Alicia Ault

WASHINGTON — A receiving hospital with specialized capabilities has the responsibility to accept an unstable inpatient from a transferring hospital, but only if the patient had not been stabilized for the original condition requiring admittance, according to a recommendation narrowly approved by the Emergency Medical Treatment and Labor Act Technical Advisory Group in September at its seventh and final meeting.

The EMTALA Technical Advisory Group has been meeting during the last 30 months to help the Department of Health and Human Services improve guidance on and enforcement of the statute.

If the Centers for Medicare and Medicaid Services—which is charged with writing the rules for and enforcing EMTALA—follows the panel's recommendation, it's likely the EMTALA interpretive guidelines would be altered, or that a new regulation would be issued under the statute, said panel chairman Dr. David Siegel, an emergency physician and senior vice president at Meridian Health, Neptune, N.J.

The recommended change came after heated debate over whether EMTALA should apply to any inpatient transfers to hospitals with specialized services, such as a catheterization lab. The four CMS officials on the panel all voted in favor of the recommendation.

But other panelists had reservations. The change would “open up a whole new universe of potential issues,” said advisory group member Dr. John A. Kusske, chairman of the department of neurologic surgeons at University of California, Irvine, Medical Center. Dr. Kusske said he was concerned that if EMTALA was applied to these transfers, it might make it harder to find specialists to take on-call duty.

Dr. Charlotte S. Yeh, a panelist from the CMs' regional office in Boston, said that the agency has lacked clarity on whether EMTALA applies to these circumstances, and thus has not actively enforced any complaints.

The clarification from the technical advisory group will help CMS shape its enforcement policy, said Dr. Yeh, who also is an emergency physician.

The responsibilities of a receiving hospital were just one issue on a laundry list of concerns discussed and voted on at the 2-day meeting.

The advisory group made a number of recommendations aimed at strengthening hospitals' ability to find and retain on-call physicians. And it unanimously supported the recommendation that liability protection be provided to hospitals and physicians who provide EMTALA care.

The committee also discussed and voted on issues regarding patients with psychiatric and behavioral disorders. They urged the CMS to refine medical screening exams so they determine if an individual is gravely disabled, suicidal, or homicidal. Even if a patient is determined to be in one of those states, that does not mean that he or she has an emergency medical condition, the advisory group said.

In addition, according to the committee, the use of chemical or physical restraints does not constitute stabilization of an emergency medical condition. EMTALA still applies, unless a hospital or physician can demonstrate that the patient is stabilized irrespective of the restraints.

At a meeting earlier this year, the panel had recommended to the CMS that its charter be extended for another year. The issue was taken up again at its final meeting, but the panelists acknowledged that only Congress can extend the advisory group's charter.

Even so, the panel recommended that the HHS secretary recognize its contributions and that its mission be continued in some fashion. Ongoing review of EMTALA is necessary, said Dr. James Nepola, an advisory group member and a professor of orthopedic surgery at the University of Iowa Hospitals and Clinics in Iowa City.

The full accounting of the technical advisory group's final recommendations will be included in its final report to the HHS secretary, which should be published in the fall, Dr. Siegel said.

“I think the EMTALA TAG did a significant amount of good work to improve the EMTALA law, regulations, and interpretative guidelines,” he said. “Unfortunately, there are issues beyond the statute, such as reimbursement and liability, that must be addressed to ultimately solve the problem.”

WASHINGTON — A receiving hospital with specialized capabilities has the responsibility to accept an unstable inpatient from a transferring hospital, but only if the patient had not been stabilized for the original condition requiring admittance, according to a recommendation narrowly approved by the Emergency Medical Treatment and Labor Act Technical Advisory Group in September at its seventh and final meeting.

The EMTALA Technical Advisory Group has been meeting during the last 30 months to help the Department of Health and Human Services improve guidance on and enforcement of the statute.

If the Centers for Medicare and Medicaid Services—which is charged with writing the rules for and enforcing EMTALA—follows the panel's recommendation, it's likely the EMTALA interpretive guidelines would be altered, or that a new regulation would be issued under the statute, said panel chairman Dr. David Siegel, an emergency physician and senior vice president at Meridian Health, Neptune, N.J.

The recommended change came after heated debate over whether EMTALA should apply to any inpatient transfers to hospitals with specialized services, such as a catheterization lab. The four CMS officials on the panel all voted in favor of the recommendation.

But other panelists had reservations. The change would “open up a whole new universe of potential issues,” said advisory group member Dr. John A. Kusske, chairman of the department of neurologic surgeons at University of California, Irvine, Medical Center. Dr. Kusske said he was concerned that if EMTALA was applied to these transfers, it might make it harder to find specialists to take on-call duty.

Dr. Charlotte S. Yeh, a panelist from the CMs' regional office in Boston, said that the agency has lacked clarity on whether EMTALA applies to these circumstances, and thus has not actively enforced any complaints.

The clarification from the technical advisory group will help CMS shape its enforcement policy, said Dr. Yeh, who also is an emergency physician.

The responsibilities of a receiving hospital were just one issue on a laundry list of concerns discussed and voted on at the 2-day meeting.

The advisory group made a number of recommendations aimed at strengthening hospitals' ability to find and retain on-call physicians. And it unanimously supported the recommendation that liability protection be provided to hospitals and physicians who provide EMTALA care.

The committee also discussed and voted on issues regarding patients with psychiatric and behavioral disorders. They urged the CMS to refine medical screening exams so they determine if an individual is gravely disabled, suicidal, or homicidal. Even if a patient is determined to be in one of those states, that does not mean that he or she has an emergency medical condition, the advisory group said.

In addition, according to the committee, the use of chemical or physical restraints does not constitute stabilization of an emergency medical condition. EMTALA still applies, unless a hospital or physician can demonstrate that the patient is stabilized irrespective of the restraints.

At a meeting earlier this year, the panel had recommended to the CMS that its charter be extended for another year. The issue was taken up again at its final meeting, but the panelists acknowledged that only Congress can extend the advisory group's charter.

Even so, the panel recommended that the HHS secretary recognize its contributions and that its mission be continued in some fashion. Ongoing review of EMTALA is necessary, said Dr. James Nepola, an advisory group member and a professor of orthopedic surgery at the University of Iowa Hospitals and Clinics in Iowa City.

The full accounting of the technical advisory group's final recommendations will be included in its final report to the HHS secretary, which should be published in the fall, Dr. Siegel said.

“I think the EMTALA TAG did a significant amount of good work to improve the EMTALA law, regulations, and interpretative guidelines,” he said. “Unfortunately, there are issues beyond the statute, such as reimbursement and liability, that must be addressed to ultimately solve the problem.”

WASHINGTON — A receiving hospital with specialized capabilities has the responsibility to accept an unstable inpatient from a transferring hospital, but only if the patient had not been stabilized for the original condition requiring admittance, according to a recommendation narrowly approved by the Emergency Medical Treatment and Labor Act Technical Advisory Group in September at its seventh and final meeting.

The EMTALA Technical Advisory Group has been meeting during the last 30 months to help the Department of Health and Human Services improve guidance on and enforcement of the statute.

If the Centers for Medicare and Medicaid Services—which is charged with writing the rules for and enforcing EMTALA—follows the panel's recommendation, it's likely the EMTALA interpretive guidelines would be altered, or that a new regulation would be issued under the statute, said panel chairman Dr. David Siegel, an emergency physician and senior vice president at Meridian Health, Neptune, N.J.

The recommended change came after heated debate over whether EMTALA should apply to any inpatient transfers to hospitals with specialized services, such as a catheterization lab. The four CMS officials on the panel all voted in favor of the recommendation.

But other panelists had reservations. The change would “open up a whole new universe of potential issues,” said advisory group member Dr. John A. Kusske, chairman of the department of neurologic surgeons at University of California, Irvine, Medical Center. Dr. Kusske said he was concerned that if EMTALA was applied to these transfers, it might make it harder to find specialists to take on-call duty.

Dr. Charlotte S. Yeh, a panelist from the CMs' regional office in Boston, said that the agency has lacked clarity on whether EMTALA applies to these circumstances, and thus has not actively enforced any complaints.

The clarification from the technical advisory group will help CMS shape its enforcement policy, said Dr. Yeh, who also is an emergency physician.

The responsibilities of a receiving hospital were just one issue on a laundry list of concerns discussed and voted on at the 2-day meeting.

The advisory group made a number of recommendations aimed at strengthening hospitals' ability to find and retain on-call physicians. And it unanimously supported the recommendation that liability protection be provided to hospitals and physicians who provide EMTALA care.

The committee also discussed and voted on issues regarding patients with psychiatric and behavioral disorders. They urged the CMS to refine medical screening exams so they determine if an individual is gravely disabled, suicidal, or homicidal. Even if a patient is determined to be in one of those states, that does not mean that he or she has an emergency medical condition, the advisory group said.

In addition, according to the committee, the use of chemical or physical restraints does not constitute stabilization of an emergency medical condition. EMTALA still applies, unless a hospital or physician can demonstrate that the patient is stabilized irrespective of the restraints.

At a meeting earlier this year, the panel had recommended to the CMS that its charter be extended for another year. The issue was taken up again at its final meeting, but the panelists acknowledged that only Congress can extend the advisory group's charter.

Even so, the panel recommended that the HHS secretary recognize its contributions and that its mission be continued in some fashion. Ongoing review of EMTALA is necessary, said Dr. James Nepola, an advisory group member and a professor of orthopedic surgery at the University of Iowa Hospitals and Clinics in Iowa City.

The full accounting of the technical advisory group's final recommendations will be included in its final report to the HHS secretary, which should be published in the fall, Dr. Siegel said.

“I think the EMTALA TAG did a significant amount of good work to improve the EMTALA law, regulations, and interpretative guidelines,” he said. “Unfortunately, there are issues beyond the statute, such as reimbursement and liability, that must be addressed to ultimately solve the problem.”

Soon after President Bush delivered on his promise to veto the bipartisan reauthorization of the State Children's Health Insurance Program (SCHIP) on Oct. 3, Democrats in the U.S. House vowed to round up the votes needed to override the veto.

Professional medical societies and advocacy groups said they would join in the battle. “If SCHIP is not reauthorized, millions of children will be denied basic health care needs. … We are asking Congress to override your veto,” Dr. David C. Dale, president of the American College of Physicians, said in a letter to the White House.

In a statement, Dr. Edward L. Langston, board chair of the American Medical Association, called the veto disappointing. “The number of uninsured kids has increased by nearly 1 million over the past year, and action must be taken to reverse this trend.”

Families USA Executive Director Ron Pollack said that even if the House is not successful in overriding the veto, the SCHIP legislation will eventually be approved. “I think there will be increasing pressure on the White House to offer concessions to get this adopted,” Mr. Pollack said in an interview, noting that every round of votes against SCHIP will prove increasingly embarrassing to Republican lawmakers.

Advocates have some time to make their case—SCHIP, which expired Sept. 30, is able to tap funds appropriated as part of a continuing resolution that was approved by Congress to keep the government running until Nov. 16.

The SCHIP program currently covers an estimated 6 million children; the package that was passed by the House and Senate (H.R. 976) and vetoed by the president would have added $35 billion in funding to the program, increasing the enrollment by as many as 4 million children. The new funding was to come from an increase in the excise tax on tobacco.

The package introduced several new elements, including dental benefits and mental health parity. States also would have been given the ability to seek a waiver to extend coverage to low-income pregnant women. And the Department of Health and Human Services was directed to develop a core set of measures to track quality in the Medicaid and SCHIP programs.

The president had signaled his intention to veto, saying that the initial package passed by the House would be a step toward government-run health care and would give coverage to higher-income children. Those children might drop private coverage to join SCHIP, Mr. Bush said.

The final package acknowledged that the program might be overreaching and directed the Government Accountability Office to study and share best practices in states that have successfully prevented children from higher-income families from dropping private coverage. That may have been the only point of convergence for the White House and Congress.

Soon after President Bush delivered on his promise to veto the bipartisan reauthorization of the State Children's Health Insurance Program (SCHIP) on Oct. 3, Democrats in the U.S. House vowed to round up the votes needed to override the veto.

Professional medical societies and advocacy groups said they would join in the battle. “If SCHIP is not reauthorized, millions of children will be denied basic health care needs. … We are asking Congress to override your veto,” Dr. David C. Dale, president of the American College of Physicians, said in a letter to the White House.

In a statement, Dr. Edward L. Langston, board chair of the American Medical Association, called the veto disappointing. “The number of uninsured kids has increased by nearly 1 million over the past year, and action must be taken to reverse this trend.”

Families USA Executive Director Ron Pollack said that even if the House is not successful in overriding the veto, the SCHIP legislation will eventually be approved. “I think there will be increasing pressure on the White House to offer concessions to get this adopted,” Mr. Pollack said in an interview, noting that every round of votes against SCHIP will prove increasingly embarrassing to Republican lawmakers.

Advocates have some time to make their case—SCHIP, which expired Sept. 30, is able to tap funds appropriated as part of a continuing resolution that was approved by Congress to keep the government running until Nov. 16.

The SCHIP program currently covers an estimated 6 million children; the package that was passed by the House and Senate (H.R. 976) and vetoed by the president would have added $35 billion in funding to the program, increasing the enrollment by as many as 4 million children. The new funding was to come from an increase in the excise tax on tobacco.

The package introduced several new elements, including dental benefits and mental health parity. States also would have been given the ability to seek a waiver to extend coverage to low-income pregnant women. And the Department of Health and Human Services was directed to develop a core set of measures to track quality in the Medicaid and SCHIP programs.

The president had signaled his intention to veto, saying that the initial package passed by the House would be a step toward government-run health care and would give coverage to higher-income children. Those children might drop private coverage to join SCHIP, Mr. Bush said.

The final package acknowledged that the program might be overreaching and directed the Government Accountability Office to study and share best practices in states that have successfully prevented children from higher-income families from dropping private coverage. That may have been the only point of convergence for the White House and Congress.

Soon after President Bush delivered on his promise to veto the bipartisan reauthorization of the State Children's Health Insurance Program (SCHIP) on Oct. 3, Democrats in the U.S. House vowed to round up the votes needed to override the veto.

Professional medical societies and advocacy groups said they would join in the battle. “If SCHIP is not reauthorized, millions of children will be denied basic health care needs. … We are asking Congress to override your veto,” Dr. David C. Dale, president of the American College of Physicians, said in a letter to the White House.

In a statement, Dr. Edward L. Langston, board chair of the American Medical Association, called the veto disappointing. “The number of uninsured kids has increased by nearly 1 million over the past year, and action must be taken to reverse this trend.”

Families USA Executive Director Ron Pollack said that even if the House is not successful in overriding the veto, the SCHIP legislation will eventually be approved. “I think there will be increasing pressure on the White House to offer concessions to get this adopted,” Mr. Pollack said in an interview, noting that every round of votes against SCHIP will prove increasingly embarrassing to Republican lawmakers.

Advocates have some time to make their case—SCHIP, which expired Sept. 30, is able to tap funds appropriated as part of a continuing resolution that was approved by Congress to keep the government running until Nov. 16.

The SCHIP program currently covers an estimated 6 million children; the package that was passed by the House and Senate (H.R. 976) and vetoed by the president would have added $35 billion in funding to the program, increasing the enrollment by as many as 4 million children. The new funding was to come from an increase in the excise tax on tobacco.

The package introduced several new elements, including dental benefits and mental health parity. States also would have been given the ability to seek a waiver to extend coverage to low-income pregnant women. And the Department of Health and Human Services was directed to develop a core set of measures to track quality in the Medicaid and SCHIP programs.

The president had signaled his intention to veto, saying that the initial package passed by the House would be a step toward government-run health care and would give coverage to higher-income children. Those children might drop private coverage to join SCHIP, Mr. Bush said.

The final package acknowledged that the program might be overreaching and directed the Government Accountability Office to study and share best practices in states that have successfully prevented children from higher-income families from dropping private coverage. That may have been the only point of convergence for the White House and Congress.

WASHINGTON — The increasing need for endoscopists may be partially met by training midlevel providers such as nurse-endoscopists, according to a gastroenterologist who has embarked on a training program and presented his early findings at the annual Digestive Disease Week.

Dr. Jan Koornstra, of the University Medical Center Groningen (the Netherlands), presented results of the first 100 colonoscopies performed by two nurses who completed the training. Their results were compared with those of a first-year gastroenterology fellow.

The two nurses were already part of the endoscopy team and volunteered for training. There were no special selection criteria or minimum standards for participation, Dr. Koornstra said.

Initially, the nurses were trained on a simulator. They were also given textbook instruction on the relevant theoretical background on colonoscopy. The nurses were also given Game Boy devices to help them improve hand-eye coordination at home. They then started performing two to three flexible sigmoidoscopies and colonoscopies per week.

Competence was assessed by measuring the unassisted cecal intubation rate and time. The nurses were given 30 minutes to reach the cecum. After each procedure, patients were interviewed about pain or discomfort; responses were rated on a 10-point visual analog scale. They were also asked to rate their overall satisfaction.

Dr. Koornstra and his colleagues evaluated the first 100 procedures for each nurse-endoscopist. They included only complete colonoscopies (that is, those in which the cecum could be reached) and diagnostic procedures. Therapeutic procedures and patients with previous large-bowel surgery were excluded.

The procedure results were split into four quarters. For the first 25 procedures, the cecal intubation rates were 70% for the nurses and 60% for the fellow. By the final 25 procedures, rates had improved to 96% for the nurses and 90% for the fellow.

For nurses, the mean intubation time was 14 minutes for the first 25 procedures, gradually decreasing to 12–13 minutes for the final quarter. Results were similar for the fellow, Dr. Koornstra said.

Pain decreased from a score of 3.1 on the 10-point scale to a score of 2 for the final quarter, and discomfort decreased from 1.7 to 0.2. There were virtually no differences on these measures between the nurses and the fellow, he said.

Patients were generally satisfied with the procedures. Abnormalities were identified in about half of the cases, all of which were correctly recognized by the nurses, Dr. Koornstra said.

“Although our data may be a bit premature, I believe our training program for nurse-performed colonoscopy is safe and effective,” at least regarding the nurses' acquisition of technical skills and competency, he said.

WASHINGTON — The increasing need for endoscopists may be partially met by training midlevel providers such as nurse-endoscopists, according to a gastroenterologist who has embarked on a training program and presented his early findings at the annual Digestive Disease Week.

Dr. Jan Koornstra, of the University Medical Center Groningen (the Netherlands), presented results of the first 100 colonoscopies performed by two nurses who completed the training. Their results were compared with those of a first-year gastroenterology fellow.

The two nurses were already part of the endoscopy team and volunteered for training. There were no special selection criteria or minimum standards for participation, Dr. Koornstra said.

Initially, the nurses were trained on a simulator. They were also given textbook instruction on the relevant theoretical background on colonoscopy. The nurses were also given Game Boy devices to help them improve hand-eye coordination at home. They then started performing two to three flexible sigmoidoscopies and colonoscopies per week.

Competence was assessed by measuring the unassisted cecal intubation rate and time. The nurses were given 30 minutes to reach the cecum. After each procedure, patients were interviewed about pain or discomfort; responses were rated on a 10-point visual analog scale. They were also asked to rate their overall satisfaction.

Dr. Koornstra and his colleagues evaluated the first 100 procedures for each nurse-endoscopist. They included only complete colonoscopies (that is, those in which the cecum could be reached) and diagnostic procedures. Therapeutic procedures and patients with previous large-bowel surgery were excluded.

The procedure results were split into four quarters. For the first 25 procedures, the cecal intubation rates were 70% for the nurses and 60% for the fellow. By the final 25 procedures, rates had improved to 96% for the nurses and 90% for the fellow.

For nurses, the mean intubation time was 14 minutes for the first 25 procedures, gradually decreasing to 12–13 minutes for the final quarter. Results were similar for the fellow, Dr. Koornstra said.

Pain decreased from a score of 3.1 on the 10-point scale to a score of 2 for the final quarter, and discomfort decreased from 1.7 to 0.2. There were virtually no differences on these measures between the nurses and the fellow, he said.

Patients were generally satisfied with the procedures. Abnormalities were identified in about half of the cases, all of which were correctly recognized by the nurses, Dr. Koornstra said.

“Although our data may be a bit premature, I believe our training program for nurse-performed colonoscopy is safe and effective,” at least regarding the nurses' acquisition of technical skills and competency, he said.

WASHINGTON — The increasing need for endoscopists may be partially met by training midlevel providers such as nurse-endoscopists, according to a gastroenterologist who has embarked on a training program and presented his early findings at the annual Digestive Disease Week.

Dr. Jan Koornstra, of the University Medical Center Groningen (the Netherlands), presented results of the first 100 colonoscopies performed by two nurses who completed the training. Their results were compared with those of a first-year gastroenterology fellow.

The two nurses were already part of the endoscopy team and volunteered for training. There were no special selection criteria or minimum standards for participation, Dr. Koornstra said.

Initially, the nurses were trained on a simulator. They were also given textbook instruction on the relevant theoretical background on colonoscopy. The nurses were also given Game Boy devices to help them improve hand-eye coordination at home. They then started performing two to three flexible sigmoidoscopies and colonoscopies per week.

Competence was assessed by measuring the unassisted cecal intubation rate and time. The nurses were given 30 minutes to reach the cecum. After each procedure, patients were interviewed about pain or discomfort; responses were rated on a 10-point visual analog scale. They were also asked to rate their overall satisfaction.

Dr. Koornstra and his colleagues evaluated the first 100 procedures for each nurse-endoscopist. They included only complete colonoscopies (that is, those in which the cecum could be reached) and diagnostic procedures. Therapeutic procedures and patients with previous large-bowel surgery were excluded.

The procedure results were split into four quarters. For the first 25 procedures, the cecal intubation rates were 70% for the nurses and 60% for the fellow. By the final 25 procedures, rates had improved to 96% for the nurses and 90% for the fellow.

For nurses, the mean intubation time was 14 minutes for the first 25 procedures, gradually decreasing to 12–13 minutes for the final quarter. Results were similar for the fellow, Dr. Koornstra said.

Pain decreased from a score of 3.1 on the 10-point scale to a score of 2 for the final quarter, and discomfort decreased from 1.7 to 0.2. There were virtually no differences on these measures between the nurses and the fellow, he said.

Patients were generally satisfied with the procedures. Abnormalities were identified in about half of the cases, all of which were correctly recognized by the nurses, Dr. Koornstra said.

“Although our data may be a bit premature, I believe our training program for nurse-performed colonoscopy is safe and effective,” at least regarding the nurses' acquisition of technical skills and competency, he said.

In issuing the third phase of the final regulations implementing the physician self-referral rule, also known as the Stark law, the Center for Medicare and Medicaid Services has returned to a stance it held in the first phase.

The Stark law governs whether, how, and when it is acceptable for physicians to refer patients to hospitals, laboratories, imaging facilities, or other entities in which they may have an ownership interest.

Under the new rule, known as Stark III, published in the Federal Register Sept. 5, physicians will be considered to be “standing in the shoes” of the group practice when their investment arrangements are evaluated for compliance, according to several attorneys.

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, a partner in the health law department of McDermott, Will & Emery's Chicago office. As a result, “the application of exceptions will be different going forward,” Mr. Melvin said in an interview.

That means that most physicians who have referral arrangements will have “a lot of contracts that will have to be looked at and possibly revised,” said Amy E. Nordeng, a counsel in the government affairs office of the Medical Group Management Association. Ms. Nordeng agreed that the return to the “stand in the shoes” view was the most significant component of Stark III.

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices. Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS. In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities under the Stark law) urged CMS to revert to the old policy. CMS itself came to see the indirect compensation analysis as a loophole that allowed potentially questionable investment arrangements to slip through, said Mr. Melvin.

In the Stark III rule, CMS wrote that the change in policy means that, “many compensation arrangements that were analyzed under Phase II as indirect compensation arrangements are now analyzed as direct compensation arrangements that must comply with an applicable exception for direct compensation arrangements.”

There were several other notable changes in Stark III. The regulations clarify that physicians who administer pharmaceuticals under Medicare Part B (such as chemotherapy or infusions) or who prescribe physical therapy, occupational therapy, and speech-language pathology, are entitled to get direct productivity credit for those orders, said Mr. Melvin.

The clarification applies to those two ancillary services only, not to radiology or laboratories, or other services typically offered in-house, he said.

CMS also lifted the prohibition on noncompete agreements. Under Stark II, practices could not impose noncompete agreements on physician recruits. Now, practices can bar competition for up to 2 years, but it's not clear how far, geographically, that noncompete can extend, said Mr. Melvin.

With the new rule, practices have to “go back and look at everything,” including how their physicians are being compensated and the arrangements the practice may have for equipment and leasing or services with hospitals or other DHS entities, he said.

The final Stark rule goes into effect Dec. 5.

In issuing the third phase of the final regulations implementing the physician self-referral rule, also known as the Stark law, the Center for Medicare and Medicaid Services has returned to a stance it held in the first phase.

The Stark law governs whether, how, and when it is acceptable for physicians to refer patients to hospitals, laboratories, imaging facilities, or other entities in which they may have an ownership interest.

Under the new rule, known as Stark III, published in the Federal Register Sept. 5, physicians will be considered to be “standing in the shoes” of the group practice when their investment arrangements are evaluated for compliance, according to several attorneys.

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, a partner in the health law department of McDermott, Will & Emery's Chicago office. As a result, “the application of exceptions will be different going forward,” Mr. Melvin said in an interview.

That means that most physicians who have referral arrangements will have “a lot of contracts that will have to be looked at and possibly revised,” said Amy E. Nordeng, a counsel in the government affairs office of the Medical Group Management Association. Ms. Nordeng agreed that the return to the “stand in the shoes” view was the most significant component of Stark III.

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices. Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS. In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities under the Stark law) urged CMS to revert to the old policy. CMS itself came to see the indirect compensation analysis as a loophole that allowed potentially questionable investment arrangements to slip through, said Mr. Melvin.

In the Stark III rule, CMS wrote that the change in policy means that, “many compensation arrangements that were analyzed under Phase II as indirect compensation arrangements are now analyzed as direct compensation arrangements that must comply with an applicable exception for direct compensation arrangements.”

There were several other notable changes in Stark III. The regulations clarify that physicians who administer pharmaceuticals under Medicare Part B (such as chemotherapy or infusions) or who prescribe physical therapy, occupational therapy, and speech-language pathology, are entitled to get direct productivity credit for those orders, said Mr. Melvin.

The clarification applies to those two ancillary services only, not to radiology or laboratories, or other services typically offered in-house, he said.

CMS also lifted the prohibition on noncompete agreements. Under Stark II, practices could not impose noncompete agreements on physician recruits. Now, practices can bar competition for up to 2 years, but it's not clear how far, geographically, that noncompete can extend, said Mr. Melvin.

With the new rule, practices have to “go back and look at everything,” including how their physicians are being compensated and the arrangements the practice may have for equipment and leasing or services with hospitals or other DHS entities, he said.

The final Stark rule goes into effect Dec. 5.

In issuing the third phase of the final regulations implementing the physician self-referral rule, also known as the Stark law, the Center for Medicare and Medicaid Services has returned to a stance it held in the first phase.

The Stark law governs whether, how, and when it is acceptable for physicians to refer patients to hospitals, laboratories, imaging facilities, or other entities in which they may have an ownership interest.

Under the new rule, known as Stark III, published in the Federal Register Sept. 5, physicians will be considered to be “standing in the shoes” of the group practice when their investment arrangements are evaluated for compliance, according to several attorneys.

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, a partner in the health law department of McDermott, Will & Emery's Chicago office. As a result, “the application of exceptions will be different going forward,” Mr. Melvin said in an interview.

That means that most physicians who have referral arrangements will have “a lot of contracts that will have to be looked at and possibly revised,” said Amy E. Nordeng, a counsel in the government affairs office of the Medical Group Management Association. Ms. Nordeng agreed that the return to the “stand in the shoes” view was the most significant component of Stark III.

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices. Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS. In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities under the Stark law) urged CMS to revert to the old policy. CMS itself came to see the indirect compensation analysis as a loophole that allowed potentially questionable investment arrangements to slip through, said Mr. Melvin.

In the Stark III rule, CMS wrote that the change in policy means that, “many compensation arrangements that were analyzed under Phase II as indirect compensation arrangements are now analyzed as direct compensation arrangements that must comply with an applicable exception for direct compensation arrangements.”

There were several other notable changes in Stark III. The regulations clarify that physicians who administer pharmaceuticals under Medicare Part B (such as chemotherapy or infusions) or who prescribe physical therapy, occupational therapy, and speech-language pathology, are entitled to get direct productivity credit for those orders, said Mr. Melvin.

The clarification applies to those two ancillary services only, not to radiology or laboratories, or other services typically offered in-house, he said.

CMS also lifted the prohibition on noncompete agreements. Under Stark II, practices could not impose noncompete agreements on physician recruits. Now, practices can bar competition for up to 2 years, but it's not clear how far, geographically, that noncompete can extend, said Mr. Melvin.

With the new rule, practices have to “go back and look at everything,” including how their physicians are being compensated and the arrangements the practice may have for equipment and leasing or services with hospitals or other DHS entities, he said.

The final Stark rule goes into effect Dec. 5.

WASHINGTON — A receiving hospital with specialized capabilities, like a stroke center, has the responsibility to accept an unstable inpatient from a transferring hospital, but only if the patient had not been stabilized for the original condition requiring admittance, according to a recommendation by the Emergency Medical Treatment and Labor Act Technical Advisory Group.

The EMTALA Technical Advisory Group has met regularly over the last 30 months to advise the Secretary of the Department of Health and Human Services on improving the statute.

Dr. Ralph Sacco, professor and chairman of the department of neurology at the University of Miami, commented on the recommendations. “It does make sense that acute neurological issues are treated in hospitals that are prepared to deal with acute neurological issues.” However, he added “one way we try to avert [a transfer] from ever happening is by designating stroke centers in advance and by designating [emergency medical service workers] to only take stroke patients there in the first place.”

Dr. Sacco was not a member of the advisory group.

If the Centers for Medicare and Medicaid Services—which is charged with writing the rules for and enforcing EMTALA—follows the recommendation, it's likely the EMTALA interpretive guidelines would be altered, or a new regulation would be issued, said panel chairman Dr. David Siegel, an emergency physician and senior vice president at Meridian Health, in Neptune, N.J.

The recommended change came after heated debate over whether EMTALA should apply to any inpatient transfers to hospitals with specialized services, such as a stroke center or a catheterization lab. The four CMS officials on the panel all voted for the recommendation.

But other panelists had reservations. The change would “open up a whole new universe of potential issues,” said advisory group member Dr. John A. Kusske, chairman of the department of neurologic surgeons at University of California, Irvine, Medical Center. Dr. Kusske was concerned that if EMTALA was applied to these transfers, it might make it harder to find specialists to take on-call duty.

Dr. Sacco added, “We hope people don't abuse the system, by saying, 'this patient is unstable, let's invoke this urgent rule and move them somewhere else.'” Dr. Sacco previoulsy served as director of the Stroke and Critical Care Division at Columbia University, New York.

“The other thing that's happening that could improve the ability to stabilize cases elsewhere is telemedicine,” he added.

Dr. Charlotte S. Yeh, a panelist from the CMS, said the agency has lacked clarity on whether EMTALA applies to these circumstances, and thus has not actively enforced any complaints.

The clarification will help CMS shape its enforcement policy, said Dr. Yeh, who also is an emergency physician.

The advisory group also made a number of recommendations aimed at strengthening hospitals' ability to find and retain on-call physicians.

And it unanimously supported the recommendation that liability protection be provided to hospitals and physicians who provide EMTALA care.

The full accounting of the technical advisory group's final recommendations will be included in its final report to the HHS secretary, which should be published in the fall, Dr. Siegel said.

“Unfortunately, there are issues beyond the statute, such as reimbursement and liability, that must be addressed to ultimately solve the problem.”

WASHINGTON — A receiving hospital with specialized capabilities, like a stroke center, has the responsibility to accept an unstable inpatient from a transferring hospital, but only if the patient had not been stabilized for the original condition requiring admittance, according to a recommendation by the Emergency Medical Treatment and Labor Act Technical Advisory Group.

The EMTALA Technical Advisory Group has met regularly over the last 30 months to advise the Secretary of the Department of Health and Human Services on improving the statute.

Dr. Ralph Sacco, professor and chairman of the department of neurology at the University of Miami, commented on the recommendations. “It does make sense that acute neurological issues are treated in hospitals that are prepared to deal with acute neurological issues.” However, he added “one way we try to avert [a transfer] from ever happening is by designating stroke centers in advance and by designating [emergency medical service workers] to only take stroke patients there in the first place.”

Dr. Sacco was not a member of the advisory group.

If the Centers for Medicare and Medicaid Services—which is charged with writing the rules for and enforcing EMTALA—follows the recommendation, it's likely the EMTALA interpretive guidelines would be altered, or a new regulation would be issued, said panel chairman Dr. David Siegel, an emergency physician and senior vice president at Meridian Health, in Neptune, N.J.

The recommended change came after heated debate over whether EMTALA should apply to any inpatient transfers to hospitals with specialized services, such as a stroke center or a catheterization lab. The four CMS officials on the panel all voted for the recommendation.

But other panelists had reservations. The change would “open up a whole new universe of potential issues,” said advisory group member Dr. John A. Kusske, chairman of the department of neurologic surgeons at University of California, Irvine, Medical Center. Dr. Kusske was concerned that if EMTALA was applied to these transfers, it might make it harder to find specialists to take on-call duty.

Dr. Sacco added, “We hope people don't abuse the system, by saying, 'this patient is unstable, let's invoke this urgent rule and move them somewhere else.'” Dr. Sacco previoulsy served as director of the Stroke and Critical Care Division at Columbia University, New York.

“The other thing that's happening that could improve the ability to stabilize cases elsewhere is telemedicine,” he added.

Dr. Charlotte S. Yeh, a panelist from the CMS, said the agency has lacked clarity on whether EMTALA applies to these circumstances, and thus has not actively enforced any complaints.

The clarification will help CMS shape its enforcement policy, said Dr. Yeh, who also is an emergency physician.

The advisory group also made a number of recommendations aimed at strengthening hospitals' ability to find and retain on-call physicians.

And it unanimously supported the recommendation that liability protection be provided to hospitals and physicians who provide EMTALA care.

The full accounting of the technical advisory group's final recommendations will be included in its final report to the HHS secretary, which should be published in the fall, Dr. Siegel said.

“Unfortunately, there are issues beyond the statute, such as reimbursement and liability, that must be addressed to ultimately solve the problem.”

WASHINGTON — A receiving hospital with specialized capabilities, like a stroke center, has the responsibility to accept an unstable inpatient from a transferring hospital, but only if the patient had not been stabilized for the original condition requiring admittance, according to a recommendation by the Emergency Medical Treatment and Labor Act Technical Advisory Group.

The EMTALA Technical Advisory Group has met regularly over the last 30 months to advise the Secretary of the Department of Health and Human Services on improving the statute.

Dr. Ralph Sacco, professor and chairman of the department of neurology at the University of Miami, commented on the recommendations. “It does make sense that acute neurological issues are treated in hospitals that are prepared to deal with acute neurological issues.” However, he added “one way we try to avert [a transfer] from ever happening is by designating stroke centers in advance and by designating [emergency medical service workers] to only take stroke patients there in the first place.”

Dr. Sacco was not a member of the advisory group.

If the Centers for Medicare and Medicaid Services—which is charged with writing the rules for and enforcing EMTALA—follows the recommendation, it's likely the EMTALA interpretive guidelines would be altered, or a new regulation would be issued, said panel chairman Dr. David Siegel, an emergency physician and senior vice president at Meridian Health, in Neptune, N.J.

The recommended change came after heated debate over whether EMTALA should apply to any inpatient transfers to hospitals with specialized services, such as a stroke center or a catheterization lab. The four CMS officials on the panel all voted for the recommendation.

But other panelists had reservations. The change would “open up a whole new universe of potential issues,” said advisory group member Dr. John A. Kusske, chairman of the department of neurologic surgeons at University of California, Irvine, Medical Center. Dr. Kusske was concerned that if EMTALA was applied to these transfers, it might make it harder to find specialists to take on-call duty.

Dr. Sacco added, “We hope people don't abuse the system, by saying, 'this patient is unstable, let's invoke this urgent rule and move them somewhere else.'” Dr. Sacco previoulsy served as director of the Stroke and Critical Care Division at Columbia University, New York.

“The other thing that's happening that could improve the ability to stabilize cases elsewhere is telemedicine,” he added.

Dr. Charlotte S. Yeh, a panelist from the CMS, said the agency has lacked clarity on whether EMTALA applies to these circumstances, and thus has not actively enforced any complaints.

The clarification will help CMS shape its enforcement policy, said Dr. Yeh, who also is an emergency physician.

The advisory group also made a number of recommendations aimed at strengthening hospitals' ability to find and retain on-call physicians.

And it unanimously supported the recommendation that liability protection be provided to hospitals and physicians who provide EMTALA care.

The full accounting of the technical advisory group's final recommendations will be included in its final report to the HHS secretary, which should be published in the fall, Dr. Siegel said.

“Unfortunately, there are issues beyond the statute, such as reimbursement and liability, that must be addressed to ultimately solve the problem.”

Soon after President Bush delivered on his promise to veto the bipartisan reauthorization of the State Children's Health Insurance Program (SCHIP) on Oct. 3, professional medical societies and children's advocates said they would join with Democrats in the U.S. House who have vowed to round up the votes needed to override the veto.

“We're going to do a full-court press to get that vote,” Dr. James King, president of the American Academy of Family Physicians, said in an interview.

If the status quo were preserved, as proposed by the White House, at least 1 million children nationwide would lose coverage, said Dr. King, who is in private practice in Selmer, Tenn.

“There should be pressure on everybody who doesn't do the right thing for children,” said Dr. Jay Berkelhamer, president of the American Academy of Pediatrics, in an interview.

Dr. Berkelhamer said he did not understand how the president could veto a bill that had such strong bipartisan agreement. The package was not an expansion, but it did ensure that at a minimum, children currently in the program would continue to receive benefits, he said.

Families USA Executive Director Ron Pollack said that even if the House is not successful in overriding the veto, the SCHIP legislation will eventually be approved, and with most of the package intact. “I think there will be increasing pressure on the White House to offer concessions to get this adopted,” said Mr. Pollack in an interview, noting that every round of votes against SCHIP will prove increasingly embarrassing to Republican lawmakers.

Advocates have some time to make their case—SCHIP, which expired Sept. 30, is able to tap funds appropriated as part of a continuing resolution that was approved by Congress to keep the government running until Nov. 16.

The SCHIP program currently covers an estimated 6 million children; the package that was passed by the House and Senate (H.R. 976) and vetoed by the president would have added $35 billion in funding to the program, increasing the enrollment by as many as 4 million children. The new funding was to come from an increase in the excise tax on tobacco.

The package introduced several new elements, including dental benefits and mental health parity. States would have been given the ability to seek a waiver to extend coverage to low-income pregnant women. And the Department of Health and Human Services was directed to develop of a core set of measures to track quality in the Medicaid and SCHIP programs.

The president signaled his intention to veto for at least a month, saying that the initial package passed by the House would be a step toward government-run health care and that it also would give coverage to higher-income children. Those children might drop private coverage to join SCHIP, said Mr. Bush.

The final package acknowledged that the program might be overreaching and directed the Government Accountability Office to study and share best practices in states that have successfully prevented children from higher-income families from dropping private coverage. That may have been the only point of convergence for the White House and Congress.

President Bush's veto was met with resounding criticism, even from Republican members of Congress.

The Democrats were more vehement. Sen. Edward Kennedy (D-Mass.) said, “Today we learned that the same president who is willing to throw away half a trillion dollars in Iraq is unwilling to spend a small fraction of that amount to bring health care to American children.”

In a statement, Dr. Edward L. Langston, board chair of the American Medical Association, called the veto disappointing. “The number of uninsured kids has increased by nearly 1 million over the past year, and action must be taken to reverse this trend.”

In the meantime, a handful of states are challenging a controversial change in SCHIP issued in August that limits their ability to extend coverage to children in families with incomes more than 250% of the federal poverty level. The stated goal of the administrative change, issued by the Centers for Medicare and Medicaid Services, is to ensure that these families are not opting for SCHIP instead of private insurance.

On Oct. 2, New York sued, alleging that the changes were issued without an opportunity for public comment, as is required by law. The suit seeks to block CMS for using the rules when evaluating states' plans to raise income eligibility limits.

CMS did just that in September when it rejected New York's proposal to cover children in families of four with incomes of up to $82,600.

The New York suit was joined by Arizona, California, Illinois, Maryland, New Hampshire, and Washington. New Jersey has filed a separate suit.

Soon after President Bush delivered on his promise to veto the bipartisan reauthorization of the State Children's Health Insurance Program (SCHIP) on Oct. 3, professional medical societies and children's advocates said they would join with Democrats in the U.S. House who have vowed to round up the votes needed to override the veto.

“We're going to do a full-court press to get that vote,” Dr. James King, president of the American Academy of Family Physicians, said in an interview.

If the status quo were preserved, as proposed by the White House, at least 1 million children nationwide would lose coverage, said Dr. King, who is in private practice in Selmer, Tenn.

“There should be pressure on everybody who doesn't do the right thing for children,” said Dr. Jay Berkelhamer, president of the American Academy of Pediatrics, in an interview.

Dr. Berkelhamer said he did not understand how the president could veto a bill that had such strong bipartisan agreement. The package was not an expansion, but it did ensure that at a minimum, children currently in the program would continue to receive benefits, he said.

Families USA Executive Director Ron Pollack said that even if the House is not successful in overriding the veto, the SCHIP legislation will eventually be approved, and with most of the package intact. “I think there will be increasing pressure on the White House to offer concessions to get this adopted,” said Mr. Pollack in an interview, noting that every round of votes against SCHIP will prove increasingly embarrassing to Republican lawmakers.

Advocates have some time to make their case—SCHIP, which expired Sept. 30, is able to tap funds appropriated as part of a continuing resolution that was approved by Congress to keep the government running until Nov. 16.

The SCHIP program currently covers an estimated 6 million children; the package that was passed by the House and Senate (H.R. 976) and vetoed by the president would have added $35 billion in funding to the program, increasing the enrollment by as many as 4 million children. The new funding was to come from an increase in the excise tax on tobacco.

The package introduced several new elements, including dental benefits and mental health parity. States would have been given the ability to seek a waiver to extend coverage to low-income pregnant women. And the Department of Health and Human Services was directed to develop of a core set of measures to track quality in the Medicaid and SCHIP programs.

The president signaled his intention to veto for at least a month, saying that the initial package passed by the House would be a step toward government-run health care and that it also would give coverage to higher-income children. Those children might drop private coverage to join SCHIP, said Mr. Bush.

The final package acknowledged that the program might be overreaching and directed the Government Accountability Office to study and share best practices in states that have successfully prevented children from higher-income families from dropping private coverage. That may have been the only point of convergence for the White House and Congress.

President Bush's veto was met with resounding criticism, even from Republican members of Congress.

The Democrats were more vehement. Sen. Edward Kennedy (D-Mass.) said, “Today we learned that the same president who is willing to throw away half a trillion dollars in Iraq is unwilling to spend a small fraction of that amount to bring health care to American children.”

In a statement, Dr. Edward L. Langston, board chair of the American Medical Association, called the veto disappointing. “The number of uninsured kids has increased by nearly 1 million over the past year, and action must be taken to reverse this trend.”

In the meantime, a handful of states are challenging a controversial change in SCHIP issued in August that limits their ability to extend coverage to children in families with incomes more than 250% of the federal poverty level. The stated goal of the administrative change, issued by the Centers for Medicare and Medicaid Services, is to ensure that these families are not opting for SCHIP instead of private insurance.

On Oct. 2, New York sued, alleging that the changes were issued without an opportunity for public comment, as is required by law. The suit seeks to block CMS for using the rules when evaluating states' plans to raise income eligibility limits.

CMS did just that in September when it rejected New York's proposal to cover children in families of four with incomes of up to $82,600.

The New York suit was joined by Arizona, California, Illinois, Maryland, New Hampshire, and Washington. New Jersey has filed a separate suit.

Soon after President Bush delivered on his promise to veto the bipartisan reauthorization of the State Children's Health Insurance Program (SCHIP) on Oct. 3, professional medical societies and children's advocates said they would join with Democrats in the U.S. House who have vowed to round up the votes needed to override the veto.

“We're going to do a full-court press to get that vote,” Dr. James King, president of the American Academy of Family Physicians, said in an interview.

If the status quo were preserved, as proposed by the White House, at least 1 million children nationwide would lose coverage, said Dr. King, who is in private practice in Selmer, Tenn.

“There should be pressure on everybody who doesn't do the right thing for children,” said Dr. Jay Berkelhamer, president of the American Academy of Pediatrics, in an interview.

Dr. Berkelhamer said he did not understand how the president could veto a bill that had such strong bipartisan agreement. The package was not an expansion, but it did ensure that at a minimum, children currently in the program would continue to receive benefits, he said.

Families USA Executive Director Ron Pollack said that even if the House is not successful in overriding the veto, the SCHIP legislation will eventually be approved, and with most of the package intact. “I think there will be increasing pressure on the White House to offer concessions to get this adopted,” said Mr. Pollack in an interview, noting that every round of votes against SCHIP will prove increasingly embarrassing to Republican lawmakers.

Advocates have some time to make their case—SCHIP, which expired Sept. 30, is able to tap funds appropriated as part of a continuing resolution that was approved by Congress to keep the government running until Nov. 16.

The SCHIP program currently covers an estimated 6 million children; the package that was passed by the House and Senate (H.R. 976) and vetoed by the president would have added $35 billion in funding to the program, increasing the enrollment by as many as 4 million children. The new funding was to come from an increase in the excise tax on tobacco.

The package introduced several new elements, including dental benefits and mental health parity. States would have been given the ability to seek a waiver to extend coverage to low-income pregnant women. And the Department of Health and Human Services was directed to develop of a core set of measures to track quality in the Medicaid and SCHIP programs.

The president signaled his intention to veto for at least a month, saying that the initial package passed by the House would be a step toward government-run health care and that it also would give coverage to higher-income children. Those children might drop private coverage to join SCHIP, said Mr. Bush.

The final package acknowledged that the program might be overreaching and directed the Government Accountability Office to study and share best practices in states that have successfully prevented children from higher-income families from dropping private coverage. That may have been the only point of convergence for the White House and Congress.

President Bush's veto was met with resounding criticism, even from Republican members of Congress.

The Democrats were more vehement. Sen. Edward Kennedy (D-Mass.) said, “Today we learned that the same president who is willing to throw away half a trillion dollars in Iraq is unwilling to spend a small fraction of that amount to bring health care to American children.”

In a statement, Dr. Edward L. Langston, board chair of the American Medical Association, called the veto disappointing. “The number of uninsured kids has increased by nearly 1 million over the past year, and action must be taken to reverse this trend.”

In the meantime, a handful of states are challenging a controversial change in SCHIP issued in August that limits their ability to extend coverage to children in families with incomes more than 250% of the federal poverty level. The stated goal of the administrative change, issued by the Centers for Medicare and Medicaid Services, is to ensure that these families are not opting for SCHIP instead of private insurance.

On Oct. 2, New York sued, alleging that the changes were issued without an opportunity for public comment, as is required by law. The suit seeks to block CMS for using the rules when evaluating states' plans to raise income eligibility limits.

CMS did just that in September when it rejected New York's proposal to cover children in families of four with incomes of up to $82,600.

The New York suit was joined by Arizona, California, Illinois, Maryland, New Hampshire, and Washington. New Jersey has filed a separate suit.

The Food and Drug Administration approved the nasal influenza vaccine FluMist for children aged 2–5 years, which could help push up childhood vaccination rates.

FluMist manufacturer MedImmune Inc. said that it anticipated shipping the vaccine to physicians and health care providers almost immediately.

The Centers for Disease Control and Prevention (CDC) currently recommends that all children aged 6 months to 5 years be vaccinated against influenza. The trivalent FluMist vaccine has previously been approved only for healthy children over age 5 years and for adults aged 18–49 years.

Dr. Sarah Long, chief of infectious diseases at St. Christopher's Hospital for Children in Philadelphia, said that the new FluMist approval is likely to spur higher vaccination rates. But, she added, physicians probably will not widely use the vaccine in young children until the CDC's Advisory Committee on Immunization Practices recommends it for the approved populations. Without an ACIP endorsement, insurers are reluctant to reimburse for a vaccine, Dr. Long, a member of the American Academy of Pediatrics committee on infectious diseases, said in an interview.

That recommendation is likely to come at ACIP's next meeting in late October, as FluMist's likely approval for use in young children had been discussed at its last meeting, Dr. Long said.

The AAP and the CDC agree that children of all ages are vastly undervaccinated. The CDC just issued vaccination statistics on children age 6–23 months. Overall, only 21% of children under the age of 2 years received full vaccination coverage—that is, two doses—in the 2005–2006 flu season, said Dr. Jeanne M. Santoli, deputy director of the Immunization Services Division in the CDC's National Immunization Program, at a press briefing on the upcoming flu season convened by the National Foundation for Infectious Diseases that occurred as the FluMist approval was granted.

FluMist joins two other vaccines currently approved for use in young children. Sanofi Pasteur's Fluzone is indicated for anyone over 6 months of age, and Novartis' Fluvirin for anyone aged 4 years or older. “This approval also offers parents and health professionals a needle-free option for squeamish toddlers, who may be reluctant to get a traditional influenza shot,” said Dr. Jesse L. Goodman, director of the Food and Drug Administration's Center for Biologics Evaluation and Research in a statement.

The approval was based on a pivotal study of 4,000 children aged 2–5 years who received the live attenuated vaccine during the 2004–2005 flu season. According to MedImmune, there was a 54% reduction in influenza in children given FluMist, compared with those who received a traditional injection.

The FluMist vaccine is contraindicated in those with asthma, children under age 2 years, and children under age 5 years who have recurrent wheezing because there is an increased risk of exacerbation of that symptom. It also should not be given to children receiving concomitant aspirin, or therapy containing aspirin, according to MedImmune, which will charge $17.95 per dose this flu season.

The Food and Drug Administration approved the nasal influenza vaccine FluMist for children aged 2–5 years, which could help push up childhood vaccination rates.

FluMist manufacturer MedImmune Inc. said that it anticipated shipping the vaccine to physicians and health care providers almost immediately.

The Centers for Disease Control and Prevention (CDC) currently recommends that all children aged 6 months to 5 years be vaccinated against influenza. The trivalent FluMist vaccine has previously been approved only for healthy children over age 5 years and for adults aged 18–49 years.

Dr. Sarah Long, chief of infectious diseases at St. Christopher's Hospital for Children in Philadelphia, said that the new FluMist approval is likely to spur higher vaccination rates. But, she added, physicians probably will not widely use the vaccine in young children until the CDC's Advisory Committee on Immunization Practices recommends it for the approved populations. Without an ACIP endorsement, insurers are reluctant to reimburse for a vaccine, Dr. Long, a member of the American Academy of Pediatrics committee on infectious diseases, said in an interview.

That recommendation is likely to come at ACIP's next meeting in late October, as FluMist's likely approval for use in young children had been discussed at its last meeting, Dr. Long said.

The AAP and the CDC agree that children of all ages are vastly undervaccinated. The CDC just issued vaccination statistics on children age 6–23 months. Overall, only 21% of children under the age of 2 years received full vaccination coverage—that is, two doses—in the 2005–2006 flu season, said Dr. Jeanne M. Santoli, deputy director of the Immunization Services Division in the CDC's National Immunization Program, at a press briefing on the upcoming flu season convened by the National Foundation for Infectious Diseases that occurred as the FluMist approval was granted.

FluMist joins two other vaccines currently approved for use in young children. Sanofi Pasteur's Fluzone is indicated for anyone over 6 months of age, and Novartis' Fluvirin for anyone aged 4 years or older. “This approval also offers parents and health professionals a needle-free option for squeamish toddlers, who may be reluctant to get a traditional influenza shot,” said Dr. Jesse L. Goodman, director of the Food and Drug Administration's Center for Biologics Evaluation and Research in a statement.

The approval was based on a pivotal study of 4,000 children aged 2–5 years who received the live attenuated vaccine during the 2004–2005 flu season. According to MedImmune, there was a 54% reduction in influenza in children given FluMist, compared with those who received a traditional injection.

The FluMist vaccine is contraindicated in those with asthma, children under age 2 years, and children under age 5 years who have recurrent wheezing because there is an increased risk of exacerbation of that symptom. It also should not be given to children receiving concomitant aspirin, or therapy containing aspirin, according to MedImmune, which will charge $17.95 per dose this flu season.

The Food and Drug Administration approved the nasal influenza vaccine FluMist for children aged 2–5 years, which could help push up childhood vaccination rates.

FluMist manufacturer MedImmune Inc. said that it anticipated shipping the vaccine to physicians and health care providers almost immediately.

The Centers for Disease Control and Prevention (CDC) currently recommends that all children aged 6 months to 5 years be vaccinated against influenza. The trivalent FluMist vaccine has previously been approved only for healthy children over age 5 years and for adults aged 18–49 years.

Dr. Sarah Long, chief of infectious diseases at St. Christopher's Hospital for Children in Philadelphia, said that the new FluMist approval is likely to spur higher vaccination rates. But, she added, physicians probably will not widely use the vaccine in young children until the CDC's Advisory Committee on Immunization Practices recommends it for the approved populations. Without an ACIP endorsement, insurers are reluctant to reimburse for a vaccine, Dr. Long, a member of the American Academy of Pediatrics committee on infectious diseases, said in an interview.

That recommendation is likely to come at ACIP's next meeting in late October, as FluMist's likely approval for use in young children had been discussed at its last meeting, Dr. Long said.

The AAP and the CDC agree that children of all ages are vastly undervaccinated. The CDC just issued vaccination statistics on children age 6–23 months. Overall, only 21% of children under the age of 2 years received full vaccination coverage—that is, two doses—in the 2005–2006 flu season, said Dr. Jeanne M. Santoli, deputy director of the Immunization Services Division in the CDC's National Immunization Program, at a press briefing on the upcoming flu season convened by the National Foundation for Infectious Diseases that occurred as the FluMist approval was granted.

FluMist joins two other vaccines currently approved for use in young children. Sanofi Pasteur's Fluzone is indicated for anyone over 6 months of age, and Novartis' Fluvirin for anyone aged 4 years or older. “This approval also offers parents and health professionals a needle-free option for squeamish toddlers, who may be reluctant to get a traditional influenza shot,” said Dr. Jesse L. Goodman, director of the Food and Drug Administration's Center for Biologics Evaluation and Research in a statement.

The approval was based on a pivotal study of 4,000 children aged 2–5 years who received the live attenuated vaccine during the 2004–2005 flu season. According to MedImmune, there was a 54% reduction in influenza in children given FluMist, compared with those who received a traditional injection.

The FluMist vaccine is contraindicated in those with asthma, children under age 2 years, and children under age 5 years who have recurrent wheezing because there is an increased risk of exacerbation of that symptom. It also should not be given to children receiving concomitant aspirin, or therapy containing aspirin, according to MedImmune, which will charge $17.95 per dose this flu season.

More Angioplasties Than CABG

The number of angioplasties almost doubled from 1993 to 2005, while the number of coronary artery bypass graft operations was on the decline over the same period, according to the latest data from the Agency for Healthcare Quality and Research's Healthcare Cost and Utilization Project. By 2005, there were about 800,000 percutaneous procedures each year, while only about 278,000 CABG procedures were performed. Even though the length of stay for an angioplasty had decreased to about 2.7 days in 2005, hospital charges rose 50% from 1993 to 2005, to about $48,000, adjusted for inflation, according to the AHQR. Coronary artery disease accounted for just over 1 million hospitalizations in 2005, making it the third-leading reason for a hospital stay.

Boston Settles Guidant Claims

Boston Scientific has agreed to pay $16.75 million to settle with attorneys general in 35 states and the District of Columbia, all of whom were investigating the circumstances surrounding recalls of three Guidant Corp. defibrillators: the Ventak Prizm 2DR Model 1861, Contak Renewal Model H135, and Contak Renewal 2 Model H155. The company admits no liability, but it has agreed to extend the supplemental warranty on the devices for 6 additional months. Boston Scientific, which acquired Guidant last year, also said in a statement that it would continue to work on making changes recommended by Guidant's independent panel, including establishing a patient safety advisory board and improving communications about product performance.

… And Is Warned on Stent Study

The Food and Drug Administration has issued a warning letter to Boston Scientific, citing the company's failure to report two of at least five deaths that occurred during a phase I U.S. study of the TriVascular stent for abdominal aortic aneurysms. The company also did not report to the agency in a timely manner on stent fractures, which occurred in at least 25 patients, according to the FDA letter. The study was initiated in 2003 by TriVascular Inc., which Boston Scientific bought in 2005. Boston Scientific cancelled the trial in 2006, and abandoned development of the stent. But the company is still required to submit required paperwork to the FDA, including progress reports on patient deaths, and a corrective action plan to address the deficiencies cited by the agency.

Bill Seeks MD Gift Disclosure

Legislation in the Senate would require quarterly disclosure of gifts, honoraria, travel, and other payments to physicians by pharmaceutical, medical device, and biotechnology manufacturers. The bill, S. 2029, was introduced by Sen. Chuck Grassley (R-Iowa) and Sen. Herb Kohl (D-Wisc.) and would apply to manufacturers with more than $100 million in gross revenues. The U.S. Health and Human Services Department would be required to make the disclosure data available on the Internet. Penalties would range from $10,000 to $100,000 per violation. Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America, said in a statement that his group had not yet reviewed the bill but that contact with physicians is essential for education purposes. The group's guidelines suggest gifts to physicians should not exceed $100. The American Medical Association had also not yet read the proposal, but in testimony earlier this year, noted that it has extensive guidelines on accepting anything from industry.

Rise in Adverse Drug Event Reports

The number of serious and fatal adverse drug events reported to the FDA more than doubled between 1998 and 2005, according to a report in Sept. 10 issue of the Archives of Internal Medicine. The agency defines a serious adverse event as an one resulting in death, a birth defect, disability, or hospitalization, or one that requires intervention. During the 8-year period, the number of reported serious adverse drug events increased from 34,966 in 1998 to 89,842 in 2005, a 2.6-fold increase; the number of reported deaths during that time increased 2.7-fold, from 5,519 to 15,107. The increase was largely a result of expedited reports from manufacturers of serious events not included on the label. Contrary to expectation, drugs related to safety withdrawals accounted for a “modest share” of reported events and declined over time. Of the 15 drugs most frequently cited in fatal events, there was a “disproportionate contribution of pain medications [7] and drugs that modify the immune system [4].” Drugs named in serious adverse drug events spanned a variety of classes, but within that group, events tied to 13 new biotechnology products increased almost 16-fold, from 580 in 1998 to 9,181 in 2005.

More Angioplasties Than CABG

The number of angioplasties almost doubled from 1993 to 2005, while the number of coronary artery bypass graft operations was on the decline over the same period, according to the latest data from the Agency for Healthcare Quality and Research's Healthcare Cost and Utilization Project. By 2005, there were about 800,000 percutaneous procedures each year, while only about 278,000 CABG procedures were performed. Even though the length of stay for an angioplasty had decreased to about 2.7 days in 2005, hospital charges rose 50% from 1993 to 2005, to about $48,000, adjusted for inflation, according to the AHQR. Coronary artery disease accounted for just over 1 million hospitalizations in 2005, making it the third-leading reason for a hospital stay.

Boston Settles Guidant Claims

Boston Scientific has agreed to pay $16.75 million to settle with attorneys general in 35 states and the District of Columbia, all of whom were investigating the circumstances surrounding recalls of three Guidant Corp. defibrillators: the Ventak Prizm 2DR Model 1861, Contak Renewal Model H135, and Contak Renewal 2 Model H155. The company admits no liability, but it has agreed to extend the supplemental warranty on the devices for 6 additional months. Boston Scientific, which acquired Guidant last year, also said in a statement that it would continue to work on making changes recommended by Guidant's independent panel, including establishing a patient safety advisory board and improving communications about product performance.

… And Is Warned on Stent Study

The Food and Drug Administration has issued a warning letter to Boston Scientific, citing the company's failure to report two of at least five deaths that occurred during a phase I U.S. study of the TriVascular stent for abdominal aortic aneurysms. The company also did not report to the agency in a timely manner on stent fractures, which occurred in at least 25 patients, according to the FDA letter. The study was initiated in 2003 by TriVascular Inc., which Boston Scientific bought in 2005. Boston Scientific cancelled the trial in 2006, and abandoned development of the stent. But the company is still required to submit required paperwork to the FDA, including progress reports on patient deaths, and a corrective action plan to address the deficiencies cited by the agency.

Bill Seeks MD Gift Disclosure

Legislation in the Senate would require quarterly disclosure of gifts, honoraria, travel, and other payments to physicians by pharmaceutical, medical device, and biotechnology manufacturers. The bill, S. 2029, was introduced by Sen. Chuck Grassley (R-Iowa) and Sen. Herb Kohl (D-Wisc.) and would apply to manufacturers with more than $100 million in gross revenues. The U.S. Health and Human Services Department would be required to make the disclosure data available on the Internet. Penalties would range from $10,000 to $100,000 per violation. Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America, said in a statement that his group had not yet reviewed the bill but that contact with physicians is essential for education purposes. The group's guidelines suggest gifts to physicians should not exceed $100. The American Medical Association had also not yet read the proposal, but in testimony earlier this year, noted that it has extensive guidelines on accepting anything from industry.

Rise in Adverse Drug Event Reports

The number of serious and fatal adverse drug events reported to the FDA more than doubled between 1998 and 2005, according to a report in Sept. 10 issue of the Archives of Internal Medicine. The agency defines a serious adverse event as an one resulting in death, a birth defect, disability, or hospitalization, or one that requires intervention. During the 8-year period, the number of reported serious adverse drug events increased from 34,966 in 1998 to 89,842 in 2005, a 2.6-fold increase; the number of reported deaths during that time increased 2.7-fold, from 5,519 to 15,107. The increase was largely a result of expedited reports from manufacturers of serious events not included on the label. Contrary to expectation, drugs related to safety withdrawals accounted for a “modest share” of reported events and declined over time. Of the 15 drugs most frequently cited in fatal events, there was a “disproportionate contribution of pain medications [7] and drugs that modify the immune system [4].” Drugs named in serious adverse drug events spanned a variety of classes, but within that group, events tied to 13 new biotechnology products increased almost 16-fold, from 580 in 1998 to 9,181 in 2005.

More Angioplasties Than CABG

The number of angioplasties almost doubled from 1993 to 2005, while the number of coronary artery bypass graft operations was on the decline over the same period, according to the latest data from the Agency for Healthcare Quality and Research's Healthcare Cost and Utilization Project. By 2005, there were about 800,000 percutaneous procedures each year, while only about 278,000 CABG procedures were performed. Even though the length of stay for an angioplasty had decreased to about 2.7 days in 2005, hospital charges rose 50% from 1993 to 2005, to about $48,000, adjusted for inflation, according to the AHQR. Coronary artery disease accounted for just over 1 million hospitalizations in 2005, making it the third-leading reason for a hospital stay.

Boston Settles Guidant Claims

Boston Scientific has agreed to pay $16.75 million to settle with attorneys general in 35 states and the District of Columbia, all of whom were investigating the circumstances surrounding recalls of three Guidant Corp. defibrillators: the Ventak Prizm 2DR Model 1861, Contak Renewal Model H135, and Contak Renewal 2 Model H155. The company admits no liability, but it has agreed to extend the supplemental warranty on the devices for 6 additional months. Boston Scientific, which acquired Guidant last year, also said in a statement that it would continue to work on making changes recommended by Guidant's independent panel, including establishing a patient safety advisory board and improving communications about product performance.

… And Is Warned on Stent Study

The Food and Drug Administration has issued a warning letter to Boston Scientific, citing the company's failure to report two of at least five deaths that occurred during a phase I U.S. study of the TriVascular stent for abdominal aortic aneurysms. The company also did not report to the agency in a timely manner on stent fractures, which occurred in at least 25 patients, according to the FDA letter. The study was initiated in 2003 by TriVascular Inc., which Boston Scientific bought in 2005. Boston Scientific cancelled the trial in 2006, and abandoned development of the stent. But the company is still required to submit required paperwork to the FDA, including progress reports on patient deaths, and a corrective action plan to address the deficiencies cited by the agency.

Bill Seeks MD Gift Disclosure

Legislation in the Senate would require quarterly disclosure of gifts, honoraria, travel, and other payments to physicians by pharmaceutical, medical device, and biotechnology manufacturers. The bill, S. 2029, was introduced by Sen. Chuck Grassley (R-Iowa) and Sen. Herb Kohl (D-Wisc.) and would apply to manufacturers with more than $100 million in gross revenues. The U.S. Health and Human Services Department would be required to make the disclosure data available on the Internet. Penalties would range from $10,000 to $100,000 per violation. Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America, said in a statement that his group had not yet reviewed the bill but that contact with physicians is essential for education purposes. The group's guidelines suggest gifts to physicians should not exceed $100. The American Medical Association had also not yet read the proposal, but in testimony earlier this year, noted that it has extensive guidelines on accepting anything from industry.

Rise in Adverse Drug Event Reports

The number of serious and fatal adverse drug events reported to the FDA more than doubled between 1998 and 2005, according to a report in Sept. 10 issue of the Archives of Internal Medicine. The agency defines a serious adverse event as an one resulting in death, a birth defect, disability, or hospitalization, or one that requires intervention. During the 8-year period, the number of reported serious adverse drug events increased from 34,966 in 1998 to 89,842 in 2005, a 2.6-fold increase; the number of reported deaths during that time increased 2.7-fold, from 5,519 to 15,107. The increase was largely a result of expedited reports from manufacturers of serious events not included on the label. Contrary to expectation, drugs related to safety withdrawals accounted for a “modest share” of reported events and declined over time. Of the 15 drugs most frequently cited in fatal events, there was a “disproportionate contribution of pain medications [7] and drugs that modify the immune system [4].” Drugs named in serious adverse drug events spanned a variety of classes, but within that group, events tied to 13 new biotechnology products increased almost 16-fold, from 580 in 1998 to 9,181 in 2005.

In issuing the third phase of the final regulations implementing the physician self-referral rule, also known as the Stark law, the Center for Medicare and Medicaid Services has returned to a stance it held in the first phase.

The Stark law governs whether, how, and when it is acceptable for physicians to refer patients to hospitals, laboratories, imaging facilities, or other entities in which they may have an ownership interest.

Under the new rule, known as Stark III, published in the Federal Register on Sept. 5, physicians will be considered to be “standing in the shoes” of the group practice when their investment arrangements are evaluated for compliance, according to several attorneys.

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, J.D., a partner in the health law department of McDermott, Will & Emery's Chicago office. As a result, “the application of exceptions will be different going forward,” Mr. Melvin said in an interview.

That means that most physicians who have referral arrangements will have “a lot of contracts that will have to be looked at and possibly revised,” said Amy E. Nordeng, J.D., a counsel in the government affairs office of the Medical Group Management Association. Ms. Nordeng agreed that the return to the “stand in the shoes” view was the most significant component of Stark III.

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices. Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS. In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities) urged CMS to revert to the old policy.

CMS itself came to see the indirect compensation analysis as a loophole that allowed potentially questionable investment arrangements to slip through, said Mr. Melvin.

In the Stark III rule, CMS wrote that the change in policy means that, “many compensation arrangements that were analyzed under Phase II as indirect compensation arrangements are now analyzed as direct compensation arrangements that must comply with an applicable exception for direct compensation arrangements.”

There were several other notable changes in Stark III.

The regulations clarify that physicians who administer pharmaceuticals under Medicare Part B are entitled to get direct productivity credit for those orders. The clarification applies to those two ancillary services only, not to radiology or laboratories, or other services typically offered in-house, said Mr. Melvin.

CMS also lifted the prohibition on noncompete agreements. Under Stark II, practices could not impose noncompete agreements on physician recruits. Now, practices can bar competition for up to 2 years, but it's not clear how far, geographically, that noncompete can extend, Mr. Melvin added.

With the new rule, practices have to “go back and look at everything,” including how their physicians are being compensated and the arrangements the practice may have for equipment and leasing or services with hospitals or other DHS entities, he said.

The final Stark rule goes into effect on December 5, 2007.

In issuing the third phase of the final regulations implementing the physician self-referral rule, also known as the Stark law, the Center for Medicare and Medicaid Services has returned to a stance it held in the first phase.

The Stark law governs whether, how, and when it is acceptable for physicians to refer patients to hospitals, laboratories, imaging facilities, or other entities in which they may have an ownership interest.

Under the new rule, known as Stark III, published in the Federal Register on Sept. 5, physicians will be considered to be “standing in the shoes” of the group practice when their investment arrangements are evaluated for compliance, according to several attorneys.

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, J.D., a partner in the health law department of McDermott, Will & Emery's Chicago office. As a result, “the application of exceptions will be different going forward,” Mr. Melvin said in an interview.

That means that most physicians who have referral arrangements will have “a lot of contracts that will have to be looked at and possibly revised,” said Amy E. Nordeng, J.D., a counsel in the government affairs office of the Medical Group Management Association. Ms. Nordeng agreed that the return to the “stand in the shoes” view was the most significant component of Stark III.

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices. Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS. In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities) urged CMS to revert to the old policy.

CMS itself came to see the indirect compensation analysis as a loophole that allowed potentially questionable investment arrangements to slip through, said Mr. Melvin.

In the Stark III rule, CMS wrote that the change in policy means that, “many compensation arrangements that were analyzed under Phase II as indirect compensation arrangements are now analyzed as direct compensation arrangements that must comply with an applicable exception for direct compensation arrangements.”

There were several other notable changes in Stark III.

The regulations clarify that physicians who administer pharmaceuticals under Medicare Part B are entitled to get direct productivity credit for those orders. The clarification applies to those two ancillary services only, not to radiology or laboratories, or other services typically offered in-house, said Mr. Melvin.

CMS also lifted the prohibition on noncompete agreements. Under Stark II, practices could not impose noncompete agreements on physician recruits. Now, practices can bar competition for up to 2 years, but it's not clear how far, geographically, that noncompete can extend, Mr. Melvin added.

With the new rule, practices have to “go back and look at everything,” including how their physicians are being compensated and the arrangements the practice may have for equipment and leasing or services with hospitals or other DHS entities, he said.

The final Stark rule goes into effect on December 5, 2007.

In issuing the third phase of the final regulations implementing the physician self-referral rule, also known as the Stark law, the Center for Medicare and Medicaid Services has returned to a stance it held in the first phase.

The Stark law governs whether, how, and when it is acceptable for physicians to refer patients to hospitals, laboratories, imaging facilities, or other entities in which they may have an ownership interest.

Under the new rule, known as Stark III, published in the Federal Register on Sept. 5, physicians will be considered to be “standing in the shoes” of the group practice when their investment arrangements are evaluated for compliance, according to several attorneys.

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, J.D., a partner in the health law department of McDermott, Will & Emery's Chicago office. As a result, “the application of exceptions will be different going forward,” Mr. Melvin said in an interview.

That means that most physicians who have referral arrangements will have “a lot of contracts that will have to be looked at and possibly revised,” said Amy E. Nordeng, J.D., a counsel in the government affairs office of the Medical Group Management Association. Ms. Nordeng agreed that the return to the “stand in the shoes” view was the most significant component of Stark III.

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices. Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS. In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities) urged CMS to revert to the old policy.

CMS itself came to see the indirect compensation analysis as a loophole that allowed potentially questionable investment arrangements to slip through, said Mr. Melvin.

In the Stark III rule, CMS wrote that the change in policy means that, “many compensation arrangements that were analyzed under Phase II as indirect compensation arrangements are now analyzed as direct compensation arrangements that must comply with an applicable exception for direct compensation arrangements.”

There were several other notable changes in Stark III.

The regulations clarify that physicians who administer pharmaceuticals under Medicare Part B are entitled to get direct productivity credit for those orders. The clarification applies to those two ancillary services only, not to radiology or laboratories, or other services typically offered in-house, said Mr. Melvin.

CMS also lifted the prohibition on noncompete agreements. Under Stark II, practices could not impose noncompete agreements on physician recruits. Now, practices can bar competition for up to 2 years, but it's not clear how far, geographically, that noncompete can extend, Mr. Melvin added.

With the new rule, practices have to “go back and look at everything,” including how their physicians are being compensated and the arrangements the practice may have for equipment and leasing or services with hospitals or other DHS entities, he said.

The final Stark rule goes into effect on December 5, 2007.

Starting in April 2008, retailers and suppliers in 10 metropolitan areas who sell certain durable medical equipment will have to become accredited and enter a competitive bidding process, according to a final rule issued by the Centers for Medicare and Medicaid Services.

Unlike other entities, physicians may opt out of competitive bidding and accreditation, but they will still have to accept a single payment for the durable medical equipment (DME) item instead of a fee schedule-based payment, Acting CMS Administrator Leslie Norwalk said in a briefing with reporters.

The new competitive bidding program was developed to reduce Medicare's substantial DME expenditures and to decrease the out-of-pocket burden for beneficiaries, who are liable for copayments of 20%.

Ms. Norwalk estimated that Medicare could shave $1 billion a year off its DME tab by the time the program is fully implemented in 2010.

The final rule will apply initially only to 10 categories of supplies and only to suppliers in 10 competitive bidding areas (CBA) that have been established by CMS. Physicians, hospitals, and other entities that sell DME, prosthetics, orthotics, and certain other supplies have submitted bids to CMS proposing charges for the items.

CMS will evaluate the bids and then, probably in December, the agency will award contracts to a certain number of bidders in each CBA, Ms. Norwalk said in the briefing.

Beginning in April 2008, Medicare will pay a single amount for each item in those areas instead of basing payments on a fee schedule, as it has in the past.

CMS will expand the program to 70 bidding areas in 2009, and to more CBAs, and to cover more DME items after that, Ms. Norwalk said.

The new bidding process was required by the Medicare Prescription Drug Improvement and Modernization Act of 2003.

Suppliers in the following 10 areas will be the first subject to the new requirements: Charlotte-Gastonia-Concord, N.C./S.C.; Cincinnati-Middletown, Ohio/Ky./ Ind.; Cleveland-Elyria-Mentor, Ohio; Dallas-Fort Worth-Arlington, Tex.; Kansas City, Mo./Kans.; Miami-Fort Lauderdale- Miami Beach, Fla.; Orlando-Kissimmee, Fla.; Pittsburgh; Riverside-San Bernardino-Ontario, Calif.; and San Juan- Caguas-Guaynabo, Puerto Rico.

The 10 categories include: oxygen supplies and equipment; standard power wheelchairs, scooters, and accessories; complex rehabilitative power wheelchairs and accessories; mail-order diabetes supplies; enteral nutrients, equipment, and supplies; continuous positive airway pressure (CPAP) devices; respiratory assist devices and supplies and accessories; hospital beds and accessories; negative pressure wound therapy pumps and supplies and accessories; walkers and related accessories; and support surfaces (group 2 and 3 mattresses and overlays).

Starting in April 2008, retailers and suppliers in 10 metropolitan areas who sell certain durable medical equipment will have to become accredited and enter a competitive bidding process, according to a final rule issued by the Centers for Medicare and Medicaid Services.

Unlike other entities, physicians may opt out of competitive bidding and accreditation, but they will still have to accept a single payment for the durable medical equipment (DME) item instead of a fee schedule-based payment, Acting CMS Administrator Leslie Norwalk said in a briefing with reporters.

The new competitive bidding program was developed to reduce Medicare's substantial DME expenditures and to decrease the out-of-pocket burden for beneficiaries, who are liable for copayments of 20%.

Ms. Norwalk estimated that Medicare could shave $1 billion a year off its DME tab by the time the program is fully implemented in 2010.

The final rule will apply initially only to 10 categories of supplies and only to suppliers in 10 competitive bidding areas (CBA) that have been established by CMS. Physicians, hospitals, and other entities that sell DME, prosthetics, orthotics, and certain other supplies have submitted bids to CMS proposing charges for the items.

CMS will evaluate the bids and then, probably in December, the agency will award contracts to a certain number of bidders in each CBA, Ms. Norwalk said in the briefing.

Beginning in April 2008, Medicare will pay a single amount for each item in those areas instead of basing payments on a fee schedule, as it has in the past.

CMS will expand the program to 70 bidding areas in 2009, and to more CBAs, and to cover more DME items after that, Ms. Norwalk said.

The new bidding process was required by the Medicare Prescription Drug Improvement and Modernization Act of 2003.

Suppliers in the following 10 areas will be the first subject to the new requirements: Charlotte-Gastonia-Concord, N.C./S.C.; Cincinnati-Middletown, Ohio/Ky./ Ind.; Cleveland-Elyria-Mentor, Ohio; Dallas-Fort Worth-Arlington, Tex.; Kansas City, Mo./Kans.; Miami-Fort Lauderdale- Miami Beach, Fla.; Orlando-Kissimmee, Fla.; Pittsburgh; Riverside-San Bernardino-Ontario, Calif.; and San Juan- Caguas-Guaynabo, Puerto Rico.

The 10 categories include: oxygen supplies and equipment; standard power wheelchairs, scooters, and accessories; complex rehabilitative power wheelchairs and accessories; mail-order diabetes supplies; enteral nutrients, equipment, and supplies; continuous positive airway pressure (CPAP) devices; respiratory assist devices and supplies and accessories; hospital beds and accessories; negative pressure wound therapy pumps and supplies and accessories; walkers and related accessories; and support surfaces (group 2 and 3 mattresses and overlays).

Starting in April 2008, retailers and suppliers in 10 metropolitan areas who sell certain durable medical equipment will have to become accredited and enter a competitive bidding process, according to a final rule issued by the Centers for Medicare and Medicaid Services.

Unlike other entities, physicians may opt out of competitive bidding and accreditation, but they will still have to accept a single payment for the durable medical equipment (DME) item instead of a fee schedule-based payment, Acting CMS Administrator Leslie Norwalk said in a briefing with reporters.

The new competitive bidding program was developed to reduce Medicare's substantial DME expenditures and to decrease the out-of-pocket burden for beneficiaries, who are liable for copayments of 20%.

Ms. Norwalk estimated that Medicare could shave $1 billion a year off its DME tab by the time the program is fully implemented in 2010.

The final rule will apply initially only to 10 categories of supplies and only to suppliers in 10 competitive bidding areas (CBA) that have been established by CMS. Physicians, hospitals, and other entities that sell DME, prosthetics, orthotics, and certain other supplies have submitted bids to CMS proposing charges for the items.

CMS will evaluate the bids and then, probably in December, the agency will award contracts to a certain number of bidders in each CBA, Ms. Norwalk said in the briefing.

Beginning in April 2008, Medicare will pay a single amount for each item in those areas instead of basing payments on a fee schedule, as it has in the past.

CMS will expand the program to 70 bidding areas in 2009, and to more CBAs, and to cover more DME items after that, Ms. Norwalk said.

The new bidding process was required by the Medicare Prescription Drug Improvement and Modernization Act of 2003.

Suppliers in the following 10 areas will be the first subject to the new requirements: Charlotte-Gastonia-Concord, N.C./S.C.; Cincinnati-Middletown, Ohio/Ky./ Ind.; Cleveland-Elyria-Mentor, Ohio; Dallas-Fort Worth-Arlington, Tex.; Kansas City, Mo./Kans.; Miami-Fort Lauderdale- Miami Beach, Fla.; Orlando-Kissimmee, Fla.; Pittsburgh; Riverside-San Bernardino-Ontario, Calif.; and San Juan- Caguas-Guaynabo, Puerto Rico.

The 10 categories include: oxygen supplies and equipment; standard power wheelchairs, scooters, and accessories; complex rehabilitative power wheelchairs and accessories; mail-order diabetes supplies; enteral nutrients, equipment, and supplies; continuous positive airway pressure (CPAP) devices; respiratory assist devices and supplies and accessories; hospital beds and accessories; negative pressure wound therapy pumps and supplies and accessories; walkers and related accessories; and support surfaces (group 2 and 3 mattresses and overlays).