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Update for August 19, 2011


Inside this Issue:


Top News


White House Announces Rural Provider Loan Assistance Program

On August 16 at the White House Rural Economic Forum, President Obama announced new initiatives that include loan assistance to rural hospitals and providers to assist them in implementing health IT systems.  The departments of Agriculture and HHS will sign an agreement giving rural hospitals and doctors the ability to participate in capital loan programs to purchase software and hardware needed to implement health information technologies.  In addition, HHS will issue guidance expanding eligibility for the National Health Services Corps loan repayment program, so that critical access hospitals can use the loans to recruit new doctors. The expanded loan program is expected to help 1,300 critical access hospitals in their physician recruiting efforts.  The White House press release is available here


Agencies Directed to Trim FY 2013 Budgets by up to 10 Percent

OMB director Jack Lew told agency heads this week to find cuts of 5 to 10 percent in their 2013 budget requests.  Unless a department has been given explicit direction otherwise, “your overall agency request for 2013 should be at least 5 percent below your 2011 enacted discretionary appropriation,” he wrote.  Agencies also were told to identify additional discretionary funding reductions that would bring their budget request to a level that is at least 10 percent below their 2011 enacted discretionary appropriation.  He advised them to “identify priority investments related to economic growth which the department proposes to expand or protect, stating the strongest possible case for the positive economic impact.”  The memorandum is available here.


$40 Billion in Grants Available for Medicaid, CHIP Enrollment Efforts

HHS announced the award of $40 million in grants for efforts to identify and enroll eligible children in Medicaid and the Children’s Health Insurance Program (CHIP). Authorized under the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), two-year grants were awarded to a total of 39 state agencies, community health centers, school based organizations and non-profit groups across 23 states.  The grants will build on the Secretary’s Connecting Kids to Coverage Challenge to find and enroll all eligible children and support outreach strategies.  The news release is available here.  A list of grant recipients is available here.


Industry Frustrated Over Unpredictable Health Sector Job Growth

Health industry experts are expressing frustration in trying to predict what effects the declining economy and proposed government cutbacks will have on the healthcare labor market.  While there has been a steady nationwide decline in jobs overall, hospitals, nursing homes and other health industries remain a significant contributor of new jobs, with an average monthly addition of 25,000 jobs a month.  However, proposed cuts to the Medicare and Medicaid programs, as well as possible additional cuts from the deficit reduction committee, create uncertainty as to the sustainability of the recent growth in healthcare-related jobs.  The cuts in government programs like Medicare and Medicaid, and pressure to reduce costs, are thwarting health care employers in trying to meet the rising demand for their services.  Additional details are available here.


New England Journal of Medicine Examines Effects of Medical Malpractice on Doctors

The New England Journal of Medicine published the results of a study that attempts to measure the economic and emotional impact of medical malpractice suits on doctors.  Researchers found that despite interest in medical malpractice reform, malpractice cases may be common, but very few are successful.  In response, the American Association for Justice, an organization representing trial lawyers, said the report proves that tort reform is not necessary and in fact lawyers are needed more than ever to help protect patients.  "What this new study tells us is that the supposed wave of malpractice payments is actually a myth that has been built up by the scare tactics of insurance companies and tort reform groups. In reality, not enough is being done to protect patients and ensure justice," AAJ president Gary Paul said in a statement. Additional details are available here.  The study, “Malpractice Risk According to Physician Specialty,” is available here. 


Chamber of Commerce Calls for Major Tax Reforms

The U.S. Chamber of Commerce, in a letter dated August 16, urged the members of the Joint Select Committee on Deficit Reduction to “act expeditiously to rein in spending, reduce the deficit, and stabilize and ultimately lower America’s level of debt.”  Enhancing economic and job growth is a prerequisite for achieving these goals, but growth alone will not be enough. Congress must reform entitlement programs and fundamentally restructure the U.S. tax code to bring revenue and spending back into alignment, the letter said.  The Chamber also called for a “complete restructuring of the U.S. tax code,” saying that this would improve efficiency, transparency, and simplicity to drive economic growth and job creation.  They contend that the current tax code acts as an impediment to worldwide competitiveness, a deterrent to saving and investment, and an obstacle to innovation and entrepreneurship.  The letter is available here.


AMGA Study Finds Providers Operating at a Loss

The American Medical Group Association (AMGA), in a news release dated August 16, announced its findings in the AMGA’s 2011 Medical Group Compensation and Financial Survey, a study of 2010 provider group financial operations.  The survey revealed that many provider organizations continue to operate at a significant loss and operating margins are increasingly thin.  "Much of the losses we see in 2010 are supplemented by other non-clinical revenue sources and/or funding from health systems with which groups are associated.  Our current volume-based reimbursement system is largely indifferent to the efforts of medical groups to elevate the standard of care in the U.S.,” said Donald W. Fisher, Ph.D., CAE, president and CEO of AMGA.  The news release is available here.  Additional details are available at:  www.amga.org.


IOM Essential Benefits Recommendations May be Delayed

A spokeswoman for the Institute of Medicine told the Baltimore Sun the agency may be delayed in issuing its recommendations on essential health benefits, originally slated for the end of September.  An 18-member IOM committee charged last year with developing recommendations for HHS recently signed off on their report, she said, and the document is now being reviewed by a number of experts who will advise IOM before a final report can be sent to HHS.  She also said that IOM will not produce specific benefits standards for the exchanges. Instead, the group is working toward recommendations on criteria and methods that would allow HHS to determine and update the essential health benefits package.  Additional details are available here.  However, in response to this report, an IOM spokesperson told Politico that the institute is “expecting to have the report out by the end of September.”  Additional details are available here


Employer Survey Finds Workers May Pay More for Health Care

Higher cost sharing for employees is the principal way businesses are dealing with the steady rise in health care costs, according to a survey conducted by The National Business Group on Health, an organization representing mostly large companies.  Their survey showed that more than half of the employers it surveyed plan to make employees cover a greater share of their healthcare costs, possibly by way of shifting away from co-pays and instead charging workers a percentage of the total costs.  Additional details are available here.


Medicare Providers Must Revalidate Program Enrollment

Medicare providers who enrolled in the program prior to March 25 will have to revalidate their enrollment using the PPACA-mandated risk-based screening system now through March 25, 2013.  Section 6401(a) of PPACA assigns providers to one of three screening categories (limited, moderate and high), based on their risk of fraud and abuse and waste.  Additional information is available online at the Medicare Learning Network here.


ADA Paper Seeks to Break Down Barriers to Oral Health

On August 12, The American Dental Association released a paper, “Breaking Down Barriers to Oral Health for All Americans: Repairing the Tattered Safety Net,” the second in a series of papers that examines the challenges and solutions to bringing good oral health to millions of Americans who currently do not receive adequate dental care.  The paper argued that prevention is essential, everyone deserves a dentist, the availability of clinical services alone will not maximize utilization, treating the disease without educating the patient is a wasted opportunity and administrative reforms and minor funding increases can yield major improvements in private practice dentists' participation in safety net programs. The paper is available here.


State News


New York Establishes Guidelines for Reporting Abuse of Disabled

New York State Governor Gary Cuomo announced August 17 a new agreement with the state police to establish guidelines for reporting alleged crimes against the disabled to law enforcement authorities.  The state currently provides a variety of services to 126,000 developmentally disabled people living in privately-run group homes and institutions.  The agreement follows a March report in The New York Times that law enforcement officials were being notified of less than 5 percent of abuse allegations.  Additional details are available here


OIG Finds States Flawed in Administering Medicaid Drug Rebate Program

An audit report released by the OIG on August 17 found that of the 48 states studied, 31 showed weaknesses in administering the Medicaid drug rebate program which could potentially affect accurate collection and documentation of rebates.  The report found flaws in states’ reporting of information on the Medicaid Drug Rebate Schedule (Form CMS 64.9R), improper accounting for interest on late rebate payments, inadequate systems for collecting rebates, and inadequate dispute resolution processes.  The OIG also found that more than half of all states had not yet implemented all of the recommendations contained in its 2005 report that audited state control over the drug rebate program.  The OIG recommended that CMS continue to stress to states the importance of an accurate Form CMS 64.9R and the importance of billing and collecting the rebates, as well as placing more emphasis on collecting Medicaid rebates for brand-name drugs administered by physicians.  The OIG report “Nationwide Rollup Report for Medicaid Drug Rebate Collections (A-06-10-00011)” is available here.


New Measures in Illinois Improve Preventative Care and Transparency

On August 9, Illinois Governor Pat Quinn (D) signed into law four new measures designed to improve care and transparency for state residents.  The first measure, H.B. 105, created the Illinois Patients’ Right to Know Act (Public Act 97-280), which will allow consumers to search an on-line database that contains extensive information pertaining to every physician and chiropractor licensed in the state.  The second bill, H.B. 2249, imposes requirements on insurance companies to cover diabetes self-management education programs.  Another preventative measure, H.B. 3039, will require insurers to annually provide their clients with information on early detection and proactive management of cardiovascular disease.  Finally, Quinn signed S.B. 1948, which will expand options for dental care for children enrolled in state and federal public aid programs.  Under the new law, the state's Department of Healthcare and Family Services will be directed to work with dentists to promote “dental homes’’ for children enrolled in programs under the Children's Health Insurance Program Act (CHIP), the Covering ALL KIDS Health Insurance Act, and the Medical Assistance Article of the Illinois Public Aid Code. The dental home structure organizes dentists to deliver comprehensive family-centered preventive and restorative oral care services.  Additional details are available at: H.B. 105, H.B. 2249, H.B. 3039, S.B. 1948


States Still Undecided About Exchanges

States are still struggling with the issue of whether and how to set up their health insurance exchanges.  In Minnesota, a partisan battle is growing over Democratic Governor Mark Dayton’s acceptance of a $4.2 million exchange planning grant.  State Rep. Steve Gottwalt, (R-St. Cloud), is among those protesting the Dayton administration's acceptance of the federal money.  He said his concern is that legislative leaders weren't consulted about moving forward with a plan that he believes could dramatically change health care in the state.  He's also believes that a government-run exchange will only create another bureaucracy that "will hurt a robust, private market."  Additional details are available here.  North Dakota is also wrestling with the uncertainty surrounding the exchanges.  Earlier this month Insurance Commissioner Adam Hamm, an outspoken critic of the overhaul law, told state lawmakers they might want to at least initially opt to have the federal government operate their exchange, according to the Forum newspaper.  Hamm said he was rethinking his earlier opinion that the state should have its own exchange.  “The feds would take all the risk,” Hamm told members of the Legislature’s Health Care Reform Review Committee.  Additional details are available here.


Additional Reading


Federal Register


CDC put on display a notice announcing a proposed collection of information project with a 60-day comment period has been submitted to the OMB for review and approval entitled, “Underreporting of Occupational Injuries and Illnesses by Workers (New) - National Institute for Occupational Safety and Health (NIOSH).”  The purpose of this project is to conduct a survey assessing the reporting behavior of workers that are injured, ill, or exposed to a harmful substance at work and are treated in hospital emergency departments.  The notice is available here and is scheduled to appear in the August 19 Federal Register.

CDC put on display a notice announcing a proposed collection of information project with a 60-day comment period has been submitted to the OMB for review and approval entitled, “Barriers to Occupational Injury Reporting by Workers: A NEISS Work Telephone Interview Survey (New) – National Institute for Occupational Safety and Health (NIOSH).”  The purpose of this project is to characterize and quantify the relative importance of incentives and disincentives with regard to the reporting of work-related injuries.  The notice is available here and is scheduled to appear in the August 19 Federal Register.

CDC put on display a notice announcing a proposed collection of information project with a 30-day comment period has been submitted to the OMB for review and approval entitled, “Comparing the Effectiveness of Traditional Evidence-Based Tobacco Cessation Interventions to Newer and Innovative Interventions Used by Comprehensive Cancer Control Programs (New) — National Center for Chronic Disease Prevention and Health Promotion.”  The agency proposes to conduct a new study of state-based tobacco-cessation programs and their client populations. The study will consist of telephone “Quitline” promotional activities cessation intervention.  The notice is available here and is scheduled to appear in the August 19 Federal Register.

FDA put on display a final rule entitled “Medical Devices; Ophthalmic Devices; Classification of the Eyelid Thermal Pulsation System [Docket No. FDA-2011-M-0570].”  The agency is classifying the eyelid thermal pulsation system into class II (special controls) in order to provide a reasonable assurance of safety and effectiveness of the device.  The classification was effective on June 28, 2011.  This rule will go into effect 30 days following publication.  The notice is available here and is scheduled to appear in the August 19, Federal Register.

FDA put on display a notice announcing a collection of information project with a 30-day comment period has been submitted to the OMB for review and approval entitled, “Premarket Notification for a New Dietary Ingredient [Docket No. FDA-2011-N-0410] - Extension.”  The notice is available here is and is scheduled to appear in the August 19 Federal Register.

FDA put on display a notice announcing a collection of information project with a 30-day comment period has been submitted to the OMB for review and approval entitled, “Substantiation for Dietary Supplement Claims Made Under the Federal Food, Drug, and Cosmetic Act [Docket No. FDA-2011-N-0403] - Extension.”  The notice is available here and is scheduled to appear in the August 19 Federal Register.

FDA announced an extension of comment period on its draft guidance document entitled, “Draft Guidance for Industry and Food and Drug Administration Staff on In Vitro Companion Diagnostic Devices [Docket No. FDA-2011-D-0215].”  The comment period has been extended to October 12, 2011.  The notice is available here and is scheduled to appear in the August 19 Federal Register.

FDA put on display a draft guidance for industry entitled, “Draft Guidance for Industry on Standards for Clinical Trial Imaging Endpoints; Availability [Docket No. FDA-2011-D-0586].”  The purpose of this draft guidance is to assist sponsors in the use of imaging endpoints in clinical trials of therapeutic drugs and biological products.  The draft guidance describes standards sponsors can use to ensure that clinical trial imaging data are obtained in a manner that complies with a trial's protocol, maintains imaging data quality, and provides a verifiable record of the imaging process.  The notice is available here and is scheduled to appear in the August 19 Federal Register.



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