Alicia Ault

Mental Health Parity Progress

The House of Representatives last month passed its version of a bill that would put mental health coverage on equal footing with benefits for physical conditions. The Paul Wellstone Mental Health and Addiction Equity Act (H.R. 1424) passed 268–148; it now has to be reconciled with a Senate bill that was put on hold in 2007 (see related Guest Editorial on p. 8). The House legislation also included the Genetic Information Nondiscrimination Act, which was reported out of a Senate committee in April 2007. There are sticking points between the House and Senate, however. The House would pay for coverage by increasing drug manufacturers' rebates to Medicaid and by limiting physician ownership of specialty hospitals. The Senate bill was silent on funding. Advocates were optimistic that an agreement was close, after 10 years of lobbying. Dr. Carolyn Robinowitz, president of the American Psychiatric Association, said in a statement that untreated mental illness costs $200 billion a year in lost productivity and increased burdens for public programs. “The costs of not passing parity legislation are too high to ignore,” she said. The House bill would require insurers to have “fairness” between copays, deductibles, and coinsurance for mental and physical illnesses; treatment limitations would also have to be equitable.

MD Mental Health Visits Frequent

In 2005, Americans went to see a physician more often for depression and other mental health issues than for back problems, high blood pressure, and trauma-related reasons, according to the Agency for Healthcare Research and Quality. There were 156 million physician office visits for depression and mental health problems, making it one of the top three reasons why Americans sought treatment in 2005, said AHRQ. Mental health visits increased 30% from 1996 to 2005, according to the agency. The same year, there were 139 million visits for back problems, 79 million for hypertension, and 133 million for trauma, such as fractures. The data come from the Medical Expenditure Panel Survey.

Suicide Tops Violence Admissions

Suicide attempts and self-injury accounted for the greatest portion of violence-related treatment at hospitals in 2005, according to another AHRQ report, “Violence-Related Stays in U.S. Hospitals, 2005.” Sixty-six percent of violence-related admissions were for attempted suicide or self-injury, according to the report. Half of those admitted for self-injury had overdosed or purposely mixed drugs. Thirty-one percent of violence-related admissions were for attempted murder, fights, rape, or other assaults. Only 4% were for sexual or other abuse. Children accounted for half of the abuse cases. Violence-related admissions cost $2.3 billion in 2005; 27% of the admissions were Medicaid patients, and 23% were uninsured.

Rx Abuse Worries Americans

Prescription drug abuse is as big a problem as illegal drug abuse, said respondents to a Wall Street Journal/Harris Interactive health care poll conducted in late February. Slightly less than half of those surveyed said they keep prescription medicines in a place whether others can't access them. Seventy percent said they were somewhat or very concerned about the risk of addiction associated with some prescription pain medications. The vast majority of the 2,027 adults surveyed voiced the same level of concern about side effects and potentially harmful interactions between pain medications and other prescriptions. About 60% said they discuss other prescriptions they are taking when prescribed a new medication.

Woodcock Named CDER Head

Dr. Janet Woodcock has been named director of the Food and Drug Administration's Center for Drug Evaluation and Research. Dr. Woodcock, a rheumatologist, served as director of CDER in the 1990s and has been acting director since October 2007. The drug industry's chief lobbying group, PhRMA, welcomed the appointment. Dr. Woodcock “has demonstrated willingness to work with diverse partners, including researchers, Congress, the White House, patients and pharmaceutical research companies,” said a statement from the group. But Dr. Sidney Wolfe, director of Public Citizen Health Research Group, said in an interview that he's “not terribly hopeful” that Dr. Woodcock will lead the center well, because she doesn't like conflict and controversy. “I don't think she's the kind of CDER director we need right now,” Dr. Wolfe said. “She's aware of a number of drugs on the market that should be taken off the market, but I don't think she has the fortitude to do something about it.”

FDA Would Expand Promotion

The FDA last month proposed guidance to let drug and medical device makers distribute medical or scientific journal articles and reference publications on unapproved uses of their products. Drug and device makers had been allowed to disseminate such materials under guidelines set by the FDA, but that authority expired in September 2006. The FDA's new “Good Reprint Practices” proposal requires the article or reference to be published by an organization that has an editorial board and fully discloses conflicts of interest. In addition, articles should be peer reviewed, and manufacturers should not distribute special supplements or publications funded by product manufacturers, or articles not supported by credible medical evidence. Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, blasted the proposal, which he said in a statement “is great news for the drug industry but terrible for the public health.”

Mental Health Parity Progress

The House of Representatives last month passed its version of a bill that would put mental health coverage on equal footing with benefits for physical conditions. The Paul Wellstone Mental Health and Addiction Equity Act (H.R. 1424) passed 268–148; it now has to be reconciled with a Senate bill that was put on hold in 2007 (see related Guest Editorial on p. 8). The House legislation also included the Genetic Information Nondiscrimination Act, which was reported out of a Senate committee in April 2007. There are sticking points between the House and Senate, however. The House would pay for coverage by increasing drug manufacturers' rebates to Medicaid and by limiting physician ownership of specialty hospitals. The Senate bill was silent on funding. Advocates were optimistic that an agreement was close, after 10 years of lobbying. Dr. Carolyn Robinowitz, president of the American Psychiatric Association, said in a statement that untreated mental illness costs $200 billion a year in lost productivity and increased burdens for public programs. “The costs of not passing parity legislation are too high to ignore,” she said. The House bill would require insurers to have “fairness” between copays, deductibles, and coinsurance for mental and physical illnesses; treatment limitations would also have to be equitable.

MD Mental Health Visits Frequent

In 2005, Americans went to see a physician more often for depression and other mental health issues than for back problems, high blood pressure, and trauma-related reasons, according to the Agency for Healthcare Research and Quality. There were 156 million physician office visits for depression and mental health problems, making it one of the top three reasons why Americans sought treatment in 2005, said AHRQ. Mental health visits increased 30% from 1996 to 2005, according to the agency. The same year, there were 139 million visits for back problems, 79 million for hypertension, and 133 million for trauma, such as fractures. The data come from the Medical Expenditure Panel Survey.

Suicide Tops Violence Admissions

Suicide attempts and self-injury accounted for the greatest portion of violence-related treatment at hospitals in 2005, according to another AHRQ report, “Violence-Related Stays in U.S. Hospitals, 2005.” Sixty-six percent of violence-related admissions were for attempted suicide or self-injury, according to the report. Half of those admitted for self-injury had overdosed or purposely mixed drugs. Thirty-one percent of violence-related admissions were for attempted murder, fights, rape, or other assaults. Only 4% were for sexual or other abuse. Children accounted for half of the abuse cases. Violence-related admissions cost $2.3 billion in 2005; 27% of the admissions were Medicaid patients, and 23% were uninsured.

Rx Abuse Worries Americans

Prescription drug abuse is as big a problem as illegal drug abuse, said respondents to a Wall Street Journal/Harris Interactive health care poll conducted in late February. Slightly less than half of those surveyed said they keep prescription medicines in a place whether others can't access them. Seventy percent said they were somewhat or very concerned about the risk of addiction associated with some prescription pain medications. The vast majority of the 2,027 adults surveyed voiced the same level of concern about side effects and potentially harmful interactions between pain medications and other prescriptions. About 60% said they discuss other prescriptions they are taking when prescribed a new medication.

Woodcock Named CDER Head

Dr. Janet Woodcock has been named director of the Food and Drug Administration's Center for Drug Evaluation and Research. Dr. Woodcock, a rheumatologist, served as director of CDER in the 1990s and has been acting director since October 2007. The drug industry's chief lobbying group, PhRMA, welcomed the appointment. Dr. Woodcock “has demonstrated willingness to work with diverse partners, including researchers, Congress, the White House, patients and pharmaceutical research companies,” said a statement from the group. But Dr. Sidney Wolfe, director of Public Citizen Health Research Group, said in an interview that he's “not terribly hopeful” that Dr. Woodcock will lead the center well, because she doesn't like conflict and controversy. “I don't think she's the kind of CDER director we need right now,” Dr. Wolfe said. “She's aware of a number of drugs on the market that should be taken off the market, but I don't think she has the fortitude to do something about it.”

FDA Would Expand Promotion

The FDA last month proposed guidance to let drug and medical device makers distribute medical or scientific journal articles and reference publications on unapproved uses of their products. Drug and device makers had been allowed to disseminate such materials under guidelines set by the FDA, but that authority expired in September 2006. The FDA's new “Good Reprint Practices” proposal requires the article or reference to be published by an organization that has an editorial board and fully discloses conflicts of interest. In addition, articles should be peer reviewed, and manufacturers should not distribute special supplements or publications funded by product manufacturers, or articles not supported by credible medical evidence. Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, blasted the proposal, which he said in a statement “is great news for the drug industry but terrible for the public health.”

Mental Health Parity Progress

The House of Representatives last month passed its version of a bill that would put mental health coverage on equal footing with benefits for physical conditions. The Paul Wellstone Mental Health and Addiction Equity Act (H.R. 1424) passed 268–148; it now has to be reconciled with a Senate bill that was put on hold in 2007 (see related Guest Editorial on p. 8). The House legislation also included the Genetic Information Nondiscrimination Act, which was reported out of a Senate committee in April 2007. There are sticking points between the House and Senate, however. The House would pay for coverage by increasing drug manufacturers' rebates to Medicaid and by limiting physician ownership of specialty hospitals. The Senate bill was silent on funding. Advocates were optimistic that an agreement was close, after 10 years of lobbying. Dr. Carolyn Robinowitz, president of the American Psychiatric Association, said in a statement that untreated mental illness costs $200 billion a year in lost productivity and increased burdens for public programs. “The costs of not passing parity legislation are too high to ignore,” she said. The House bill would require insurers to have “fairness” between copays, deductibles, and coinsurance for mental and physical illnesses; treatment limitations would also have to be equitable.

MD Mental Health Visits Frequent

In 2005, Americans went to see a physician more often for depression and other mental health issues than for back problems, high blood pressure, and trauma-related reasons, according to the Agency for Healthcare Research and Quality. There were 156 million physician office visits for depression and mental health problems, making it one of the top three reasons why Americans sought treatment in 2005, said AHRQ. Mental health visits increased 30% from 1996 to 2005, according to the agency. The same year, there were 139 million visits for back problems, 79 million for hypertension, and 133 million for trauma, such as fractures. The data come from the Medical Expenditure Panel Survey.

Suicide Tops Violence Admissions

Suicide attempts and self-injury accounted for the greatest portion of violence-related treatment at hospitals in 2005, according to another AHRQ report, “Violence-Related Stays in U.S. Hospitals, 2005.” Sixty-six percent of violence-related admissions were for attempted suicide or self-injury, according to the report. Half of those admitted for self-injury had overdosed or purposely mixed drugs. Thirty-one percent of violence-related admissions were for attempted murder, fights, rape, or other assaults. Only 4% were for sexual or other abuse. Children accounted for half of the abuse cases. Violence-related admissions cost $2.3 billion in 2005; 27% of the admissions were Medicaid patients, and 23% were uninsured.

Rx Abuse Worries Americans

Prescription drug abuse is as big a problem as illegal drug abuse, said respondents to a Wall Street Journal/Harris Interactive health care poll conducted in late February. Slightly less than half of those surveyed said they keep prescription medicines in a place whether others can't access them. Seventy percent said they were somewhat or very concerned about the risk of addiction associated with some prescription pain medications. The vast majority of the 2,027 adults surveyed voiced the same level of concern about side effects and potentially harmful interactions between pain medications and other prescriptions. About 60% said they discuss other prescriptions they are taking when prescribed a new medication.

Woodcock Named CDER Head

Dr. Janet Woodcock has been named director of the Food and Drug Administration's Center for Drug Evaluation and Research. Dr. Woodcock, a rheumatologist, served as director of CDER in the 1990s and has been acting director since October 2007. The drug industry's chief lobbying group, PhRMA, welcomed the appointment. Dr. Woodcock “has demonstrated willingness to work with diverse partners, including researchers, Congress, the White House, patients and pharmaceutical research companies,” said a statement from the group. But Dr. Sidney Wolfe, director of Public Citizen Health Research Group, said in an interview that he's “not terribly hopeful” that Dr. Woodcock will lead the center well, because she doesn't like conflict and controversy. “I don't think she's the kind of CDER director we need right now,” Dr. Wolfe said. “She's aware of a number of drugs on the market that should be taken off the market, but I don't think she has the fortitude to do something about it.”

FDA Would Expand Promotion

The FDA last month proposed guidance to let drug and medical device makers distribute medical or scientific journal articles and reference publications on unapproved uses of their products. Drug and device makers had been allowed to disseminate such materials under guidelines set by the FDA, but that authority expired in September 2006. The FDA's new “Good Reprint Practices” proposal requires the article or reference to be published by an organization that has an editorial board and fully discloses conflicts of interest. In addition, articles should be peer reviewed, and manufacturers should not distribute special supplements or publications funded by product manufacturers, or articles not supported by credible medical evidence. Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, blasted the proposal, which he said in a statement “is great news for the drug industry but terrible for the public health.”

WASHINGTON – With health care expenses accounting for the single largest expense in their budget, states are increasingly looking for solutions from within, not from the federal government, according to an annual accounting of state legislative trends compiled by the Blue Cross and Blue Shield Association.

“Health care spending represented nearly one-third of total state expenditures last fiscal year,” said Susan Laudicina, BCBSA director for state research and policy at a briefing for reporters. And, she noted, as the economy weakens, health care costs will continue to rise, while tax revenues will fall. That will add to the pressure to find creative solutions, she said.

“The challenge for state lawmakers is how to avoid cutting existing programs like Medicaid and the State Children's Health Insurance Program while also finding new ways to cover the uninsured and contain costs,” said Ms. Laudicina.

The most significant trend observed in the states: an attempt to expand coverage. About half of the state legislatures debated universal coverage or expansion programs for children in fiscal 2007. State mandates requiring individuals to buy insurance were introduced in 12 states. All of those failed, largely because they are controversial, she said.

Connecticut and New York expanded eligibility for SCHIP to 400% of the federal poverty level and seven other states raised eligibility to 300%, but those efforts are threatened by a rule change issued by the Department of Health and Human Services last August that ostensibly caps eligibility at 250% of the federal poverty level. Eight states have sued to challenge that ruling.

Eight states–Connecticut, Indiana, Kansas, Louisiana, Maryland, New York, Texas, and Washington–created programs in which public funds subsidize the cost of private employer-sponsored health insurance to Medicaid-eligible workers. Oklahoma expanded its existing subsidy program, making more people eligible.

So-called “transparency” initiatives are gaining ground, also. These are proposals that require hospitals–and in some cases, physicians–to publicly share information on infections and other adverse events, and also other quality data and pricing. Twenty-one states debated proposals that would require transparency on some level. Transparency bills were enacted in 10 states: Arkansas, Delaware, Georgia, Indiana, Minnesota, New Jersey, Oregon, Pennsylvania, Texas, and Washington.

In Texas, for instance, the state now requires hospitals and physicians to provide patients with estimates of charges if requested. Hospitals will also be required to tell patients if there is a possibility that an out-of-network provider will be working in an in-network facility, and to inform them there may be costs to the patient as a result.

The Texas law reflects a growing concern that patients are not aware that they may be balance billed, Ms. Laudicina said.

Eleven states will take up transparency measures in 2008, she said.

The annual State Legislative Health Care and Insurance Issues report compiles information from the BCBSA's survey of 39 independent Blue Cross and Blue Shield plans.

WASHINGTON – With health care expenses accounting for the single largest expense in their budget, states are increasingly looking for solutions from within, not from the federal government, according to an annual accounting of state legislative trends compiled by the Blue Cross and Blue Shield Association.

“Health care spending represented nearly one-third of total state expenditures last fiscal year,” said Susan Laudicina, BCBSA director for state research and policy at a briefing for reporters. And, she noted, as the economy weakens, health care costs will continue to rise, while tax revenues will fall. That will add to the pressure to find creative solutions, she said.

“The challenge for state lawmakers is how to avoid cutting existing programs like Medicaid and the State Children's Health Insurance Program while also finding new ways to cover the uninsured and contain costs,” said Ms. Laudicina.

The most significant trend observed in the states: an attempt to expand coverage. About half of the state legislatures debated universal coverage or expansion programs for children in fiscal 2007. State mandates requiring individuals to buy insurance were introduced in 12 states. All of those failed, largely because they are controversial, she said.

Connecticut and New York expanded eligibility for SCHIP to 400% of the federal poverty level and seven other states raised eligibility to 300%, but those efforts are threatened by a rule change issued by the Department of Health and Human Services last August that ostensibly caps eligibility at 250% of the federal poverty level. Eight states have sued to challenge that ruling.

Eight states–Connecticut, Indiana, Kansas, Louisiana, Maryland, New York, Texas, and Washington–created programs in which public funds subsidize the cost of private employer-sponsored health insurance to Medicaid-eligible workers. Oklahoma expanded its existing subsidy program, making more people eligible.

So-called “transparency” initiatives are gaining ground, also. These are proposals that require hospitals–and in some cases, physicians–to publicly share information on infections and other adverse events, and also other quality data and pricing. Twenty-one states debated proposals that would require transparency on some level. Transparency bills were enacted in 10 states: Arkansas, Delaware, Georgia, Indiana, Minnesota, New Jersey, Oregon, Pennsylvania, Texas, and Washington.

In Texas, for instance, the state now requires hospitals and physicians to provide patients with estimates of charges if requested. Hospitals will also be required to tell patients if there is a possibility that an out-of-network provider will be working in an in-network facility, and to inform them there may be costs to the patient as a result.

The Texas law reflects a growing concern that patients are not aware that they may be balance billed, Ms. Laudicina said.

Eleven states will take up transparency measures in 2008, she said.

The annual State Legislative Health Care and Insurance Issues report compiles information from the BCBSA's survey of 39 independent Blue Cross and Blue Shield plans.

WASHINGTON – With health care expenses accounting for the single largest expense in their budget, states are increasingly looking for solutions from within, not from the federal government, according to an annual accounting of state legislative trends compiled by the Blue Cross and Blue Shield Association.

“Health care spending represented nearly one-third of total state expenditures last fiscal year,” said Susan Laudicina, BCBSA director for state research and policy at a briefing for reporters. And, she noted, as the economy weakens, health care costs will continue to rise, while tax revenues will fall. That will add to the pressure to find creative solutions, she said.

“The challenge for state lawmakers is how to avoid cutting existing programs like Medicaid and the State Children's Health Insurance Program while also finding new ways to cover the uninsured and contain costs,” said Ms. Laudicina.

The most significant trend observed in the states: an attempt to expand coverage. About half of the state legislatures debated universal coverage or expansion programs for children in fiscal 2007. State mandates requiring individuals to buy insurance were introduced in 12 states. All of those failed, largely because they are controversial, she said.

Connecticut and New York expanded eligibility for SCHIP to 400% of the federal poverty level and seven other states raised eligibility to 300%, but those efforts are threatened by a rule change issued by the Department of Health and Human Services last August that ostensibly caps eligibility at 250% of the federal poverty level. Eight states have sued to challenge that ruling.

Eight states–Connecticut, Indiana, Kansas, Louisiana, Maryland, New York, Texas, and Washington–created programs in which public funds subsidize the cost of private employer-sponsored health insurance to Medicaid-eligible workers. Oklahoma expanded its existing subsidy program, making more people eligible.

So-called “transparency” initiatives are gaining ground, also. These are proposals that require hospitals–and in some cases, physicians–to publicly share information on infections and other adverse events, and also other quality data and pricing. Twenty-one states debated proposals that would require transparency on some level. Transparency bills were enacted in 10 states: Arkansas, Delaware, Georgia, Indiana, Minnesota, New Jersey, Oregon, Pennsylvania, Texas, and Washington.

In Texas, for instance, the state now requires hospitals and physicians to provide patients with estimates of charges if requested. Hospitals will also be required to tell patients if there is a possibility that an out-of-network provider will be working in an in-network facility, and to inform them there may be costs to the patient as a result.

The Texas law reflects a growing concern that patients are not aware that they may be balance billed, Ms. Laudicina said.

Eleven states will take up transparency measures in 2008, she said.

The annual State Legislative Health Care and Insurance Issues report compiles information from the BCBSA's survey of 39 independent Blue Cross and Blue Shield plans.

LAS VEGAS – As more of the agreements signed by several large insurers to settle a class action suit alleging inappropriate billing practices expire, the possibility is increasing that the companies will return to the same behavior, especially given that many are being accused of violating the terms already, reported a compliance expert at an emergency medicine meeting.

Several of the health plans have said they will continue to comply with the terms of their settlements once they expire, but “not all have said that,” said Edward R. Gaines III, vice president and chief compliance officer for Healthcare Business Resources in Durham, N.C., who spoke at a meeting on reimbursement sponsored by the American College of Emergency Physicians.

Mr. Gaines said noncompliance among all the plans that have settled has continued to be an issue, which is being dealt with in the courts and administratively. But “the problem is, once the settlement agreement expires, I can't go back into federal court through an easy process to make my complaint heard,” he said.

The settlements were struck in response to Multidistrict Litigation 1334, which was certified as a class action in U.S. District Court for the Southern District of Florida in 2002 and named Aetna Inc., Anthem Insurance Cos. Inc., Cigna, Coventry Health Care Inc., Health Net Inc., Humana Inc., PacifiCare Health Systems Inc., Prudential Insurance Co. of America, United Health Care, and WellPoint Health Networks Inc. as defendants. The suits alleged that the insurers violated the federal Racketeer Influenced and Corrupt Organizations Act by engaging in fraud and extortion in a common scheme to wrongfully deny payment to physicians.

Several state and county medical societies filed the suits on behalf of virtually every physician in the nation–about 900,000 doctors.

United Healthcare and Coventry both were summarily released from litigation. Their release has been upheld on appeal.

Aetna and Cigna struck agreements that entailed an immediate payout in response to claims filed by physicians, some changes in billing behavior, and an agreement to provide prospective relief–$300 million from Aetna and $400 million from Cigna.

Cigna's 4-year agreement has now expired, and Aetna's 4-year agreement expired in June 2007; but Aetna's agreement was extended through June 2008 because of compliance disputes. After an investigation, the New Jersey insurance department fined Aetna $9.5 million in June 2007 for failing to properly pay for out-of-network providers. The insurer is paying nonparticipating physicians only 125% of Medicare rates and informing patients that they are not responsible for the difference.

ACEP, the North Carolina chapter of ACEP, Wake Emergency Physicians, and the North Carolina Medical Society subsequently followed up with a complaint to the North Carolina insurance department in November, Mr. Gaines said. The North Carolina group is challenging bundling of 12-lead ECGs into evaluation and management codes, and bundling of other procedures using the CPT-25 modifier codes.

“If we don't get prompt action from Aetna, we're going back to court [to] ask for an extension of the settlement agreement term,” he said.

The American Medical Association and Aetna recently said they are working together to resolve outstanding complaints. Prudential's agreement expires in 2009; agreements with HealthNet, Anthem/WellPoint, and Humana expire in 2010.

Agreements were reached with 90% of the nation's Blue Cross and Blue Shield plans and the Blue Cross and Blue Shield Association last April, but the final settlement date was being worked out at press time. The Blues plans agreed to similar terms as did the other payers, with one exception: Anthem/WellPoint and the Blues plans refused to accept assignment of benefits. The Blues plans were willing to walk away from the settlement if they did not win that concession, said Mr. Gaines.

The court gave preliminary approval last November to a settlement with the West Virginia-based Highmark/Mountain State Blue Cross Blue Shield. Claims could still be filed through February 2008. The final settlement date was also to be decided in February.

Mr. Gaines urged physicians to hold the health plans accountable to their agreements. Information on settlement terms and how to dispute claims can be found at www.hmosettlements.com

LAS VEGAS – As more of the agreements signed by several large insurers to settle a class action suit alleging inappropriate billing practices expire, the possibility is increasing that the companies will return to the same behavior, especially given that many are being accused of violating the terms already, reported a compliance expert at an emergency medicine meeting.

Several of the health plans have said they will continue to comply with the terms of their settlements once they expire, but “not all have said that,” said Edward R. Gaines III, vice president and chief compliance officer for Healthcare Business Resources in Durham, N.C., who spoke at a meeting on reimbursement sponsored by the American College of Emergency Physicians.

Mr. Gaines said noncompliance among all the plans that have settled has continued to be an issue, which is being dealt with in the courts and administratively. But “the problem is, once the settlement agreement expires, I can't go back into federal court through an easy process to make my complaint heard,” he said.

The settlements were struck in response to Multidistrict Litigation 1334, which was certified as a class action in U.S. District Court for the Southern District of Florida in 2002 and named Aetna Inc., Anthem Insurance Cos. Inc., Cigna, Coventry Health Care Inc., Health Net Inc., Humana Inc., PacifiCare Health Systems Inc., Prudential Insurance Co. of America, United Health Care, and WellPoint Health Networks Inc. as defendants. The suits alleged that the insurers violated the federal Racketeer Influenced and Corrupt Organizations Act by engaging in fraud and extortion in a common scheme to wrongfully deny payment to physicians.

Several state and county medical societies filed the suits on behalf of virtually every physician in the nation–about 900,000 doctors.

United Healthcare and Coventry both were summarily released from litigation. Their release has been upheld on appeal.

Aetna and Cigna struck agreements that entailed an immediate payout in response to claims filed by physicians, some changes in billing behavior, and an agreement to provide prospective relief–$300 million from Aetna and $400 million from Cigna.

Cigna's 4-year agreement has now expired, and Aetna's 4-year agreement expired in June 2007; but Aetna's agreement was extended through June 2008 because of compliance disputes. After an investigation, the New Jersey insurance department fined Aetna $9.5 million in June 2007 for failing to properly pay for out-of-network providers. The insurer is paying nonparticipating physicians only 125% of Medicare rates and informing patients that they are not responsible for the difference.

ACEP, the North Carolina chapter of ACEP, Wake Emergency Physicians, and the North Carolina Medical Society subsequently followed up with a complaint to the North Carolina insurance department in November, Mr. Gaines said. The North Carolina group is challenging bundling of 12-lead ECGs into evaluation and management codes, and bundling of other procedures using the CPT-25 modifier codes.

“If we don't get prompt action from Aetna, we're going back to court [to] ask for an extension of the settlement agreement term,” he said.

The American Medical Association and Aetna recently said they are working together to resolve outstanding complaints. Prudential's agreement expires in 2009; agreements with HealthNet, Anthem/WellPoint, and Humana expire in 2010.

Agreements were reached with 90% of the nation's Blue Cross and Blue Shield plans and the Blue Cross and Blue Shield Association last April, but the final settlement date was being worked out at press time. The Blues plans agreed to similar terms as did the other payers, with one exception: Anthem/WellPoint and the Blues plans refused to accept assignment of benefits. The Blues plans were willing to walk away from the settlement if they did not win that concession, said Mr. Gaines.

The court gave preliminary approval last November to a settlement with the West Virginia-based Highmark/Mountain State Blue Cross Blue Shield. Claims could still be filed through February 2008. The final settlement date was also to be decided in February.

Mr. Gaines urged physicians to hold the health plans accountable to their agreements. Information on settlement terms and how to dispute claims can be found at www.hmosettlements.com

LAS VEGAS – As more of the agreements signed by several large insurers to settle a class action suit alleging inappropriate billing practices expire, the possibility is increasing that the companies will return to the same behavior, especially given that many are being accused of violating the terms already, reported a compliance expert at an emergency medicine meeting.

Several of the health plans have said they will continue to comply with the terms of their settlements once they expire, but “not all have said that,” said Edward R. Gaines III, vice president and chief compliance officer for Healthcare Business Resources in Durham, N.C., who spoke at a meeting on reimbursement sponsored by the American College of Emergency Physicians.

Mr. Gaines said noncompliance among all the plans that have settled has continued to be an issue, which is being dealt with in the courts and administratively. But “the problem is, once the settlement agreement expires, I can't go back into federal court through an easy process to make my complaint heard,” he said.

The settlements were struck in response to Multidistrict Litigation 1334, which was certified as a class action in U.S. District Court for the Southern District of Florida in 2002 and named Aetna Inc., Anthem Insurance Cos. Inc., Cigna, Coventry Health Care Inc., Health Net Inc., Humana Inc., PacifiCare Health Systems Inc., Prudential Insurance Co. of America, United Health Care, and WellPoint Health Networks Inc. as defendants. The suits alleged that the insurers violated the federal Racketeer Influenced and Corrupt Organizations Act by engaging in fraud and extortion in a common scheme to wrongfully deny payment to physicians.

Several state and county medical societies filed the suits on behalf of virtually every physician in the nation–about 900,000 doctors.

United Healthcare and Coventry both were summarily released from litigation. Their release has been upheld on appeal.

Aetna and Cigna struck agreements that entailed an immediate payout in response to claims filed by physicians, some changes in billing behavior, and an agreement to provide prospective relief–$300 million from Aetna and $400 million from Cigna.

Cigna's 4-year agreement has now expired, and Aetna's 4-year agreement expired in June 2007; but Aetna's agreement was extended through June 2008 because of compliance disputes. After an investigation, the New Jersey insurance department fined Aetna $9.5 million in June 2007 for failing to properly pay for out-of-network providers. The insurer is paying nonparticipating physicians only 125% of Medicare rates and informing patients that they are not responsible for the difference.

ACEP, the North Carolina chapter of ACEP, Wake Emergency Physicians, and the North Carolina Medical Society subsequently followed up with a complaint to the North Carolina insurance department in November, Mr. Gaines said. The North Carolina group is challenging bundling of 12-lead ECGs into evaluation and management codes, and bundling of other procedures using the CPT-25 modifier codes.

“If we don't get prompt action from Aetna, we're going back to court [to] ask for an extension of the settlement agreement term,” he said.

The American Medical Association and Aetna recently said they are working together to resolve outstanding complaints. Prudential's agreement expires in 2009; agreements with HealthNet, Anthem/WellPoint, and Humana expire in 2010.

Agreements were reached with 90% of the nation's Blue Cross and Blue Shield plans and the Blue Cross and Blue Shield Association last April, but the final settlement date was being worked out at press time. The Blues plans agreed to similar terms as did the other payers, with one exception: Anthem/WellPoint and the Blues plans refused to accept assignment of benefits. The Blues plans were willing to walk away from the settlement if they did not win that concession, said Mr. Gaines.

The court gave preliminary approval last November to a settlement with the West Virginia-based Highmark/Mountain State Blue Cross Blue Shield. Claims could still be filed through February 2008. The final settlement date was also to be decided in February.

Mr. Gaines urged physicians to hold the health plans accountable to their agreements. Information on settlement terms and how to dispute claims can be found at www.hmosettlements.com

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small increase from the previous year, America's prescription drug tab increased by 8.5%, fueled largely by the new Medicare Part D drug benefit.

Health spending as a share of the nation's gross domestic product continues to rise, hitting 16% in 2006.

Total spending on physician and clinical services grew 5.9% to $448 billion, which was the slowest rate of growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report, which was published in the January/February issue of Health Affairs.

Spending on nursing home and home health declined from the previous year's growth. Nursing home prices dropped; spending still grew 3.5% in 2006, but that was less than the almost 5% increase in 2005. Home health services—the fastest growing component of personal health spending—grew almost 10% in 2006, down from a 12% increase in 2005.

Medicare had the fastest rate of growth since 1981, according to the report. Spending increased 19% in 2006 to $401 billion, driven largely by the prescription drug benefit and the cost of administration for that benefit and for Medicare Advantage, a managed care program.

Medicaid spending dropped for the first time since the program began in 1965. The 0.9% decrease was largely due to a large number of Medicaid enrollees shifted into Medicare for their prescription drugs.

Overall drug spending grew 8.5% in 2006—a far cry from the double-digit increases seen in the late 1990s, but still an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising given that about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

The change in the drug rebate picture also contributed to rising drug costs. Under Medicaid, states received an average 30% rebate from drugmakers. Medicare, however, got only about 5% from manufacturers for the millions of beneficiaries who shifted out of Medicaid.

Medicare spent $41 billion on Part D in 2006, with $35 billion for drug purchases and $6 billion for administration and “net cost of insurance”—that is, the cost of subsidizing premiums for low-income beneficiaries and costs for transferring beneficiaries into private plans. Medicare paid for 18% of all retail drugs, compared with only 2% in 2005. Medicare took on costs that were previously covered by private insurers, Medicaid, and the uninsured. On average, each Part D enrollee received $1,700 in benefits, according to CMS.

The largest increase in drug utilization came from beneficiaries using the Part D benefit. But there was also increased drug use due to new indications for existing drugs, growth in several therapeutic classes, and rising use of specialty drugs such as injectable biologics for rheumatoid arthritis and multiple sclerosis, and anemia drugs for oncology. Hypnotics saw the largest rise in use of any drug class.

The rising availability of generic drugs—and programs designed to encourage use of generics, such as smaller copays for that category—also drove an increase in pharmaceutical utilization. A $4 generic program offered by Wal-Mart contributed to that trend and also helped keep prices down, according to the CMS authors. Of drugs dispensed in the United States in 2006, 63% were generic, according to the report.

Overall, the CMS analysis shows that the largest category of health spending is still hospital care, which consumes 31% of the nation's health dollars. Other spending, which includes dental, home health, durable medical equipment, over-the-counter medications, public health, research, and capital equipment, consumes 25% of the health dollar. Physician and clinical services follow at 21%, then prescription drugs at 10%, administration at 7%, and nursing home care at 6%.

The authors said the data they had at hand and their analysis did not allow them to determine whether the prescription drug benefit had increased or lowered overall health care spending. “Sooner or later, somebody's going to do a dynamite study and figure this out,” said Richard Foster, the chief actuary at CMS.

Mr. Foster told reporters that the study showed that the “overall cost of prescription drugs has changed very little as a result of Part D.” A study by Consumers Union, however, seemed to refute that claim. (See box at left.)

ELSEVIER GLOBAL MEDICAL NEWS

Drug Prices Up, Consumers Union Says

Government economists have concluded that the Medicare Part D prescription drug benefit did not affect the price of pharmaceuticals in 2006, the program's first full year, but Consumers Union has issued another in a series of studies charging that drug prices are indeed rising under the program.

Each month since December 2005, the consumer advocacy group has tracked the prices of five drugs commonly used by Medicare beneficiaries in a single ZIP code in each of five states—California, Florida, Illinois, New York, and Texas. The data are taken directly from

Medicare.gov

Medicare beneficiaries might be bearing the brunt of price increases, especially because they usually are liable for a percentage of the drug's price as a copayment. “We're seeing a lot of inflation,” said Consumers Union Senior Policy Analyst Bill Vaughan in an interview.

The group also found that prices generally rise the most from December to January—after a beneficiary has locked into a plan for the upcoming year. The average increase for the five drugs as a package (Lipitor, Celebrex, Zoloft, nifedipine ER, and Altace) was $369 from December 2007 to January 2008, according to Consumers Union.

“Most of these Medicare drug plans are increasing costs [at] double or triple the rate of inflation, which really torpedoes the insurance industry's claim that they are getting the best deal for seniors,” said Mr. Vaughan. “These continual price hikes are Exhibit A for Congress to give renewed attention to negotiating drug prices on behalf of America's taxpayers and seniors, and offering the option of a Medicare-run drug benefit.”

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small increase from the previous year, America's prescription drug tab increased by 8.5%, fueled largely by the new Medicare Part D drug benefit.

Health spending as a share of the nation's gross domestic product continues to rise, hitting 16% in 2006.

Total spending on physician and clinical services grew 5.9% to $448 billion, which was the slowest rate of growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report, which was published in the January/February issue of Health Affairs.

Spending on nursing home and home health declined from the previous year's growth. Nursing home prices dropped; spending still grew 3.5% in 2006, but that was less than the almost 5% increase in 2005. Home health services—the fastest growing component of personal health spending—grew almost 10% in 2006, down from a 12% increase in 2005.

Medicare had the fastest rate of growth since 1981, according to the report. Spending increased 19% in 2006 to $401 billion, driven largely by the prescription drug benefit and the cost of administration for that benefit and for Medicare Advantage, a managed care program.

Medicaid spending dropped for the first time since the program began in 1965. The 0.9% decrease was largely due to a large number of Medicaid enrollees shifted into Medicare for their prescription drugs.

Overall drug spending grew 8.5% in 2006—a far cry from the double-digit increases seen in the late 1990s, but still an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising given that about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

The change in the drug rebate picture also contributed to rising drug costs. Under Medicaid, states received an average 30% rebate from drugmakers. Medicare, however, got only about 5% from manufacturers for the millions of beneficiaries who shifted out of Medicaid.

Medicare spent $41 billion on Part D in 2006, with $35 billion for drug purchases and $6 billion for administration and “net cost of insurance”—that is, the cost of subsidizing premiums for low-income beneficiaries and costs for transferring beneficiaries into private plans. Medicare paid for 18% of all retail drugs, compared with only 2% in 2005. Medicare took on costs that were previously covered by private insurers, Medicaid, and the uninsured. On average, each Part D enrollee received $1,700 in benefits, according to CMS.

The largest increase in drug utilization came from beneficiaries using the Part D benefit. But there was also increased drug use due to new indications for existing drugs, growth in several therapeutic classes, and rising use of specialty drugs such as injectable biologics for rheumatoid arthritis and multiple sclerosis, and anemia drugs for oncology. Hypnotics saw the largest rise in use of any drug class.

The rising availability of generic drugs—and programs designed to encourage use of generics, such as smaller copays for that category—also drove an increase in pharmaceutical utilization. A $4 generic program offered by Wal-Mart contributed to that trend and also helped keep prices down, according to the CMS authors. Of drugs dispensed in the United States in 2006, 63% were generic, according to the report.

Overall, the CMS analysis shows that the largest category of health spending is still hospital care, which consumes 31% of the nation's health dollars. Other spending, which includes dental, home health, durable medical equipment, over-the-counter medications, public health, research, and capital equipment, consumes 25% of the health dollar. Physician and clinical services follow at 21%, then prescription drugs at 10%, administration at 7%, and nursing home care at 6%.

The authors said the data they had at hand and their analysis did not allow them to determine whether the prescription drug benefit had increased or lowered overall health care spending. “Sooner or later, somebody's going to do a dynamite study and figure this out,” said Richard Foster, the chief actuary at CMS.

Mr. Foster told reporters that the study showed that the “overall cost of prescription drugs has changed very little as a result of Part D.” A study by Consumers Union, however, seemed to refute that claim. (See box at left.)

ELSEVIER GLOBAL MEDICAL NEWS

Drug Prices Up, Consumers Union Says

Government economists have concluded that the Medicare Part D prescription drug benefit did not affect the price of pharmaceuticals in 2006, the program's first full year, but Consumers Union has issued another in a series of studies charging that drug prices are indeed rising under the program.

Each month since December 2005, the consumer advocacy group has tracked the prices of five drugs commonly used by Medicare beneficiaries in a single ZIP code in each of five states—California, Florida, Illinois, New York, and Texas. The data are taken directly from

Medicare.gov

Medicare beneficiaries might be bearing the brunt of price increases, especially because they usually are liable for a percentage of the drug's price as a copayment. “We're seeing a lot of inflation,” said Consumers Union Senior Policy Analyst Bill Vaughan in an interview.

The group also found that prices generally rise the most from December to January—after a beneficiary has locked into a plan for the upcoming year. The average increase for the five drugs as a package (Lipitor, Celebrex, Zoloft, nifedipine ER, and Altace) was $369 from December 2007 to January 2008, according to Consumers Union.

“Most of these Medicare drug plans are increasing costs [at] double or triple the rate of inflation, which really torpedoes the insurance industry's claim that they are getting the best deal for seniors,” said Mr. Vaughan. “These continual price hikes are Exhibit A for Congress to give renewed attention to negotiating drug prices on behalf of America's taxpayers and seniors, and offering the option of a Medicare-run drug benefit.”

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small increase from the previous year, America's prescription drug tab increased by 8.5%, fueled largely by the new Medicare Part D drug benefit.

Health spending as a share of the nation's gross domestic product continues to rise, hitting 16% in 2006.

Total spending on physician and clinical services grew 5.9% to $448 billion, which was the slowest rate of growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report, which was published in the January/February issue of Health Affairs.

Spending on nursing home and home health declined from the previous year's growth. Nursing home prices dropped; spending still grew 3.5% in 2006, but that was less than the almost 5% increase in 2005. Home health services—the fastest growing component of personal health spending—grew almost 10% in 2006, down from a 12% increase in 2005.

Medicare had the fastest rate of growth since 1981, according to the report. Spending increased 19% in 2006 to $401 billion, driven largely by the prescription drug benefit and the cost of administration for that benefit and for Medicare Advantage, a managed care program.

Medicaid spending dropped for the first time since the program began in 1965. The 0.9% decrease was largely due to a large number of Medicaid enrollees shifted into Medicare for their prescription drugs.

Overall drug spending grew 8.5% in 2006—a far cry from the double-digit increases seen in the late 1990s, but still an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising given that about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

The change in the drug rebate picture also contributed to rising drug costs. Under Medicaid, states received an average 30% rebate from drugmakers. Medicare, however, got only about 5% from manufacturers for the millions of beneficiaries who shifted out of Medicaid.

Medicare spent $41 billion on Part D in 2006, with $35 billion for drug purchases and $6 billion for administration and “net cost of insurance”—that is, the cost of subsidizing premiums for low-income beneficiaries and costs for transferring beneficiaries into private plans. Medicare paid for 18% of all retail drugs, compared with only 2% in 2005. Medicare took on costs that were previously covered by private insurers, Medicaid, and the uninsured. On average, each Part D enrollee received $1,700 in benefits, according to CMS.

The largest increase in drug utilization came from beneficiaries using the Part D benefit. But there was also increased drug use due to new indications for existing drugs, growth in several therapeutic classes, and rising use of specialty drugs such as injectable biologics for rheumatoid arthritis and multiple sclerosis, and anemia drugs for oncology. Hypnotics saw the largest rise in use of any drug class.

The rising availability of generic drugs—and programs designed to encourage use of generics, such as smaller copays for that category—also drove an increase in pharmaceutical utilization. A $4 generic program offered by Wal-Mart contributed to that trend and also helped keep prices down, according to the CMS authors. Of drugs dispensed in the United States in 2006, 63% were generic, according to the report.

Overall, the CMS analysis shows that the largest category of health spending is still hospital care, which consumes 31% of the nation's health dollars. Other spending, which includes dental, home health, durable medical equipment, over-the-counter medications, public health, research, and capital equipment, consumes 25% of the health dollar. Physician and clinical services follow at 21%, then prescription drugs at 10%, administration at 7%, and nursing home care at 6%.

The authors said the data they had at hand and their analysis did not allow them to determine whether the prescription drug benefit had increased or lowered overall health care spending. “Sooner or later, somebody's going to do a dynamite study and figure this out,” said Richard Foster, the chief actuary at CMS.

Mr. Foster told reporters that the study showed that the “overall cost of prescription drugs has changed very little as a result of Part D.” A study by Consumers Union, however, seemed to refute that claim. (See box at left.)

ELSEVIER GLOBAL MEDICAL NEWS

Drug Prices Up, Consumers Union Says

Government economists have concluded that the Medicare Part D prescription drug benefit did not affect the price of pharmaceuticals in 2006, the program's first full year, but Consumers Union has issued another in a series of studies charging that drug prices are indeed rising under the program.

Each month since December 2005, the consumer advocacy group has tracked the prices of five drugs commonly used by Medicare beneficiaries in a single ZIP code in each of five states—California, Florida, Illinois, New York, and Texas. The data are taken directly from

Medicare.gov

Medicare beneficiaries might be bearing the brunt of price increases, especially because they usually are liable for a percentage of the drug's price as a copayment. “We're seeing a lot of inflation,” said Consumers Union Senior Policy Analyst Bill Vaughan in an interview.

The group also found that prices generally rise the most from December to January—after a beneficiary has locked into a plan for the upcoming year. The average increase for the five drugs as a package (Lipitor, Celebrex, Zoloft, nifedipine ER, and Altace) was $369 from December 2007 to January 2008, according to Consumers Union.

“Most of these Medicare drug plans are increasing costs [at] double or triple the rate of inflation, which really torpedoes the insurance industry's claim that they are getting the best deal for seniors,” said Mr. Vaughan. “These continual price hikes are Exhibit A for Congress to give renewed attention to negotiating drug prices on behalf of America's taxpayers and seniors, and offering the option of a Medicare-run drug benefit.”

Hospitals participating in a Medicare-sponsored pay-for-performance demonstration continue to sustain initial gains in quality improvement and have seen a huge decline in costs and mortality for selected conditions over the project's first 3 years, according to data released by Premier Inc., a hospital performance improvement alliance.

Overall, the median hospital cost per patient dropped by $1,000 in the first 3 years, and median mortality dropped by 1.87%. The project has 250 participating hospitals, and more than 1 million patient records were analyzed.

Premier, which is managing the Centers for Medicare and Medicaid Services-funded Hospital Quality Incentive Demonstration project, estimated that if every hospital in the United States achieved the same benchmarks, there would be 70,000 fewer deaths each year and hospital costs would drop by as much as $4.5 billion a year.

At a briefing to release the results, Mark Wynn, Ph.D., director of payment policy demonstrations at CMS, said that the hospital project is considered one of the agency's primary arguments in favor of value-based purchasing. CMS has been pushing that policy as the most effective way to restructure Medicare reimbursement to reward efficiency and value.

Dr. Wynn acknowledged that the financial incentives have been very small, but even so, there has been significant improvement. "Relatively modest dollars can have huge impacts," he said.

Dr. Evan Benjamin, chief quality officer for Baystate Health System in Springfield, Mass., agreed that even small financial carrots have an effect. Dr. Benjamin was the lead author of a study looking at earlier data from the improvement project. He and his colleagues found that quality was higher among the 250 hospitals that were given incentives than it was in control hospitals that were required to report their data publicly but were not given pay-for-performance incentives (N. Engl. J. Med. 2007;356:486–96).

There's room for even more improvement, Dr. Benjamin said at the briefing, noting that most of the hospitals started at a relatively high level of quality and that larger financial incentives might push greater gains.

The Hospital Quality Incentive Demonstration project began in October 2003; the data released covered every quarter through June 2007.

Hospitals were given aggregate scores for each of five conditions—acute myocardial infarction, heart failure, coronary artery bypass graft, pneumonia, and hip and knee replacement—based on reporting for 27 process measures. Hospitals with fewer than eight cases per quarter were excluded.

Overall, hospitals improved by an average 17% on a composite quality score used by the project. Improvements were largest in pneumonia and heart failure. For instance, only 70% of patients were receiving appropriate pneumonia care at the start, but by June 2007, 93% were. For heart failure, the numbers rose from 64% to 93% of patients getting quality care. Savings were also greatest for heart failure, at about $1,339 per case.

There was a continuing downward trend in performance variation among the hospitals, with all moving toward the ideal, said Richard Norling, president and CEO of Premier Inc. For the hospitals that were on target 100% of the time with 100% of patients, costs and mortality were lowest, he said. For instance, the mortality rate for coronary artery bypass graft patients was close to 6% at hospitals that met appropriate care benchmarks in only half the patients or fewer. Mortality was just under 2% for facilities that met those benchmarks in 75%–100% of the patients, Mr. Norling said.

Attaining the goals of the demonstration project required huge cultural shifts and large investments in information systems, according to two hospital executives whose facilities participated in the project. Before the project, the Aurora Health Care system was reactive and was achieving only incremental quality improvement, despite having a culture and leadership that focused on better care, said Dr. Nick Turkal, president and CEO of the Milwaukee-based nonprofit system.

Participation in the demonstration has changed the mind-set to "a pursuit of perfection," Dr. Turkal said at the briefing. The system's 13 hospitals have 100,000 admissions annually. Data on meeting the pay-for-performance goals are given to employees every 60 days, and are updated regularly on the system's Web site for the public to see. Mortality and costs are down significantly across the system, but "we're not done yet," he said.

Improvements are possible regardless of facility size or location, said Dr. Mark Povroznik, director of quality initiatives at United Hospital Center, Clarksburg, W.Va. The 375-bed facility has about 15,000 admissions a year and is facing a large and growing uncompensated care burden, he said at the briefing.

The facility has gone from being among the top 20% in two conditions during the first year to being on track to hitting that mark for four conditions in the upcoming year, said Dr. Povroznik. The payout has been tiny, with an estimated $143,000 in bonuses due for 2007, but the rewards are large in quality improvement, he said.

The demonstration project has proved that incentives can work, said Dr. Wynn. CMS is tinkering slightly with the project, however. Starting this year, there will be incentives not just for improvement over baseline and for hitting the top 20%, but also for hospitals that show the greatest improvement. A total of $12 million will be available, he said.

Hospitals participating in a Medicare-sponsored pay-for-performance demonstration continue to sustain initial gains in quality improvement and have seen a huge decline in costs and mortality for selected conditions over the project's first 3 years, according to data released by Premier Inc., a hospital performance improvement alliance.

Overall, the median hospital cost per patient dropped by $1,000 in the first 3 years, and median mortality dropped by 1.87%. The project has 250 participating hospitals, and more than 1 million patient records were analyzed.

Premier, which is managing the Centers for Medicare and Medicaid Services-funded Hospital Quality Incentive Demonstration project, estimated that if every hospital in the United States achieved the same benchmarks, there would be 70,000 fewer deaths each year and hospital costs would drop by as much as $4.5 billion a year.

At a briefing to release the results, Mark Wynn, Ph.D., director of payment policy demonstrations at CMS, said that the hospital project is considered one of the agency's primary arguments in favor of value-based purchasing. CMS has been pushing that policy as the most effective way to restructure Medicare reimbursement to reward efficiency and value.

Dr. Wynn acknowledged that the financial incentives have been very small, but even so, there has been significant improvement. "Relatively modest dollars can have huge impacts," he said.

Dr. Evan Benjamin, chief quality officer for Baystate Health System in Springfield, Mass., agreed that even small financial carrots have an effect. Dr. Benjamin was the lead author of a study looking at earlier data from the improvement project. He and his colleagues found that quality was higher among the 250 hospitals that were given incentives than it was in control hospitals that were required to report their data publicly but were not given pay-for-performance incentives (N. Engl. J. Med. 2007;356:486–96).

There's room for even more improvement, Dr. Benjamin said at the briefing, noting that most of the hospitals started at a relatively high level of quality and that larger financial incentives might push greater gains.

The Hospital Quality Incentive Demonstration project began in October 2003; the data released covered every quarter through June 2007.

Hospitals were given aggregate scores for each of five conditions—acute myocardial infarction, heart failure, coronary artery bypass graft, pneumonia, and hip and knee replacement—based on reporting for 27 process measures. Hospitals with fewer than eight cases per quarter were excluded.

Overall, hospitals improved by an average 17% on a composite quality score used by the project. Improvements were largest in pneumonia and heart failure. For instance, only 70% of patients were receiving appropriate pneumonia care at the start, but by June 2007, 93% were. For heart failure, the numbers rose from 64% to 93% of patients getting quality care. Savings were also greatest for heart failure, at about $1,339 per case.

There was a continuing downward trend in performance variation among the hospitals, with all moving toward the ideal, said Richard Norling, president and CEO of Premier Inc. For the hospitals that were on target 100% of the time with 100% of patients, costs and mortality were lowest, he said. For instance, the mortality rate for coronary artery bypass graft patients was close to 6% at hospitals that met appropriate care benchmarks in only half the patients or fewer. Mortality was just under 2% for facilities that met those benchmarks in 75%–100% of the patients, Mr. Norling said.

Attaining the goals of the demonstration project required huge cultural shifts and large investments in information systems, according to two hospital executives whose facilities participated in the project. Before the project, the Aurora Health Care system was reactive and was achieving only incremental quality improvement, despite having a culture and leadership that focused on better care, said Dr. Nick Turkal, president and CEO of the Milwaukee-based nonprofit system.

Participation in the demonstration has changed the mind-set to "a pursuit of perfection," Dr. Turkal said at the briefing. The system's 13 hospitals have 100,000 admissions annually. Data on meeting the pay-for-performance goals are given to employees every 60 days, and are updated regularly on the system's Web site for the public to see. Mortality and costs are down significantly across the system, but "we're not done yet," he said.

Improvements are possible regardless of facility size or location, said Dr. Mark Povroznik, director of quality initiatives at United Hospital Center, Clarksburg, W.Va. The 375-bed facility has about 15,000 admissions a year and is facing a large and growing uncompensated care burden, he said at the briefing.

The facility has gone from being among the top 20% in two conditions during the first year to being on track to hitting that mark for four conditions in the upcoming year, said Dr. Povroznik. The payout has been tiny, with an estimated $143,000 in bonuses due for 2007, but the rewards are large in quality improvement, he said.

The demonstration project has proved that incentives can work, said Dr. Wynn. CMS is tinkering slightly with the project, however. Starting this year, there will be incentives not just for improvement over baseline and for hitting the top 20%, but also for hospitals that show the greatest improvement. A total of $12 million will be available, he said.

Hospitals participating in a Medicare-sponsored pay-for-performance demonstration continue to sustain initial gains in quality improvement and have seen a huge decline in costs and mortality for selected conditions over the project's first 3 years, according to data released by Premier Inc., a hospital performance improvement alliance.

Overall, the median hospital cost per patient dropped by $1,000 in the first 3 years, and median mortality dropped by 1.87%. The project has 250 participating hospitals, and more than 1 million patient records were analyzed.

Premier, which is managing the Centers for Medicare and Medicaid Services-funded Hospital Quality Incentive Demonstration project, estimated that if every hospital in the United States achieved the same benchmarks, there would be 70,000 fewer deaths each year and hospital costs would drop by as much as $4.5 billion a year.

At a briefing to release the results, Mark Wynn, Ph.D., director of payment policy demonstrations at CMS, said that the hospital project is considered one of the agency's primary arguments in favor of value-based purchasing. CMS has been pushing that policy as the most effective way to restructure Medicare reimbursement to reward efficiency and value.

Dr. Wynn acknowledged that the financial incentives have been very small, but even so, there has been significant improvement. "Relatively modest dollars can have huge impacts," he said.

Dr. Evan Benjamin, chief quality officer for Baystate Health System in Springfield, Mass., agreed that even small financial carrots have an effect. Dr. Benjamin was the lead author of a study looking at earlier data from the improvement project. He and his colleagues found that quality was higher among the 250 hospitals that were given incentives than it was in control hospitals that were required to report their data publicly but were not given pay-for-performance incentives (N. Engl. J. Med. 2007;356:486–96).

There's room for even more improvement, Dr. Benjamin said at the briefing, noting that most of the hospitals started at a relatively high level of quality and that larger financial incentives might push greater gains.

The Hospital Quality Incentive Demonstration project began in October 2003; the data released covered every quarter through June 2007.

Hospitals were given aggregate scores for each of five conditions—acute myocardial infarction, heart failure, coronary artery bypass graft, pneumonia, and hip and knee replacement—based on reporting for 27 process measures. Hospitals with fewer than eight cases per quarter were excluded.

Overall, hospitals improved by an average 17% on a composite quality score used by the project. Improvements were largest in pneumonia and heart failure. For instance, only 70% of patients were receiving appropriate pneumonia care at the start, but by June 2007, 93% were. For heart failure, the numbers rose from 64% to 93% of patients getting quality care. Savings were also greatest for heart failure, at about $1,339 per case.

There was a continuing downward trend in performance variation among the hospitals, with all moving toward the ideal, said Richard Norling, president and CEO of Premier Inc. For the hospitals that were on target 100% of the time with 100% of patients, costs and mortality were lowest, he said. For instance, the mortality rate for coronary artery bypass graft patients was close to 6% at hospitals that met appropriate care benchmarks in only half the patients or fewer. Mortality was just under 2% for facilities that met those benchmarks in 75%–100% of the patients, Mr. Norling said.

Attaining the goals of the demonstration project required huge cultural shifts and large investments in information systems, according to two hospital executives whose facilities participated in the project. Before the project, the Aurora Health Care system was reactive and was achieving only incremental quality improvement, despite having a culture and leadership that focused on better care, said Dr. Nick Turkal, president and CEO of the Milwaukee-based nonprofit system.

Participation in the demonstration has changed the mind-set to "a pursuit of perfection," Dr. Turkal said at the briefing. The system's 13 hospitals have 100,000 admissions annually. Data on meeting the pay-for-performance goals are given to employees every 60 days, and are updated regularly on the system's Web site for the public to see. Mortality and costs are down significantly across the system, but "we're not done yet," he said.

Improvements are possible regardless of facility size or location, said Dr. Mark Povroznik, director of quality initiatives at United Hospital Center, Clarksburg, W.Va. The 375-bed facility has about 15,000 admissions a year and is facing a large and growing uncompensated care burden, he said at the briefing.

The facility has gone from being among the top 20% in two conditions during the first year to being on track to hitting that mark for four conditions in the upcoming year, said Dr. Povroznik. The payout has been tiny, with an estimated $143,000 in bonuses due for 2007, but the rewards are large in quality improvement, he said.

The demonstration project has proved that incentives can work, said Dr. Wynn. CMS is tinkering slightly with the project, however. Starting this year, there will be incentives not just for improvement over baseline and for hitting the top 20%, but also for hospitals that show the greatest improvement. A total of $12 million will be available, he said.

WASHINGTON — With health care expenses accounting for the single largest expense in their budget, states are increasingly looking for solutions from within, not from the federal government, according to an annual accounting of state legislative trends compiled by the Blue Cross and Blue Shield Association.

"Health care spending represented nearly one-third of total state expenditures last fiscal year," said Susan Laudicina, BCBSA director for state research and policy at a briefing for reporters. And, she noted, as the economy weakens, health care costs will continue to rise, while tax revenues will fall. That will add to the pressure to find creative solutions, she said.

"The challenge for state lawmakers is how to avoid cutting existing programs like Medicaid and the State Children's Health Insurance Program while also finding new ways to cover the uninsured and contain costs," said Ms. Laudicina.

The most significant trend observed in the states: an attempt to expand coverage. About half of the state legislatures debated universal coverage or expansion programs for children in fiscal 2007. State mandates requiring individuals to buy insurance were introduced in 12 states. All failed, largely because they are controversial, Ms. Laudicina said.

Connecticut and New York expanded eligibility for SCHIP to 400% of the federal poverty level and seven other states raised eligibility to 300%, but those efforts are threatened by a rule change issued by the Department of Health and Human Services last August that ostensibly caps eligibility at 250% of the federal poverty level. Eight states have sued to challenge that ruling.

Eight states—Connecticut, Indiana, Kansas, Louisiana, Maryland, New York, Texas and Washington—created programs in which public funds are used to subsidize the cost of private employer-sponsored health insurance to Medicaid-eligible workers. Oklahoma expanded its subsidy program, making more people eligible.

So-called "transparency" initiatives are gaining ground, also. These are proposals that require hospitals—and in some cases, physicians—to publicly share information on infections and other adverse events, and also other quality data and pricing. Twenty-one states debated proposals that would require transparency on some level. Transparency bills were enacted in 10 states: Arkansas, Delaware, Georgia, Indiana, Minnesota, New Jersey, Oregon, Pennsylvania, Texas, and Washington.

In Texas, for instance, the state is now requiring hospitals and physicians to provide patients with estimates of charges if requested. Hospitals also will be required to tell patients if there is the possibility that an out-of-network provider will be working in an in-network facility, and to inform them there may be costs to the patient as a result.

The Texas law reflects a growing concern that patients aren't aware that they may be balance-billed, Ms. Laudicina said. Eleven states will take up transparency measures in 2008.

The annual State Legislative Health Care and Insurance Issues report compiles information from the BCBSA's survey of 39 independent Blue Cross and Blue Shield plans.

WASHINGTON — With health care expenses accounting for the single largest expense in their budget, states are increasingly looking for solutions from within, not from the federal government, according to an annual accounting of state legislative trends compiled by the Blue Cross and Blue Shield Association.

"Health care spending represented nearly one-third of total state expenditures last fiscal year," said Susan Laudicina, BCBSA director for state research and policy at a briefing for reporters. And, she noted, as the economy weakens, health care costs will continue to rise, while tax revenues will fall. That will add to the pressure to find creative solutions, she said.

"The challenge for state lawmakers is how to avoid cutting existing programs like Medicaid and the State Children's Health Insurance Program while also finding new ways to cover the uninsured and contain costs," said Ms. Laudicina.

The most significant trend observed in the states: an attempt to expand coverage. About half of the state legislatures debated universal coverage or expansion programs for children in fiscal 2007. State mandates requiring individuals to buy insurance were introduced in 12 states. All failed, largely because they are controversial, Ms. Laudicina said.

Connecticut and New York expanded eligibility for SCHIP to 400% of the federal poverty level and seven other states raised eligibility to 300%, but those efforts are threatened by a rule change issued by the Department of Health and Human Services last August that ostensibly caps eligibility at 250% of the federal poverty level. Eight states have sued to challenge that ruling.

Eight states—Connecticut, Indiana, Kansas, Louisiana, Maryland, New York, Texas and Washington—created programs in which public funds are used to subsidize the cost of private employer-sponsored health insurance to Medicaid-eligible workers. Oklahoma expanded its subsidy program, making more people eligible.

So-called "transparency" initiatives are gaining ground, also. These are proposals that require hospitals—and in some cases, physicians—to publicly share information on infections and other adverse events, and also other quality data and pricing. Twenty-one states debated proposals that would require transparency on some level. Transparency bills were enacted in 10 states: Arkansas, Delaware, Georgia, Indiana, Minnesota, New Jersey, Oregon, Pennsylvania, Texas, and Washington.

In Texas, for instance, the state is now requiring hospitals and physicians to provide patients with estimates of charges if requested. Hospitals also will be required to tell patients if there is the possibility that an out-of-network provider will be working in an in-network facility, and to inform them there may be costs to the patient as a result.

The Texas law reflects a growing concern that patients aren't aware that they may be balance-billed, Ms. Laudicina said. Eleven states will take up transparency measures in 2008.

The annual State Legislative Health Care and Insurance Issues report compiles information from the BCBSA's survey of 39 independent Blue Cross and Blue Shield plans.

WASHINGTON — With health care expenses accounting for the single largest expense in their budget, states are increasingly looking for solutions from within, not from the federal government, according to an annual accounting of state legislative trends compiled by the Blue Cross and Blue Shield Association.

"Health care spending represented nearly one-third of total state expenditures last fiscal year," said Susan Laudicina, BCBSA director for state research and policy at a briefing for reporters. And, she noted, as the economy weakens, health care costs will continue to rise, while tax revenues will fall. That will add to the pressure to find creative solutions, she said.

"The challenge for state lawmakers is how to avoid cutting existing programs like Medicaid and the State Children's Health Insurance Program while also finding new ways to cover the uninsured and contain costs," said Ms. Laudicina.

The most significant trend observed in the states: an attempt to expand coverage. About half of the state legislatures debated universal coverage or expansion programs for children in fiscal 2007. State mandates requiring individuals to buy insurance were introduced in 12 states. All failed, largely because they are controversial, Ms. Laudicina said.

Connecticut and New York expanded eligibility for SCHIP to 400% of the federal poverty level and seven other states raised eligibility to 300%, but those efforts are threatened by a rule change issued by the Department of Health and Human Services last August that ostensibly caps eligibility at 250% of the federal poverty level. Eight states have sued to challenge that ruling.

Eight states—Connecticut, Indiana, Kansas, Louisiana, Maryland, New York, Texas and Washington—created programs in which public funds are used to subsidize the cost of private employer-sponsored health insurance to Medicaid-eligible workers. Oklahoma expanded its subsidy program, making more people eligible.

So-called "transparency" initiatives are gaining ground, also. These are proposals that require hospitals—and in some cases, physicians—to publicly share information on infections and other adverse events, and also other quality data and pricing. Twenty-one states debated proposals that would require transparency on some level. Transparency bills were enacted in 10 states: Arkansas, Delaware, Georgia, Indiana, Minnesota, New Jersey, Oregon, Pennsylvania, Texas, and Washington.

In Texas, for instance, the state is now requiring hospitals and physicians to provide patients with estimates of charges if requested. Hospitals also will be required to tell patients if there is the possibility that an out-of-network provider will be working in an in-network facility, and to inform them there may be costs to the patient as a result.

The Texas law reflects a growing concern that patients aren't aware that they may be balance-billed, Ms. Laudicina said. Eleven states will take up transparency measures in 2008.

The annual State Legislative Health Care and Insurance Issues report compiles information from the BCBSA's survey of 39 independent Blue Cross and Blue Shield plans.

LAS VEGAS — As more of the agreements signed by several large insurers to settle a class action suit alleging inappropriate billing practices expire, the possibility is increasing that the companies will return to the same behavior, especially given that many are being accused of violating the terms already, reported a compliance expert.

Several of the health plans have said they will continue to comply with the terms of their settlements once they expire, but "not all have said that," said Edward R. Gaines III, vice president and chief compliance officer for Healthcare Business Resources in Durham, N.C., who spoke at a meeting on reimbursement sponsored by the American College of Emergency Physicians.

Mr. Gaines said that noncompliance among all the plans that have settled has continued to be an issue, which is being dealt with in the courts and administratively. But, "the problem is, once the settlement agreement expires, I can't go back into federal court through an easy process to make my complaint heard," he said.

The settlements were struck in response to Multidistrict Litigation 1334, which was certified as a class action in U.S. District Court for the Southern District of Florida in 2002 and named Aetna Inc., Anthem Insurance Cos. Inc., Cigna, Coventry Health Care Inc., Health Net Inc., Humana Inc., PacifiCare Health Systems Inc., Prudential Insurance Co. of America, United Health Care, and WellPoint Health Networks Inc. as defendants. The suits alleged that the insurers violated the federal Racketeer Influenced and Corrupt Organizations Act by engaging in fraud and extortion in a common scheme to wrongfully deny payment to physicians.

Several state and county medical societies filed the suits on behalf of virtually every physician in the nation—about 900,000 doctors. United Health Care and Coventry both were summarily released from the litigation. Their release has been upheld on appeal. Aetna and Cigna struck agreements that entailed an immediate payout in response to claims filed by physicians, some changes in billing behavior, and an agreement to provide prospective relief—$300 million from Aetna and $400 million from Cigna.

Cigna's 4-year agreement has now expired, and Aetna's 4-year agreement expired in June 2007; but Aetna's agreement was extended through June 2008 because of compliance disputes. After an investigation, the New Jersey insurance department fined Aetna $9.5 million in June 2007 for failing to properly pay for out-of-network providers. The insurer is paying nonparticipating physicians only 125% of Medicare rates and informing patients that they are not responsible for the difference.

ACEP, the North Carolina chapter of ACEP, Wake Emergency Physicians, and the North Carolina Medical Society subsequently followed up with a complaint to the North Carolina insurance department in November, said Mr. Gaines. The North Carolina group is challenging bundling of 12-lead ECGs into evaluation and management codes, and bundling of other procedures that use the CPT-25 modifier codes.

"If we don't get prompt action from Aetna, we're going back to court [to] ask for an extension of the settlement agreement term," he said.

The American Medical Association and Aetna recently announced that they are working together to resolve outstanding complaints.

Prudential's agreement expires in 2009, and agreements with three other insurers expire in 2010: HealthNet, Anthem/WellPoint, and Humana.

Agreements were reached with 90% of the nation's Blue Cross and Blue Shield plans and the Blue Cross and Blue Shield Association last April, but the final settlement date was being worked out at press time. The Blues plans agreed to similar terms as did the other payers, with one exception: Anthem/WellPoint and the Blues plans refused to accept assignment of benefits. In fact, the Blues plans were willing to walk away from the settlement if they did not win that concession, said Mr. Gaines.

The court gave preliminary approval last November to a settlement with the West Virginia-based Highmark/Mountain State Blue Cross Blue Shield. Claims could still be filed through February 2008.

Mr. Gaines urged physicians to hold the health plans that settled accountable to their agreements.

Information on settlement terms and how to dispute claims can be found at www.hmosettlements.com

LAS VEGAS — As more of the agreements signed by several large insurers to settle a class action suit alleging inappropriate billing practices expire, the possibility is increasing that the companies will return to the same behavior, especially given that many are being accused of violating the terms already, reported a compliance expert.

Several of the health plans have said they will continue to comply with the terms of their settlements once they expire, but "not all have said that," said Edward R. Gaines III, vice president and chief compliance officer for Healthcare Business Resources in Durham, N.C., who spoke at a meeting on reimbursement sponsored by the American College of Emergency Physicians.

Mr. Gaines said that noncompliance among all the plans that have settled has continued to be an issue, which is being dealt with in the courts and administratively. But, "the problem is, once the settlement agreement expires, I can't go back into federal court through an easy process to make my complaint heard," he said.

The settlements were struck in response to Multidistrict Litigation 1334, which was certified as a class action in U.S. District Court for the Southern District of Florida in 2002 and named Aetna Inc., Anthem Insurance Cos. Inc., Cigna, Coventry Health Care Inc., Health Net Inc., Humana Inc., PacifiCare Health Systems Inc., Prudential Insurance Co. of America, United Health Care, and WellPoint Health Networks Inc. as defendants. The suits alleged that the insurers violated the federal Racketeer Influenced and Corrupt Organizations Act by engaging in fraud and extortion in a common scheme to wrongfully deny payment to physicians.

Several state and county medical societies filed the suits on behalf of virtually every physician in the nation—about 900,000 doctors. United Health Care and Coventry both were summarily released from the litigation. Their release has been upheld on appeal. Aetna and Cigna struck agreements that entailed an immediate payout in response to claims filed by physicians, some changes in billing behavior, and an agreement to provide prospective relief—$300 million from Aetna and $400 million from Cigna.

Cigna's 4-year agreement has now expired, and Aetna's 4-year agreement expired in June 2007; but Aetna's agreement was extended through June 2008 because of compliance disputes. After an investigation, the New Jersey insurance department fined Aetna $9.5 million in June 2007 for failing to properly pay for out-of-network providers. The insurer is paying nonparticipating physicians only 125% of Medicare rates and informing patients that they are not responsible for the difference.

ACEP, the North Carolina chapter of ACEP, Wake Emergency Physicians, and the North Carolina Medical Society subsequently followed up with a complaint to the North Carolina insurance department in November, said Mr. Gaines. The North Carolina group is challenging bundling of 12-lead ECGs into evaluation and management codes, and bundling of other procedures that use the CPT-25 modifier codes.

"If we don't get prompt action from Aetna, we're going back to court [to] ask for an extension of the settlement agreement term," he said.

The American Medical Association and Aetna recently announced that they are working together to resolve outstanding complaints.

Prudential's agreement expires in 2009, and agreements with three other insurers expire in 2010: HealthNet, Anthem/WellPoint, and Humana.

Agreements were reached with 90% of the nation's Blue Cross and Blue Shield plans and the Blue Cross and Blue Shield Association last April, but the final settlement date was being worked out at press time. The Blues plans agreed to similar terms as did the other payers, with one exception: Anthem/WellPoint and the Blues plans refused to accept assignment of benefits. In fact, the Blues plans were willing to walk away from the settlement if they did not win that concession, said Mr. Gaines.

The court gave preliminary approval last November to a settlement with the West Virginia-based Highmark/Mountain State Blue Cross Blue Shield. Claims could still be filed through February 2008.

Mr. Gaines urged physicians to hold the health plans that settled accountable to their agreements.

Information on settlement terms and how to dispute claims can be found at www.hmosettlements.com

LAS VEGAS — As more of the agreements signed by several large insurers to settle a class action suit alleging inappropriate billing practices expire, the possibility is increasing that the companies will return to the same behavior, especially given that many are being accused of violating the terms already, reported a compliance expert.

Several of the health plans have said they will continue to comply with the terms of their settlements once they expire, but "not all have said that," said Edward R. Gaines III, vice president and chief compliance officer for Healthcare Business Resources in Durham, N.C., who spoke at a meeting on reimbursement sponsored by the American College of Emergency Physicians.

Mr. Gaines said that noncompliance among all the plans that have settled has continued to be an issue, which is being dealt with in the courts and administratively. But, "the problem is, once the settlement agreement expires, I can't go back into federal court through an easy process to make my complaint heard," he said.

The settlements were struck in response to Multidistrict Litigation 1334, which was certified as a class action in U.S. District Court for the Southern District of Florida in 2002 and named Aetna Inc., Anthem Insurance Cos. Inc., Cigna, Coventry Health Care Inc., Health Net Inc., Humana Inc., PacifiCare Health Systems Inc., Prudential Insurance Co. of America, United Health Care, and WellPoint Health Networks Inc. as defendants. The suits alleged that the insurers violated the federal Racketeer Influenced and Corrupt Organizations Act by engaging in fraud and extortion in a common scheme to wrongfully deny payment to physicians.

Several state and county medical societies filed the suits on behalf of virtually every physician in the nation—about 900,000 doctors. United Health Care and Coventry both were summarily released from the litigation. Their release has been upheld on appeal. Aetna and Cigna struck agreements that entailed an immediate payout in response to claims filed by physicians, some changes in billing behavior, and an agreement to provide prospective relief—$300 million from Aetna and $400 million from Cigna.

Cigna's 4-year agreement has now expired, and Aetna's 4-year agreement expired in June 2007; but Aetna's agreement was extended through June 2008 because of compliance disputes. After an investigation, the New Jersey insurance department fined Aetna $9.5 million in June 2007 for failing to properly pay for out-of-network providers. The insurer is paying nonparticipating physicians only 125% of Medicare rates and informing patients that they are not responsible for the difference.

ACEP, the North Carolina chapter of ACEP, Wake Emergency Physicians, and the North Carolina Medical Society subsequently followed up with a complaint to the North Carolina insurance department in November, said Mr. Gaines. The North Carolina group is challenging bundling of 12-lead ECGs into evaluation and management codes, and bundling of other procedures that use the CPT-25 modifier codes.

"If we don't get prompt action from Aetna, we're going back to court [to] ask for an extension of the settlement agreement term," he said.

The American Medical Association and Aetna recently announced that they are working together to resolve outstanding complaints.

Prudential's agreement expires in 2009, and agreements with three other insurers expire in 2010: HealthNet, Anthem/WellPoint, and Humana.

Agreements were reached with 90% of the nation's Blue Cross and Blue Shield plans and the Blue Cross and Blue Shield Association last April, but the final settlement date was being worked out at press time. The Blues plans agreed to similar terms as did the other payers, with one exception: Anthem/WellPoint and the Blues plans refused to accept assignment of benefits. In fact, the Blues plans were willing to walk away from the settlement if they did not win that concession, said Mr. Gaines.

The court gave preliminary approval last November to a settlement with the West Virginia-based Highmark/Mountain State Blue Cross Blue Shield. Claims could still be filed through February 2008.

Mr. Gaines urged physicians to hold the health plans that settled accountable to their agreements.

Information on settlement terms and how to dispute claims can be found at www.hmosettlements.com

Botox Promotions Investigated

The U.S. Attorney's office for the northern district of Georgia has subpoenaed Allergan, seeking documents that might show off-label promotion of Botox (botulinum toxin type A) for the treatment of headache. The company confirmed the inquiry in a statement, and said that while Allergan currently has Botox in phase III studies for headache, "it is Allergan's policy to promote its products only in a manner consistent with the FDA-approved product labeling." Allergan also intends to comply "with all applicable laws, rules, and regulations," according to the statement. Botox is Allergan's second-biggest-selling product, with $1.2 billion in sales in 2007. The company is projecting sales of about $1.3 billion this year.

Galderma Buys CollaGenex

Two dermatology powerhouses are about to combine—that is, if U.S. regulatory authorities approve the merger of Galderma Laboratories and CollaGenex Pharmaceuticals. Galderma proposes to purchase all of CollaGenex's outstanding shares for about $420 million. Galderma, a subsidiary of the Swiss drugmaker Galderma Pharma based in Newtown, Pa., has such products as Clobex, Tri-Luma, Cetaphil, and Pliaglis. It is also seeking U.S. approval for Dysport, a botulinum toxin type A injection sold in Brazil and Argentina. CollaGenex's flagship therapy is Oracea and the company is testing a vitamin D analogue for mild to moderate psoriasis. Galderma said that it expects to complete the merger before the end of the second quarter.

Supreme Court Limits Device Suits

The U.S. Supreme Court has bolstered medical device manufacturers' argument that FDA approval confers special protection against liability suits. The justices voted 8–1 in finding that the Medical Device Amendments of 1976 supersede state law. That federal law regulates devices that have gone through the premarket approval process, the most rigorous path to approval. Plaintiff Charles Riegel's estate had sued Medtronic Inc., alleging that a catheter that ruptured during cardiac surgery was designed, labeled, and manufactured in violation of New York law. But the justices said that FDA approval "bars common-law claims challenging the safety or effectiveness of a medical device. …" They upheld two previous lower court decisions; Justice Ruth Bader Ginsburg was the sole dissenter. Members of Congress involved in crafting the original amendments were not pleased. "Congress never intended that FDA approval would give blanket immunity to manufacturers from liability for injuries caused by faulty devices," said Sen. Ted Kennedy (D-Mass.) in a statement. "Congress obviously needs to correct the court's decision," he said.

Woodcock Named CDER Head

Dr. Janet Woodcock has been named director of the FDA's Center for Drug Evaluation and Research. Dr. Woodcock, a rheumatologist, served as director of CDER once before, in the 1990s, and has served as acting director since October 2007. The drug industry's chief lobbying group, PhRMA, welcomed the appointment. Dr. Woodcock "has demonstrated willingness to work with diverse partners, including researchers, Congress, the White House, patients, and pharmaceutical research companies," said a statement from the group. But Public Citizen's health research group director Dr. Sidney Wolfe said in an interview that he's "not terribly hopeful" that Dr. Woodcock will lead the center well, because she doesn't like conflict or controversy. "I don't think she's the kind of CDER director we need right now," Dr. Wolfe said. "She's aware of a number of drugs on the market that should be taken off the market, but I don't think she has the fortitude to do something about it."

Drug, Device Promotion May Expand

FDA last month proposed draft guidance that would allow drug and medical device makers to distribute medical or scientific journal articles and reference publications that involve unapproved uses of FDA-approved drugs and medical devices. Drug and device makers had been allowed to disseminate such materials under guidelines set by the FDA, but that authority expired in September 2006. The FDA's new "Good Reprint Practices" draft guidance states that the article or reference should be published by an organization that has an editorial board and fully discloses conflicts of interest. In addition, articles should be peer reviewed, and manufacturers should not distribute special supplements or publications funded by product manufacturers. Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, blasted the FDA for its proposal, which he said in a statement "is great news for the drug industry but terrible for the public health."

Rx Abuse Worries Americans

The abuse of prescription drugs is as big a problem as the abuse of illegal drugs, according to respondents to a Wall Street Journal/Harris Interactive poll. Even so, less than half of those surveyed said they keep prescription medicines in a place where others can't access them. Seventy percent said they were somewhat or very concerned about the risk of addiction associated with some prescription pain medications. The vast majority of the 2,027 adults surveyed voiced the same level of concern about drug side effects and potentially harmful interactions between pain medications and other prescriptions. About 60% of the respondents said they discuss with their physician other prescriptions they are taking when they are prescribed a new medication. Smaller numbers said they told their physician about over-the-counter medications or nutritional supplements.

Botox Promotions Investigated

The U.S. Attorney's office for the northern district of Georgia has subpoenaed Allergan, seeking documents that might show off-label promotion of Botox (botulinum toxin type A) for the treatment of headache. The company confirmed the inquiry in a statement, and said that while Allergan currently has Botox in phase III studies for headache, "it is Allergan's policy to promote its products only in a manner consistent with the FDA-approved product labeling." Allergan also intends to comply "with all applicable laws, rules, and regulations," according to the statement. Botox is Allergan's second-biggest-selling product, with $1.2 billion in sales in 2007. The company is projecting sales of about $1.3 billion this year.

Galderma Buys CollaGenex

Two dermatology powerhouses are about to combine—that is, if U.S. regulatory authorities approve the merger of Galderma Laboratories and CollaGenex Pharmaceuticals. Galderma proposes to purchase all of CollaGenex's outstanding shares for about $420 million. Galderma, a subsidiary of the Swiss drugmaker Galderma Pharma based in Newtown, Pa., has such products as Clobex, Tri-Luma, Cetaphil, and Pliaglis. It is also seeking U.S. approval for Dysport, a botulinum toxin type A injection sold in Brazil and Argentina. CollaGenex's flagship therapy is Oracea and the company is testing a vitamin D analogue for mild to moderate psoriasis. Galderma said that it expects to complete the merger before the end of the second quarter.

Supreme Court Limits Device Suits

The U.S. Supreme Court has bolstered medical device manufacturers' argument that FDA approval confers special protection against liability suits. The justices voted 8–1 in finding that the Medical Device Amendments of 1976 supersede state law. That federal law regulates devices that have gone through the premarket approval process, the most rigorous path to approval. Plaintiff Charles Riegel's estate had sued Medtronic Inc., alleging that a catheter that ruptured during cardiac surgery was designed, labeled, and manufactured in violation of New York law. But the justices said that FDA approval "bars common-law claims challenging the safety or effectiveness of a medical device. …" They upheld two previous lower court decisions; Justice Ruth Bader Ginsburg was the sole dissenter. Members of Congress involved in crafting the original amendments were not pleased. "Congress never intended that FDA approval would give blanket immunity to manufacturers from liability for injuries caused by faulty devices," said Sen. Ted Kennedy (D-Mass.) in a statement. "Congress obviously needs to correct the court's decision," he said.

Woodcock Named CDER Head

Dr. Janet Woodcock has been named director of the FDA's Center for Drug Evaluation and Research. Dr. Woodcock, a rheumatologist, served as director of CDER once before, in the 1990s, and has served as acting director since October 2007. The drug industry's chief lobbying group, PhRMA, welcomed the appointment. Dr. Woodcock "has demonstrated willingness to work with diverse partners, including researchers, Congress, the White House, patients, and pharmaceutical research companies," said a statement from the group. But Public Citizen's health research group director Dr. Sidney Wolfe said in an interview that he's "not terribly hopeful" that Dr. Woodcock will lead the center well, because she doesn't like conflict or controversy. "I don't think she's the kind of CDER director we need right now," Dr. Wolfe said. "She's aware of a number of drugs on the market that should be taken off the market, but I don't think she has the fortitude to do something about it."

Drug, Device Promotion May Expand

FDA last month proposed draft guidance that would allow drug and medical device makers to distribute medical or scientific journal articles and reference publications that involve unapproved uses of FDA-approved drugs and medical devices. Drug and device makers had been allowed to disseminate such materials under guidelines set by the FDA, but that authority expired in September 2006. The FDA's new "Good Reprint Practices" draft guidance states that the article or reference should be published by an organization that has an editorial board and fully discloses conflicts of interest. In addition, articles should be peer reviewed, and manufacturers should not distribute special supplements or publications funded by product manufacturers. Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, blasted the FDA for its proposal, which he said in a statement "is great news for the drug industry but terrible for the public health."

Rx Abuse Worries Americans

The abuse of prescription drugs is as big a problem as the abuse of illegal drugs, according to respondents to a Wall Street Journal/Harris Interactive poll. Even so, less than half of those surveyed said they keep prescription medicines in a place where others can't access them. Seventy percent said they were somewhat or very concerned about the risk of addiction associated with some prescription pain medications. The vast majority of the 2,027 adults surveyed voiced the same level of concern about drug side effects and potentially harmful interactions between pain medications and other prescriptions. About 60% of the respondents said they discuss with their physician other prescriptions they are taking when they are prescribed a new medication. Smaller numbers said they told their physician about over-the-counter medications or nutritional supplements.

Botox Promotions Investigated

The U.S. Attorney's office for the northern district of Georgia has subpoenaed Allergan, seeking documents that might show off-label promotion of Botox (botulinum toxin type A) for the treatment of headache. The company confirmed the inquiry in a statement, and said that while Allergan currently has Botox in phase III studies for headache, "it is Allergan's policy to promote its products only in a manner consistent with the FDA-approved product labeling." Allergan also intends to comply "with all applicable laws, rules, and regulations," according to the statement. Botox is Allergan's second-biggest-selling product, with $1.2 billion in sales in 2007. The company is projecting sales of about $1.3 billion this year.

Galderma Buys CollaGenex

Two dermatology powerhouses are about to combine—that is, if U.S. regulatory authorities approve the merger of Galderma Laboratories and CollaGenex Pharmaceuticals. Galderma proposes to purchase all of CollaGenex's outstanding shares for about $420 million. Galderma, a subsidiary of the Swiss drugmaker Galderma Pharma based in Newtown, Pa., has such products as Clobex, Tri-Luma, Cetaphil, and Pliaglis. It is also seeking U.S. approval for Dysport, a botulinum toxin type A injection sold in Brazil and Argentina. CollaGenex's flagship therapy is Oracea and the company is testing a vitamin D analogue for mild to moderate psoriasis. Galderma said that it expects to complete the merger before the end of the second quarter.

Supreme Court Limits Device Suits

The U.S. Supreme Court has bolstered medical device manufacturers' argument that FDA approval confers special protection against liability suits. The justices voted 8–1 in finding that the Medical Device Amendments of 1976 supersede state law. That federal law regulates devices that have gone through the premarket approval process, the most rigorous path to approval. Plaintiff Charles Riegel's estate had sued Medtronic Inc., alleging that a catheter that ruptured during cardiac surgery was designed, labeled, and manufactured in violation of New York law. But the justices said that FDA approval "bars common-law claims challenging the safety or effectiveness of a medical device. …" They upheld two previous lower court decisions; Justice Ruth Bader Ginsburg was the sole dissenter. Members of Congress involved in crafting the original amendments were not pleased. "Congress never intended that FDA approval would give blanket immunity to manufacturers from liability for injuries caused by faulty devices," said Sen. Ted Kennedy (D-Mass.) in a statement. "Congress obviously needs to correct the court's decision," he said.

Woodcock Named CDER Head

Dr. Janet Woodcock has been named director of the FDA's Center for Drug Evaluation and Research. Dr. Woodcock, a rheumatologist, served as director of CDER once before, in the 1990s, and has served as acting director since October 2007. The drug industry's chief lobbying group, PhRMA, welcomed the appointment. Dr. Woodcock "has demonstrated willingness to work with diverse partners, including researchers, Congress, the White House, patients, and pharmaceutical research companies," said a statement from the group. But Public Citizen's health research group director Dr. Sidney Wolfe said in an interview that he's "not terribly hopeful" that Dr. Woodcock will lead the center well, because she doesn't like conflict or controversy. "I don't think she's the kind of CDER director we need right now," Dr. Wolfe said. "She's aware of a number of drugs on the market that should be taken off the market, but I don't think she has the fortitude to do something about it."

Drug, Device Promotion May Expand

FDA last month proposed draft guidance that would allow drug and medical device makers to distribute medical or scientific journal articles and reference publications that involve unapproved uses of FDA-approved drugs and medical devices. Drug and device makers had been allowed to disseminate such materials under guidelines set by the FDA, but that authority expired in September 2006. The FDA's new "Good Reprint Practices" draft guidance states that the article or reference should be published by an organization that has an editorial board and fully discloses conflicts of interest. In addition, articles should be peer reviewed, and manufacturers should not distribute special supplements or publications funded by product manufacturers. Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, blasted the FDA for its proposal, which he said in a statement "is great news for the drug industry but terrible for the public health."

Rx Abuse Worries Americans

The abuse of prescription drugs is as big a problem as the abuse of illegal drugs, according to respondents to a Wall Street Journal/Harris Interactive poll. Even so, less than half of those surveyed said they keep prescription medicines in a place where others can't access them. Seventy percent said they were somewhat or very concerned about the risk of addiction associated with some prescription pain medications. The vast majority of the 2,027 adults surveyed voiced the same level of concern about drug side effects and potentially harmful interactions between pain medications and other prescriptions. About 60% of the respondents said they discuss with their physician other prescriptions they are taking when they are prescribed a new medication. Smaller numbers said they told their physician about over-the-counter medications or nutritional supplements.

WASHINGTON — Congress is taking a tough look at the use of human growth hormone for a wide variety of conditions, which is prompting some concern that payers may react by limiting reimbursement for legitimate purposes.

Insurers are already reluctant to cover scientifically validated uses of HGH, Dr. Richard Hellman of the University of Missouri, Kansas City, said in an interview. The drug can cost $10,000-$20,000 a year. The continuing use for purposes that have little to no evidence of safety and effectiveness may ultimately endanger patients who genuinely need HGH, said Dr. Hellman, president of the American Association of Clinical Endocrinologists.

An Internet search for “HGH” shows that the drug (or an illicit or counterfeit version) is being promoted for a large number of off-label uses.

Although this has been a widely known problem, Congress decided to take a closer look at HGH and other alleged performance-enhancing substances in the wake of the December 2007 report issued by former Sen. George Mitchell that exposed a culture of acceptance for off-label and unproven uses of HGH and anabolic steroids in Major League Baseball.

In mid-February, the House Committee on Oversight and Government Reform held a hearing on what it called “myths and facts” about HGH, vitamin B12, and other substances. The hearing was essentially a warm-up for subsequent panel meetings on the use of such substances in baseball and other professional sports that were scheduled for February, but it touched on issues of interest to physicians.

The hearing was “an opportunity to provide essential and accurate information not just to professional athletes, but to high school kids, senior citizens, baby boomers turning 60, and everyone in between,” said Rep. Henry Waxman (D-Calif.), chairman of the oversight committee.

HGH has been touted as an antiaging substance, and increasingly appears to be used by athletes of all ages in the belief that it helps them improve performance and recover from injuries faster.

It has been legitimately studied for injury recovery in the elderly, and also is being investigated as a potential therapy for conditions such as fibromyalgia and chronic fatigue syndrome. But this field of inquiry is relatively new.

All of these uses are illegal. HGH is the sole Food and Drug Administration (FDA) approved product that can only be prescribed for the approved indications. In children, the approved indications are to treat growth hormone deficiency, chronic kidney disease, Turner syndrome, small-for-gestational-age infants who do not catch up to normal range, Prader-Willi syndrome, idiopathic short stature; SHOX gene haploinsufficiency, and Noonan syndrome. In adults, HGH is legal for AIDS-related wasting syndrome, short-bowel syndrome, and growth hormone deficiency.

Distribution of HGH, or possession with intent to distribute, for any off-label use is a felony, punishable with up to 5 years in prison and fines.

“Without question, those attempting to market or distribute HGH claiming it will aid healing, slow or reverse the aging process, assist in weight loss, or cure depression are scamming consumers and breaking the law,” warned Rep. Tom Davis (R-Va.), the oversight committee's ranking republican member.

And yet, some estimate that illegal HGH sales far outweigh the sanctioned market. Dr. Thomas Perls told the House committee in February that anti-aging sales amount to $2 billion a year. “I personally have found Web sites of 279 antiaging clinics that advertise HGH treatment, and 26 pharmacies that distribute the drug to these clinics or sometimes directly to users,” said Dr. Perls of Boston University. “I have certainly discovered only a fraction of what exists out there,” he added.

In a JAMA article in 2005, Dr. Perls said that legal sales of HGH in 2004 amounted to about $622 million annually, for a little more than 200,000 initial and refill prescriptions, according to data from IMS Health, a market research company (JAMA 2005:294;2086–90).

Dr. Alan Rogol, of the University of Virginia, Charlottesville, also expressed dismay at the House hearing at what appears to be the growing misuse of HGH. Off-label use comes with increased risk of side effects such as acromegaly, and increased insulin resistance or diabetes, said Dr. Rogol.

He also said that in many cases, HGH purchasers were getting something other than HGH. The prices being advertised are too low and, “many of these preparations are taken orally and cannot be the protein hormone HGH, for it is not active by this route,” said Dr. Rogol, who testified on behalf of the Endocrine Society.

Another potential danger is that many of the illicit sales are of human tissue-derived pituitary growth hormone, which has been removed from the market because it has the potential to contain the pathogen that causes Creutzfeldt-Jakob disease. And yet, some of this type of hormone is still available in Eastern Europe and through the Internet.

“It is my opinion for an adult there are no legitimate off-label uses,” Dr. Rogol emphasized in an interview.

But both Dr. Rogol and Dr. Hellman acknowledged that there are no central data on how much HGH is being used illicitly, by either nonphysician or physician prescribers. It's in the public interest to keep a registry or to create some other way to keep track of HGH use, Dr. Hellman said. Physicians legitimately using HGH “should have no problem having their work scrutinized,” he said.

Both also said they were open to considering data on new uses of HGH, as long as it came from a validated scientific process.

The Endocrine Society and AACE both have published guidelines on HGH. The Endocrine Society guidelines, published in 2006, only pertained to treating adult growth hormone deficiency (J. Clin. Endocrinol. Metab. 2006;91:1621–34).

AACE last published guidelines in 2003. That report took a broad look at HGH uses and highlighted concerns that off-label prescribing or abuse could lead to reimbursement issues for legitimate patients (Endocr. Pract. 2003;9:64–76).

WASHINGTON — Congress is taking a tough look at the use of human growth hormone for a wide variety of conditions, which is prompting some concern that payers may react by limiting reimbursement for legitimate purposes.

Insurers are already reluctant to cover scientifically validated uses of HGH, Dr. Richard Hellman of the University of Missouri, Kansas City, said in an interview. The drug can cost $10,000-$20,000 a year. The continuing use for purposes that have little to no evidence of safety and effectiveness may ultimately endanger patients who genuinely need HGH, said Dr. Hellman, president of the American Association of Clinical Endocrinologists.

An Internet search for “HGH” shows that the drug (or an illicit or counterfeit version) is being promoted for a large number of off-label uses.

Although this has been a widely known problem, Congress decided to take a closer look at HGH and other alleged performance-enhancing substances in the wake of the December 2007 report issued by former Sen. George Mitchell that exposed a culture of acceptance for off-label and unproven uses of HGH and anabolic steroids in Major League Baseball.

In mid-February, the House Committee on Oversight and Government Reform held a hearing on what it called “myths and facts” about HGH, vitamin B12, and other substances. The hearing was essentially a warm-up for subsequent panel meetings on the use of such substances in baseball and other professional sports that were scheduled for February, but it touched on issues of interest to physicians.

The hearing was “an opportunity to provide essential and accurate information not just to professional athletes, but to high school kids, senior citizens, baby boomers turning 60, and everyone in between,” said Rep. Henry Waxman (D-Calif.), chairman of the oversight committee.

HGH has been touted as an antiaging substance, and increasingly appears to be used by athletes of all ages in the belief that it helps them improve performance and recover from injuries faster.

It has been legitimately studied for injury recovery in the elderly, and also is being investigated as a potential therapy for conditions such as fibromyalgia and chronic fatigue syndrome. But this field of inquiry is relatively new.

All of these uses are illegal. HGH is the sole Food and Drug Administration (FDA) approved product that can only be prescribed for the approved indications. In children, the approved indications are to treat growth hormone deficiency, chronic kidney disease, Turner syndrome, small-for-gestational-age infants who do not catch up to normal range, Prader-Willi syndrome, idiopathic short stature; SHOX gene haploinsufficiency, and Noonan syndrome. In adults, HGH is legal for AIDS-related wasting syndrome, short-bowel syndrome, and growth hormone deficiency.

Distribution of HGH, or possession with intent to distribute, for any off-label use is a felony, punishable with up to 5 years in prison and fines.

“Without question, those attempting to market or distribute HGH claiming it will aid healing, slow or reverse the aging process, assist in weight loss, or cure depression are scamming consumers and breaking the law,” warned Rep. Tom Davis (R-Va.), the oversight committee's ranking republican member.

And yet, some estimate that illegal HGH sales far outweigh the sanctioned market. Dr. Thomas Perls told the House committee in February that anti-aging sales amount to $2 billion a year. “I personally have found Web sites of 279 antiaging clinics that advertise HGH treatment, and 26 pharmacies that distribute the drug to these clinics or sometimes directly to users,” said Dr. Perls of Boston University. “I have certainly discovered only a fraction of what exists out there,” he added.

In a JAMA article in 2005, Dr. Perls said that legal sales of HGH in 2004 amounted to about $622 million annually, for a little more than 200,000 initial and refill prescriptions, according to data from IMS Health, a market research company (JAMA 2005:294;2086–90).

Dr. Alan Rogol, of the University of Virginia, Charlottesville, also expressed dismay at the House hearing at what appears to be the growing misuse of HGH. Off-label use comes with increased risk of side effects such as acromegaly, and increased insulin resistance or diabetes, said Dr. Rogol.

He also said that in many cases, HGH purchasers were getting something other than HGH. The prices being advertised are too low and, “many of these preparations are taken orally and cannot be the protein hormone HGH, for it is not active by this route,” said Dr. Rogol, who testified on behalf of the Endocrine Society.

Another potential danger is that many of the illicit sales are of human tissue-derived pituitary growth hormone, which has been removed from the market because it has the potential to contain the pathogen that causes Creutzfeldt-Jakob disease. And yet, some of this type of hormone is still available in Eastern Europe and through the Internet.

“It is my opinion for an adult there are no legitimate off-label uses,” Dr. Rogol emphasized in an interview.

But both Dr. Rogol and Dr. Hellman acknowledged that there are no central data on how much HGH is being used illicitly, by either nonphysician or physician prescribers. It's in the public interest to keep a registry or to create some other way to keep track of HGH use, Dr. Hellman said. Physicians legitimately using HGH “should have no problem having their work scrutinized,” he said.

Both also said they were open to considering data on new uses of HGH, as long as it came from a validated scientific process.

The Endocrine Society and AACE both have published guidelines on HGH. The Endocrine Society guidelines, published in 2006, only pertained to treating adult growth hormone deficiency (J. Clin. Endocrinol. Metab. 2006;91:1621–34).

AACE last published guidelines in 2003. That report took a broad look at HGH uses and highlighted concerns that off-label prescribing or abuse could lead to reimbursement issues for legitimate patients (Endocr. Pract. 2003;9:64–76).

WASHINGTON — Congress is taking a tough look at the use of human growth hormone for a wide variety of conditions, which is prompting some concern that payers may react by limiting reimbursement for legitimate purposes.

Insurers are already reluctant to cover scientifically validated uses of HGH, Dr. Richard Hellman of the University of Missouri, Kansas City, said in an interview. The drug can cost $10,000-$20,000 a year. The continuing use for purposes that have little to no evidence of safety and effectiveness may ultimately endanger patients who genuinely need HGH, said Dr. Hellman, president of the American Association of Clinical Endocrinologists.

An Internet search for “HGH” shows that the drug (or an illicit or counterfeit version) is being promoted for a large number of off-label uses.

Although this has been a widely known problem, Congress decided to take a closer look at HGH and other alleged performance-enhancing substances in the wake of the December 2007 report issued by former Sen. George Mitchell that exposed a culture of acceptance for off-label and unproven uses of HGH and anabolic steroids in Major League Baseball.

In mid-February, the House Committee on Oversight and Government Reform held a hearing on what it called “myths and facts” about HGH, vitamin B12, and other substances. The hearing was essentially a warm-up for subsequent panel meetings on the use of such substances in baseball and other professional sports that were scheduled for February, but it touched on issues of interest to physicians.

The hearing was “an opportunity to provide essential and accurate information not just to professional athletes, but to high school kids, senior citizens, baby boomers turning 60, and everyone in between,” said Rep. Henry Waxman (D-Calif.), chairman of the oversight committee.

HGH has been touted as an antiaging substance, and increasingly appears to be used by athletes of all ages in the belief that it helps them improve performance and recover from injuries faster.

It has been legitimately studied for injury recovery in the elderly, and also is being investigated as a potential therapy for conditions such as fibromyalgia and chronic fatigue syndrome. But this field of inquiry is relatively new.

All of these uses are illegal. HGH is the sole Food and Drug Administration (FDA) approved product that can only be prescribed for the approved indications. In children, the approved indications are to treat growth hormone deficiency, chronic kidney disease, Turner syndrome, small-for-gestational-age infants who do not catch up to normal range, Prader-Willi syndrome, idiopathic short stature; SHOX gene haploinsufficiency, and Noonan syndrome. In adults, HGH is legal for AIDS-related wasting syndrome, short-bowel syndrome, and growth hormone deficiency.

Distribution of HGH, or possession with intent to distribute, for any off-label use is a felony, punishable with up to 5 years in prison and fines.

“Without question, those attempting to market or distribute HGH claiming it will aid healing, slow or reverse the aging process, assist in weight loss, or cure depression are scamming consumers and breaking the law,” warned Rep. Tom Davis (R-Va.), the oversight committee's ranking republican member.

And yet, some estimate that illegal HGH sales far outweigh the sanctioned market. Dr. Thomas Perls told the House committee in February that anti-aging sales amount to $2 billion a year. “I personally have found Web sites of 279 antiaging clinics that advertise HGH treatment, and 26 pharmacies that distribute the drug to these clinics or sometimes directly to users,” said Dr. Perls of Boston University. “I have certainly discovered only a fraction of what exists out there,” he added.

In a JAMA article in 2005, Dr. Perls said that legal sales of HGH in 2004 amounted to about $622 million annually, for a little more than 200,000 initial and refill prescriptions, according to data from IMS Health, a market research company (JAMA 2005:294;2086–90).

Dr. Alan Rogol, of the University of Virginia, Charlottesville, also expressed dismay at the House hearing at what appears to be the growing misuse of HGH. Off-label use comes with increased risk of side effects such as acromegaly, and increased insulin resistance or diabetes, said Dr. Rogol.

He also said that in many cases, HGH purchasers were getting something other than HGH. The prices being advertised are too low and, “many of these preparations are taken orally and cannot be the protein hormone HGH, for it is not active by this route,” said Dr. Rogol, who testified on behalf of the Endocrine Society.

Another potential danger is that many of the illicit sales are of human tissue-derived pituitary growth hormone, which has been removed from the market because it has the potential to contain the pathogen that causes Creutzfeldt-Jakob disease. And yet, some of this type of hormone is still available in Eastern Europe and through the Internet.

“It is my opinion for an adult there are no legitimate off-label uses,” Dr. Rogol emphasized in an interview.

But both Dr. Rogol and Dr. Hellman acknowledged that there are no central data on how much HGH is being used illicitly, by either nonphysician or physician prescribers. It's in the public interest to keep a registry or to create some other way to keep track of HGH use, Dr. Hellman said. Physicians legitimately using HGH “should have no problem having their work scrutinized,” he said.

Both also said they were open to considering data on new uses of HGH, as long as it came from a validated scientific process.

The Endocrine Society and AACE both have published guidelines on HGH. The Endocrine Society guidelines, published in 2006, only pertained to treating adult growth hormone deficiency (J. Clin. Endocrinol. Metab. 2006;91:1621–34).

AACE last published guidelines in 2003. That report took a broad look at HGH uses and highlighted concerns that off-label prescribing or abuse could lead to reimbursement issues for legitimate patients (Endocr. Pract. 2003;9:64–76).

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small increase from the previous year, America's prescription drug tab increased by 8.5%, fueled largely by the new Medicare Part D drug benefit.

Health spending as a share of the nation's gross domestic product continues to rise, hitting 16% in 2006. (See chart.)

Total spending on physician and clinical services grew 5.9% to $448 billion, which was the slowest rate of growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report, which was published in the January/February issue of Health Affairs.

Medicare had the fastest rate of growth since 1981, according to the report. Spending increased 19% in 2006 to $401 billion, driven largely by the prescription drug benefit and the cost of administration for that benefit and for Medicare Advantage, a managed care program.

Medicaid spending dropped for the first time since the program began in 1965. The 0.9% decrease was largely due to a large number of Medicaid enrollees who were shifted into Medicare for their prescription drugs.

Overall drug spending grew 8.5% in 2006—a far cry from the double-digit increases seen in the late 1990s, but still an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising given that about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

The change in the drug rebate picture also contributed to rising drug costs. Under Medicaid, states received an average 30% rebate from drugmakers. Medicare, however, got only about 5% from manufacturers for the millions of beneficiaries who shifted out of Medicaid.

The rising availability of generic drugs—and programs designed to encourage use of generics, such as smaller copays for that category—also drove an increase in pharmaceutical utilization. A $4 generic program offered by Wal-Mart contributed to that trend and also helped keep prices down, according to the CMS authors. Sixty-three percent of drugs dispensed in the United States in 2006 were generic, according to the report.

Overall, the CMS analysis shows that the largest category of health spending is still hospital care, which consumes 31% of the nation's health dollars. Other spending, which includes dental, home health, durable medical equipment, over-the-counter medications, public health, research, and capital equipment, consumes 25% of the health dollar. Physician and clinical services follow at 21%, then prescription drugs at 10%, administration at 7%, and nursing home care at 6%.

ELSEVIER GLOBAL MEDICAL NEWS

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small increase from the previous year, America's prescription drug tab increased by 8.5%, fueled largely by the new Medicare Part D drug benefit.

Health spending as a share of the nation's gross domestic product continues to rise, hitting 16% in 2006. (See chart.)

Total spending on physician and clinical services grew 5.9% to $448 billion, which was the slowest rate of growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report, which was published in the January/February issue of Health Affairs.

Medicare had the fastest rate of growth since 1981, according to the report. Spending increased 19% in 2006 to $401 billion, driven largely by the prescription drug benefit and the cost of administration for that benefit and for Medicare Advantage, a managed care program.

Medicaid spending dropped for the first time since the program began in 1965. The 0.9% decrease was largely due to a large number of Medicaid enrollees who were shifted into Medicare for their prescription drugs.

Overall drug spending grew 8.5% in 2006—a far cry from the double-digit increases seen in the late 1990s, but still an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising given that about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

The change in the drug rebate picture also contributed to rising drug costs. Under Medicaid, states received an average 30% rebate from drugmakers. Medicare, however, got only about 5% from manufacturers for the millions of beneficiaries who shifted out of Medicaid.

The rising availability of generic drugs—and programs designed to encourage use of generics, such as smaller copays for that category—also drove an increase in pharmaceutical utilization. A $4 generic program offered by Wal-Mart contributed to that trend and also helped keep prices down, according to the CMS authors. Sixty-three percent of drugs dispensed in the United States in 2006 were generic, according to the report.

Overall, the CMS analysis shows that the largest category of health spending is still hospital care, which consumes 31% of the nation's health dollars. Other spending, which includes dental, home health, durable medical equipment, over-the-counter medications, public health, research, and capital equipment, consumes 25% of the health dollar. Physician and clinical services follow at 21%, then prescription drugs at 10%, administration at 7%, and nursing home care at 6%.

ELSEVIER GLOBAL MEDICAL NEWS

WASHINGTON — The nation spent $2 trillion, or $7,000 per person, on health care in 2006. While that was only a small increase from the previous year, America's prescription drug tab increased by 8.5%, fueled largely by the new Medicare Part D drug benefit.

Health spending as a share of the nation's gross domestic product continues to rise, hitting 16% in 2006. (See chart.)

Total spending on physician and clinical services grew 5.9% to $448 billion, which was the slowest rate of growth since 1999. Physician pay crawled almost to a halt, largely because of the freeze in Medicare's reimbursement rates in 2006. Private insurers seemed to have followed suit, said Cathy Cowan, an economist at the Centers for Medicare and Medicaid Services. Cowan, a coauthor of an annual analysis of the nation's health spending, spoke at a briefing on the report, which was published in the January/February issue of Health Affairs.

Medicare had the fastest rate of growth since 1981, according to the report. Spending increased 19% in 2006 to $401 billion, driven largely by the prescription drug benefit and the cost of administration for that benefit and for Medicare Advantage, a managed care program.

Medicaid spending dropped for the first time since the program began in 1965. The 0.9% decrease was largely due to a large number of Medicaid enrollees who were shifted into Medicare for their prescription drugs.

Overall drug spending grew 8.5% in 2006—a far cry from the double-digit increases seen in the late 1990s, but still an increase from the 5.8% rise in spending in 2005. Half of the 2006 increase was due to greater utilization, not surprising given that about 23 million Medicare beneficiaries took advantage of the new benefit. Prescription prices increased by only a little over 3%, according to an annual analysis by actuaries at the Centers for Medicare and Medicaid Services.

The change in the drug rebate picture also contributed to rising drug costs. Under Medicaid, states received an average 30% rebate from drugmakers. Medicare, however, got only about 5% from manufacturers for the millions of beneficiaries who shifted out of Medicaid.

The rising availability of generic drugs—and programs designed to encourage use of generics, such as smaller copays for that category—also drove an increase in pharmaceutical utilization. A $4 generic program offered by Wal-Mart contributed to that trend and also helped keep prices down, according to the CMS authors. Sixty-three percent of drugs dispensed in the United States in 2006 were generic, according to the report.

Overall, the CMS analysis shows that the largest category of health spending is still hospital care, which consumes 31% of the nation's health dollars. Other spending, which includes dental, home health, durable medical equipment, over-the-counter medications, public health, research, and capital equipment, consumes 25% of the health dollar. Physician and clinical services follow at 21%, then prescription drugs at 10%, administration at 7%, and nursing home care at 6%.

ELSEVIER GLOBAL MEDICAL NEWS