Alicia Ault

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

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

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

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, J.D., a partner in the health law department of McDermott, Will & Emery's Chicago office.

As a result, “the application of exceptions will be different going forward,” Mr. Melvin said in an interview.

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

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices.

Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS. In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities, under the Stark law) urged CMS to revert to the old policy.

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

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

There were several other notable changes in Stark III.

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

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

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

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

“At the very least, they're going to want to do a review of the arrangements in place,” to see if any of the exceptions being relied on will change with Stark III, Ms. Nordeng added.

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

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

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

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

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, J.D., a partner in the health law department of McDermott, Will & Emery's Chicago office.

As a result, “the application of exceptions will be different going forward,” Mr. Melvin said in an interview.

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

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices.

Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS. In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities, under the Stark law) urged CMS to revert to the old policy.

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

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

There were several other notable changes in Stark III.

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

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

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

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

“At the very least, they're going to want to do a review of the arrangements in place,” to see if any of the exceptions being relied on will change with Stark III, Ms. Nordeng added.

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

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

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

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

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, J.D., a partner in the health law department of McDermott, Will & Emery's Chicago office.

As a result, “the application of exceptions will be different going forward,” Mr. Melvin said in an interview.

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

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices.

Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS. In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities, under the Stark law) urged CMS to revert to the old policy.

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

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

There were several other notable changes in Stark III.

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

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

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

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

“At the very least, they're going to want to do a review of the arrangements in place,” to see if any of the exceptions being relied on will change with Stark III, Ms. Nordeng added.

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

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

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

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

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, J.D., a partner in the health law department of McDermott, Will & Emery's Chicago office.

As a result, "the application of exceptions will be different going forward," Mr. Melvin said in an interview.

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

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices. Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS.

In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities under the Stark law) urged CMS to revert to the old policy.

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

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

There were several other notable changes in Stark III.

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

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

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

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

"At the very least, they're going to want to do a review of the arrangements in place," to see if any of the exceptions being relied on will change with Stark III, added Ms. Nordeng.

The final Stark rule will go into effect on Dec. 5.

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

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

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

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, J.D., a partner in the health law department of McDermott, Will & Emery's Chicago office.

As a result, "the application of exceptions will be different going forward," Mr. Melvin said in an interview.

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

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices. Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS.

In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities under the Stark law) urged CMS to revert to the old policy.

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

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

There were several other notable changes in Stark III.

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

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

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

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

"At the very least, they're going to want to do a review of the arrangements in place," to see if any of the exceptions being relied on will change with Stark III, added Ms. Nordeng.

The final Stark rule will go into effect on Dec. 5.

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

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

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

This reversion back to the initial Stark policy is among the most important changes in the 516-page document, said Daniel H. Melvin, J.D., a partner in the health law department of McDermott, Will & Emery's Chicago office.

As a result, "the application of exceptions will be different going forward," Mr. Melvin said in an interview.

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

Under Stark II—an interim policy that began in 2004—physicians were considered to be individuals, outside of their practices. Exceptions to the law were evaluated using an indirect compensation analysis, which ended up being onerous and was the subject of many complaints to CMS.

In comments on Stark II, physician groups, hospitals, and other facilities (called designated health services, or DHS entities under the Stark law) urged CMS to revert to the old policy.

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

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

There were several other notable changes in Stark III.

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

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

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

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

"At the very least, they're going to want to do a review of the arrangements in place," to see if any of the exceptions being relied on will change with Stark III, added Ms. Nordeng.

The final Stark rule will go into effect on Dec. 5.

Tanning Knowledge Disparity

White Hispanic teens perceive themselves to be at lower risk for skin cancer than white non-Hispanic teens, and thus take fewer precautions, according to a study of students at a public high school in Miami-Dade County. Hispanics are the fastest growing minority in the United States, and while they have a low incidence of melanoma, incidence has been increasing by 3% a year the last 15 years, according to the study, in the August 2007 Archives of Dermatology. A random sample of 369 students completed a self-administered anonymous survey; 60% (221) were white Hispanic and 40% (148) were white non-Hispanic. Hispanics were significantly more likely than non-Hispanics to tan deeply, 44% compared with 31%. Both groups reported spending a similar amount of time in the sun. But Hispanics were 2.5 times more likely than whites to have used a tanning bed in the past year, and reported a greater number of tanning bed uses. Three-quarters of each group agreed that sun exposure was the most important skin cancer risk factor. But more whites were familiar with skin self-exams and how to perform them. Whites were more likely to wear protective clothing and sunscreen with an SPF of 15 or higher. The authors concluded that skin cancer prevention programs should also target Hispanics.

OTC Anti-Aging Products Reviewed

Consumers are increasingly looking for a fountain-of-youth-in-a-bottle, but it still does not exist, despite the proliferation of such claims, according to a review of over-the-counter "anti-aging" products in the July/August issue of Aesthetic Surgery Journal. Dr. Timothy A. Miller, chief of the division of plastic and reconstructive surgery at the University of California, Los Angeles, and resident Dr. Catherine K. Huang reviewed derivatives of vitamins A, B, C, and E, antioxidants like coenzyme Q-10, alpha hydroxy acids, botanicals, moisturizers, and pentapeptides. Only vitamin C, alpha hydroxy acids, and pentapeptides have evidence indicating some anti-aging properties, they concluded. And there have been some promising studies of vitamin A and B derivatives, they said, but the authors concluded that, "although many different compounds are marketed as anti-aging products, there are few studies proving their efficacy."

Nanoparticles in Sunscreens

The nonprofit environmental group Friends of the Earth wants nanoparticles removed from sunscreens, saying that the substances don't boost effectiveness, and that they may be harmful. The group noted that most consumers won't even know which brands have nanoparticles, since they aren't on the label. The group queried 128 manufacturers; 90 refused to answer; 9 said their product did not contain nanoparticles. The group's "Nanoparticles and Sunscreens: A Consumer Guide for Avoiding Nano Sunscreens," can be found at

www.foe.org/nano

NIH Lupus Research Plan

Government scientists recently outlined their plans for future research in lupus. The goals include laying the foundation for lupus prevention, identifying disease triggers, defining target organ damage mechanisms, understanding autoantibodies, expanding biopsychosocial research, discovering and validating biomarkers, and advancing therapy options. These goals are part of a long-range planning document recently released by the National Institute of Arthritis and Musculoskeletal and Skin Diseases, part of the National Institutes of Health. The NIH document predicts that lupus prevention could become an "attainable goal" in the next decade, and outlines a need to advance research efforts to identify disease risk through family studies and genetics. The document, which was mandated by Congress, was developed with input from scientific experts from the lupus community, according to NIH. "The ultimate goal of this plan is to identify needs and opportunities from both public and private organizations to continue to accelerate progress in lupus research to further improve quality of life of patients who have lupus," Dr. Stephen Katz, director of NIAMS, wrote in the introduction to the research plan.

Tanning Knowledge Disparity

White Hispanic teens perceive themselves to be at lower risk for skin cancer than white non-Hispanic teens, and thus take fewer precautions, according to a study of students at a public high school in Miami-Dade County. Hispanics are the fastest growing minority in the United States, and while they have a low incidence of melanoma, incidence has been increasing by 3% a year the last 15 years, according to the study, in the August 2007 Archives of Dermatology. A random sample of 369 students completed a self-administered anonymous survey; 60% (221) were white Hispanic and 40% (148) were white non-Hispanic. Hispanics were significantly more likely than non-Hispanics to tan deeply, 44% compared with 31%. Both groups reported spending a similar amount of time in the sun. But Hispanics were 2.5 times more likely than whites to have used a tanning bed in the past year, and reported a greater number of tanning bed uses. Three-quarters of each group agreed that sun exposure was the most important skin cancer risk factor. But more whites were familiar with skin self-exams and how to perform them. Whites were more likely to wear protective clothing and sunscreen with an SPF of 15 or higher. The authors concluded that skin cancer prevention programs should also target Hispanics.

OTC Anti-Aging Products Reviewed

Consumers are increasingly looking for a fountain-of-youth-in-a-bottle, but it still does not exist, despite the proliferation of such claims, according to a review of over-the-counter "anti-aging" products in the July/August issue of Aesthetic Surgery Journal. Dr. Timothy A. Miller, chief of the division of plastic and reconstructive surgery at the University of California, Los Angeles, and resident Dr. Catherine K. Huang reviewed derivatives of vitamins A, B, C, and E, antioxidants like coenzyme Q-10, alpha hydroxy acids, botanicals, moisturizers, and pentapeptides. Only vitamin C, alpha hydroxy acids, and pentapeptides have evidence indicating some anti-aging properties, they concluded. And there have been some promising studies of vitamin A and B derivatives, they said, but the authors concluded that, "although many different compounds are marketed as anti-aging products, there are few studies proving their efficacy."

Nanoparticles in Sunscreens

The nonprofit environmental group Friends of the Earth wants nanoparticles removed from sunscreens, saying that the substances don't boost effectiveness, and that they may be harmful. The group noted that most consumers won't even know which brands have nanoparticles, since they aren't on the label. The group queried 128 manufacturers; 90 refused to answer; 9 said their product did not contain nanoparticles. The group's "Nanoparticles and Sunscreens: A Consumer Guide for Avoiding Nano Sunscreens," can be found at

www.foe.org/nano

NIH Lupus Research Plan

Government scientists recently outlined their plans for future research in lupus. The goals include laying the foundation for lupus prevention, identifying disease triggers, defining target organ damage mechanisms, understanding autoantibodies, expanding biopsychosocial research, discovering and validating biomarkers, and advancing therapy options. These goals are part of a long-range planning document recently released by the National Institute of Arthritis and Musculoskeletal and Skin Diseases, part of the National Institutes of Health. The NIH document predicts that lupus prevention could become an "attainable goal" in the next decade, and outlines a need to advance research efforts to identify disease risk through family studies and genetics. The document, which was mandated by Congress, was developed with input from scientific experts from the lupus community, according to NIH. "The ultimate goal of this plan is to identify needs and opportunities from both public and private organizations to continue to accelerate progress in lupus research to further improve quality of life of patients who have lupus," Dr. Stephen Katz, director of NIAMS, wrote in the introduction to the research plan.

Tanning Knowledge Disparity

White Hispanic teens perceive themselves to be at lower risk for skin cancer than white non-Hispanic teens, and thus take fewer precautions, according to a study of students at a public high school in Miami-Dade County. Hispanics are the fastest growing minority in the United States, and while they have a low incidence of melanoma, incidence has been increasing by 3% a year the last 15 years, according to the study, in the August 2007 Archives of Dermatology. A random sample of 369 students completed a self-administered anonymous survey; 60% (221) were white Hispanic and 40% (148) were white non-Hispanic. Hispanics were significantly more likely than non-Hispanics to tan deeply, 44% compared with 31%. Both groups reported spending a similar amount of time in the sun. But Hispanics were 2.5 times more likely than whites to have used a tanning bed in the past year, and reported a greater number of tanning bed uses. Three-quarters of each group agreed that sun exposure was the most important skin cancer risk factor. But more whites were familiar with skin self-exams and how to perform them. Whites were more likely to wear protective clothing and sunscreen with an SPF of 15 or higher. The authors concluded that skin cancer prevention programs should also target Hispanics.

OTC Anti-Aging Products Reviewed

Consumers are increasingly looking for a fountain-of-youth-in-a-bottle, but it still does not exist, despite the proliferation of such claims, according to a review of over-the-counter "anti-aging" products in the July/August issue of Aesthetic Surgery Journal. Dr. Timothy A. Miller, chief of the division of plastic and reconstructive surgery at the University of California, Los Angeles, and resident Dr. Catherine K. Huang reviewed derivatives of vitamins A, B, C, and E, antioxidants like coenzyme Q-10, alpha hydroxy acids, botanicals, moisturizers, and pentapeptides. Only vitamin C, alpha hydroxy acids, and pentapeptides have evidence indicating some anti-aging properties, they concluded. And there have been some promising studies of vitamin A and B derivatives, they said, but the authors concluded that, "although many different compounds are marketed as anti-aging products, there are few studies proving their efficacy."

Nanoparticles in Sunscreens

The nonprofit environmental group Friends of the Earth wants nanoparticles removed from sunscreens, saying that the substances don't boost effectiveness, and that they may be harmful. The group noted that most consumers won't even know which brands have nanoparticles, since they aren't on the label. The group queried 128 manufacturers; 90 refused to answer; 9 said their product did not contain nanoparticles. The group's "Nanoparticles and Sunscreens: A Consumer Guide for Avoiding Nano Sunscreens," can be found at

www.foe.org/nano

NIH Lupus Research Plan

Government scientists recently outlined their plans for future research in lupus. The goals include laying the foundation for lupus prevention, identifying disease triggers, defining target organ damage mechanisms, understanding autoantibodies, expanding biopsychosocial research, discovering and validating biomarkers, and advancing therapy options. These goals are part of a long-range planning document recently released by the National Institute of Arthritis and Musculoskeletal and Skin Diseases, part of the National Institutes of Health. The NIH document predicts that lupus prevention could become an "attainable goal" in the next decade, and outlines a need to advance research efforts to identify disease risk through family studies and genetics. The document, which was mandated by Congress, was developed with input from scientific experts from the lupus community, according to NIH. "The ultimate goal of this plan is to identify needs and opportunities from both public and private organizations to continue to accelerate progress in lupus research to further improve quality of life of patients who have lupus," Dr. Stephen Katz, director of NIAMS, wrote in the introduction to the research plan.

Starting next year, federal health programs will cover any procedure performed at an ambulatory surgery center, with few but defined exclusions, according to final regulations released by the Centers for Medicare and Medicaid Services.

The payment formula for such procedures, to be phased in over 4 years, was also set by the regulations.

Previously, CMS covered approximately 2,600 procedures when they were performed at an ASC; now, an additional 790 procedures will be eligible in 2008. According to Dr. Charles Mabry, chairman of the American College of Surgeons' health policy steering committee and a member of the general surgery coding and reimbursement committee, as new procedures receive CPT codes, they, too will be covered, unless they are specifically excluded.

The Centers for Medicare and Medicaid Services will not pay for a procedure if it falls within the following exclusion criteria:

▸ It poses a significant safety risk to the beneficiary.

▸ It would result in the patient's requiring active monitoring or an overnight stay.

▸ It directly involves major blood vessels.

▸ It requires major or prolonged invasion of body cavities.

▸ It results in extensive blood loss.

▸ It is emergent or life threatening.

▸ It requires systemic thrombolysis.

▸ It can be reported only with an unlisted code.

The change means that more patients will likely be able to have procedures done in an ASC, said Dr. Mabry, who is also a shareholder in an ambulatory surgery center in Pine Bluff, Ark.

The question now: “Is the payment rate the right rate?” he said. (See box below.)

CMS also decided to limit payment for procedures performed in an ASC that are done in a physician's office more than half the time. “CMS does not want to create inappropriate payment incentives for procedures to be performed in ASCs if the physician's office is the most efficient setting for providing high-quality care,” according to the agency.

FASA, the advocacy arm of the Foundation for Ambulatory Surgery in America, objected to this proposal and also to CMS's list of exclusions, arguing that the agency should pay for any procedure that is not covered under the inpatient system.

Under the new rule, Medicare will make separate payments for ancillary services, such as radiology, and for some drugs and biologicals considered integral to a surgical procedure. The agency will also make adjustments for procedures that have high device costs (that is, when the cost of the device accounts for more than half the median cost of the procedure).

Those high device-cost procedures include placement of neurostimulators, pulse generators, or pacemakers. The adjustment is already in effect under CMS's hospital outpatient payment system.

Payments to ASCs Proposed for 2008

In addition to setting the formula for how ambulatory surgery centers will be paid going forward, CMS has also issued proposals on how the formula will guide payments to ASCs in 2008, and on how much hospital outpatient departments will receive in 2008.

In 2008, the federal health agency has proposed that ASCs would be paid at 65% of hospital outpatient rates, a slight increase over an earlier proposal of 62%. Medicare and Medicaid expect to pay $3 billion in 2008 to about 4,600 participating ASCs, according to CMS.

In the proposed pay rates, orthopedic procedures would receive the greatest increases, whereas gastrointestinal procedures would be cut. Procedures involving the implantation of cardiac devices are mostly slated for increases, and payment for the implantation of neurologic devices would also increase.

The agency also issued its proposal for hospital outpatient payments, which is partially driven by the desire to keep beneficiary copays at 20%. In 2008, the overall copay will be about 26%, but for most procedures, beneficiaries will be liable for only 20%.

Hospitals will receive $35 billion under the proposed rule in 2008, about a 10% increase over 2007. CMS said “the current rate of growth of expenditures is of great concern,” because of its effect on taxpayers and beneficiaries whose premiums fund 25% of Medicare Part B expenses.

Hospitals will get an automatic 2% cut in fees in 2009 if they don't report on 10 quality measures in 2008, including 5 measures on how well emergency departments handle myocardial infarction; 2 surgical care measures (the selection and timing of antibiotic prophylaxis); 1 heart failure measure (ACE inhibitor or angiotensin receptor blocker given); 1 on community-acquired pneumonia (empiric antibiotic); and a diabetes measure (poor hemoglobin A_1c control).

Starting next year, federal health programs will cover any procedure performed at an ambulatory surgery center, with few but defined exclusions, according to final regulations released by the Centers for Medicare and Medicaid Services.

The payment formula for such procedures, to be phased in over 4 years, was also set by the regulations.

Previously, CMS covered approximately 2,600 procedures when they were performed at an ASC; now, an additional 790 procedures will be eligible in 2008. According to Dr. Charles Mabry, chairman of the American College of Surgeons' health policy steering committee and a member of the general surgery coding and reimbursement committee, as new procedures receive CPT codes, they, too will be covered, unless they are specifically excluded.

The Centers for Medicare and Medicaid Services will not pay for a procedure if it falls within the following exclusion criteria:

▸ It poses a significant safety risk to the beneficiary.

▸ It would result in the patient's requiring active monitoring or an overnight stay.

▸ It directly involves major blood vessels.

▸ It requires major or prolonged invasion of body cavities.

▸ It results in extensive blood loss.

▸ It is emergent or life threatening.

▸ It requires systemic thrombolysis.

▸ It can be reported only with an unlisted code.

The change means that more patients will likely be able to have procedures done in an ASC, said Dr. Mabry, who is also a shareholder in an ambulatory surgery center in Pine Bluff, Ark.

The question now: “Is the payment rate the right rate?” he said. (See box below.)

CMS also decided to limit payment for procedures performed in an ASC that are done in a physician's office more than half the time. “CMS does not want to create inappropriate payment incentives for procedures to be performed in ASCs if the physician's office is the most efficient setting for providing high-quality care,” according to the agency.

FASA, the advocacy arm of the Foundation for Ambulatory Surgery in America, objected to this proposal and also to CMS's list of exclusions, arguing that the agency should pay for any procedure that is not covered under the inpatient system.

Under the new rule, Medicare will make separate payments for ancillary services, such as radiology, and for some drugs and biologicals considered integral to a surgical procedure. The agency will also make adjustments for procedures that have high device costs (that is, when the cost of the device accounts for more than half the median cost of the procedure).

Those high device-cost procedures include placement of neurostimulators, pulse generators, or pacemakers. The adjustment is already in effect under CMS's hospital outpatient payment system.

Payments to ASCs Proposed for 2008

In addition to setting the formula for how ambulatory surgery centers will be paid going forward, CMS has also issued proposals on how the formula will guide payments to ASCs in 2008, and on how much hospital outpatient departments will receive in 2008.

In 2008, the federal health agency has proposed that ASCs would be paid at 65% of hospital outpatient rates, a slight increase over an earlier proposal of 62%. Medicare and Medicaid expect to pay $3 billion in 2008 to about 4,600 participating ASCs, according to CMS.

In the proposed pay rates, orthopedic procedures would receive the greatest increases, whereas gastrointestinal procedures would be cut. Procedures involving the implantation of cardiac devices are mostly slated for increases, and payment for the implantation of neurologic devices would also increase.

The agency also issued its proposal for hospital outpatient payments, which is partially driven by the desire to keep beneficiary copays at 20%. In 2008, the overall copay will be about 26%, but for most procedures, beneficiaries will be liable for only 20%.

Hospitals will receive $35 billion under the proposed rule in 2008, about a 10% increase over 2007. CMS said “the current rate of growth of expenditures is of great concern,” because of its effect on taxpayers and beneficiaries whose premiums fund 25% of Medicare Part B expenses.

Hospitals will get an automatic 2% cut in fees in 2009 if they don't report on 10 quality measures in 2008, including 5 measures on how well emergency departments handle myocardial infarction; 2 surgical care measures (the selection and timing of antibiotic prophylaxis); 1 heart failure measure (ACE inhibitor or angiotensin receptor blocker given); 1 on community-acquired pneumonia (empiric antibiotic); and a diabetes measure (poor hemoglobin A_1c control).

Starting next year, federal health programs will cover any procedure performed at an ambulatory surgery center, with few but defined exclusions, according to final regulations released by the Centers for Medicare and Medicaid Services.

The payment formula for such procedures, to be phased in over 4 years, was also set by the regulations.

Previously, CMS covered approximately 2,600 procedures when they were performed at an ASC; now, an additional 790 procedures will be eligible in 2008. According to Dr. Charles Mabry, chairman of the American College of Surgeons' health policy steering committee and a member of the general surgery coding and reimbursement committee, as new procedures receive CPT codes, they, too will be covered, unless they are specifically excluded.

The Centers for Medicare and Medicaid Services will not pay for a procedure if it falls within the following exclusion criteria:

▸ It poses a significant safety risk to the beneficiary.

▸ It would result in the patient's requiring active monitoring or an overnight stay.

▸ It directly involves major blood vessels.

▸ It requires major or prolonged invasion of body cavities.

▸ It results in extensive blood loss.

▸ It is emergent or life threatening.

▸ It requires systemic thrombolysis.

▸ It can be reported only with an unlisted code.

The change means that more patients will likely be able to have procedures done in an ASC, said Dr. Mabry, who is also a shareholder in an ambulatory surgery center in Pine Bluff, Ark.

The question now: “Is the payment rate the right rate?” he said. (See box below.)

CMS also decided to limit payment for procedures performed in an ASC that are done in a physician's office more than half the time. “CMS does not want to create inappropriate payment incentives for procedures to be performed in ASCs if the physician's office is the most efficient setting for providing high-quality care,” according to the agency.

FASA, the advocacy arm of the Foundation for Ambulatory Surgery in America, objected to this proposal and also to CMS's list of exclusions, arguing that the agency should pay for any procedure that is not covered under the inpatient system.

Under the new rule, Medicare will make separate payments for ancillary services, such as radiology, and for some drugs and biologicals considered integral to a surgical procedure. The agency will also make adjustments for procedures that have high device costs (that is, when the cost of the device accounts for more than half the median cost of the procedure).

Those high device-cost procedures include placement of neurostimulators, pulse generators, or pacemakers. The adjustment is already in effect under CMS's hospital outpatient payment system.

Payments to ASCs Proposed for 2008

In addition to setting the formula for how ambulatory surgery centers will be paid going forward, CMS has also issued proposals on how the formula will guide payments to ASCs in 2008, and on how much hospital outpatient departments will receive in 2008.

In 2008, the federal health agency has proposed that ASCs would be paid at 65% of hospital outpatient rates, a slight increase over an earlier proposal of 62%. Medicare and Medicaid expect to pay $3 billion in 2008 to about 4,600 participating ASCs, according to CMS.

In the proposed pay rates, orthopedic procedures would receive the greatest increases, whereas gastrointestinal procedures would be cut. Procedures involving the implantation of cardiac devices are mostly slated for increases, and payment for the implantation of neurologic devices would also increase.

The agency also issued its proposal for hospital outpatient payments, which is partially driven by the desire to keep beneficiary copays at 20%. In 2008, the overall copay will be about 26%, but for most procedures, beneficiaries will be liable for only 20%.

Hospitals will receive $35 billion under the proposed rule in 2008, about a 10% increase over 2007. CMS said “the current rate of growth of expenditures is of great concern,” because of its effect on taxpayers and beneficiaries whose premiums fund 25% of Medicare Part B expenses.

Hospitals will get an automatic 2% cut in fees in 2009 if they don't report on 10 quality measures in 2008, including 5 measures on how well emergency departments handle myocardial infarction; 2 surgical care measures (the selection and timing of antibiotic prophylaxis); 1 heart failure measure (ACE inhibitor or angiotensin receptor blocker given); 1 on community-acquired pneumonia (empiric antibiotic); and a diabetes measure (poor hemoglobin A_1c control).

Building on the success of its Hospital Quality Improvement Demonstration, Premier Inc. is launching a new initiative to pay hospitals that perform at the top of a scale measuring improvements in mortality, the percentage of patients who receive appropriate care, efficiency, harm avoidance, and patient satisfaction.

Premier introduced the QUEST (Quality, Efficiency, Safety, and Transparency) initiative in late July and said it was recruiting hospitals to participate through the end of September. In a briefing with reporters, Premier president and CEO Richard A. Norling said that 60 hospitals had expressed interest so far, but he declined to name them.

Premier is an alliance that is owned by 1,700 nonprofit hospitals. Premier's purchasing network also serves 46,500 health care entities.

The alliance's previous project—HQID—was a joint effort with the Centers for Medicare & Medicaid Services that began in 2003 and concludes in November.

QUEST will initially focus on hospitals' risk-adjusted mortality ratio, and on how well they deliver appropriate care, measured by the percentage of patients who receive perfect care according to evidence-based guidelines. Hospitals will also be measured on the severity adjusted cost per discharge, a reflection of efficiency.

In the second year, QUEST hospitals will have to show how well they prevent health care-related infections and adverse drug events, and how well they serve patients, measured through CMS Hospital Consumer Assessment of Healthcare Providers and Systems.

QUEST participants are also expected to share best practices.

The hospitals that show the most improvement from baseline will receive an incentive payment, most likely in year 3.

Premier has provided seed money for the incentives, said Susan DeVore, the alliance's chief operating officer. The company is in discussions with the Blue Cross Blue Shield Association to provide more funds.

QUEST results will be made public at some point, though in aggregate only.

“Transparency has arrived and should be considered a good thing for providers,” said Dr. Ken Davis, chief medical officer of North Mississippi Health Services, at the briefing. The Tupelo, Miss.-based hospital is a member of Premier and will be a QUEST participant, said Dr. Davis.

Building on the success of its Hospital Quality Improvement Demonstration, Premier Inc. is launching a new initiative to pay hospitals that perform at the top of a scale measuring improvements in mortality, the percentage of patients who receive appropriate care, efficiency, harm avoidance, and patient satisfaction.

Premier introduced the QUEST (Quality, Efficiency, Safety, and Transparency) initiative in late July and said it was recruiting hospitals to participate through the end of September. In a briefing with reporters, Premier president and CEO Richard A. Norling said that 60 hospitals had expressed interest so far, but he declined to name them.

Premier is an alliance that is owned by 1,700 nonprofit hospitals. Premier's purchasing network also serves 46,500 health care entities.

The alliance's previous project—HQID—was a joint effort with the Centers for Medicare & Medicaid Services that began in 2003 and concludes in November.

QUEST will initially focus on hospitals' risk-adjusted mortality ratio, and on how well they deliver appropriate care, measured by the percentage of patients who receive perfect care according to evidence-based guidelines. Hospitals will also be measured on the severity adjusted cost per discharge, a reflection of efficiency.

In the second year, QUEST hospitals will have to show how well they prevent health care-related infections and adverse drug events, and how well they serve patients, measured through CMS Hospital Consumer Assessment of Healthcare Providers and Systems.

QUEST participants are also expected to share best practices.

The hospitals that show the most improvement from baseline will receive an incentive payment, most likely in year 3.

Premier has provided seed money for the incentives, said Susan DeVore, the alliance's chief operating officer. The company is in discussions with the Blue Cross Blue Shield Association to provide more funds.

QUEST results will be made public at some point, though in aggregate only.

“Transparency has arrived and should be considered a good thing for providers,” said Dr. Ken Davis, chief medical officer of North Mississippi Health Services, at the briefing. The Tupelo, Miss.-based hospital is a member of Premier and will be a QUEST participant, said Dr. Davis.

Building on the success of its Hospital Quality Improvement Demonstration, Premier Inc. is launching a new initiative to pay hospitals that perform at the top of a scale measuring improvements in mortality, the percentage of patients who receive appropriate care, efficiency, harm avoidance, and patient satisfaction.

Premier introduced the QUEST (Quality, Efficiency, Safety, and Transparency) initiative in late July and said it was recruiting hospitals to participate through the end of September. In a briefing with reporters, Premier president and CEO Richard A. Norling said that 60 hospitals had expressed interest so far, but he declined to name them.

Premier is an alliance that is owned by 1,700 nonprofit hospitals. Premier's purchasing network also serves 46,500 health care entities.

The alliance's previous project—HQID—was a joint effort with the Centers for Medicare & Medicaid Services that began in 2003 and concludes in November.

QUEST will initially focus on hospitals' risk-adjusted mortality ratio, and on how well they deliver appropriate care, measured by the percentage of patients who receive perfect care according to evidence-based guidelines. Hospitals will also be measured on the severity adjusted cost per discharge, a reflection of efficiency.

In the second year, QUEST hospitals will have to show how well they prevent health care-related infections and adverse drug events, and how well they serve patients, measured through CMS Hospital Consumer Assessment of Healthcare Providers and Systems.

QUEST participants are also expected to share best practices.

The hospitals that show the most improvement from baseline will receive an incentive payment, most likely in year 3.

Premier has provided seed money for the incentives, said Susan DeVore, the alliance's chief operating officer. The company is in discussions with the Blue Cross Blue Shield Association to provide more funds.

QUEST results will be made public at some point, though in aggregate only.

“Transparency has arrived and should be considered a good thing for providers,” said Dr. Ken Davis, chief medical officer of North Mississippi Health Services, at the briefing. The Tupelo, Miss.-based hospital is a member of Premier and will be a QUEST participant, said Dr. Davis.

The true impact isn't known yet, but an administrative change by the Centers for Medicare and Medicaid Services to rules governing the State Children's Health Insurance Program—made on a Friday night during Congress' August recess—may have the effect of dropping children who currently have coverage.

Sen. Jay Rockefeller (D-W.Va.), one of the original coauthors of SCHIP, sent a letter to President George W. Bush chiding the administration for making the change without congressional input.

“Not only do I question the wisdom and legality of this new policy, I also question the process,” wrote Sen. Rockefeller, noting that “a policy change of this magnitude should, at a minimum, be handled through the formal rule-making process, with proper public notice and comment, and not through unilateral subregulatory guidance.”

About 4 million children are eligible for Medicaid or SCHIP currently; some 6 million received benefits in 2006. An estimated 9 million children do not have health insurance.

SCHIP, now entering its 10th year, has been the subject of fierce battles this year, as lawmakers have struggled to come up with financing for the next 5 years that is palatable to both parties. Authorization for SCHIP expires Sept. 30. Before leaving for summer recess, the House and the Senate passed vastly different funding packages.

President Bush said he would veto either bill, saying that he viewed both as a back-door way of expanding government-financed health care at the expense of the private insurance market.

So the Aug. 17 letter from CMS Director for Medicaid and State Operations Dennis G. Smith to state health officials should not have come as a surprise. In the letter, states were told that if they were raising eligibility for children whose family incomes were equal to or above 250% of the federal poverty level, they would have to meet stringent new requirements. The goal: to ensure that these families aren't opting for SCHIP instead of private insurance.

“Existing regulations … provide that states must have 'reasonable procedures' to prevent substitution of public SCHIP coverage for private coverage,” Mr. Smith wrote.

Many states have had such procedures in place, but the CMS is now requiring that specific processes be implemented. For instance, children will have to be uninsured for at least 1 year before receiving SCHIP benefits. Currently, only Alaska requires a year-long exclusion, said Judy Solomon, a senior fellow with the Center on Budget and Policy Priorities, a Washington-based policy research organization.

Most states impose a 1- to 6-month waiting period, but most also have generous exceptions to those rules.

Under the administrative change, states also will have to prove that they've enrolled at least 95% of children who are below 200% of the federal poverty level, and document that the number of low-income children who are eligible for and covered by private insurance has not dropped by more than 2% in the past 5 years.

States that have already increased their eligibility to 250% or more—18 states—will have to comply with the new requirements within a year or lose some of their federal matching funds.

The CMS said that the requirements should not harm children who currently receive benefits. “We would not expect any effect on current enrollees,” Mr. Smith wrote.

While it's not clear how many children might be dropped, “at the very least, you're going to have thousands of children unable to get coverage,” Ms. Solomon said, noting that the hurdles might be too high for new enrollees.

SCHIP was designed to give states flexibility to meet the needs of their own citizenry, noted Ms. Solomon. For instance, states with a higher cost of living and the ability to shoulder a higher fiscal burden—like New York, New Jersey, and Massachusetts—have increased income eligibility levels.

But the new CMS policy is severely diminishing that flexibility. “This turns back the clock,” Ms. Solomon said.

The House and Senate will meet in conference in September to determine the course of SCHIP over the next 5 years.

The true impact isn't known yet, but an administrative change by the Centers for Medicare and Medicaid Services to rules governing the State Children's Health Insurance Program—made on a Friday night during Congress' August recess—may have the effect of dropping children who currently have coverage.

Sen. Jay Rockefeller (D-W.Va.), one of the original coauthors of SCHIP, sent a letter to President George W. Bush chiding the administration for making the change without congressional input.

“Not only do I question the wisdom and legality of this new policy, I also question the process,” wrote Sen. Rockefeller, noting that “a policy change of this magnitude should, at a minimum, be handled through the formal rule-making process, with proper public notice and comment, and not through unilateral subregulatory guidance.”

About 4 million children are eligible for Medicaid or SCHIP currently; some 6 million received benefits in 2006. An estimated 9 million children do not have health insurance.

SCHIP, now entering its 10th year, has been the subject of fierce battles this year, as lawmakers have struggled to come up with financing for the next 5 years that is palatable to both parties. Authorization for SCHIP expires Sept. 30. Before leaving for summer recess, the House and the Senate passed vastly different funding packages.

President Bush said he would veto either bill, saying that he viewed both as a back-door way of expanding government-financed health care at the expense of the private insurance market.

So the Aug. 17 letter from CMS Director for Medicaid and State Operations Dennis G. Smith to state health officials should not have come as a surprise. In the letter, states were told that if they were raising eligibility for children whose family incomes were equal to or above 250% of the federal poverty level, they would have to meet stringent new requirements. The goal: to ensure that these families aren't opting for SCHIP instead of private insurance.

“Existing regulations … provide that states must have 'reasonable procedures' to prevent substitution of public SCHIP coverage for private coverage,” Mr. Smith wrote.

Many states have had such procedures in place, but the CMS is now requiring that specific processes be implemented. For instance, children will have to be uninsured for at least 1 year before receiving SCHIP benefits. Currently, only Alaska requires a year-long exclusion, said Judy Solomon, a senior fellow with the Center on Budget and Policy Priorities, a Washington-based policy research organization.

Most states impose a 1- to 6-month waiting period, but most also have generous exceptions to those rules.

Under the administrative change, states also will have to prove that they've enrolled at least 95% of children who are below 200% of the federal poverty level, and document that the number of low-income children who are eligible for and covered by private insurance has not dropped by more than 2% in the past 5 years.

States that have already increased their eligibility to 250% or more—18 states—will have to comply with the new requirements within a year or lose some of their federal matching funds.

The CMS said that the requirements should not harm children who currently receive benefits. “We would not expect any effect on current enrollees,” Mr. Smith wrote.

While it's not clear how many children might be dropped, “at the very least, you're going to have thousands of children unable to get coverage,” Ms. Solomon said, noting that the hurdles might be too high for new enrollees.

SCHIP was designed to give states flexibility to meet the needs of their own citizenry, noted Ms. Solomon. For instance, states with a higher cost of living and the ability to shoulder a higher fiscal burden—like New York, New Jersey, and Massachusetts—have increased income eligibility levels.

But the new CMS policy is severely diminishing that flexibility. “This turns back the clock,” Ms. Solomon said.

The House and Senate will meet in conference in September to determine the course of SCHIP over the next 5 years.

The true impact isn't known yet, but an administrative change by the Centers for Medicare and Medicaid Services to rules governing the State Children's Health Insurance Program—made on a Friday night during Congress' August recess—may have the effect of dropping children who currently have coverage.

Sen. Jay Rockefeller (D-W.Va.), one of the original coauthors of SCHIP, sent a letter to President George W. Bush chiding the administration for making the change without congressional input.

“Not only do I question the wisdom and legality of this new policy, I also question the process,” wrote Sen. Rockefeller, noting that “a policy change of this magnitude should, at a minimum, be handled through the formal rule-making process, with proper public notice and comment, and not through unilateral subregulatory guidance.”

About 4 million children are eligible for Medicaid or SCHIP currently; some 6 million received benefits in 2006. An estimated 9 million children do not have health insurance.

SCHIP, now entering its 10th year, has been the subject of fierce battles this year, as lawmakers have struggled to come up with financing for the next 5 years that is palatable to both parties. Authorization for SCHIP expires Sept. 30. Before leaving for summer recess, the House and the Senate passed vastly different funding packages.

President Bush said he would veto either bill, saying that he viewed both as a back-door way of expanding government-financed health care at the expense of the private insurance market.

So the Aug. 17 letter from CMS Director for Medicaid and State Operations Dennis G. Smith to state health officials should not have come as a surprise. In the letter, states were told that if they were raising eligibility for children whose family incomes were equal to or above 250% of the federal poverty level, they would have to meet stringent new requirements. The goal: to ensure that these families aren't opting for SCHIP instead of private insurance.

“Existing regulations … provide that states must have 'reasonable procedures' to prevent substitution of public SCHIP coverage for private coverage,” Mr. Smith wrote.

Many states have had such procedures in place, but the CMS is now requiring that specific processes be implemented. For instance, children will have to be uninsured for at least 1 year before receiving SCHIP benefits. Currently, only Alaska requires a year-long exclusion, said Judy Solomon, a senior fellow with the Center on Budget and Policy Priorities, a Washington-based policy research organization.

Most states impose a 1- to 6-month waiting period, but most also have generous exceptions to those rules.

Under the administrative change, states also will have to prove that they've enrolled at least 95% of children who are below 200% of the federal poverty level, and document that the number of low-income children who are eligible for and covered by private insurance has not dropped by more than 2% in the past 5 years.

States that have already increased their eligibility to 250% or more—18 states—will have to comply with the new requirements within a year or lose some of their federal matching funds.

The CMS said that the requirements should not harm children who currently receive benefits. “We would not expect any effect on current enrollees,” Mr. Smith wrote.

While it's not clear how many children might be dropped, “at the very least, you're going to have thousands of children unable to get coverage,” Ms. Solomon said, noting that the hurdles might be too high for new enrollees.

SCHIP was designed to give states flexibility to meet the needs of their own citizenry, noted Ms. Solomon. For instance, states with a higher cost of living and the ability to shoulder a higher fiscal burden—like New York, New Jersey, and Massachusetts—have increased income eligibility levels.

But the new CMS policy is severely diminishing that flexibility. “This turns back the clock,” Ms. Solomon said.

The House and Senate will meet in conference in September to determine the course of SCHIP over the next 5 years.

Two years after Hurricane Katrina, the relatively few open health care facilities and diminished corps of physicians in New Orleans are struggling to serve the needs of a smaller, but just as needy, population. It's a picture that's changed little since this time last year.

Emergency rooms, in particular, bear the brunt of the broken system, as they are one resource that is nearly always available to the uninsured and those with little access to primary care.

It is thought that about 200,000 people now reside in the city, with another 400,000 in the three surrounding parishes (Jefferson, Plaquemines, and St. Bernard). There are some 101,000 uninsured residents and 147,000 Medicaid recipients, according to the Louisiana Department of Health and Hospitals (DHH).

It's still unclear how many of the roughly 3,000 physicians in the area before the storm have returned. In mid-2006, according to Blue Cross and Blue Shield, only half were back. The Louisiana State Board of Medical Examiners said from August 2005 to July 2006, the number of primary care physicians declined from 2,645 to 1,913.

The lack of access has hit hard. An analysis of death notices in the Times-Picayune by Dr. Kevin U. Stephens, Sr., director of the city health department, and associates, showed a 47% mortality increase in the first half of 2006—to 91/100,000, versus 62/100,000 in 2002-2004 (Disaster Med. Public Health Preparedness 2007;1:15-20). The authors studied death notices because of vast gaps in state and city data.

Primary Clinics to Be Medical Homes

In an interview, Dr. Frederick P. Cerise, secretary of the Louisiana Department of Health and Hospitals, said there are 26 primary health care sites in the New Orleans area, including federally qualified health centers, Tulane University and Louisiana State University outpatient clinics, and mobile and nonprofit clinics. The sites will receive $100 million from the federal government over next 3 years as part of a $161 million allocation aimed at improving health care in the area.

The clinics are eagerly awaiting that money, said Dr. Karen DeSalvo, executive director of Tulane University Community Health Center at Covenant House, in an interview. The money will give “a chance to expand upon what's been developing—multiple neighborhood clinics that are turning into medical homes,” said Dr. DeSalvo, also chief of general internal medicine and geriatrics at the university and special assistant to its president for health policy. Dr. DeSalvo that though primary care is improving (the 18 clinics see about 900 patients daily), too many still seek routine care in EDs. “We're trying to find those patients in the ER and get them into our system.”

Inpatient Capacity Still Down

Currently, in New Orleans proper, five hospitals are open; and five more are abandoned or closed, according to the Louisiana Hospital Association.

Louisiana State University, Baton Rouge, is once again operating a level one trauma center in downtown New Orleans at the LSU Interim Hospital (formerly University Hospital).

The now 179-bed Interim Hospital and Tulane Hospital are all that's left of the Medical Center of Louisiana at New Orleans. Before Katrina, that campus also included Charity Hospital, a Veterans Affairs (VA) hospital, and medical office buildings. LSU was able to open Interim Hospital with $64 million in Federal Emergency Management Agency (FEMA) funds. It recently added a 20-bed detox unit (only 5 were staffed at press time), and is in the midst of adding 33 inpatient mental health beds elsewhere in the city, plus a mental health unit in the emergency department.

LSU is one of the main backers of a huge new medical campus within a few blocks of Charity Hospital on a 37-acre parcel that the city said it will take.

According to testimony by Mayor C. Ray Nagin at a field hearing of the U.S. House Committee on Veterans' Affairs in early July, the campus would include 30 public, private, and nonprofit organizations. The state has put aside $38 million for a cancer research institute at the site. The city—along with LSU and Tulane—is trying to convince the VA to rebuild on the campus.

Before Katrina, 75 Tulane physicians had joint VA-Tulane appointments, and 120 Tulane residents received training at the VA, said Dr. Alan Miller, interim senior vice president for health sciences at Tulane, at the hearing. Currently, 40 Tulane doctors provide services and training at VA outpatient clinics, which represents $2.2 million in physician compensation, he said.

The private Ochsner Health System is vying to have the new VA hospital built across the street from its Jefferson Parish campus. At the hearing, Dr. Patrick J. Quinlan, Ochsner's CEO, noted the site “is above sea level and not located in a flood plain.” In the end, however, the VA decided to stay in downtown New Orleans. It has not decided yet whether it will rebuild on the existing shuttered 34-acre site or join together with Charity and University on a new parcel of land. Because the federal government has not agreed to fund a new campus for Charity and University, Gov. Kathleen Blanco signed an executive order allocating an immediate $74.5 million for land acquisition and planning. To come up with the additional $1.2 billion needed, the state will issue a series of bonds.

Some have not given up on Charity. Last year, the state legislature approved a study to see if the first three floors could be refurbished while a new medical campus is put together.

EDs Feel Ripple Effect

Two years ago, the now-shuttered Charity Hospital ED received 120,000 to 200,000 visits annually. Fewer people are in the city now, but more are sicker or in need of basic care, said Dr. Jim Aiken of the emergency medicine department at LSU, in an interview. “We do a lot of renewing prescriptions and checking blood pressures,” and other primary care interventions. The Interim Hospital sees about 3,500 patients a month. Although things have improved in the last year, the ED admits more patients than before the storm. “We struggle every day with surge capacity,” he said.

Diversion is not uncommon, but the hospitals in the area now at least have a new communications module that lets them track online what's happening at other facilities in the area.

Lack of adequate mental health care, combined with poststorm stress and anxiety, is having the biggest impact on the ED, said Dr. Aiken. It is not unusual for the hospital to be holding 15 psychiatric patients at its 31-bed ED, he said.

Charity also housed a crisis intervention unit where the police could take the mentally ill. With that unit gone, those with psychiatric needs have been spread out.

Before Katrina, there were 578 psychiatric and detox beds in and around New Orleans; that number is now at 236, with only a small portion actually in downtown New Orleans, according to Dr. Cerise. The deteriorated mental health system is “probably the most critical health care issue in this state since the storm,” said Dr. Aiken.

Even the LSU system in Baton Rouge has been affected, said Dr. William “Beau” Clark, president of the Louisiana chapter of the American College of Emergency Physicians. Emergency rooms in that city have absorbed some of New Orleans' outflow, including psychiatric patients who end up boarding in Baton Rouge, he said.

Grants Aim to Recruit, Retain Primary Care Help After Katrina

For more information on the program and to download an application, visit

www.pcrh.dhh.louisiana.gov

Louisiana and the city of New Orleans are struggling to lure physicians and nurses back to the city, and to convince those who have returned to stay despite many uninsured patients and a patchwork system of care.

In April 2006, the federal government declared the greater New Orleans area a health-professional shortage area, making it eligible for federal grants to retain or recruit health professionals, and gave rise to the Greater New Orleans Health Service Corps.

The Louisiana Department of Health and Hospitals, which oversees the Corps, has received $85 million for recruitment and retention, said Gayla Strahan, of the DHH's Bureau of Primary Care and Rural Health and manager of the Service Corps effort. Half goes for recruitment and half for retention.

When the state applied for federal health shortage funds, in mid-2006, there were 405 primary care physicians and 30 psychiatrists in the region, but just 76 primary care doctors and 6 psychiatrists took Medicaid or uninsured patients. Based on the region's then population (about 700,000) and Medicaid enrollment (about 135,000), the DHH determined there was a need for 48 more primary care physicians, 38 more dentists, 10 more psychiatrists, and 33 other mental health professionals (psychologists, licensed clinical social workers, and marriage and family therapists).

The goal is to retain 50 primary care physicians and recruit 48 more by September 2009, when the grant cycle ends, she said. For mental health, the goal is 24 retentions and 43 recruits; for dentists, it is 10 and 30, and for faculty, the aim is to keep 48 current positions and bring in 46 more, including 24 at the medical schools.

The Service Corps also earmarked just over $2 million to retain 5 specialists and bring in 15 more. The applicant has to show there is a dire need, for instance, if there's only one cardiologist who agrees to accept Medicaid.

Applicants must accept Medicare, Medicaid, and the uninsured; work at least 32 hours a week in clinical practice; and be licensed in Louisiana or agree to become licensed before starting. Participants, who have a 3-year obligation, can tailor their own package of incentives up to $110,000, which is paid up front as a lump sum. They can use it for salary, to repay loans, for malpractice premiums, and/or to buy health information technology. Mid-level providers are eligible up to $55,000, registered nurses and nurse faculty up to $40,000, and allied health professionals can receive up to $40,000.

Two years after Hurricane Katrina, the relatively few open health care facilities and diminished corps of physicians in New Orleans are struggling to serve the needs of a smaller, but just as needy, population. It's a picture that's changed little since this time last year.

Emergency rooms, in particular, bear the brunt of the broken system, as they are one resource that is nearly always available to the uninsured and those with little access to primary care.

It is thought that about 200,000 people now reside in the city, with another 400,000 in the three surrounding parishes (Jefferson, Plaquemines, and St. Bernard). There are some 101,000 uninsured residents and 147,000 Medicaid recipients, according to the Louisiana Department of Health and Hospitals (DHH).

It's still unclear how many of the roughly 3,000 physicians in the area before the storm have returned. In mid-2006, according to Blue Cross and Blue Shield, only half were back. The Louisiana State Board of Medical Examiners said from August 2005 to July 2006, the number of primary care physicians declined from 2,645 to 1,913.

The lack of access has hit hard. An analysis of death notices in the Times-Picayune by Dr. Kevin U. Stephens, Sr., director of the city health department, and associates, showed a 47% mortality increase in the first half of 2006—to 91/100,000, versus 62/100,000 in 2002-2004 (Disaster Med. Public Health Preparedness 2007;1:15-20). The authors studied death notices because of vast gaps in state and city data.

Primary Clinics to Be Medical Homes

In an interview, Dr. Frederick P. Cerise, secretary of the Louisiana Department of Health and Hospitals, said there are 26 primary health care sites in the New Orleans area, including federally qualified health centers, Tulane University and Louisiana State University outpatient clinics, and mobile and nonprofit clinics. The sites will receive $100 million from the federal government over next 3 years as part of a $161 million allocation aimed at improving health care in the area.

The clinics are eagerly awaiting that money, said Dr. Karen DeSalvo, executive director of Tulane University Community Health Center at Covenant House, in an interview. The money will give “a chance to expand upon what's been developing—multiple neighborhood clinics that are turning into medical homes,” said Dr. DeSalvo, also chief of general internal medicine and geriatrics at the university and special assistant to its president for health policy. Dr. DeSalvo that though primary care is improving (the 18 clinics see about 900 patients daily), too many still seek routine care in EDs. “We're trying to find those patients in the ER and get them into our system.”

Inpatient Capacity Still Down

Currently, in New Orleans proper, five hospitals are open; and five more are abandoned or closed, according to the Louisiana Hospital Association.

Louisiana State University, Baton Rouge, is once again operating a level one trauma center in downtown New Orleans at the LSU Interim Hospital (formerly University Hospital).

The now 179-bed Interim Hospital and Tulane Hospital are all that's left of the Medical Center of Louisiana at New Orleans. Before Katrina, that campus also included Charity Hospital, a Veterans Affairs (VA) hospital, and medical office buildings. LSU was able to open Interim Hospital with $64 million in Federal Emergency Management Agency (FEMA) funds. It recently added a 20-bed detox unit (only 5 were staffed at press time), and is in the midst of adding 33 inpatient mental health beds elsewhere in the city, plus a mental health unit in the emergency department.

LSU is one of the main backers of a huge new medical campus within a few blocks of Charity Hospital on a 37-acre parcel that the city said it will take.

According to testimony by Mayor C. Ray Nagin at a field hearing of the U.S. House Committee on Veterans' Affairs in early July, the campus would include 30 public, private, and nonprofit organizations. The state has put aside $38 million for a cancer research institute at the site. The city—along with LSU and Tulane—is trying to convince the VA to rebuild on the campus.

Before Katrina, 75 Tulane physicians had joint VA-Tulane appointments, and 120 Tulane residents received training at the VA, said Dr. Alan Miller, interim senior vice president for health sciences at Tulane, at the hearing. Currently, 40 Tulane doctors provide services and training at VA outpatient clinics, which represents $2.2 million in physician compensation, he said.

The private Ochsner Health System is vying to have the new VA hospital built across the street from its Jefferson Parish campus. At the hearing, Dr. Patrick J. Quinlan, Ochsner's CEO, noted the site “is above sea level and not located in a flood plain.” In the end, however, the VA decided to stay in downtown New Orleans. It has not decided yet whether it will rebuild on the existing shuttered 34-acre site or join together with Charity and University on a new parcel of land. Because the federal government has not agreed to fund a new campus for Charity and University, Gov. Kathleen Blanco signed an executive order allocating an immediate $74.5 million for land acquisition and planning. To come up with the additional $1.2 billion needed, the state will issue a series of bonds.

Some have not given up on Charity. Last year, the state legislature approved a study to see if the first three floors could be refurbished while a new medical campus is put together.

EDs Feel Ripple Effect

Two years ago, the now-shuttered Charity Hospital ED received 120,000 to 200,000 visits annually. Fewer people are in the city now, but more are sicker or in need of basic care, said Dr. Jim Aiken of the emergency medicine department at LSU, in an interview. “We do a lot of renewing prescriptions and checking blood pressures,” and other primary care interventions. The Interim Hospital sees about 3,500 patients a month. Although things have improved in the last year, the ED admits more patients than before the storm. “We struggle every day with surge capacity,” he said.

Diversion is not uncommon, but the hospitals in the area now at least have a new communications module that lets them track online what's happening at other facilities in the area.

Lack of adequate mental health care, combined with poststorm stress and anxiety, is having the biggest impact on the ED, said Dr. Aiken. It is not unusual for the hospital to be holding 15 psychiatric patients at its 31-bed ED, he said.

Charity also housed a crisis intervention unit where the police could take the mentally ill. With that unit gone, those with psychiatric needs have been spread out.

Before Katrina, there were 578 psychiatric and detox beds in and around New Orleans; that number is now at 236, with only a small portion actually in downtown New Orleans, according to Dr. Cerise. The deteriorated mental health system is “probably the most critical health care issue in this state since the storm,” said Dr. Aiken.

Even the LSU system in Baton Rouge has been affected, said Dr. William “Beau” Clark, president of the Louisiana chapter of the American College of Emergency Physicians. Emergency rooms in that city have absorbed some of New Orleans' outflow, including psychiatric patients who end up boarding in Baton Rouge, he said.

Grants Aim to Recruit, Retain Primary Care Help After Katrina

For more information on the program and to download an application, visit

www.pcrh.dhh.louisiana.gov

Louisiana and the city of New Orleans are struggling to lure physicians and nurses back to the city, and to convince those who have returned to stay despite many uninsured patients and a patchwork system of care.

In April 2006, the federal government declared the greater New Orleans area a health-professional shortage area, making it eligible for federal grants to retain or recruit health professionals, and gave rise to the Greater New Orleans Health Service Corps.

The Louisiana Department of Health and Hospitals, which oversees the Corps, has received $85 million for recruitment and retention, said Gayla Strahan, of the DHH's Bureau of Primary Care and Rural Health and manager of the Service Corps effort. Half goes for recruitment and half for retention.

When the state applied for federal health shortage funds, in mid-2006, there were 405 primary care physicians and 30 psychiatrists in the region, but just 76 primary care doctors and 6 psychiatrists took Medicaid or uninsured patients. Based on the region's then population (about 700,000) and Medicaid enrollment (about 135,000), the DHH determined there was a need for 48 more primary care physicians, 38 more dentists, 10 more psychiatrists, and 33 other mental health professionals (psychologists, licensed clinical social workers, and marriage and family therapists).

The goal is to retain 50 primary care physicians and recruit 48 more by September 2009, when the grant cycle ends, she said. For mental health, the goal is 24 retentions and 43 recruits; for dentists, it is 10 and 30, and for faculty, the aim is to keep 48 current positions and bring in 46 more, including 24 at the medical schools.

The Service Corps also earmarked just over $2 million to retain 5 specialists and bring in 15 more. The applicant has to show there is a dire need, for instance, if there's only one cardiologist who agrees to accept Medicaid.

Applicants must accept Medicare, Medicaid, and the uninsured; work at least 32 hours a week in clinical practice; and be licensed in Louisiana or agree to become licensed before starting. Participants, who have a 3-year obligation, can tailor their own package of incentives up to $110,000, which is paid up front as a lump sum. They can use it for salary, to repay loans, for malpractice premiums, and/or to buy health information technology. Mid-level providers are eligible up to $55,000, registered nurses and nurse faculty up to $40,000, and allied health professionals can receive up to $40,000.

Two years after Hurricane Katrina, the relatively few open health care facilities and diminished corps of physicians in New Orleans are struggling to serve the needs of a smaller, but just as needy, population. It's a picture that's changed little since this time last year.

Emergency rooms, in particular, bear the brunt of the broken system, as they are one resource that is nearly always available to the uninsured and those with little access to primary care.

It is thought that about 200,000 people now reside in the city, with another 400,000 in the three surrounding parishes (Jefferson, Plaquemines, and St. Bernard). There are some 101,000 uninsured residents and 147,000 Medicaid recipients, according to the Louisiana Department of Health and Hospitals (DHH).

It's still unclear how many of the roughly 3,000 physicians in the area before the storm have returned. In mid-2006, according to Blue Cross and Blue Shield, only half were back. The Louisiana State Board of Medical Examiners said from August 2005 to July 2006, the number of primary care physicians declined from 2,645 to 1,913.

The lack of access has hit hard. An analysis of death notices in the Times-Picayune by Dr. Kevin U. Stephens, Sr., director of the city health department, and associates, showed a 47% mortality increase in the first half of 2006—to 91/100,000, versus 62/100,000 in 2002-2004 (Disaster Med. Public Health Preparedness 2007;1:15-20). The authors studied death notices because of vast gaps in state and city data.

Primary Clinics to Be Medical Homes

In an interview, Dr. Frederick P. Cerise, secretary of the Louisiana Department of Health and Hospitals, said there are 26 primary health care sites in the New Orleans area, including federally qualified health centers, Tulane University and Louisiana State University outpatient clinics, and mobile and nonprofit clinics. The sites will receive $100 million from the federal government over next 3 years as part of a $161 million allocation aimed at improving health care in the area.

The clinics are eagerly awaiting that money, said Dr. Karen DeSalvo, executive director of Tulane University Community Health Center at Covenant House, in an interview. The money will give “a chance to expand upon what's been developing—multiple neighborhood clinics that are turning into medical homes,” said Dr. DeSalvo, also chief of general internal medicine and geriatrics at the university and special assistant to its president for health policy. Dr. DeSalvo that though primary care is improving (the 18 clinics see about 900 patients daily), too many still seek routine care in EDs. “We're trying to find those patients in the ER and get them into our system.”

Inpatient Capacity Still Down

Currently, in New Orleans proper, five hospitals are open; and five more are abandoned or closed, according to the Louisiana Hospital Association.

Louisiana State University, Baton Rouge, is once again operating a level one trauma center in downtown New Orleans at the LSU Interim Hospital (formerly University Hospital).

The now 179-bed Interim Hospital and Tulane Hospital are all that's left of the Medical Center of Louisiana at New Orleans. Before Katrina, that campus also included Charity Hospital, a Veterans Affairs (VA) hospital, and medical office buildings. LSU was able to open Interim Hospital with $64 million in Federal Emergency Management Agency (FEMA) funds. It recently added a 20-bed detox unit (only 5 were staffed at press time), and is in the midst of adding 33 inpatient mental health beds elsewhere in the city, plus a mental health unit in the emergency department.

LSU is one of the main backers of a huge new medical campus within a few blocks of Charity Hospital on a 37-acre parcel that the city said it will take.

According to testimony by Mayor C. Ray Nagin at a field hearing of the U.S. House Committee on Veterans' Affairs in early July, the campus would include 30 public, private, and nonprofit organizations. The state has put aside $38 million for a cancer research institute at the site. The city—along with LSU and Tulane—is trying to convince the VA to rebuild on the campus.

Before Katrina, 75 Tulane physicians had joint VA-Tulane appointments, and 120 Tulane residents received training at the VA, said Dr. Alan Miller, interim senior vice president for health sciences at Tulane, at the hearing. Currently, 40 Tulane doctors provide services and training at VA outpatient clinics, which represents $2.2 million in physician compensation, he said.

The private Ochsner Health System is vying to have the new VA hospital built across the street from its Jefferson Parish campus. At the hearing, Dr. Patrick J. Quinlan, Ochsner's CEO, noted the site “is above sea level and not located in a flood plain.” In the end, however, the VA decided to stay in downtown New Orleans. It has not decided yet whether it will rebuild on the existing shuttered 34-acre site or join together with Charity and University on a new parcel of land. Because the federal government has not agreed to fund a new campus for Charity and University, Gov. Kathleen Blanco signed an executive order allocating an immediate $74.5 million for land acquisition and planning. To come up with the additional $1.2 billion needed, the state will issue a series of bonds.

Some have not given up on Charity. Last year, the state legislature approved a study to see if the first three floors could be refurbished while a new medical campus is put together.

EDs Feel Ripple Effect

Two years ago, the now-shuttered Charity Hospital ED received 120,000 to 200,000 visits annually. Fewer people are in the city now, but more are sicker or in need of basic care, said Dr. Jim Aiken of the emergency medicine department at LSU, in an interview. “We do a lot of renewing prescriptions and checking blood pressures,” and other primary care interventions. The Interim Hospital sees about 3,500 patients a month. Although things have improved in the last year, the ED admits more patients than before the storm. “We struggle every day with surge capacity,” he said.

Diversion is not uncommon, but the hospitals in the area now at least have a new communications module that lets them track online what's happening at other facilities in the area.

Lack of adequate mental health care, combined with poststorm stress and anxiety, is having the biggest impact on the ED, said Dr. Aiken. It is not unusual for the hospital to be holding 15 psychiatric patients at its 31-bed ED, he said.

Charity also housed a crisis intervention unit where the police could take the mentally ill. With that unit gone, those with psychiatric needs have been spread out.

Before Katrina, there were 578 psychiatric and detox beds in and around New Orleans; that number is now at 236, with only a small portion actually in downtown New Orleans, according to Dr. Cerise. The deteriorated mental health system is “probably the most critical health care issue in this state since the storm,” said Dr. Aiken.

Even the LSU system in Baton Rouge has been affected, said Dr. William “Beau” Clark, president of the Louisiana chapter of the American College of Emergency Physicians. Emergency rooms in that city have absorbed some of New Orleans' outflow, including psychiatric patients who end up boarding in Baton Rouge, he said.

Grants Aim to Recruit, Retain Primary Care Help After Katrina

For more information on the program and to download an application, visit

www.pcrh.dhh.louisiana.gov

Louisiana and the city of New Orleans are struggling to lure physicians and nurses back to the city, and to convince those who have returned to stay despite many uninsured patients and a patchwork system of care.

In April 2006, the federal government declared the greater New Orleans area a health-professional shortage area, making it eligible for federal grants to retain or recruit health professionals, and gave rise to the Greater New Orleans Health Service Corps.

The Louisiana Department of Health and Hospitals, which oversees the Corps, has received $85 million for recruitment and retention, said Gayla Strahan, of the DHH's Bureau of Primary Care and Rural Health and manager of the Service Corps effort. Half goes for recruitment and half for retention.

When the state applied for federal health shortage funds, in mid-2006, there were 405 primary care physicians and 30 psychiatrists in the region, but just 76 primary care doctors and 6 psychiatrists took Medicaid or uninsured patients. Based on the region's then population (about 700,000) and Medicaid enrollment (about 135,000), the DHH determined there was a need for 48 more primary care physicians, 38 more dentists, 10 more psychiatrists, and 33 other mental health professionals (psychologists, licensed clinical social workers, and marriage and family therapists).

The goal is to retain 50 primary care physicians and recruit 48 more by September 2009, when the grant cycle ends, she said. For mental health, the goal is 24 retentions and 43 recruits; for dentists, it is 10 and 30, and for faculty, the aim is to keep 48 current positions and bring in 46 more, including 24 at the medical schools.

The Service Corps also earmarked just over $2 million to retain 5 specialists and bring in 15 more. The applicant has to show there is a dire need, for instance, if there's only one cardiologist who agrees to accept Medicaid.

Applicants must accept Medicare, Medicaid, and the uninsured; work at least 32 hours a week in clinical practice; and be licensed in Louisiana or agree to become licensed before starting. Participants, who have a 3-year obligation, can tailor their own package of incentives up to $110,000, which is paid up front as a lump sum. They can use it for salary, to repay loans, for malpractice premiums, and/or to buy health information technology. Mid-level providers are eligible up to $55,000, registered nurses and nurse faculty up to $40,000, and allied health professionals can receive up to $40,000.

Cardio Surgery Network Launches

The Cardiothoracic Surgery Investigations Network is getting under way, with the designation of the International Center for Health Outcomes and Innovation Research at Columbia University as the coordinating arm of the new seven-site network. The Columbia center received $23 million from the National Heart, Lung, and Blood Institute to design trials and protocols, to coordinate clinical care, to review data, and to monitor the seven sites: New York-Presbyterian Hospital/Columbia University, New York; Duke University, Durham, N.C.; the Cleveland Clinic; Albert Einstein College of Medicine/Montefiore Medical Center, New York; Emory University, Atlanta; University of Virginia, Charlottesville; and Montreal Heart Institute. The network was established by the National Institutes of Health and the Canadian Institutes of Health Research to promote the use of evidence-based medicine in surgery, and to quickly evaluate major innovations on a large-scale basis. “This cardiothoracic surgery network is important because it will help answer the unanswered questions about which patients may benefit most from heart surgeries and when new technologies are appropriate or not,” said Dr. Eric A. Rose, surgeon-in-chief at New York-Presbyterian and lead investigator for the network, in a statement. NHLBI will award a total of $35 million in grants to the network participants over the next 5 years.

DES Might Be Barred in England

The use of drug-eluting stents could be barred in England and Wales if a draft guidance by the U.K. National Institute for Health and Clinical Excellence is given final approval. NICE makes clinical effectiveness recommendations for the National Health Service. The institute found that drug-eluting stents are not cost effective when compared with bare-metal stents, and said that hospitals participating with the NHS should not implant the devices. Currently, NHS hospitals pay for DES implantation in patients in whom the target artery has an internal diameter smaller than 3 mm or a lesion longer than 15 mm. The guidance was open for public comment through the end of August, and, if approved, would go into effect in January 2008.

Drug Premium About $25 in 2008

The Centers for Medicare and Medicaid Services said that Medicare beneficiaries will pay about $25 a month for their Part D pharmaceutical coverage in 2008. This is about a $3 per month increase over the average premium in 2007, but still 40% lower than what had been projected when the program was established in 2003, according to CMS. The premiums for those who get their benefits through private Medicare Advantage plans will be about $14, according to CMS. The agency said that almost 10 million low-income beneficiaries are having their premiums subsidized by the federal government. Because Part D is sketching out to cost 30% less in the first 10 years than had been estimated, President Bush's 2009 budget will be retooled to reflect the decline, according to CMS.

Small Practices Decline

Some physicians are shying away from practicing in solo and two-physician practices, according to a new report from the Center for Studying Health System Change. Although these small practices are still the most common practice arrangements, researchers saw a shift between 1996–1997 and 2004–2005 from solo and two-person practices to midsized, single-specialty groups of 6–50 physicians. The percentage of physicians who practiced in solo and two-person practices fell from 40.7% in 1996–1997 to 32.5% in 2004–2005. During the same time period, the percentage of physicians practicing in midsized groups rose from 13.1% to 17.6%. The biggest declines in physicians' choosing small practices have come from medical specialists and surgical specialists, whereas the proportion of primary care physicians in small practices has remained steady at about 36%. The report's findings are based on the group's nationally representative Community Tracking Study Physician Survey.

AMA, PhRMA Big Spenders

Halfway through 2007, the American Medical Association and the Pharmaceutical Research and Manufacturers of America were among the bigger spenders when it came to lobbying Capitol Hill for their causes. The AMA spent $10.3 million and PhRMA $10.7 million in the first 6 months of the year, according to lobbying disclosure reports filed with the Senate's public records office. By comparison, the American Heart Association spent $615,790, the American Academy of Family Physicians spent $1.2 million, and the American College of Physicians spent $419,575.

Cardio Surgery Network Launches

The Cardiothoracic Surgery Investigations Network is getting under way, with the designation of the International Center for Health Outcomes and Innovation Research at Columbia University as the coordinating arm of the new seven-site network. The Columbia center received $23 million from the National Heart, Lung, and Blood Institute to design trials and protocols, to coordinate clinical care, to review data, and to monitor the seven sites: New York-Presbyterian Hospital/Columbia University, New York; Duke University, Durham, N.C.; the Cleveland Clinic; Albert Einstein College of Medicine/Montefiore Medical Center, New York; Emory University, Atlanta; University of Virginia, Charlottesville; and Montreal Heart Institute. The network was established by the National Institutes of Health and the Canadian Institutes of Health Research to promote the use of evidence-based medicine in surgery, and to quickly evaluate major innovations on a large-scale basis. “This cardiothoracic surgery network is important because it will help answer the unanswered questions about which patients may benefit most from heart surgeries and when new technologies are appropriate or not,” said Dr. Eric A. Rose, surgeon-in-chief at New York-Presbyterian and lead investigator for the network, in a statement. NHLBI will award a total of $35 million in grants to the network participants over the next 5 years.

DES Might Be Barred in England

The use of drug-eluting stents could be barred in England and Wales if a draft guidance by the U.K. National Institute for Health and Clinical Excellence is given final approval. NICE makes clinical effectiveness recommendations for the National Health Service. The institute found that drug-eluting stents are not cost effective when compared with bare-metal stents, and said that hospitals participating with the NHS should not implant the devices. Currently, NHS hospitals pay for DES implantation in patients in whom the target artery has an internal diameter smaller than 3 mm or a lesion longer than 15 mm. The guidance was open for public comment through the end of August, and, if approved, would go into effect in January 2008.

Drug Premium About $25 in 2008

The Centers for Medicare and Medicaid Services said that Medicare beneficiaries will pay about $25 a month for their Part D pharmaceutical coverage in 2008. This is about a $3 per month increase over the average premium in 2007, but still 40% lower than what had been projected when the program was established in 2003, according to CMS. The premiums for those who get their benefits through private Medicare Advantage plans will be about $14, according to CMS. The agency said that almost 10 million low-income beneficiaries are having their premiums subsidized by the federal government. Because Part D is sketching out to cost 30% less in the first 10 years than had been estimated, President Bush's 2009 budget will be retooled to reflect the decline, according to CMS.

Small Practices Decline

Some physicians are shying away from practicing in solo and two-physician practices, according to a new report from the Center for Studying Health System Change. Although these small practices are still the most common practice arrangements, researchers saw a shift between 1996–1997 and 2004–2005 from solo and two-person practices to midsized, single-specialty groups of 6–50 physicians. The percentage of physicians who practiced in solo and two-person practices fell from 40.7% in 1996–1997 to 32.5% in 2004–2005. During the same time period, the percentage of physicians practicing in midsized groups rose from 13.1% to 17.6%. The biggest declines in physicians' choosing small practices have come from medical specialists and surgical specialists, whereas the proportion of primary care physicians in small practices has remained steady at about 36%. The report's findings are based on the group's nationally representative Community Tracking Study Physician Survey.

AMA, PhRMA Big Spenders

Halfway through 2007, the American Medical Association and the Pharmaceutical Research and Manufacturers of America were among the bigger spenders when it came to lobbying Capitol Hill for their causes. The AMA spent $10.3 million and PhRMA $10.7 million in the first 6 months of the year, according to lobbying disclosure reports filed with the Senate's public records office. By comparison, the American Heart Association spent $615,790, the American Academy of Family Physicians spent $1.2 million, and the American College of Physicians spent $419,575.

Cardio Surgery Network Launches

The Cardiothoracic Surgery Investigations Network is getting under way, with the designation of the International Center for Health Outcomes and Innovation Research at Columbia University as the coordinating arm of the new seven-site network. The Columbia center received $23 million from the National Heart, Lung, and Blood Institute to design trials and protocols, to coordinate clinical care, to review data, and to monitor the seven sites: New York-Presbyterian Hospital/Columbia University, New York; Duke University, Durham, N.C.; the Cleveland Clinic; Albert Einstein College of Medicine/Montefiore Medical Center, New York; Emory University, Atlanta; University of Virginia, Charlottesville; and Montreal Heart Institute. The network was established by the National Institutes of Health and the Canadian Institutes of Health Research to promote the use of evidence-based medicine in surgery, and to quickly evaluate major innovations on a large-scale basis. “This cardiothoracic surgery network is important because it will help answer the unanswered questions about which patients may benefit most from heart surgeries and when new technologies are appropriate or not,” said Dr. Eric A. Rose, surgeon-in-chief at New York-Presbyterian and lead investigator for the network, in a statement. NHLBI will award a total of $35 million in grants to the network participants over the next 5 years.

DES Might Be Barred in England

The use of drug-eluting stents could be barred in England and Wales if a draft guidance by the U.K. National Institute for Health and Clinical Excellence is given final approval. NICE makes clinical effectiveness recommendations for the National Health Service. The institute found that drug-eluting stents are not cost effective when compared with bare-metal stents, and said that hospitals participating with the NHS should not implant the devices. Currently, NHS hospitals pay for DES implantation in patients in whom the target artery has an internal diameter smaller than 3 mm or a lesion longer than 15 mm. The guidance was open for public comment through the end of August, and, if approved, would go into effect in January 2008.

Drug Premium About $25 in 2008

The Centers for Medicare and Medicaid Services said that Medicare beneficiaries will pay about $25 a month for their Part D pharmaceutical coverage in 2008. This is about a $3 per month increase over the average premium in 2007, but still 40% lower than what had been projected when the program was established in 2003, according to CMS. The premiums for those who get their benefits through private Medicare Advantage plans will be about $14, according to CMS. The agency said that almost 10 million low-income beneficiaries are having their premiums subsidized by the federal government. Because Part D is sketching out to cost 30% less in the first 10 years than had been estimated, President Bush's 2009 budget will be retooled to reflect the decline, according to CMS.

Small Practices Decline

Some physicians are shying away from practicing in solo and two-physician practices, according to a new report from the Center for Studying Health System Change. Although these small practices are still the most common practice arrangements, researchers saw a shift between 1996–1997 and 2004–2005 from solo and two-person practices to midsized, single-specialty groups of 6–50 physicians. The percentage of physicians who practiced in solo and two-person practices fell from 40.7% in 1996–1997 to 32.5% in 2004–2005. During the same time period, the percentage of physicians practicing in midsized groups rose from 13.1% to 17.6%. The biggest declines in physicians' choosing small practices have come from medical specialists and surgical specialists, whereas the proportion of primary care physicians in small practices has remained steady at about 36%. The report's findings are based on the group's nationally representative Community Tracking Study Physician Survey.

AMA, PhRMA Big Spenders

Halfway through 2007, the American Medical Association and the Pharmaceutical Research and Manufacturers of America were among the bigger spenders when it came to lobbying Capitol Hill for their causes. The AMA spent $10.3 million and PhRMA $10.7 million in the first 6 months of the year, according to lobbying disclosure reports filed with the Senate's public records office. By comparison, the American Heart Association spent $615,790, the American Academy of Family Physicians spent $1.2 million, and the American College of Physicians spent $419,575.

The U.S. House Committee on Energy and Commerce is looking into whether the Food and Drug Administration may have been too lenient in its treatment of Cordis Corp. after the agency warned the company in 2004 about manufacturing violations relating to its Cypher sirolimus-eluting coronary stent.

In letters sent to FDA Commissioner Dr. Andrew von Eschenbach and to Johnson & Johnson CEO William Weldon in August, the congressional committee said it was seeking all documentation relating to FDA inspections of six Cordis facilities in 2003.

Following those inspections, the agency sent a warning letter to Cordis, a Johnson & Johnson subsidiary, in April 2004 citing violations in good manufacturing practice regulations. The FDA found “systemic violations in the quality management system employed to ensure the safety and effectiveness of your drug-eluting stents that recurred at several of your facilities,” wrote the agency in its warning letter.

“Despite these numerous violations, however, Cordis was allowed to continue marketing Cypher stents,” wrote Committee Chairman Rep. John Dingell (D-Mich.) and Oversight and Investigations Subcommittee Chairman Rep. Bart Stupak (D-Mich.).

Companies are legally entitled to continue manufacturing a drug or device after a issuance of warning letter. If there is a public health threat, the agency will seek a voluntary recall. Otherwise, until the violations cited in a warning letter are resolved, a manufacturer can't receive approval of other new or pending applications for drugs or devices. For Cordis, that hold lasted from April 2004 until June 2007.

In an interview, Ira Loss, an analyst who follows the medical device and pharmaceutical sectors for Washington Analysis Corp., noted that Cordis lost ground to competitors that had carotid stents approved while its carotid device was on hold. He said it was not clear why the Energy and Commerce panel would be pursuing an action against Cordis now.

The first half of 2007 has been a dismal one for drug-eluting stents. When compared with the second quarter of 2006, U.S. sales of Cypher dropped 41% in the second quarter of 2007, to $210 million, reported Johnson & Johnson. Sales outside the United States dropped 30%, to $240 million.

The U.S. House Committee on Energy and Commerce is looking into whether the Food and Drug Administration may have been too lenient in its treatment of Cordis Corp. after the agency warned the company in 2004 about manufacturing violations relating to its Cypher sirolimus-eluting coronary stent.

In letters sent to FDA Commissioner Dr. Andrew von Eschenbach and to Johnson & Johnson CEO William Weldon in August, the congressional committee said it was seeking all documentation relating to FDA inspections of six Cordis facilities in 2003.

Following those inspections, the agency sent a warning letter to Cordis, a Johnson & Johnson subsidiary, in April 2004 citing violations in good manufacturing practice regulations. The FDA found “systemic violations in the quality management system employed to ensure the safety and effectiveness of your drug-eluting stents that recurred at several of your facilities,” wrote the agency in its warning letter.

“Despite these numerous violations, however, Cordis was allowed to continue marketing Cypher stents,” wrote Committee Chairman Rep. John Dingell (D-Mich.) and Oversight and Investigations Subcommittee Chairman Rep. Bart Stupak (D-Mich.).

Companies are legally entitled to continue manufacturing a drug or device after a issuance of warning letter. If there is a public health threat, the agency will seek a voluntary recall. Otherwise, until the violations cited in a warning letter are resolved, a manufacturer can't receive approval of other new or pending applications for drugs or devices. For Cordis, that hold lasted from April 2004 until June 2007.

In an interview, Ira Loss, an analyst who follows the medical device and pharmaceutical sectors for Washington Analysis Corp., noted that Cordis lost ground to competitors that had carotid stents approved while its carotid device was on hold. He said it was not clear why the Energy and Commerce panel would be pursuing an action against Cordis now.

The first half of 2007 has been a dismal one for drug-eluting stents. When compared with the second quarter of 2006, U.S. sales of Cypher dropped 41% in the second quarter of 2007, to $210 million, reported Johnson & Johnson. Sales outside the United States dropped 30%, to $240 million.

The U.S. House Committee on Energy and Commerce is looking into whether the Food and Drug Administration may have been too lenient in its treatment of Cordis Corp. after the agency warned the company in 2004 about manufacturing violations relating to its Cypher sirolimus-eluting coronary stent.

In letters sent to FDA Commissioner Dr. Andrew von Eschenbach and to Johnson & Johnson CEO William Weldon in August, the congressional committee said it was seeking all documentation relating to FDA inspections of six Cordis facilities in 2003.

Following those inspections, the agency sent a warning letter to Cordis, a Johnson & Johnson subsidiary, in April 2004 citing violations in good manufacturing practice regulations. The FDA found “systemic violations in the quality management system employed to ensure the safety and effectiveness of your drug-eluting stents that recurred at several of your facilities,” wrote the agency in its warning letter.

“Despite these numerous violations, however, Cordis was allowed to continue marketing Cypher stents,” wrote Committee Chairman Rep. John Dingell (D-Mich.) and Oversight and Investigations Subcommittee Chairman Rep. Bart Stupak (D-Mich.).

Companies are legally entitled to continue manufacturing a drug or device after a issuance of warning letter. If there is a public health threat, the agency will seek a voluntary recall. Otherwise, until the violations cited in a warning letter are resolved, a manufacturer can't receive approval of other new or pending applications for drugs or devices. For Cordis, that hold lasted from April 2004 until June 2007.

In an interview, Ira Loss, an analyst who follows the medical device and pharmaceutical sectors for Washington Analysis Corp., noted that Cordis lost ground to competitors that had carotid stents approved while its carotid device was on hold. He said it was not clear why the Energy and Commerce panel would be pursuing an action against Cordis now.

The first half of 2007 has been a dismal one for drug-eluting stents. When compared with the second quarter of 2006, U.S. sales of Cypher dropped 41% in the second quarter of 2007, to $210 million, reported Johnson & Johnson. Sales outside the United States dropped 30%, to $240 million.

The true impact isn't known yet, but an administrative change by the Centers for Medicare and Medicaid Services to rules governing the State Children's Health Insurance Program—made on a Friday night during Congress' August recess—may have the effect of dropping children who currently have coverage.

Sen. Jay Rockefeller (D-W.Va.), one of the original coauthors of SCHIP, sent a letter to President George W. Bush chiding the administration for making the change without congressional input.

“Not only do I question the wisdom and legality of this new policy, I also question the process,” wrote Sen. Rockefeller, noting that “a policy change of this magnitude should, at a minimum, be handled through the formal rule-making process, with proper public notice and comment.”

About 4 million children are eligible for Medicaid or SCHIP currently; some 6 million received benefits in 2006. An estimated 9 million children do not have health insurance.

SCHIP, now entering its 10th year, has been the subject of fierce battles this year, as lawmakers have struggled to come up with financing for the next 5 years. Authorization for SCHIP expires Sept. 30. Before leaving for summer recess, the House and the Senate passed very different packages.

President Bush said he would veto either bill, saying that he viewed both as a back-door way of expanding government-financed health care at the expense of the private insurance market.

So, the Aug. 17 letter from CMS Director for Medicaid and State Operations Dennis G. Smith to state health officials should not have come as a surprise. In the letter, states were told that if they were raising eligibility for children whose family incomes were equal to or above 250% of the federal poverty level, they would have to meet stringent new requirements. The goal: to ensure that these families aren't opting for SCHIP instead of private insurance.

CMS is now requiring that, for example, children be uninsured for at least 1 year before receiving SCHIP benefits. In addition, states also will have to document that the number of low-income children who are eligible for and covered by private insurance has not dropped by more than 2% in the past 5 years.

The House and Senate will meet in conference in September to determine the course of SCHIP over the next 5 years.

The true impact isn't known yet, but an administrative change by the Centers for Medicare and Medicaid Services to rules governing the State Children's Health Insurance Program—made on a Friday night during Congress' August recess—may have the effect of dropping children who currently have coverage.

Sen. Jay Rockefeller (D-W.Va.), one of the original coauthors of SCHIP, sent a letter to President George W. Bush chiding the administration for making the change without congressional input.

“Not only do I question the wisdom and legality of this new policy, I also question the process,” wrote Sen. Rockefeller, noting that “a policy change of this magnitude should, at a minimum, be handled through the formal rule-making process, with proper public notice and comment.”

About 4 million children are eligible for Medicaid or SCHIP currently; some 6 million received benefits in 2006. An estimated 9 million children do not have health insurance.

SCHIP, now entering its 10th year, has been the subject of fierce battles this year, as lawmakers have struggled to come up with financing for the next 5 years. Authorization for SCHIP expires Sept. 30. Before leaving for summer recess, the House and the Senate passed very different packages.

President Bush said he would veto either bill, saying that he viewed both as a back-door way of expanding government-financed health care at the expense of the private insurance market.

So, the Aug. 17 letter from CMS Director for Medicaid and State Operations Dennis G. Smith to state health officials should not have come as a surprise. In the letter, states were told that if they were raising eligibility for children whose family incomes were equal to or above 250% of the federal poverty level, they would have to meet stringent new requirements. The goal: to ensure that these families aren't opting for SCHIP instead of private insurance.

CMS is now requiring that, for example, children be uninsured for at least 1 year before receiving SCHIP benefits. In addition, states also will have to document that the number of low-income children who are eligible for and covered by private insurance has not dropped by more than 2% in the past 5 years.

The House and Senate will meet in conference in September to determine the course of SCHIP over the next 5 years.

The true impact isn't known yet, but an administrative change by the Centers for Medicare and Medicaid Services to rules governing the State Children's Health Insurance Program—made on a Friday night during Congress' August recess—may have the effect of dropping children who currently have coverage.

Sen. Jay Rockefeller (D-W.Va.), one of the original coauthors of SCHIP, sent a letter to President George W. Bush chiding the administration for making the change without congressional input.

“Not only do I question the wisdom and legality of this new policy, I also question the process,” wrote Sen. Rockefeller, noting that “a policy change of this magnitude should, at a minimum, be handled through the formal rule-making process, with proper public notice and comment.”

About 4 million children are eligible for Medicaid or SCHIP currently; some 6 million received benefits in 2006. An estimated 9 million children do not have health insurance.

SCHIP, now entering its 10th year, has been the subject of fierce battles this year, as lawmakers have struggled to come up with financing for the next 5 years. Authorization for SCHIP expires Sept. 30. Before leaving for summer recess, the House and the Senate passed very different packages.

President Bush said he would veto either bill, saying that he viewed both as a back-door way of expanding government-financed health care at the expense of the private insurance market.

So, the Aug. 17 letter from CMS Director for Medicaid and State Operations Dennis G. Smith to state health officials should not have come as a surprise. In the letter, states were told that if they were raising eligibility for children whose family incomes were equal to or above 250% of the federal poverty level, they would have to meet stringent new requirements. The goal: to ensure that these families aren't opting for SCHIP instead of private insurance.

CMS is now requiring that, for example, children be uninsured for at least 1 year before receiving SCHIP benefits. In addition, states also will have to document that the number of low-income children who are eligible for and covered by private insurance has not dropped by more than 2% in the past 5 years.

The House and Senate will meet in conference in September to determine the course of SCHIP over the next 5 years.