Alicia Ault

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

At its April meeting, the commission (MedPAC) unanimously voted to include a bundling recommendation in its June report to Congress. As a first step, physicians and hospitals should be required to report to the Centers for Medicare and Medicaid Services (CMS) on resource use and readmissions during an “episode of care,” which is proposed to include the first 30 days post hospitalization. The data would be confidential initially, but by the 3rd year, should be made public, MedPAC commissioners recommended.

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

Finally, MedPAC voted to recommend that CMS create a voluntary pilot to test actual bundled payment in selected disease conditions. The pilot could throw some light on how the hospital or accountable care organization receiving the payment decided to share funds, and how Medicare might share in any savings, according to MedPAC staff.

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

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

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

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

At its April meeting, the commission (MedPAC) unanimously voted to include a bundling recommendation in its June report to Congress. As a first step, physicians and hospitals should be required to report to the Centers for Medicare and Medicaid Services (CMS) on resource use and readmissions during an “episode of care,” which is proposed to include the first 30 days post hospitalization. The data would be confidential initially, but by the 3rd year, should be made public, MedPAC commissioners recommended.

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

Finally, MedPAC voted to recommend that CMS create a voluntary pilot to test actual bundled payment in selected disease conditions. The pilot could throw some light on how the hospital or accountable care organization receiving the payment decided to share funds, and how Medicare might share in any savings, according to MedPAC staff.

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

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

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

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

At its April meeting, the commission (MedPAC) unanimously voted to include a bundling recommendation in its June report to Congress. As a first step, physicians and hospitals should be required to report to the Centers for Medicare and Medicaid Services (CMS) on resource use and readmissions during an “episode of care,” which is proposed to include the first 30 days post hospitalization. The data would be confidential initially, but by the 3rd year, should be made public, MedPAC commissioners recommended.

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

Finally, MedPAC voted to recommend that CMS create a voluntary pilot to test actual bundled payment in selected disease conditions. The pilot could throw some light on how the hospital or accountable care organization receiving the payment decided to share funds, and how Medicare might share in any savings, according to MedPAC staff.

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

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

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

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

At their recent meeting, MedPAC commissioners debated the potential impact of rising hospice costs on the Medicare program.

The hospice benefit began in 1983 with the idea that it would cost Medicare less to provide hospice than conventional end-of-life treatment, which is usually delivered in the hospital, said MedPAC staff member James Mathews, Ph.D.

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

According to MedPAC's analysis of Medicare claims data, hospice spending tripled from 2000 to 2007, when Medicare spent $10 billion on hospice services. The mean length of hospice stay increased 30% from 2000 to 2005.

It's not clear why length of stay is increasing, although data have shown that some illnesses—such as Alzheimer's disease and ischemic heart disease—tend to result in longer stays, according to Dr. Mathews.

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

But it appears that much of the growth in costs and length of stay is due to the huge increase in for-profit hospice facilities in the market.

From 2000 to 2007, very few nonprofit hospices entered the market, while the for-profit sector grew 12% a year, according to Dr. Mathews.

There were just a little more than 1,600 for-profit hospices in 2007, compared with about 1,200 nonprofit and 400 government-run facilities, according to the MedPAC analysis.

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

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

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

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

MedPAC vice chairman Robert Reischauer, Ph.D., suggested that Medicare payment could be refined to buy more appropriate care.

“It strikes me that there's probably an easy way to do this,” according to Dr. Reischauer, who is also president of the Urban Institute.

J. Donald Schumacher, Psy.D., president and CEO of the National Hospice and Palliative Care Association, acknowledged that there has been a “huge growth spurt” in the hospice field. Facilities are worried that the Centers for Medicare and Medicaid Services or Congress might clamp down, using a “blunt instrument,” Dr. Schumacher said at the meeting.

The commissioners and Dr. Schumacher agreed that a first step to a solution is getting more data on the hospice sector. CMS has already started down that path. In July, hospices will begin submitting data to CMS on the types of services they provide and which practitioners are delivering them.

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

At their recent meeting, MedPAC commissioners debated the potential impact of rising hospice costs on the Medicare program.

The hospice benefit began in 1983 with the idea that it would cost Medicare less to provide hospice than conventional end-of-life treatment, which is usually delivered in the hospital, said MedPAC staff member James Mathews, Ph.D.

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

According to MedPAC's analysis of Medicare claims data, hospice spending tripled from 2000 to 2007, when Medicare spent $10 billion on hospice services. The mean length of hospice stay increased 30% from 2000 to 2005.

It's not clear why length of stay is increasing, although data have shown that some illnesses—such as Alzheimer's disease and ischemic heart disease—tend to result in longer stays, according to Dr. Mathews.

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

But it appears that much of the growth in costs and length of stay is due to the huge increase in for-profit hospice facilities in the market.

From 2000 to 2007, very few nonprofit hospices entered the market, while the for-profit sector grew 12% a year, according to Dr. Mathews.

There were just a little more than 1,600 for-profit hospices in 2007, compared with about 1,200 nonprofit and 400 government-run facilities, according to the MedPAC analysis.

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

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

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

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

MedPAC vice chairman Robert Reischauer, Ph.D., suggested that Medicare payment could be refined to buy more appropriate care.

“It strikes me that there's probably an easy way to do this,” according to Dr. Reischauer, who is also president of the Urban Institute.

J. Donald Schumacher, Psy.D., president and CEO of the National Hospice and Palliative Care Association, acknowledged that there has been a “huge growth spurt” in the hospice field. Facilities are worried that the Centers for Medicare and Medicaid Services or Congress might clamp down, using a “blunt instrument,” Dr. Schumacher said at the meeting.

The commissioners and Dr. Schumacher agreed that a first step to a solution is getting more data on the hospice sector. CMS has already started down that path. In July, hospices will begin submitting data to CMS on the types of services they provide and which practitioners are delivering them.

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

At their recent meeting, MedPAC commissioners debated the potential impact of rising hospice costs on the Medicare program.

The hospice benefit began in 1983 with the idea that it would cost Medicare less to provide hospice than conventional end-of-life treatment, which is usually delivered in the hospital, said MedPAC staff member James Mathews, Ph.D.

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

According to MedPAC's analysis of Medicare claims data, hospice spending tripled from 2000 to 2007, when Medicare spent $10 billion on hospice services. The mean length of hospice stay increased 30% from 2000 to 2005.

It's not clear why length of stay is increasing, although data have shown that some illnesses—such as Alzheimer's disease and ischemic heart disease—tend to result in longer stays, according to Dr. Mathews.

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

But it appears that much of the growth in costs and length of stay is due to the huge increase in for-profit hospice facilities in the market.

From 2000 to 2007, very few nonprofit hospices entered the market, while the for-profit sector grew 12% a year, according to Dr. Mathews.

There were just a little more than 1,600 for-profit hospices in 2007, compared with about 1,200 nonprofit and 400 government-run facilities, according to the MedPAC analysis.

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

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

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

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

MedPAC vice chairman Robert Reischauer, Ph.D., suggested that Medicare payment could be refined to buy more appropriate care.

“It strikes me that there's probably an easy way to do this,” according to Dr. Reischauer, who is also president of the Urban Institute.

J. Donald Schumacher, Psy.D., president and CEO of the National Hospice and Palliative Care Association, acknowledged that there has been a “huge growth spurt” in the hospice field. Facilities are worried that the Centers for Medicare and Medicaid Services or Congress might clamp down, using a “blunt instrument,” Dr. Schumacher said at the meeting.

The commissioners and Dr. Schumacher agreed that a first step to a solution is getting more data on the hospice sector. CMS has already started down that path. In July, hospices will begin submitting data to CMS on the types of services they provide and which practitioners are delivering them.

Home Test Coverage Expanded

The Centers for Medicare and Medicaid Services issued a final decision to expand coverage of home prothrombin time (or International Normalized Ratio) testing for patients taking anticoagulation therapy for chronic atrial fibrillation and venous thromboembolism. Patients have to meet certain other criteria, and the home tests can't be used more than once a week. Medicare has covered home testing since 2002, but only for patients with mechanical heart valves.

The request for expanded coverage was made in June 2007 by the three main manufacturers of home testing devices (Roche Diagnostics, International Technidyne Corp., and HemoSense Inc.). The companies said there was plenty of new evidence to support home testing for the two other conditions. The CMS agreed. “Medicare's coverage extension of home blood testing of prothrombin time… is based on current evidence for these two conditions,” CMS Acting Administrator Kerry Weems said in a statement. Currently, PT testing is conducted about every 4–6 weeks, primarily in physicians' offices, according to the CMS. Fewer than 5% of patients on anticoagulation therapy monitor PT at home.

“Those Medicare beneficiaries and their physicians managing conditions related to chronic atrial fibrillation or venous thromboembolism will benefit greatly through the use of the home test,” Mr. Weems said. In a statement, Roche estimated that Medicare beneficiaries would pay $35 for training in use of at-home devices, and about $30 a month for test strips. Patients who have supplemental insurance might not have any out-of-pocket costs, the company said.

Inquiry Request on Stolen NIH Data

A National Heart, Lung, and Blood Institute researcher had the misfortune of having his laptop stolen out of the trunk of his car in late February. More unfortunately, the laptop held confidential information from ongoing cardiac studies of about 3,200 patients, including unsecured Social Security numbers for about 1,200 patients. Most unfortunately, among those whose data are at risk is Rep. Joe Barton (R-Tex.), ranking minority member of the House Energy and Commerce Committee.

Rep. Barton was informed of the breach on March 28 and quickly wrote to the Department of Health and Human Services' Inspector General seeking an inquiry into why the data were not secure and why the NHLBI took almost a month to inform patients of the breach.

The data in the researcher's computer were from ongoing studies of MRI's potential to quickly determine the source of chest pain in the emergency department, and to determine the impact of myocardial infarction on heart structure and function, according to the NHLBI. A spokesman said in an interview that for now, it appears no data were lost, as they were backed up shortly before the theft on an institute server. Also, the NHLBI has offered free credit monitoring and up to $20,000 in identity theft insurance to those whose Social Security numbers were on the laptop.

The National Institutes of Health is now taking steps to ensure encryption of all data storage devices, said the spokesman. The theft and the NHLBI response are being investigated by the Energy and Commerce Committee and the panel's Oversight and Investigations Subcommittee.

Gene Group to Look at Long QT

A new global collaboration led by the NIH and Japan's Center for Genomic Medicine will explore how genes may play a role in drug-induced long QT syndrome, among its first projects. The Global Alliance for Pharmacogenomics will identify genetic factors that influence individuals' responses to pharmaceuticals. The collaborative will also work with the International Warfarin Consortium to develop dosing recommendations based on patients' genetic profiles. Other initial projects include looking at how genes influence the effectiveness of aromatase inhibitors for breast cancer, and side effects from gemcitabine and bevacizumab.

“We expect this international agreement to speed scientific discovery and the translation of results into improved treatments for cancer, heart disease, and other serious conditions,” Dr. Elias Zerhouni, NIH director, said in a statement. The alliance is supported by public funds.

Health Sector Biggest Lobby

The health care industry was the biggest spender when it came to lobbying Congress in 2007. Pharmaceutical, medical device, physician, and hospital groups spent $227 million, a larger tally than for any other sector, according to the Center for Responsive Politics, a Washington-based watchdog group.

Of individual lobbying concerns, the U.S. Chamber of Commerce was number one, spending $53 million on in-house and external personnel, the center reported. Close behind was General Electric ($24 million), followed by the Pharmaceutical Research and Manufacturers of America ($23 million), the American Medical Association ($22 million), and the American Hospital Association ($20 million).

Broken out by industries, the pharmaceutical sector has spent more than any other industry in the last decade, laying out an accumulated $1.3 billion since 1997, said the center.

The data are taken from official lobbying reports that are submitted to the Senate Office of Public Records. The figures do not include other spending that is still aimed at influencing policy, according to the center.

Home Test Coverage Expanded

The Centers for Medicare and Medicaid Services issued a final decision to expand coverage of home prothrombin time (or International Normalized Ratio) testing for patients taking anticoagulation therapy for chronic atrial fibrillation and venous thromboembolism. Patients have to meet certain other criteria, and the home tests can't be used more than once a week. Medicare has covered home testing since 2002, but only for patients with mechanical heart valves.

The request for expanded coverage was made in June 2007 by the three main manufacturers of home testing devices (Roche Diagnostics, International Technidyne Corp., and HemoSense Inc.). The companies said there was plenty of new evidence to support home testing for the two other conditions. The CMS agreed. “Medicare's coverage extension of home blood testing of prothrombin time… is based on current evidence for these two conditions,” CMS Acting Administrator Kerry Weems said in a statement. Currently, PT testing is conducted about every 4–6 weeks, primarily in physicians' offices, according to the CMS. Fewer than 5% of patients on anticoagulation therapy monitor PT at home.

“Those Medicare beneficiaries and their physicians managing conditions related to chronic atrial fibrillation or venous thromboembolism will benefit greatly through the use of the home test,” Mr. Weems said. In a statement, Roche estimated that Medicare beneficiaries would pay $35 for training in use of at-home devices, and about $30 a month for test strips. Patients who have supplemental insurance might not have any out-of-pocket costs, the company said.

Inquiry Request on Stolen NIH Data

A National Heart, Lung, and Blood Institute researcher had the misfortune of having his laptop stolen out of the trunk of his car in late February. More unfortunately, the laptop held confidential information from ongoing cardiac studies of about 3,200 patients, including unsecured Social Security numbers for about 1,200 patients. Most unfortunately, among those whose data are at risk is Rep. Joe Barton (R-Tex.), ranking minority member of the House Energy and Commerce Committee.

Rep. Barton was informed of the breach on March 28 and quickly wrote to the Department of Health and Human Services' Inspector General seeking an inquiry into why the data were not secure and why the NHLBI took almost a month to inform patients of the breach.

The data in the researcher's computer were from ongoing studies of MRI's potential to quickly determine the source of chest pain in the emergency department, and to determine the impact of myocardial infarction on heart structure and function, according to the NHLBI. A spokesman said in an interview that for now, it appears no data were lost, as they were backed up shortly before the theft on an institute server. Also, the NHLBI has offered free credit monitoring and up to $20,000 in identity theft insurance to those whose Social Security numbers were on the laptop.

The National Institutes of Health is now taking steps to ensure encryption of all data storage devices, said the spokesman. The theft and the NHLBI response are being investigated by the Energy and Commerce Committee and the panel's Oversight and Investigations Subcommittee.

Gene Group to Look at Long QT

A new global collaboration led by the NIH and Japan's Center for Genomic Medicine will explore how genes may play a role in drug-induced long QT syndrome, among its first projects. The Global Alliance for Pharmacogenomics will identify genetic factors that influence individuals' responses to pharmaceuticals. The collaborative will also work with the International Warfarin Consortium to develop dosing recommendations based on patients' genetic profiles. Other initial projects include looking at how genes influence the effectiveness of aromatase inhibitors for breast cancer, and side effects from gemcitabine and bevacizumab.

“We expect this international agreement to speed scientific discovery and the translation of results into improved treatments for cancer, heart disease, and other serious conditions,” Dr. Elias Zerhouni, NIH director, said in a statement. The alliance is supported by public funds.

Health Sector Biggest Lobby

The health care industry was the biggest spender when it came to lobbying Congress in 2007. Pharmaceutical, medical device, physician, and hospital groups spent $227 million, a larger tally than for any other sector, according to the Center for Responsive Politics, a Washington-based watchdog group.

Of individual lobbying concerns, the U.S. Chamber of Commerce was number one, spending $53 million on in-house and external personnel, the center reported. Close behind was General Electric ($24 million), followed by the Pharmaceutical Research and Manufacturers of America ($23 million), the American Medical Association ($22 million), and the American Hospital Association ($20 million).

Broken out by industries, the pharmaceutical sector has spent more than any other industry in the last decade, laying out an accumulated $1.3 billion since 1997, said the center.

The data are taken from official lobbying reports that are submitted to the Senate Office of Public Records. The figures do not include other spending that is still aimed at influencing policy, according to the center.

Home Test Coverage Expanded

The Centers for Medicare and Medicaid Services issued a final decision to expand coverage of home prothrombin time (or International Normalized Ratio) testing for patients taking anticoagulation therapy for chronic atrial fibrillation and venous thromboembolism. Patients have to meet certain other criteria, and the home tests can't be used more than once a week. Medicare has covered home testing since 2002, but only for patients with mechanical heart valves.

The request for expanded coverage was made in June 2007 by the three main manufacturers of home testing devices (Roche Diagnostics, International Technidyne Corp., and HemoSense Inc.). The companies said there was plenty of new evidence to support home testing for the two other conditions. The CMS agreed. “Medicare's coverage extension of home blood testing of prothrombin time… is based on current evidence for these two conditions,” CMS Acting Administrator Kerry Weems said in a statement. Currently, PT testing is conducted about every 4–6 weeks, primarily in physicians' offices, according to the CMS. Fewer than 5% of patients on anticoagulation therapy monitor PT at home.

“Those Medicare beneficiaries and their physicians managing conditions related to chronic atrial fibrillation or venous thromboembolism will benefit greatly through the use of the home test,” Mr. Weems said. In a statement, Roche estimated that Medicare beneficiaries would pay $35 for training in use of at-home devices, and about $30 a month for test strips. Patients who have supplemental insurance might not have any out-of-pocket costs, the company said.

Inquiry Request on Stolen NIH Data

A National Heart, Lung, and Blood Institute researcher had the misfortune of having his laptop stolen out of the trunk of his car in late February. More unfortunately, the laptop held confidential information from ongoing cardiac studies of about 3,200 patients, including unsecured Social Security numbers for about 1,200 patients. Most unfortunately, among those whose data are at risk is Rep. Joe Barton (R-Tex.), ranking minority member of the House Energy and Commerce Committee.

Rep. Barton was informed of the breach on March 28 and quickly wrote to the Department of Health and Human Services' Inspector General seeking an inquiry into why the data were not secure and why the NHLBI took almost a month to inform patients of the breach.

The data in the researcher's computer were from ongoing studies of MRI's potential to quickly determine the source of chest pain in the emergency department, and to determine the impact of myocardial infarction on heart structure and function, according to the NHLBI. A spokesman said in an interview that for now, it appears no data were lost, as they were backed up shortly before the theft on an institute server. Also, the NHLBI has offered free credit monitoring and up to $20,000 in identity theft insurance to those whose Social Security numbers were on the laptop.

The National Institutes of Health is now taking steps to ensure encryption of all data storage devices, said the spokesman. The theft and the NHLBI response are being investigated by the Energy and Commerce Committee and the panel's Oversight and Investigations Subcommittee.

Gene Group to Look at Long QT

A new global collaboration led by the NIH and Japan's Center for Genomic Medicine will explore how genes may play a role in drug-induced long QT syndrome, among its first projects. The Global Alliance for Pharmacogenomics will identify genetic factors that influence individuals' responses to pharmaceuticals. The collaborative will also work with the International Warfarin Consortium to develop dosing recommendations based on patients' genetic profiles. Other initial projects include looking at how genes influence the effectiveness of aromatase inhibitors for breast cancer, and side effects from gemcitabine and bevacizumab.

“We expect this international agreement to speed scientific discovery and the translation of results into improved treatments for cancer, heart disease, and other serious conditions,” Dr. Elias Zerhouni, NIH director, said in a statement. The alliance is supported by public funds.

Health Sector Biggest Lobby

The health care industry was the biggest spender when it came to lobbying Congress in 2007. Pharmaceutical, medical device, physician, and hospital groups spent $227 million, a larger tally than for any other sector, according to the Center for Responsive Politics, a Washington-based watchdog group.

Of individual lobbying concerns, the U.S. Chamber of Commerce was number one, spending $53 million on in-house and external personnel, the center reported. Close behind was General Electric ($24 million), followed by the Pharmaceutical Research and Manufacturers of America ($23 million), the American Medical Association ($22 million), and the American Hospital Association ($20 million).

Broken out by industries, the pharmaceutical sector has spent more than any other industry in the last decade, laying out an accumulated $1.3 billion since 1997, said the center.

The data are taken from official lobbying reports that are submitted to the Senate Office of Public Records. The figures do not include other spending that is still aimed at influencing policy, according to the center.

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

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

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

Finally, MedPAC voted to recommend that CMS create a voluntary pilot to test actual bundled payment in selected disease conditions. The pilot could throw some light on how the hospital or accountable care organization receiving the payment decided to share funds, and how Medicare might share in any savings, according to MedPAC staff.

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

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

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

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

Finally, MedPAC voted to recommend that CMS create a voluntary pilot to test actual bundled payment in selected disease conditions. The pilot could throw some light on how the hospital or accountable care organization receiving the payment decided to share funds, and how Medicare might share in any savings, according to MedPAC staff.

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

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

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

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

Finally, MedPAC voted to recommend that CMS create a voluntary pilot to test actual bundled payment in selected disease conditions. The pilot could throw some light on how the hospital or accountable care organization receiving the payment decided to share funds, and how Medicare might share in any savings, according to MedPAC staff.

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

The Food and Drug Administration has given manufacturers of coronary drug-eluting stents a look at what kind of safety and effectiveness data it will be seeking in the future—and the industry does not appear to be taken aback by what's in the 89-page document.

“This draft guidance is part of FDA's ongoing effort to provide regulated industry with recommendations on measures that can minimize the risks while preserving for patients the benefits of drug-eluting stents,” said Dr. Daniel Schultz, director of the FDA's Center for Devices and Radiological Health, in a statement accompanying the document's publication.

The draft gives recommendations on assessing the toxicity of drug coatings, both on their own and as part of the stent product, according to the agency. Most of the guidance pertains to metal drug-eluting stents; there is less complete information provided on stents made from other materials, such as ceramic or polymer.

The document clearly states an expectation of postmarketing studies out to 5 years after approval. The proposed “guidance,” if made final, would not carry the weight of a regulation.

The guidance is a departure for the agency, as it combines the efforts of the drug and device divisions. “This guidance demonstrates how FDA will need to work across traditional product boundaries to guide the development of innovative new products,” said Dr. Janet Woodcock, director of the Center for Drug Evaluation and Research, in the statement.

Dr. Christopher White, chairman of the department of cardiovascular diseases at Ochsner Clinic Foundation, and a principal investigator for several stents, views the FDA guidance as a positive development. “The fact that FDA is willing to commit on paper the core elements of what they view as necessary for device approval is actually very helpful,” said Dr. White in an interview.

He said that the draft does not seek much that companies are not already doing—with the exception of long postmarketing data—and it will take a while to be put in place.

A Boston Scientific Corp. spokesman agreed that its pipeline would likely not be affected. In any case, Boston Scientific has already been collecting 5 years of postmarketing data on its products, said the spokesman.

The FDA will accept comments on the guidance through July.

The Food and Drug Administration has given manufacturers of coronary drug-eluting stents a look at what kind of safety and effectiveness data it will be seeking in the future—and the industry does not appear to be taken aback by what's in the 89-page document.

“This draft guidance is part of FDA's ongoing effort to provide regulated industry with recommendations on measures that can minimize the risks while preserving for patients the benefits of drug-eluting stents,” said Dr. Daniel Schultz, director of the FDA's Center for Devices and Radiological Health, in a statement accompanying the document's publication.

The draft gives recommendations on assessing the toxicity of drug coatings, both on their own and as part of the stent product, according to the agency. Most of the guidance pertains to metal drug-eluting stents; there is less complete information provided on stents made from other materials, such as ceramic or polymer.

The document clearly states an expectation of postmarketing studies out to 5 years after approval. The proposed “guidance,” if made final, would not carry the weight of a regulation.

The guidance is a departure for the agency, as it combines the efforts of the drug and device divisions. “This guidance demonstrates how FDA will need to work across traditional product boundaries to guide the development of innovative new products,” said Dr. Janet Woodcock, director of the Center for Drug Evaluation and Research, in the statement.

Dr. Christopher White, chairman of the department of cardiovascular diseases at Ochsner Clinic Foundation, and a principal investigator for several stents, views the FDA guidance as a positive development. “The fact that FDA is willing to commit on paper the core elements of what they view as necessary for device approval is actually very helpful,” said Dr. White in an interview.

He said that the draft does not seek much that companies are not already doing—with the exception of long postmarketing data—and it will take a while to be put in place.

A Boston Scientific Corp. spokesman agreed that its pipeline would likely not be affected. In any case, Boston Scientific has already been collecting 5 years of postmarketing data on its products, said the spokesman.

The FDA will accept comments on the guidance through July.

The Food and Drug Administration has given manufacturers of coronary drug-eluting stents a look at what kind of safety and effectiveness data it will be seeking in the future—and the industry does not appear to be taken aback by what's in the 89-page document.

“This draft guidance is part of FDA's ongoing effort to provide regulated industry with recommendations on measures that can minimize the risks while preserving for patients the benefits of drug-eluting stents,” said Dr. Daniel Schultz, director of the FDA's Center for Devices and Radiological Health, in a statement accompanying the document's publication.

The draft gives recommendations on assessing the toxicity of drug coatings, both on their own and as part of the stent product, according to the agency. Most of the guidance pertains to metal drug-eluting stents; there is less complete information provided on stents made from other materials, such as ceramic or polymer.

The document clearly states an expectation of postmarketing studies out to 5 years after approval. The proposed “guidance,” if made final, would not carry the weight of a regulation.

The guidance is a departure for the agency, as it combines the efforts of the drug and device divisions. “This guidance demonstrates how FDA will need to work across traditional product boundaries to guide the development of innovative new products,” said Dr. Janet Woodcock, director of the Center for Drug Evaluation and Research, in the statement.

Dr. Christopher White, chairman of the department of cardiovascular diseases at Ochsner Clinic Foundation, and a principal investigator for several stents, views the FDA guidance as a positive development. “The fact that FDA is willing to commit on paper the core elements of what they view as necessary for device approval is actually very helpful,” said Dr. White in an interview.

He said that the draft does not seek much that companies are not already doing—with the exception of long postmarketing data—and it will take a while to be put in place.

A Boston Scientific Corp. spokesman agreed that its pipeline would likely not be affected. In any case, Boston Scientific has already been collecting 5 years of postmarketing data on its products, said the spokesman.

The FDA will accept comments on the guidance through July.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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