Institute.

WASHINGTON — The concept of a medical home is a step closer to reality for Medicare patients, after it received strong backing from the Medicare Payment Advisory Commission at its April meeting.

All 17 commissioners present at the meeting voted to urge Congress to instruct the Centers for Medicare and Medicaid Services to develop a large pilot study of medical homes for Medicare beneficiaries. The recommendation will be included in MedPAC's June report to Congress.

Most of the commissioners also voted to adjust the Medicare fee schedule to increase payment for primary care, which MedPAC has deemed as undervalued at previous meetings.

The medical home concept has been advanced by the American College of Physicians, the American Academy of Family Physicians, and the American Academy of Pediatrics. A demonstration project is authorized under the Medicare program, but the commissioners said a larger pilot with clear thresholds could accelerate the evaluation process, and easily be discontinued or expanded.

They compiled a wish list of criteria for a medical home, including the ability to provide primary care, use information technology for clinical decision support, conduct care management, offer 24-hour communication with patients, maintain up-to-date records of patients' advance directives, and operate a formal quality improvement program. Also, beneficiaries should agree to adhere to medical home principles by respecting the idea that someone is in charge of coordinating their care, and communicating with the physician when they seek care elsewhere.

There was some debate over whether patients should be allowed to access other providers without a referral, which is permitted under current fee-for-service Medicare. Most of the commissioners wanted some restrictions, or at least a way to track when patients see specialists, to facilitate assessment of the program's success or failure.

The medical home would not be limited to primary care physicians; specialists likely would be able to fulfill criteria for participation, according to the commission's vision.

The program would cost $50–250 million in the first year, and cost less than $1 billion over the first 5 years, MedPAC staffers estimated. The estimate included monthly fees to medical homes, but not anticipated savings, said MedPAC staffer Christine Boccuti.

Dr. Francis Jay Crosson, a commissioner and senior medical director of Permanente Federation in Oakland, called the proposal a “significant evolution” from what had been presented to the panel in 2007.

Commissioner Jack Ebeler, a health policy consultant in Reston, Va., said the promotion of the medical home approach is a direct way to reform the health care delivery system.

Commissioners also said that the medical home recommendation dovetailed with MedPAC's support of increased pay for primary care services.

Dr. Ronald Castellanos, a commissioner and urologist in private practice in Ft. Myers, Fla., said an adjustment to the fee schedule was “long overdue,” and increased pay might lure more residents into primary care and help those currently practicing to stay in the workplace.

The commissioners debated how the CMS could determine which physicians or other health providers, such as nurse practitioners, would receive the update. MedPAC staff presented the increase as budget neutral, which made some panelists uneasy.

Dr. Nicholas Wolter of the Billings (Mont.) Clinic suggested that the increase be made without trying to maintain budget neutrality.

But Dr. Karen Borman, professor of surgery at the University of Mississippi, Jackson, expressed concern that rewarding primary care could hurt other physicians. She voted against the recommendation for increased pay for primary care.

WASHINGTON — The concept of a medical home is a step closer to reality for Medicare patients, after it received strong backing from the Medicare Payment Advisory Commission at its April meeting.

All 17 commissioners present at the meeting voted to urge Congress to instruct the Centers for Medicare and Medicaid Services to develop a large pilot study of medical homes for Medicare beneficiaries. The recommendation will be included in MedPAC's June report to Congress.

Most of the commissioners also voted to adjust the Medicare fee schedule to increase payment for primary care, which MedPAC has deemed as undervalued at previous meetings.

The medical home concept has been advanced by the American College of Physicians, the American Academy of Family Physicians, and the American Academy of Pediatrics. A demonstration project is authorized under the Medicare program, but the commissioners said a larger pilot with clear thresholds could accelerate the evaluation process, and easily be discontinued or expanded.

They compiled a wish list of criteria for a medical home, including the ability to provide primary care, use information technology for clinical decision support, conduct care management, offer 24-hour communication with patients, maintain up-to-date records of patients' advance directives, and operate a formal quality improvement program. Also, beneficiaries should agree to adhere to medical home principles by respecting the idea that someone is in charge of coordinating their care, and communicating with the physician when they seek care elsewhere.

There was some debate over whether patients should be allowed to access other providers without a referral, which is permitted under current fee-for-service Medicare. Most of the commissioners wanted some restrictions, or at least a way to track when patients see specialists, to facilitate assessment of the program's success or failure.

The medical home would not be limited to primary care physicians; specialists likely would be able to fulfill criteria for participation, according to the commission's vision.

The program would cost $50–250 million in the first year, and cost less than $1 billion over the first 5 years, MedPAC staffers estimated. The estimate included monthly fees to medical homes, but not anticipated savings, said MedPAC staffer Christine Boccuti.

Dr. Francis Jay Crosson, a commissioner and senior medical director of Permanente Federation in Oakland, called the proposal a “significant evolution” from what had been presented to the panel in 2007.

Commissioner Jack Ebeler, a health policy consultant in Reston, Va., said the promotion of the medical home approach is a direct way to reform the health care delivery system.

Commissioners also said that the medical home recommendation dovetailed with MedPAC's support of increased pay for primary care services.

Dr. Ronald Castellanos, a commissioner and urologist in private practice in Ft. Myers, Fla., said an adjustment to the fee schedule was “long overdue,” and increased pay might lure more residents into primary care and help those currently practicing to stay in the workplace.

The commissioners debated how the CMS could determine which physicians or other health providers, such as nurse practitioners, would receive the update. MedPAC staff presented the increase as budget neutral, which made some panelists uneasy.

Dr. Nicholas Wolter of the Billings (Mont.) Clinic suggested that the increase be made without trying to maintain budget neutrality.

But Dr. Karen Borman, professor of surgery at the University of Mississippi, Jackson, expressed concern that rewarding primary care could hurt other physicians. She voted against the recommendation for increased pay for primary care.

WASHINGTON — The concept of a medical home is a step closer to reality for Medicare patients, after it received strong backing from the Medicare Payment Advisory Commission at its April meeting.

All 17 commissioners present at the meeting voted to urge Congress to instruct the Centers for Medicare and Medicaid Services to develop a large pilot study of medical homes for Medicare beneficiaries. The recommendation will be included in MedPAC's June report to Congress.

Most of the commissioners also voted to adjust the Medicare fee schedule to increase payment for primary care, which MedPAC has deemed as undervalued at previous meetings.

The medical home concept has been advanced by the American College of Physicians, the American Academy of Family Physicians, and the American Academy of Pediatrics. A demonstration project is authorized under the Medicare program, but the commissioners said a larger pilot with clear thresholds could accelerate the evaluation process, and easily be discontinued or expanded.

They compiled a wish list of criteria for a medical home, including the ability to provide primary care, use information technology for clinical decision support, conduct care management, offer 24-hour communication with patients, maintain up-to-date records of patients' advance directives, and operate a formal quality improvement program. Also, beneficiaries should agree to adhere to medical home principles by respecting the idea that someone is in charge of coordinating their care, and communicating with the physician when they seek care elsewhere.

There was some debate over whether patients should be allowed to access other providers without a referral, which is permitted under current fee-for-service Medicare. Most of the commissioners wanted some restrictions, or at least a way to track when patients see specialists, to facilitate assessment of the program's success or failure.

The medical home would not be limited to primary care physicians; specialists likely would be able to fulfill criteria for participation, according to the commission's vision.

The program would cost $50–250 million in the first year, and cost less than $1 billion over the first 5 years, MedPAC staffers estimated. The estimate included monthly fees to medical homes, but not anticipated savings, said MedPAC staffer Christine Boccuti.

Dr. Francis Jay Crosson, a commissioner and senior medical director of Permanente Federation in Oakland, called the proposal a “significant evolution” from what had been presented to the panel in 2007.

Commissioner Jack Ebeler, a health policy consultant in Reston, Va., said the promotion of the medical home approach is a direct way to reform the health care delivery system.

Commissioners also said that the medical home recommendation dovetailed with MedPAC's support of increased pay for primary care services.

Dr. Ronald Castellanos, a commissioner and urologist in private practice in Ft. Myers, Fla., said an adjustment to the fee schedule was “long overdue,” and increased pay might lure more residents into primary care and help those currently practicing to stay in the workplace.

The commissioners debated how the CMS could determine which physicians or other health providers, such as nurse practitioners, would receive the update. MedPAC staff presented the increase as budget neutral, which made some panelists uneasy.

Dr. Nicholas Wolter of the Billings (Mont.) Clinic suggested that the increase be made without trying to maintain budget neutrality.

But Dr. Karen Borman, professor of surgery at the University of Mississippi, Jackson, expressed concern that rewarding primary care could hurt other physicians. She voted against the recommendation for increased pay for primary care.

Medicare reimbursement for computed tomographic angiography will not be limited, according to the Centers for Medicare and Medicaid Services.

The federal agency never had a formal policy on CTA, but the majority of local Medicare contractors had been covering the procedure. In July 2007, the CMS said it was starting a formal analysis of CTA with an eye toward potentially limiting its coverage. In December 2007, the CMS posted a formal proposal to do just that.

Under the proposal, Medicare would have covered only CTA for symptomatic patients with chronic angina at intermediate risk of coronary artery disease, and symptomatic patients with unstable angina at low risk of short-term death or intermediate risk of CAD.

Reimbursement would be made only for patients getting CTA as part of a CMS-approved clinical trial.

After reviewing the current literature, however, the CMS said that it had decided that “coverage should be determined by local contractors through the local coverage determination process or case-by-case adjudication.”

The decision applies only to use of CTA for evaluation of coronary arteries in patients with symptomatic coronary artery disease, according to the CMS. CTA for asymptomatic patients would not be covered under Medicare, as it is considered a screening test.

The American College of Cardiology, which submitted comments opposing the CMS proposal, said it was pleased with the agency's decision. “Medicare beneficiaries can continue to have the access they deserve to an advanced, noninvasive clinical tool that has been clinically proven to be effective in diagnosing coronary artery disease,” Jack Lewin, ACC CEO, said in a statement.

The ACC, along with five other professional societies—the American Society of Nuclear Cardiology, the American College of Radiology, the Society for Cardiovascular Angiography and Interventions, the North American Society for Cardiac Imaging, and the Society of Cardiovascular Computed Tomography—argued that the CMS had relied on studies of older technology, such as 4-, 8-, and 16-slice imaging.

According to the ACC, 64-slice or higher machines are now considered the clinical standard for diagnosing CAD.

The CMS received 670 comments after the proposed decision was published. According to the CMS, 649 of the comments were opposed.

There were 10 comments in favor, and the rest provided no direction for coverage. Among those who backed the CMS' proposal to limit CTA reimbursement: America's Health Insurance Plans.

Even so, Aetna, Humana, UnitedHealth Group, and 14 Blue Cross Blue Shield plans, currently cover CTA, according to the American College of Radiology.

Almost half of those who submitted comments to the CMS said that CTA would save money and reduce the number of invasive tests done. The agency said it generally does not consider cost when weighing a national coverage determination, but that it would be interested in knowing whether CTA prevented the need for additional procedures. The CMS could not find any such evidence, however.

Medicare reimbursement for computed tomographic angiography will not be limited, according to the Centers for Medicare and Medicaid Services.

The federal agency never had a formal policy on CTA, but the majority of local Medicare contractors had been covering the procedure. In July 2007, the CMS said it was starting a formal analysis of CTA with an eye toward potentially limiting its coverage. In December 2007, the CMS posted a formal proposal to do just that.

Under the proposal, Medicare would have covered only CTA for symptomatic patients with chronic angina at intermediate risk of coronary artery disease, and symptomatic patients with unstable angina at low risk of short-term death or intermediate risk of CAD.

Reimbursement would be made only for patients getting CTA as part of a CMS-approved clinical trial.

After reviewing the current literature, however, the CMS said that it had decided that “coverage should be determined by local contractors through the local coverage determination process or case-by-case adjudication.”

The decision applies only to use of CTA for evaluation of coronary arteries in patients with symptomatic coronary artery disease, according to the CMS. CTA for asymptomatic patients would not be covered under Medicare, as it is considered a screening test.

The American College of Cardiology, which submitted comments opposing the CMS proposal, said it was pleased with the agency's decision. “Medicare beneficiaries can continue to have the access they deserve to an advanced, noninvasive clinical tool that has been clinically proven to be effective in diagnosing coronary artery disease,” Jack Lewin, ACC CEO, said in a statement.

The ACC, along with five other professional societies—the American Society of Nuclear Cardiology, the American College of Radiology, the Society for Cardiovascular Angiography and Interventions, the North American Society for Cardiac Imaging, and the Society of Cardiovascular Computed Tomography—argued that the CMS had relied on studies of older technology, such as 4-, 8-, and 16-slice imaging.

According to the ACC, 64-slice or higher machines are now considered the clinical standard for diagnosing CAD.

The CMS received 670 comments after the proposed decision was published. According to the CMS, 649 of the comments were opposed.

There were 10 comments in favor, and the rest provided no direction for coverage. Among those who backed the CMS' proposal to limit CTA reimbursement: America's Health Insurance Plans.

Even so, Aetna, Humana, UnitedHealth Group, and 14 Blue Cross Blue Shield plans, currently cover CTA, according to the American College of Radiology.

Almost half of those who submitted comments to the CMS said that CTA would save money and reduce the number of invasive tests done. The agency said it generally does not consider cost when weighing a national coverage determination, but that it would be interested in knowing whether CTA prevented the need for additional procedures. The CMS could not find any such evidence, however.

Medicare reimbursement for computed tomographic angiography will not be limited, according to the Centers for Medicare and Medicaid Services.

The federal agency never had a formal policy on CTA, but the majority of local Medicare contractors had been covering the procedure. In July 2007, the CMS said it was starting a formal analysis of CTA with an eye toward potentially limiting its coverage. In December 2007, the CMS posted a formal proposal to do just that.

Under the proposal, Medicare would have covered only CTA for symptomatic patients with chronic angina at intermediate risk of coronary artery disease, and symptomatic patients with unstable angina at low risk of short-term death or intermediate risk of CAD.

Reimbursement would be made only for patients getting CTA as part of a CMS-approved clinical trial.

After reviewing the current literature, however, the CMS said that it had decided that “coverage should be determined by local contractors through the local coverage determination process or case-by-case adjudication.”

The decision applies only to use of CTA for evaluation of coronary arteries in patients with symptomatic coronary artery disease, according to the CMS. CTA for asymptomatic patients would not be covered under Medicare, as it is considered a screening test.

The American College of Cardiology, which submitted comments opposing the CMS proposal, said it was pleased with the agency's decision. “Medicare beneficiaries can continue to have the access they deserve to an advanced, noninvasive clinical tool that has been clinically proven to be effective in diagnosing coronary artery disease,” Jack Lewin, ACC CEO, said in a statement.

The ACC, along with five other professional societies—the American Society of Nuclear Cardiology, the American College of Radiology, the Society for Cardiovascular Angiography and Interventions, the North American Society for Cardiac Imaging, and the Society of Cardiovascular Computed Tomography—argued that the CMS had relied on studies of older technology, such as 4-, 8-, and 16-slice imaging.

According to the ACC, 64-slice or higher machines are now considered the clinical standard for diagnosing CAD.

The CMS received 670 comments after the proposed decision was published. According to the CMS, 649 of the comments were opposed.

There were 10 comments in favor, and the rest provided no direction for coverage. Among those who backed the CMS' proposal to limit CTA reimbursement: America's Health Insurance Plans.

Even so, Aetna, Humana, UnitedHealth Group, and 14 Blue Cross Blue Shield plans, currently cover CTA, according to the American College of Radiology.

Almost half of those who submitted comments to the CMS said that CTA would save money and reduce the number of invasive tests done. The agency said it generally does not consider cost when weighing a national coverage determination, but that it would be interested in knowing whether CTA prevented the need for additional procedures. The CMS could not find any such evidence, however.

WASHINGTON — The Medicare Payment Advisory Commission has given its backing to bundling payment for hospitalization, which would essentially give hospitals and physicians an incentive to control costs and avoid readmissions.

At its April meeting, the commission (MedPAC) unanimously voted to include a bundling recommendation in its June report to Congress. As a first step, physicians and hospitals should be required to report to the Centers for Medicare and Medicaid Services (CMS) on resource use and readmissions during an “episode of care,” which is proposed to include the first 30 days post hospitalization. The data would be confidential initially, but by the third year, should be made public, MedPAC commissioners recommended.

Once the resource and readmission data are in hand, CMS should start adjusting payment to hospitals, according to the recommendation. There would be the possibility for gainsharing among hospitals and physicians. The commissioners also voted to direct CMS to study the feasibility of “virtual” bundling. With virtual bundling, the payment would be adjusted based on aggregate use of services over an entire episode of care.

Finally, MedPAC voted to recommend that CMS create a voluntary pilot to test actual bundled payment in selected disease conditions.

The pilot could throw some light on how the hospital or accountable care organization receiving the payment decided to share funds, and how Medicare might share in any savings, according to MedPAC staff.

The pilot represents Medicare's ultimate goal—making bundled payments, said MedPAC chairman Glenn Hackbarth who is a health care consultant in Bend, Ore.

The data collection and adjusting payment based on readmission are interim steps aimed at getting providers to collaborate to improve care and cut costs, said Mr. Hackbarth.

Commissioner Ronald Castellanos, a urologist in private practice in Fort Myers, Fla., said he thought it would take 5 or 10 years to make collaboration work, but that he agreed that it was the ultimate end point.

WASHINGTON — The Medicare Payment Advisory Commission has given its backing to bundling payment for hospitalization, which would essentially give hospitals and physicians an incentive to control costs and avoid readmissions.

At its April meeting, the commission (MedPAC) unanimously voted to include a bundling recommendation in its June report to Congress. As a first step, physicians and hospitals should be required to report to the Centers for Medicare and Medicaid Services (CMS) on resource use and readmissions during an “episode of care,” which is proposed to include the first 30 days post hospitalization. The data would be confidential initially, but by the third year, should be made public, MedPAC commissioners recommended.

Once the resource and readmission data are in hand, CMS should start adjusting payment to hospitals, according to the recommendation. There would be the possibility for gainsharing among hospitals and physicians. The commissioners also voted to direct CMS to study the feasibility of “virtual” bundling. With virtual bundling, the payment would be adjusted based on aggregate use of services over an entire episode of care.

Finally, MedPAC voted to recommend that CMS create a voluntary pilot to test actual bundled payment in selected disease conditions.

The pilot could throw some light on how the hospital or accountable care organization receiving the payment decided to share funds, and how Medicare might share in any savings, according to MedPAC staff.

The pilot represents Medicare's ultimate goal—making bundled payments, said MedPAC chairman Glenn Hackbarth who is a health care consultant in Bend, Ore.

The data collection and adjusting payment based on readmission are interim steps aimed at getting providers to collaborate to improve care and cut costs, said Mr. Hackbarth.

Commissioner Ronald Castellanos, a urologist in private practice in Fort Myers, Fla., said he thought it would take 5 or 10 years to make collaboration work, but that he agreed that it was the ultimate end point.

WASHINGTON — The Medicare Payment Advisory Commission has given its backing to bundling payment for hospitalization, which would essentially give hospitals and physicians an incentive to control costs and avoid readmissions.

At its April meeting, the commission (MedPAC) unanimously voted to include a bundling recommendation in its June report to Congress. As a first step, physicians and hospitals should be required to report to the Centers for Medicare and Medicaid Services (CMS) on resource use and readmissions during an “episode of care,” which is proposed to include the first 30 days post hospitalization. The data would be confidential initially, but by the third year, should be made public, MedPAC commissioners recommended.

Once the resource and readmission data are in hand, CMS should start adjusting payment to hospitals, according to the recommendation. There would be the possibility for gainsharing among hospitals and physicians. The commissioners also voted to direct CMS to study the feasibility of “virtual” bundling. With virtual bundling, the payment would be adjusted based on aggregate use of services over an entire episode of care.

Finally, MedPAC voted to recommend that CMS create a voluntary pilot to test actual bundled payment in selected disease conditions.

The pilot could throw some light on how the hospital or accountable care organization receiving the payment decided to share funds, and how Medicare might share in any savings, according to MedPAC staff.

The pilot represents Medicare's ultimate goal—making bundled payments, said MedPAC chairman Glenn Hackbarth who is a health care consultant in Bend, Ore.

The data collection and adjusting payment based on readmission are interim steps aimed at getting providers to collaborate to improve care and cut costs, said Mr. Hackbarth.

Commissioner Ronald Castellanos, a urologist in private practice in Fort Myers, Fla., said he thought it would take 5 or 10 years to make collaboration work, but that he agreed that it was the ultimate end point.

The federal government's portrayal of enrollment growth in the State Children's Health Insurance Program in 2007 is disingenuous and somewhat misleading, advocates for children's programs said.

According to the Centers for Medicare and Medicaid Services, 7.1 million children were enrolled in the program (SCHIP) in 2007, up from 6.7 million in 2006.

“While we are pleased that SCHIP continues to grow, we must do more to reach those at the lowest income levels who still need this coverage,” Mike Leavitt, Health and Human Services secretary, said in a statement. “Toward that end, we will continue to work with Congress on the reauthorization of this vital program.”

That comment is “disingenuous,” Dr. Steve Wegner, chairman of the child health funding committee at the American Academy of Pediatrics, said in an interview. He noted that President Bush vetoed a compromise agreement to reauthorize SCHIP not once, but twice, in 2007.

“The administration did everything possible to stand in the way of the reauthorization,” Jenny Sullivan, a health policy analyst with Families USA, said in an interview.

SCHIP was finally given a reprieve, with Congress passing, and the president signing, a funding extension through March 2009. But the program still has not been formally reauthorized.

And, said Ms. Sullivan and Dr. Wegner, many millions more children would have been covered in 2007 if the reauthorization had been approved when it was first taken up early in the year.

CMS spokeswoman Mary Kahn said it was not accurate to imply that the Bush administration did not want to continue the SCHIP program. The administration did, however, want to fund it at a lower level, she said in an interview.

Also in the HHS statement, Kerry Weems, CMS acting administrator, said, “We continue to work with states to [ensure] as many eligible, uninsured children as possible are enrolled in SCHIP and Medicaid.”

Dr. Wegner took exception to that statement as well, noting that a CMS directive issued in August 2007 has effectively prevented states from expanding eligibility. The CMS said it would limit states' ability to expand coverage to children in families who had incomes at 250% of the poverty level or above. Ms. Sullivan said that the directive had, in many cases, reversed expansion plans previously approved by the CMS.

According to the Kaiser Family Foundation, 23 states are expected to be affected by the directive. Nine already cover children in families with incomes above 250%, and 13 states had received approval to expand eligibility at or above that level. In addition, Washington was covering children at the 250% level and had gotten approval to raise that cap.

The directive is consistent with the administration's belief that every effort should be made to enroll 95% of children eligible at the lowest income levels before expanding it to those who are in higher-income families, said Ms. Kahn.

The increase in SCHIP enrollment was not unusually high for the program, said Ms. Sullivan. And, she said, U.S. Census Bureau figures indicate that the overall number of uninsured children actually increased in the last 2 years.

There are about 9 million uninsured children in the United States, according to a Families USA analysis. Both Ms. Sullivan and Dr. Wegner said they expect that number to grow in the current year, as states face harsh budget realities.

A much larger number of children are covered under traditional Medicaid programs—about 28 million in 2005, according to Kaiser—but their coverage is also being threatened because of a series of CMS regulations taking effect this year. Rep. John Dingell (D-Mich.) and Rep. Tim Murphy (R-Penn.) introduced a bill in March (H.R. 5613) that would place a 1-year moratorium on seven of those regulations. According to estimates they cite from the Congressional Budget Office, the regulations could translate to $20 billion in cuts to Medicaid over the next 5 years.

The National Governors Association, the National Association of State Medicaid Directors, and the American Public Human Services Association, have all expressed their opposition to the regulations in letters to HHS.

The federal government's portrayal of enrollment growth in the State Children's Health Insurance Program in 2007 is disingenuous and somewhat misleading, advocates for children's programs said.

According to the Centers for Medicare and Medicaid Services, 7.1 million children were enrolled in the program (SCHIP) in 2007, up from 6.7 million in 2006.

“While we are pleased that SCHIP continues to grow, we must do more to reach those at the lowest income levels who still need this coverage,” Mike Leavitt, Health and Human Services secretary, said in a statement. “Toward that end, we will continue to work with Congress on the reauthorization of this vital program.”

That comment is “disingenuous,” Dr. Steve Wegner, chairman of the child health funding committee at the American Academy of Pediatrics, said in an interview. He noted that President Bush vetoed a compromise agreement to reauthorize SCHIP not once, but twice, in 2007.

“The administration did everything possible to stand in the way of the reauthorization,” Jenny Sullivan, a health policy analyst with Families USA, said in an interview.

SCHIP was finally given a reprieve, with Congress passing, and the president signing, a funding extension through March 2009. But the program still has not been formally reauthorized.

And, said Ms. Sullivan and Dr. Wegner, many millions more children would have been covered in 2007 if the reauthorization had been approved when it was first taken up early in the year.

CMS spokeswoman Mary Kahn said it was not accurate to imply that the Bush administration did not want to continue the SCHIP program. The administration did, however, want to fund it at a lower level, she said in an interview.

Also in the HHS statement, Kerry Weems, CMS acting administrator, said, “We continue to work with states to [ensure] as many eligible, uninsured children as possible are enrolled in SCHIP and Medicaid.”

Dr. Wegner took exception to that statement as well, noting that a CMS directive issued in August 2007 has effectively prevented states from expanding eligibility. The CMS said it would limit states' ability to expand coverage to children in families who had incomes at 250% of the poverty level or above. Ms. Sullivan said that the directive had, in many cases, reversed expansion plans previously approved by the CMS.

According to the Kaiser Family Foundation, 23 states are expected to be affected by the directive. Nine already cover children in families with incomes above 250%, and 13 states had received approval to expand eligibility at or above that level. In addition, Washington was covering children at the 250% level and had gotten approval to raise that cap.

The directive is consistent with the administration's belief that every effort should be made to enroll 95% of children eligible at the lowest income levels before expanding it to those who are in higher-income families, said Ms. Kahn.

The increase in SCHIP enrollment was not unusually high for the program, said Ms. Sullivan. And, she said, U.S. Census Bureau figures indicate that the overall number of uninsured children actually increased in the last 2 years.

There are about 9 million uninsured children in the United States, according to a Families USA analysis. Both Ms. Sullivan and Dr. Wegner said they expect that number to grow in the current year, as states face harsh budget realities.

A much larger number of children are covered under traditional Medicaid programs—about 28 million in 2005, according to Kaiser—but their coverage is also being threatened because of a series of CMS regulations taking effect this year. Rep. John Dingell (D-Mich.) and Rep. Tim Murphy (R-Penn.) introduced a bill in March (H.R. 5613) that would place a 1-year moratorium on seven of those regulations. According to estimates they cite from the Congressional Budget Office, the regulations could translate to $20 billion in cuts to Medicaid over the next 5 years.

The National Governors Association, the National Association of State Medicaid Directors, and the American Public Human Services Association, have all expressed their opposition to the regulations in letters to HHS.

The federal government's portrayal of enrollment growth in the State Children's Health Insurance Program in 2007 is disingenuous and somewhat misleading, advocates for children's programs said.

According to the Centers for Medicare and Medicaid Services, 7.1 million children were enrolled in the program (SCHIP) in 2007, up from 6.7 million in 2006.

“While we are pleased that SCHIP continues to grow, we must do more to reach those at the lowest income levels who still need this coverage,” Mike Leavitt, Health and Human Services secretary, said in a statement. “Toward that end, we will continue to work with Congress on the reauthorization of this vital program.”

That comment is “disingenuous,” Dr. Steve Wegner, chairman of the child health funding committee at the American Academy of Pediatrics, said in an interview. He noted that President Bush vetoed a compromise agreement to reauthorize SCHIP not once, but twice, in 2007.

“The administration did everything possible to stand in the way of the reauthorization,” Jenny Sullivan, a health policy analyst with Families USA, said in an interview.

SCHIP was finally given a reprieve, with Congress passing, and the president signing, a funding extension through March 2009. But the program still has not been formally reauthorized.

And, said Ms. Sullivan and Dr. Wegner, many millions more children would have been covered in 2007 if the reauthorization had been approved when it was first taken up early in the year.

CMS spokeswoman Mary Kahn said it was not accurate to imply that the Bush administration did not want to continue the SCHIP program. The administration did, however, want to fund it at a lower level, she said in an interview.

Also in the HHS statement, Kerry Weems, CMS acting administrator, said, “We continue to work with states to [ensure] as many eligible, uninsured children as possible are enrolled in SCHIP and Medicaid.”

Dr. Wegner took exception to that statement as well, noting that a CMS directive issued in August 2007 has effectively prevented states from expanding eligibility. The CMS said it would limit states' ability to expand coverage to children in families who had incomes at 250% of the poverty level or above. Ms. Sullivan said that the directive had, in many cases, reversed expansion plans previously approved by the CMS.

According to the Kaiser Family Foundation, 23 states are expected to be affected by the directive. Nine already cover children in families with incomes above 250%, and 13 states had received approval to expand eligibility at or above that level. In addition, Washington was covering children at the 250% level and had gotten approval to raise that cap.

The directive is consistent with the administration's belief that every effort should be made to enroll 95% of children eligible at the lowest income levels before expanding it to those who are in higher-income families, said Ms. Kahn.

The increase in SCHIP enrollment was not unusually high for the program, said Ms. Sullivan. And, she said, U.S. Census Bureau figures indicate that the overall number of uninsured children actually increased in the last 2 years.

There are about 9 million uninsured children in the United States, according to a Families USA analysis. Both Ms. Sullivan and Dr. Wegner said they expect that number to grow in the current year, as states face harsh budget realities.

A much larger number of children are covered under traditional Medicaid programs—about 28 million in 2005, according to Kaiser—but their coverage is also being threatened because of a series of CMS regulations taking effect this year. Rep. John Dingell (D-Mich.) and Rep. Tim Murphy (R-Penn.) introduced a bill in March (H.R. 5613) that would place a 1-year moratorium on seven of those regulations. According to estimates they cite from the Congressional Budget Office, the regulations could translate to $20 billion in cuts to Medicaid over the next 5 years.

The National Governors Association, the National Association of State Medicaid Directors, and the American Public Human Services Association, have all expressed their opposition to the regulations in letters to HHS.

Does tanning increase the risk of melanoma? Not according to the Indoor Tanning Association, which has launched a print and TV advertising campaign in seven major cities claiming there is no compelling scientific evidence linking tanning to melanoma. “Both the sun and tanning beds have been unnecessarily demonized by special interests using junk science and scare tactics,” Sarah Longwell, ITA spokeswoman, claimed in a statement.

The organization, which represents manufacturers of tanning beds and tanning salons, cited recent research in the Proceedings of the National Academy of Sciences showing that higher vitamin D levels increased survival in certain types of cancer. A reference was not supplied.

According to the ITA's press release, the association will be running TV commercials in New York, Boston, Washington, Chicago, San Francisco, Seattle, and Pittsburgh—all areas in which the ITA says vitamin D deficiency is common. The ITA is also challenging what it calls “myths” about tanning at two new Web sites (www.sunlightscam.comwww.trusttanning.com

The association did not respond to multiple requests for comment.

The American Academy of Dermatology issued a statement on the same day in wake of the ITA release. “While the health benefits of vitamin D are well known, it also is well known that exposure to [UV] radiation can cause skin cancer,” AAD president Dr. C. William Hanke said in a statement.

In a follow-up interview, Dr. Hanke said, “You really don't need to destroy your skin to get adequate vitamin D.” A few minutes of sun exposure is generally enough for vitamin D intake. Dietary sources of vitamin D are superior, he said.

“There is no evidence whatsoever that indoor tanning is safe,” said Dr. Hanke, adding, “We're not going to put our patients at risk by condoning indoor tanning.” In addition, said Dr. Hanke, “there is substantial evidence that excessive exposure to any form of UV radiation increases the risk of developing melanoma and nonmelanoma skin cancer.”

Melanoma incidence has stayed steady since 2000, after rising for almost 30 years, according to the American Cancer Society's latest statistics. In 2008, there will be an estimated 62,480 cases in the United States and 8,420 deaths.

The ITA also is accusing dermatologists—and specifically the AAD—of being corrupt because of money the organization receives from sunscreen manufacturers. On its Web sites, the ITA attacks both the AAD and its current officers, and the Skin Cancer Foundation, which it calls a front group for the sunscreen industry.

Dr. Hanke said that if taking money from manufacturers was the bar, then most medical societies would be considered corrupt. Support from pharmaceutical companies and sunscreen manufacturers is essential to carrying out the educational mission of the AAD, he said.

Does tanning increase the risk of melanoma? Not according to the Indoor Tanning Association, which has launched a print and TV advertising campaign in seven major cities claiming there is no compelling scientific evidence linking tanning to melanoma. “Both the sun and tanning beds have been unnecessarily demonized by special interests using junk science and scare tactics,” Sarah Longwell, ITA spokeswoman, claimed in a statement.

The organization, which represents manufacturers of tanning beds and tanning salons, cited recent research in the Proceedings of the National Academy of Sciences showing that higher vitamin D levels increased survival in certain types of cancer. A reference was not supplied.

According to the ITA's press release, the association will be running TV commercials in New York, Boston, Washington, Chicago, San Francisco, Seattle, and Pittsburgh—all areas in which the ITA says vitamin D deficiency is common. The ITA is also challenging what it calls “myths” about tanning at two new Web sites (www.sunlightscam.comwww.trusttanning.com

The association did not respond to multiple requests for comment.

The American Academy of Dermatology issued a statement on the same day in wake of the ITA release. “While the health benefits of vitamin D are well known, it also is well known that exposure to [UV] radiation can cause skin cancer,” AAD president Dr. C. William Hanke said in a statement.

In a follow-up interview, Dr. Hanke said, “You really don't need to destroy your skin to get adequate vitamin D.” A few minutes of sun exposure is generally enough for vitamin D intake. Dietary sources of vitamin D are superior, he said.

“There is no evidence whatsoever that indoor tanning is safe,” said Dr. Hanke, adding, “We're not going to put our patients at risk by condoning indoor tanning.” In addition, said Dr. Hanke, “there is substantial evidence that excessive exposure to any form of UV radiation increases the risk of developing melanoma and nonmelanoma skin cancer.”

Melanoma incidence has stayed steady since 2000, after rising for almost 30 years, according to the American Cancer Society's latest statistics. In 2008, there will be an estimated 62,480 cases in the United States and 8,420 deaths.

The ITA also is accusing dermatologists—and specifically the AAD—of being corrupt because of money the organization receives from sunscreen manufacturers. On its Web sites, the ITA attacks both the AAD and its current officers, and the Skin Cancer Foundation, which it calls a front group for the sunscreen industry.

Dr. Hanke said that if taking money from manufacturers was the bar, then most medical societies would be considered corrupt. Support from pharmaceutical companies and sunscreen manufacturers is essential to carrying out the educational mission of the AAD, he said.

Does tanning increase the risk of melanoma? Not according to the Indoor Tanning Association, which has launched a print and TV advertising campaign in seven major cities claiming there is no compelling scientific evidence linking tanning to melanoma. “Both the sun and tanning beds have been unnecessarily demonized by special interests using junk science and scare tactics,” Sarah Longwell, ITA spokeswoman, claimed in a statement.

The organization, which represents manufacturers of tanning beds and tanning salons, cited recent research in the Proceedings of the National Academy of Sciences showing that higher vitamin D levels increased survival in certain types of cancer. A reference was not supplied.

According to the ITA's press release, the association will be running TV commercials in New York, Boston, Washington, Chicago, San Francisco, Seattle, and Pittsburgh—all areas in which the ITA says vitamin D deficiency is common. The ITA is also challenging what it calls “myths” about tanning at two new Web sites (www.sunlightscam.comwww.trusttanning.com

The association did not respond to multiple requests for comment.

The American Academy of Dermatology issued a statement on the same day in wake of the ITA release. “While the health benefits of vitamin D are well known, it also is well known that exposure to [UV] radiation can cause skin cancer,” AAD president Dr. C. William Hanke said in a statement.

In a follow-up interview, Dr. Hanke said, “You really don't need to destroy your skin to get adequate vitamin D.” A few minutes of sun exposure is generally enough for vitamin D intake. Dietary sources of vitamin D are superior, he said.

“There is no evidence whatsoever that indoor tanning is safe,” said Dr. Hanke, adding, “We're not going to put our patients at risk by condoning indoor tanning.” In addition, said Dr. Hanke, “there is substantial evidence that excessive exposure to any form of UV radiation increases the risk of developing melanoma and nonmelanoma skin cancer.”

Melanoma incidence has stayed steady since 2000, after rising for almost 30 years, according to the American Cancer Society's latest statistics. In 2008, there will be an estimated 62,480 cases in the United States and 8,420 deaths.

The ITA also is accusing dermatologists—and specifically the AAD—of being corrupt because of money the organization receives from sunscreen manufacturers. On its Web sites, the ITA attacks both the AAD and its current officers, and the Skin Cancer Foundation, which it calls a front group for the sunscreen industry.

Dr. Hanke said that if taking money from manufacturers was the bar, then most medical societies would be considered corrupt. Support from pharmaceutical companies and sunscreen manufacturers is essential to carrying out the educational mission of the AAD, he said.

FDA Clears Generic Wellbutrin

The generic formulation of Wellbutrin XL (300 mg) is bioequivalent to the brand, the Food and Drug Administration has determined. The agency began a review of generic bupropion after receiving 85 adverse event reports in the first 6 months of 2007. Seventy-eight patients said they had experienced loss of antidepressant effect when they were switched from the branded product to the generic manufactured by Teva Pharmaceutical Industries Ltd. The Teva product was approved in 2006, but at the 150-mg dose and based on bioequivalence to 150 mg of Wellbutrin XL, according to the FDA, which noted that the pharmacokinetic profile was not expected to differ between the 150-mg and 300-mg doses. After the rash of adverse event reports, the agency again reviewed the bioequivalence data and the literature on natural history of depression. The FDA concluded that there was no difference between the two products. Also, if there was a link to the generic, there should have been many more reports, said the FDA, noting that by early 2007, at least 40% of bupropion prescriptions were for the generic. The agency added, “The recurrent nature of major depressive disorder offers a scientifically reasonable explanation for the reports of lack of efficacy following a switch to a generic product.”

Teva to Market Generic Risperdal

A U.S. District Court judge in Washington, has ruled that Teva Pharmaceutical Industries Ltd. has the right to make and sell a generic version of Risperdal (risperidone). Unless the ruling is challenged, Teva can begin exclusive sales of risperidone on June 29, the date Johnson & Johnson's patent for Risperdal expires. The FDA and generic pharmaceutical manufacturer Mylan Inc. had argued that Teva should not be allowed to have exclusive rights to the generic version of the drug. But U.S. District Court Judge Royce Lamberth disagreed. In the meantime, J&J and its partner Alkermes Inc. have applied to the FDA to sell a long-acting form of the drug, Risperdal Consta, for frequently relapsing bipolar disorder, defined as four or more manic episodes in the previous year. Alkermes estimates that 10%–20% of people with bipolar disorder worldwide meet that criterion.

Zyprexa Lawsuits March On

Eli Lilly & Co. agreed to pay the state of Alaska $15 million to settle charges that it was not forthcoming about side effects such as weight gain, hyperglycemia, and diabetes related to Zyprexa (olanzapine). But the company is facing a separate suit filed by Connecticut Attorney General Richard Blumenthal in mid-March, alleging concealment of side effects and illegal promotion of off-label uses. Lilly is also negotiating with the U.S. Attorney for the Eastern District of Pennsylvania in an inquiry related to marketing practices. The Alaska settlement came several weeks into a suit brought on behalf of the state's Medicaid program. The company said in a statement that it settled to avoid the cost of a lengthy trial. Zyprexa has been prescribed to 23 million people since its 1996 approval and is approved in 80 other countries. In 2007, sales were $4.8 billion worldwide.

Social Anxiety's Serious Impact

A survey commissioned by the Anxiety Disorders Association of America has found that about a third of the respondents with social anxiety disorder said that they had symptoms for 10 years or more before seeking help. The survey portrayed individuals who had difficulty finding or keeping friends or romantic partners. Thirty-four percent said the disorder led to serious fights with significant others, and 77% said that when they are not treated, the disorder has a negative impact on romantic relationships. Seventy-five percent said social anxiety inhibited their ability to function normally. Fifty-eight percent said they were embarrassed by their disorder. Patients with social anxiety disorder typically try to hide their condition, and therefore become more anxious and isolated, according to the association. Survey respondents indicated that treatment seems to help: 59% who were treated said it helped them have romantic relationships. The survey was conducted in December; 578 people with anxiety, 276 people with obsessive-compulsive disorder, and 287 with social anxiety disorder were queried by Harris Interactive. All agreed to be invited to participate. The ADAA received an unrestricted educational grant from Jazz Pharmaceuticals Inc. to support public awareness efforts about the disorder.

Side Effects Underreported

One in six Americans who have taken a prescription drug experienced a side effect serious enough to send them to the doctor or hospital, but only 35% of consumers said they know they can report these side effects to the FDA, according to a Consumer Reports poll. Additionally, 81% of respondents said they had seen or heard an ad for prescription drugs within the last 30 days, almost all on television. The Consumers Union, the nonprofit publisher of the magazine, gave the FDA a petition signed by nearly 56,000 consumers asking that a toll-free number and Web site be included in all television drug ads so people can easily report their serious side effects. “What better way for the FDA to let consumers know how to report serious problems with their medications than putting a toll-free number and Web site in all those drug ads we're bombarded by each day?” asked Liz Foley, campaign coordinator with Consumers Union, in a statement.

FDA Clears Generic Wellbutrin

The generic formulation of Wellbutrin XL (300 mg) is bioequivalent to the brand, the Food and Drug Administration has determined. The agency began a review of generic bupropion after receiving 85 adverse event reports in the first 6 months of 2007. Seventy-eight patients said they had experienced loss of antidepressant effect when they were switched from the branded product to the generic manufactured by Teva Pharmaceutical Industries Ltd. The Teva product was approved in 2006, but at the 150-mg dose and based on bioequivalence to 150 mg of Wellbutrin XL, according to the FDA, which noted that the pharmacokinetic profile was not expected to differ between the 150-mg and 300-mg doses. After the rash of adverse event reports, the agency again reviewed the bioequivalence data and the literature on natural history of depression. The FDA concluded that there was no difference between the two products. Also, if there was a link to the generic, there should have been many more reports, said the FDA, noting that by early 2007, at least 40% of bupropion prescriptions were for the generic. The agency added, “The recurrent nature of major depressive disorder offers a scientifically reasonable explanation for the reports of lack of efficacy following a switch to a generic product.”

Teva to Market Generic Risperdal

A U.S. District Court judge in Washington, has ruled that Teva Pharmaceutical Industries Ltd. has the right to make and sell a generic version of Risperdal (risperidone). Unless the ruling is challenged, Teva can begin exclusive sales of risperidone on June 29, the date Johnson & Johnson's patent for Risperdal expires. The FDA and generic pharmaceutical manufacturer Mylan Inc. had argued that Teva should not be allowed to have exclusive rights to the generic version of the drug. But U.S. District Court Judge Royce Lamberth disagreed. In the meantime, J&J and its partner Alkermes Inc. have applied to the FDA to sell a long-acting form of the drug, Risperdal Consta, for frequently relapsing bipolar disorder, defined as four or more manic episodes in the previous year. Alkermes estimates that 10%–20% of people with bipolar disorder worldwide meet that criterion.

Zyprexa Lawsuits March On

Eli Lilly & Co. agreed to pay the state of Alaska $15 million to settle charges that it was not forthcoming about side effects such as weight gain, hyperglycemia, and diabetes related to Zyprexa (olanzapine). But the company is facing a separate suit filed by Connecticut Attorney General Richard Blumenthal in mid-March, alleging concealment of side effects and illegal promotion of off-label uses. Lilly is also negotiating with the U.S. Attorney for the Eastern District of Pennsylvania in an inquiry related to marketing practices. The Alaska settlement came several weeks into a suit brought on behalf of the state's Medicaid program. The company said in a statement that it settled to avoid the cost of a lengthy trial. Zyprexa has been prescribed to 23 million people since its 1996 approval and is approved in 80 other countries. In 2007, sales were $4.8 billion worldwide.

Social Anxiety's Serious Impact

A survey commissioned by the Anxiety Disorders Association of America has found that about a third of the respondents with social anxiety disorder said that they had symptoms for 10 years or more before seeking help. The survey portrayed individuals who had difficulty finding or keeping friends or romantic partners. Thirty-four percent said the disorder led to serious fights with significant others, and 77% said that when they are not treated, the disorder has a negative impact on romantic relationships. Seventy-five percent said social anxiety inhibited their ability to function normally. Fifty-eight percent said they were embarrassed by their disorder. Patients with social anxiety disorder typically try to hide their condition, and therefore become more anxious and isolated, according to the association. Survey respondents indicated that treatment seems to help: 59% who were treated said it helped them have romantic relationships. The survey was conducted in December; 578 people with anxiety, 276 people with obsessive-compulsive disorder, and 287 with social anxiety disorder were queried by Harris Interactive. All agreed to be invited to participate. The ADAA received an unrestricted educational grant from Jazz Pharmaceuticals Inc. to support public awareness efforts about the disorder.

Side Effects Underreported

One in six Americans who have taken a prescription drug experienced a side effect serious enough to send them to the doctor or hospital, but only 35% of consumers said they know they can report these side effects to the FDA, according to a Consumer Reports poll. Additionally, 81% of respondents said they had seen or heard an ad for prescription drugs within the last 30 days, almost all on television. The Consumers Union, the nonprofit publisher of the magazine, gave the FDA a petition signed by nearly 56,000 consumers asking that a toll-free number and Web site be included in all television drug ads so people can easily report their serious side effects. “What better way for the FDA to let consumers know how to report serious problems with their medications than putting a toll-free number and Web site in all those drug ads we're bombarded by each day?” asked Liz Foley, campaign coordinator with Consumers Union, in a statement.

FDA Clears Generic Wellbutrin

The generic formulation of Wellbutrin XL (300 mg) is bioequivalent to the brand, the Food and Drug Administration has determined. The agency began a review of generic bupropion after receiving 85 adverse event reports in the first 6 months of 2007. Seventy-eight patients said they had experienced loss of antidepressant effect when they were switched from the branded product to the generic manufactured by Teva Pharmaceutical Industries Ltd. The Teva product was approved in 2006, but at the 150-mg dose and based on bioequivalence to 150 mg of Wellbutrin XL, according to the FDA, which noted that the pharmacokinetic profile was not expected to differ between the 150-mg and 300-mg doses. After the rash of adverse event reports, the agency again reviewed the bioequivalence data and the literature on natural history of depression. The FDA concluded that there was no difference between the two products. Also, if there was a link to the generic, there should have been many more reports, said the FDA, noting that by early 2007, at least 40% of bupropion prescriptions were for the generic. The agency added, “The recurrent nature of major depressive disorder offers a scientifically reasonable explanation for the reports of lack of efficacy following a switch to a generic product.”

Teva to Market Generic Risperdal

A U.S. District Court judge in Washington, has ruled that Teva Pharmaceutical Industries Ltd. has the right to make and sell a generic version of Risperdal (risperidone). Unless the ruling is challenged, Teva can begin exclusive sales of risperidone on June 29, the date Johnson & Johnson's patent for Risperdal expires. The FDA and generic pharmaceutical manufacturer Mylan Inc. had argued that Teva should not be allowed to have exclusive rights to the generic version of the drug. But U.S. District Court Judge Royce Lamberth disagreed. In the meantime, J&J and its partner Alkermes Inc. have applied to the FDA to sell a long-acting form of the drug, Risperdal Consta, for frequently relapsing bipolar disorder, defined as four or more manic episodes in the previous year. Alkermes estimates that 10%–20% of people with bipolar disorder worldwide meet that criterion.

Zyprexa Lawsuits March On

Eli Lilly & Co. agreed to pay the state of Alaska $15 million to settle charges that it was not forthcoming about side effects such as weight gain, hyperglycemia, and diabetes related to Zyprexa (olanzapine). But the company is facing a separate suit filed by Connecticut Attorney General Richard Blumenthal in mid-March, alleging concealment of side effects and illegal promotion of off-label uses. Lilly is also negotiating with the U.S. Attorney for the Eastern District of Pennsylvania in an inquiry related to marketing practices. The Alaska settlement came several weeks into a suit brought on behalf of the state's Medicaid program. The company said in a statement that it settled to avoid the cost of a lengthy trial. Zyprexa has been prescribed to 23 million people since its 1996 approval and is approved in 80 other countries. In 2007, sales were $4.8 billion worldwide.

Social Anxiety's Serious Impact

A survey commissioned by the Anxiety Disorders Association of America has found that about a third of the respondents with social anxiety disorder said that they had symptoms for 10 years or more before seeking help. The survey portrayed individuals who had difficulty finding or keeping friends or romantic partners. Thirty-four percent said the disorder led to serious fights with significant others, and 77% said that when they are not treated, the disorder has a negative impact on romantic relationships. Seventy-five percent said social anxiety inhibited their ability to function normally. Fifty-eight percent said they were embarrassed by their disorder. Patients with social anxiety disorder typically try to hide their condition, and therefore become more anxious and isolated, according to the association. Survey respondents indicated that treatment seems to help: 59% who were treated said it helped them have romantic relationships. The survey was conducted in December; 578 people with anxiety, 276 people with obsessive-compulsive disorder, and 287 with social anxiety disorder were queried by Harris Interactive. All agreed to be invited to participate. The ADAA received an unrestricted educational grant from Jazz Pharmaceuticals Inc. to support public awareness efforts about the disorder.

Side Effects Underreported

One in six Americans who have taken a prescription drug experienced a side effect serious enough to send them to the doctor or hospital, but only 35% of consumers said they know they can report these side effects to the FDA, according to a Consumer Reports poll. Additionally, 81% of respondents said they had seen or heard an ad for prescription drugs within the last 30 days, almost all on television. The Consumers Union, the nonprofit publisher of the magazine, gave the FDA a petition signed by nearly 56,000 consumers asking that a toll-free number and Web site be included in all television drug ads so people can easily report their serious side effects. “What better way for the FDA to let consumers know how to report serious problems with their medications than putting a toll-free number and Web site in all those drug ads we're bombarded by each day?” asked Liz Foley, campaign coordinator with Consumers Union, in a statement.

The Centers for Medicare and Medicaid Services has proposed an overall 3% increase in payments for outpatient hospital care in 2009, almost a full percent below the update for 2008. As expected, reporting on quality of care is being tied to the amount of increase hospitals and other outpatient providers will receive.

For the first time, hospitals and other recipients of payments under the outpatient system that do not report data on seven quality measures on emergency department and perioperative care will see only a 1% increase.

The proposed rule, issued in July, also outlines changes for ambulatory surgery centers (ASCs) that are part of a 4-year transition to a new payment system that began this year. In 2009, as was the case this year, ASCs would be paid 65% of the rate paid for the same service in an outpatient hospital department.

The agency estimates it will spend $29 billion in 2009 on payments to acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute-care hospitals, community mental health centers, children's hospitals, and cancer hospitals. That's a $2 billion increase from the estimated $27 billion CMS will spend on outpatient services this year. Payments to ambulatory surgery centers will increase from an estimated $3.5 billion in 2008 to $3.9 billion in 2009, according to CMS.

“The changes proposed for 2009 are intended to give hospitals greater flexibility to manage their resources and give them incentives to improve efficiency so that both beneficiaries and taxpayers get the most value for their health care dollar,” said CMS Acting Administrator Kerry Weems in a statement.

CMS is proposing to more aggressively penalize hospitals and other outpatient providers that do not report quality data. Providers must report on 7 measures in 2008 and on 11 in 2009, including 4 imaging efficiency measures. In addition, the agency is seeking to reduce copayments for beneficiaries who are treated at hospitals that do not report quality data.

By law, Medicare is gradually changing the payment system so that beneficiaries will be liable for only 20% of a covered service. The coinsurance rate has varied widely over the last 8-10 years. In 2009, about 25% of services will be subject to the 20% coinsurance, up from 23% in 2008, CMS said.

For imaging—a huge and growing portion of Medicare expenditures—CMS would make a single payment for multiple imaging procedures performed in a single hospital session, including ultrasound, CT, and MRI.

CMS also proposes reducing pay for some of the higher-cost device-oriented procedures: a 48% reduction in pay for the placing of left ventricular pacing add-on leads; a 3% decrease for replacing pacemakers, electrodes, or pulse generators; 4% for stent placement; and just 1% for drug-eluting stents.

A small increase is proposed for most neurology devices, as well as for urologic and gynecologic procedures and drug infusion devices, but placement of neurostimulator electrodes would be slashed by 52%.

For ASCs, reimbursement would decrease for 92 procedures, but increase for 2,475 procedures, according to the Ambulatory Surgery Center Association. Gastrointestinal procedures as a whole are slated for a 6% reduction, and nervous system procedures and pain management would be reduced by 3%, according to Washington Analysis, a firm that advises investors on health policy developments.

CMS proposes adding nine surgical procedures to the list of services covered at an ASC. Three have brand new current procedural terminology (CPT) codes, and six—nasal/sinus endoscopy surgery; removal of vein clot; blood exchange/transfuse, non-nb; laparoscopic insertion of a permanent intraperitoneal catheter; laparoscopic revision of a permanent intraperitoneal catheter; and laparoscopy with omentopexy add-on—were previously excluded from coverage. Five procedures will be added to the list of office-based procedures, which are paid at either the ASC rate or the office practice expense payment rate, whichever is lower.

CMS is accepting public comments on the outpatient and ASC proposals until Sept. 2 and expects to issue the final rule Nov. 1.

The Centers for Medicare and Medicaid Services has proposed an overall 3% increase in payments for outpatient hospital care in 2009, almost a full percent below the update for 2008. As expected, reporting on quality of care is being tied to the amount of increase hospitals and other outpatient providers will receive.

For the first time, hospitals and other recipients of payments under the outpatient system that do not report data on seven quality measures on emergency department and perioperative care will see only a 1% increase.

The proposed rule, issued in July, also outlines changes for ambulatory surgery centers (ASCs) that are part of a 4-year transition to a new payment system that began this year. In 2009, as was the case this year, ASCs would be paid 65% of the rate paid for the same service in an outpatient hospital department.

The agency estimates it will spend $29 billion in 2009 on payments to acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute-care hospitals, community mental health centers, children's hospitals, and cancer hospitals. That's a $2 billion increase from the estimated $27 billion CMS will spend on outpatient services this year. Payments to ambulatory surgery centers will increase from an estimated $3.5 billion in 2008 to $3.9 billion in 2009, according to CMS.

“The changes proposed for 2009 are intended to give hospitals greater flexibility to manage their resources and give them incentives to improve efficiency so that both beneficiaries and taxpayers get the most value for their health care dollar,” said CMS Acting Administrator Kerry Weems in a statement.

CMS is proposing to more aggressively penalize hospitals and other outpatient providers that do not report quality data. Providers must report on 7 measures in 2008 and on 11 in 2009, including 4 imaging efficiency measures. In addition, the agency is seeking to reduce copayments for beneficiaries who are treated at hospitals that do not report quality data.

By law, Medicare is gradually changing the payment system so that beneficiaries will be liable for only 20% of a covered service. The coinsurance rate has varied widely over the last 8-10 years. In 2009, about 25% of services will be subject to the 20% coinsurance, up from 23% in 2008, CMS said.

For imaging—a huge and growing portion of Medicare expenditures—CMS would make a single payment for multiple imaging procedures performed in a single hospital session, including ultrasound, CT, and MRI.

CMS also proposes reducing pay for some of the higher-cost device-oriented procedures: a 48% reduction in pay for the placing of left ventricular pacing add-on leads; a 3% decrease for replacing pacemakers, electrodes, or pulse generators; 4% for stent placement; and just 1% for drug-eluting stents.

A small increase is proposed for most neurology devices, as well as for urologic and gynecologic procedures and drug infusion devices, but placement of neurostimulator electrodes would be slashed by 52%.

For ASCs, reimbursement would decrease for 92 procedures, but increase for 2,475 procedures, according to the Ambulatory Surgery Center Association. Gastrointestinal procedures as a whole are slated for a 6% reduction, and nervous system procedures and pain management would be reduced by 3%, according to Washington Analysis, a firm that advises investors on health policy developments.

CMS proposes adding nine surgical procedures to the list of services covered at an ASC. Three have brand new current procedural terminology (CPT) codes, and six—nasal/sinus endoscopy surgery; removal of vein clot; blood exchange/transfuse, non-nb; laparoscopic insertion of a permanent intraperitoneal catheter; laparoscopic revision of a permanent intraperitoneal catheter; and laparoscopy with omentopexy add-on—were previously excluded from coverage. Five procedures will be added to the list of office-based procedures, which are paid at either the ASC rate or the office practice expense payment rate, whichever is lower.

CMS is accepting public comments on the outpatient and ASC proposals until Sept. 2 and expects to issue the final rule Nov. 1.

The Centers for Medicare and Medicaid Services has proposed an overall 3% increase in payments for outpatient hospital care in 2009, almost a full percent below the update for 2008. As expected, reporting on quality of care is being tied to the amount of increase hospitals and other outpatient providers will receive.

For the first time, hospitals and other recipients of payments under the outpatient system that do not report data on seven quality measures on emergency department and perioperative care will see only a 1% increase.

The proposed rule, issued in July, also outlines changes for ambulatory surgery centers (ASCs) that are part of a 4-year transition to a new payment system that began this year. In 2009, as was the case this year, ASCs would be paid 65% of the rate paid for the same service in an outpatient hospital department.

The agency estimates it will spend $29 billion in 2009 on payments to acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute-care hospitals, community mental health centers, children's hospitals, and cancer hospitals. That's a $2 billion increase from the estimated $27 billion CMS will spend on outpatient services this year. Payments to ambulatory surgery centers will increase from an estimated $3.5 billion in 2008 to $3.9 billion in 2009, according to CMS.

“The changes proposed for 2009 are intended to give hospitals greater flexibility to manage their resources and give them incentives to improve efficiency so that both beneficiaries and taxpayers get the most value for their health care dollar,” said CMS Acting Administrator Kerry Weems in a statement.

CMS is proposing to more aggressively penalize hospitals and other outpatient providers that do not report quality data. Providers must report on 7 measures in 2008 and on 11 in 2009, including 4 imaging efficiency measures. In addition, the agency is seeking to reduce copayments for beneficiaries who are treated at hospitals that do not report quality data.

By law, Medicare is gradually changing the payment system so that beneficiaries will be liable for only 20% of a covered service. The coinsurance rate has varied widely over the last 8-10 years. In 2009, about 25% of services will be subject to the 20% coinsurance, up from 23% in 2008, CMS said.

For imaging—a huge and growing portion of Medicare expenditures—CMS would make a single payment for multiple imaging procedures performed in a single hospital session, including ultrasound, CT, and MRI.

CMS also proposes reducing pay for some of the higher-cost device-oriented procedures: a 48% reduction in pay for the placing of left ventricular pacing add-on leads; a 3% decrease for replacing pacemakers, electrodes, or pulse generators; 4% for stent placement; and just 1% for drug-eluting stents.

A small increase is proposed for most neurology devices, as well as for urologic and gynecologic procedures and drug infusion devices, but placement of neurostimulator electrodes would be slashed by 52%.

For ASCs, reimbursement would decrease for 92 procedures, but increase for 2,475 procedures, according to the Ambulatory Surgery Center Association. Gastrointestinal procedures as a whole are slated for a 6% reduction, and nervous system procedures and pain management would be reduced by 3%, according to Washington Analysis, a firm that advises investors on health policy developments.

CMS proposes adding nine surgical procedures to the list of services covered at an ASC. Three have brand new current procedural terminology (CPT) codes, and six—nasal/sinus endoscopy surgery; removal of vein clot; blood exchange/transfuse, non-nb; laparoscopic insertion of a permanent intraperitoneal catheter; laparoscopic revision of a permanent intraperitoneal catheter; and laparoscopy with omentopexy add-on—were previously excluded from coverage. Five procedures will be added to the list of office-based procedures, which are paid at either the ASC rate or the office practice expense payment rate, whichever is lower.

CMS is accepting public comments on the outpatient and ASC proposals until Sept. 2 and expects to issue the final rule Nov. 1.

The Centers for Medicare and Medicaid Services has expanded coverage of home prothrombin time (or International Normalized Ratio, INR) testing to include patients who are taking anticoagulation therapy for chronic atrial fibrillation and venous thromboembolism.

Patients must meet certain other criteria, and the home tests can't be used more than once a week, according to the final decision issued by the CMS.

Medicare has covered home prothrombin time testing since 2002, but only for patients with mechanical heart valves. The request for expanded coverage was made in June 2007 by the three main manufacturers of home testing devices—Roche Diagnostics, International Technidyne Corp., and HemoSense Inc. The companies said that there was plenty of new evidence to support home testing for the two other conditions. The CMS agreed.

“Medicare's coverage extension of home blood testing of prothrombin time International Normalized Ratio is based on current evidence for these two conditions,” CMS Acting Administrator Kerry Weems said in a statement. Currently, prothrombin testing is conducted about every 4–6 weeks, primarily in physicians' offices, according to the CMS. Fewer than 5% of patients on anticoagulation therapy monitor prothrombin at home.

“Those Medicare beneficiaries and their physicians managing conditions related to chronic atrial fibrillation or venous thromboembolism will benefit greatly through the use of the home test,” Mr. Weems said.

Roche estimated that Medicare beneficiaries would pay $35 for training in use of at-home devices, and about $30 a month for test strips. Patients who have supplemental Medicare insurance might not have any out-of-pocket costs, the company said in a statement.

The Centers for Medicare and Medicaid Services has expanded coverage of home prothrombin time (or International Normalized Ratio, INR) testing to include patients who are taking anticoagulation therapy for chronic atrial fibrillation and venous thromboembolism.

Patients must meet certain other criteria, and the home tests can't be used more than once a week, according to the final decision issued by the CMS.

Medicare has covered home prothrombin time testing since 2002, but only for patients with mechanical heart valves. The request for expanded coverage was made in June 2007 by the three main manufacturers of home testing devices—Roche Diagnostics, International Technidyne Corp., and HemoSense Inc. The companies said that there was plenty of new evidence to support home testing for the two other conditions. The CMS agreed.

“Medicare's coverage extension of home blood testing of prothrombin time International Normalized Ratio is based on current evidence for these two conditions,” CMS Acting Administrator Kerry Weems said in a statement. Currently, prothrombin testing is conducted about every 4–6 weeks, primarily in physicians' offices, according to the CMS. Fewer than 5% of patients on anticoagulation therapy monitor prothrombin at home.

“Those Medicare beneficiaries and their physicians managing conditions related to chronic atrial fibrillation or venous thromboembolism will benefit greatly through the use of the home test,” Mr. Weems said.

Roche estimated that Medicare beneficiaries would pay $35 for training in use of at-home devices, and about $30 a month for test strips. Patients who have supplemental Medicare insurance might not have any out-of-pocket costs, the company said in a statement.

The Centers for Medicare and Medicaid Services has expanded coverage of home prothrombin time (or International Normalized Ratio, INR) testing to include patients who are taking anticoagulation therapy for chronic atrial fibrillation and venous thromboembolism.

Patients must meet certain other criteria, and the home tests can't be used more than once a week, according to the final decision issued by the CMS.

Medicare has covered home prothrombin time testing since 2002, but only for patients with mechanical heart valves. The request for expanded coverage was made in June 2007 by the three main manufacturers of home testing devices—Roche Diagnostics, International Technidyne Corp., and HemoSense Inc. The companies said that there was plenty of new evidence to support home testing for the two other conditions. The CMS agreed.

“Medicare's coverage extension of home blood testing of prothrombin time International Normalized Ratio is based on current evidence for these two conditions,” CMS Acting Administrator Kerry Weems said in a statement. Currently, prothrombin testing is conducted about every 4–6 weeks, primarily in physicians' offices, according to the CMS. Fewer than 5% of patients on anticoagulation therapy monitor prothrombin at home.

“Those Medicare beneficiaries and their physicians managing conditions related to chronic atrial fibrillation or venous thromboembolism will benefit greatly through the use of the home test,” Mr. Weems said.

Roche estimated that Medicare beneficiaries would pay $35 for training in use of at-home devices, and about $30 a month for test strips. Patients who have supplemental Medicare insurance might not have any out-of-pocket costs, the company said in a statement.

WASHINGTON — The concept of a medical home is a step closer to reality for Medicare patients, after it received strong backing from the Medicare Payment Advisory Commission at its April meeting.

All 17 commissioners present at the meeting voted to urge Congress to instruct the Centers for Medicare and Medicaid Services to develop a large pilot study of medical homes for Medicare beneficiaries. Most of the commissioners also voted to adjust the Medicare fee schedule to increase payment for primary care, which MedPAC has deemed as undervalued.

The medical home concept has been advanced by the American College of Physicians, the American Academy of Family Physicians, and the American Academy of Pediatrics. A demonstration project is authorized under the Medicare program, but the commissioners recommended a larger pilot with clear thresholds.

The commissioners' criteria for a medical home included the ability to provide primary care, use information technology for clinical decision support, conduct care management, offer 24-hour communication with patients, maintain up-to-date records of patients' advance directives, and operate a formal quality improvement program. Also, beneficiaries should agree to adhere to medical home principles by respecting the idea that someone is in charge of coordinating their care, and communicating with the physician when they seek care elsewhere.

There was some debate over whether patients should be allowed to access other providers without a referral, which is permitted under current fee-for-service Medicare. Most commissioners wanted some restrictions, or at least a way to track when patients see specialists, to facilitate assessment of the program.

The medical home would not be limited to primary care physicians; specialists likely would be able to fulfill criteria for participation, according to the commission.

The program would cost $50-$250 million in the first year, and cost less than $1 billion over the first 5 years, MedPAC staffers estimated. The estimate included monthly fees to medical homes, but not anticipated savings, said MedPAC staffer Christine Boccuti.

Dr. Francis Jay Crosson, a commissioner and senior medical director of Permanente Federation in Oakland, Calif., called the proposal a “significant evolution” from what had been presented to the panel in 2007. “I think it's a good evolution,” he said.

“This is a very exciting recommendation,” said Commissioner Jack Ebeler, a health policy consultant in Reston, Va. Promotion of the medical home approach is a direct way to reform the health care delivery system, he added.

Commissioners also said that the medical home recommendation dovetailed with MedPAC's support of increased pay for primary care services.

An adjustment to the fee schedule is “long overdue,” said Dr. Ronald Castellanos, a commissioner and urologist in private practice in Fort Myers, Fla. Increased pay might lure more residents into primary care and help those currently practicing to stay in the workplace, he said.

The commissioners debated how CMS could determine which physicians or other health providers—such as nurse practitioners—would receive the update. MedPAC staff presented the increase as budget neutral, which made some panelists uneasy.

Dr. Nicholas Wolter of the Billings (Mont.) Clinic suggested that the increase be made without trying to maintain budget neutrality. Dr. Karen Borman, professor of surgery at the University of Mississippi, Jackson, expressed concern that rewarding primary care could end up hurting other physicians. “I have some philosophical problems here,” said Dr. Borman, adding that primary care was not always linked with a traditional primary care physician. She said that she often provided what would be considered primary care to her breast cancer patients.

Dr. Borman ended up voting against the recommendation for increased pay for primary care.

WASHINGTON — The concept of a medical home is a step closer to reality for Medicare patients, after it received strong backing from the Medicare Payment Advisory Commission at its April meeting.

All 17 commissioners present at the meeting voted to urge Congress to instruct the Centers for Medicare and Medicaid Services to develop a large pilot study of medical homes for Medicare beneficiaries. Most of the commissioners also voted to adjust the Medicare fee schedule to increase payment for primary care, which MedPAC has deemed as undervalued.

The medical home concept has been advanced by the American College of Physicians, the American Academy of Family Physicians, and the American Academy of Pediatrics. A demonstration project is authorized under the Medicare program, but the commissioners recommended a larger pilot with clear thresholds.

The commissioners' criteria for a medical home included the ability to provide primary care, use information technology for clinical decision support, conduct care management, offer 24-hour communication with patients, maintain up-to-date records of patients' advance directives, and operate a formal quality improvement program. Also, beneficiaries should agree to adhere to medical home principles by respecting the idea that someone is in charge of coordinating their care, and communicating with the physician when they seek care elsewhere.

There was some debate over whether patients should be allowed to access other providers without a referral, which is permitted under current fee-for-service Medicare. Most commissioners wanted some restrictions, or at least a way to track when patients see specialists, to facilitate assessment of the program.

The medical home would not be limited to primary care physicians; specialists likely would be able to fulfill criteria for participation, according to the commission.

The program would cost $50-$250 million in the first year, and cost less than $1 billion over the first 5 years, MedPAC staffers estimated. The estimate included monthly fees to medical homes, but not anticipated savings, said MedPAC staffer Christine Boccuti.

Dr. Francis Jay Crosson, a commissioner and senior medical director of Permanente Federation in Oakland, Calif., called the proposal a “significant evolution” from what had been presented to the panel in 2007. “I think it's a good evolution,” he said.

“This is a very exciting recommendation,” said Commissioner Jack Ebeler, a health policy consultant in Reston, Va. Promotion of the medical home approach is a direct way to reform the health care delivery system, he added.

Commissioners also said that the medical home recommendation dovetailed with MedPAC's support of increased pay for primary care services.

An adjustment to the fee schedule is “long overdue,” said Dr. Ronald Castellanos, a commissioner and urologist in private practice in Fort Myers, Fla. Increased pay might lure more residents into primary care and help those currently practicing to stay in the workplace, he said.

The commissioners debated how CMS could determine which physicians or other health providers—such as nurse practitioners—would receive the update. MedPAC staff presented the increase as budget neutral, which made some panelists uneasy.

Dr. Nicholas Wolter of the Billings (Mont.) Clinic suggested that the increase be made without trying to maintain budget neutrality. Dr. Karen Borman, professor of surgery at the University of Mississippi, Jackson, expressed concern that rewarding primary care could end up hurting other physicians. “I have some philosophical problems here,” said Dr. Borman, adding that primary care was not always linked with a traditional primary care physician. She said that she often provided what would be considered primary care to her breast cancer patients.

Dr. Borman ended up voting against the recommendation for increased pay for primary care.

WASHINGTON — The concept of a medical home is a step closer to reality for Medicare patients, after it received strong backing from the Medicare Payment Advisory Commission at its April meeting.

All 17 commissioners present at the meeting voted to urge Congress to instruct the Centers for Medicare and Medicaid Services to develop a large pilot study of medical homes for Medicare beneficiaries. Most of the commissioners also voted to adjust the Medicare fee schedule to increase payment for primary care, which MedPAC has deemed as undervalued.

The medical home concept has been advanced by the American College of Physicians, the American Academy of Family Physicians, and the American Academy of Pediatrics. A demonstration project is authorized under the Medicare program, but the commissioners recommended a larger pilot with clear thresholds.

The commissioners' criteria for a medical home included the ability to provide primary care, use information technology for clinical decision support, conduct care management, offer 24-hour communication with patients, maintain up-to-date records of patients' advance directives, and operate a formal quality improvement program. Also, beneficiaries should agree to adhere to medical home principles by respecting the idea that someone is in charge of coordinating their care, and communicating with the physician when they seek care elsewhere.

There was some debate over whether patients should be allowed to access other providers without a referral, which is permitted under current fee-for-service Medicare. Most commissioners wanted some restrictions, or at least a way to track when patients see specialists, to facilitate assessment of the program.

The medical home would not be limited to primary care physicians; specialists likely would be able to fulfill criteria for participation, according to the commission.

The program would cost $50-$250 million in the first year, and cost less than $1 billion over the first 5 years, MedPAC staffers estimated. The estimate included monthly fees to medical homes, but not anticipated savings, said MedPAC staffer Christine Boccuti.

Dr. Francis Jay Crosson, a commissioner and senior medical director of Permanente Federation in Oakland, Calif., called the proposal a “significant evolution” from what had been presented to the panel in 2007. “I think it's a good evolution,” he said.

“This is a very exciting recommendation,” said Commissioner Jack Ebeler, a health policy consultant in Reston, Va. Promotion of the medical home approach is a direct way to reform the health care delivery system, he added.

Commissioners also said that the medical home recommendation dovetailed with MedPAC's support of increased pay for primary care services.

An adjustment to the fee schedule is “long overdue,” said Dr. Ronald Castellanos, a commissioner and urologist in private practice in Fort Myers, Fla. Increased pay might lure more residents into primary care and help those currently practicing to stay in the workplace, he said.

The commissioners debated how CMS could determine which physicians or other health providers—such as nurse practitioners—would receive the update. MedPAC staff presented the increase as budget neutral, which made some panelists uneasy.

Dr. Nicholas Wolter of the Billings (Mont.) Clinic suggested that the increase be made without trying to maintain budget neutrality. Dr. Karen Borman, professor of surgery at the University of Mississippi, Jackson, expressed concern that rewarding primary care could end up hurting other physicians. “I have some philosophical problems here,” said Dr. Borman, adding that primary care was not always linked with a traditional primary care physician. She said that she often provided what would be considered primary care to her breast cancer patients.

Dr. Borman ended up voting against the recommendation for increased pay for primary care.