Alicia Ault

WASHINGTON – Obama administration officials last month previewed impending regulations on how Medicare will bundle payments to hospitals.

“In the weeks ahead, we'll be launching a series of different models that give providers the opportunity to receive bundled payment and keep the savings they generate,” White House Deputy Chief of Staff Nancy-Ann DeParle said at the forum. “These models will cover care in hospitals and post-acute facilities,” she said, adding that interested providers would be able to start using the models this year.

In 2013, the administration plans to start a second bundled payment program “that will help get us another step closer to the ultimate goal – higher quality health care at a lower cost,” she said.

The bundled payment program initially will target “high-impact areas,” Ms. DeParle said without elaborating as to which areas. However, she said, the program would likely hew closely to the principles delineated in a white paper issued by the Center for American Progress, a Washington-based think tank. In that report, the Center recommended a bundling program that “focuses on high-volume conditions for which interventions are well established and supported by clinical guidelines, and for which, despite those guidelines, actual treatments (and related costs) vary substantially.”

The Center also urged the government to design payment methods to promote collaboration among providers, by either offering a single bundled payment amount to be divided, or an alternative method that pays each individual involved in the episode “an amount that blends existing payment methods with financial incentives based on the combined performance of all providers involved in the episode.

Initial payments should reflect the current costs of care and reward efficient delivery. Providers should also be required to publicly report quality measures. Finally, said the Center, providers should inform beneficiaries about the program and give them the option to get care from providers who aren't a part of the bundled pay program.

Dr. Richard Gilfillan, acting director of the Center for Medicare and Medicaid Innovation, one of the Centers for Medicare and Medicaid Services, said that the bundled payment program is “about care improvement.”

Though he said he needed “to be a little vague here because I can't make announcements about exactly what we're going to do and when,” he did provide some details on where the CMS is leaning.

The easiest program to initiate will be bundling payment retrospectively for an acute-care episode, especially bundling hospital and physician payments together in a gain-sharing arrangement. “That's an attractive opportunity,” said Dr. Gilfillan, who noted that the agency has a demonstration project of that concept in New York and New Jersey.

CMS is also looking at retrospectively bundling acute with post-acute care and for post-acute care only, he said.

Prospective bundled payment will be more difficult, said Dr. Gilfillan, former CEO of the Geisinger Health Plan in Danville, Penn. That is the insurance arm of the Geisinger Health System, which has been viewed as a model for bundled payments and accountable care organizations (ACOs).

CMS has multiple demonstration projects bundling physician and hospital pay for an acute episode. Noting that the CMS has a system in place to execute this concept, he said, “We're interested in seeing more of that.”

The agency is not set up for an acute plus post-acute episode prospective payment, and is even less prepared for post-acute prospective payment. Down the road, the CMS will look at chronic care bundled payment, Dr. Gilfillan said.

The agency initially will build on what it has already established. And, he said, the CMS is “going to start small initially but build for scaling.” The bundled payment initiative will also likely “engage people who may not be ready to engage in ACOs,” and it could possibly “form the framework for ACOs.”

Francois de Brantes, executive director of the Health Care Incentives Improvement Institute (HCI3), told attendees that the bundled payment program may help speed the transformation to collaborative care that the ACO model envisions. HCI3 is involved in several private sector efforts to improve quality of care and bundle payments.

But he said, “while hospital-based episodes are appealing because you're dealing with a relatively reduced number of providers around the country, that's not where the savings are. The savings are in chronic care.”

The first models for bundled payments “will cover care in hospitals and post-acute facilities,” White House Deputy Chief of Staff Nancy-Ann DeParle said.

Source Alicia Ault/Elsevier Global Medical News

WASHINGTON – Obama administration officials last month previewed impending regulations on how Medicare will bundle payments to hospitals.

“In the weeks ahead, we'll be launching a series of different models that give providers the opportunity to receive bundled payment and keep the savings they generate,” White House Deputy Chief of Staff Nancy-Ann DeParle said at the forum. “These models will cover care in hospitals and post-acute facilities,” she said, adding that interested providers would be able to start using the models this year.

In 2013, the administration plans to start a second bundled payment program “that will help get us another step closer to the ultimate goal – higher quality health care at a lower cost,” she said.

The bundled payment program initially will target “high-impact areas,” Ms. DeParle said without elaborating as to which areas. However, she said, the program would likely hew closely to the principles delineated in a white paper issued by the Center for American Progress, a Washington-based think tank. In that report, the Center recommended a bundling program that “focuses on high-volume conditions for which interventions are well established and supported by clinical guidelines, and for which, despite those guidelines, actual treatments (and related costs) vary substantially.”

The Center also urged the government to design payment methods to promote collaboration among providers, by either offering a single bundled payment amount to be divided, or an alternative method that pays each individual involved in the episode “an amount that blends existing payment methods with financial incentives based on the combined performance of all providers involved in the episode.

Initial payments should reflect the current costs of care and reward efficient delivery. Providers should also be required to publicly report quality measures. Finally, said the Center, providers should inform beneficiaries about the program and give them the option to get care from providers who aren't a part of the bundled pay program.

Dr. Richard Gilfillan, acting director of the Center for Medicare and Medicaid Innovation, one of the Centers for Medicare and Medicaid Services, said that the bundled payment program is “about care improvement.”

Though he said he needed “to be a little vague here because I can't make announcements about exactly what we're going to do and when,” he did provide some details on where the CMS is leaning.

The easiest program to initiate will be bundling payment retrospectively for an acute-care episode, especially bundling hospital and physician payments together in a gain-sharing arrangement. “That's an attractive opportunity,” said Dr. Gilfillan, who noted that the agency has a demonstration project of that concept in New York and New Jersey.

CMS is also looking at retrospectively bundling acute with post-acute care and for post-acute care only, he said.

Prospective bundled payment will be more difficult, said Dr. Gilfillan, former CEO of the Geisinger Health Plan in Danville, Penn. That is the insurance arm of the Geisinger Health System, which has been viewed as a model for bundled payments and accountable care organizations (ACOs).

CMS has multiple demonstration projects bundling physician and hospital pay for an acute episode. Noting that the CMS has a system in place to execute this concept, he said, “We're interested in seeing more of that.”

The agency is not set up for an acute plus post-acute episode prospective payment, and is even less prepared for post-acute prospective payment. Down the road, the CMS will look at chronic care bundled payment, Dr. Gilfillan said.

The agency initially will build on what it has already established. And, he said, the CMS is “going to start small initially but build for scaling.” The bundled payment initiative will also likely “engage people who may not be ready to engage in ACOs,” and it could possibly “form the framework for ACOs.”

Francois de Brantes, executive director of the Health Care Incentives Improvement Institute (HCI3), told attendees that the bundled payment program may help speed the transformation to collaborative care that the ACO model envisions. HCI3 is involved in several private sector efforts to improve quality of care and bundle payments.

But he said, “while hospital-based episodes are appealing because you're dealing with a relatively reduced number of providers around the country, that's not where the savings are. The savings are in chronic care.”

The first models for bundled payments “will cover care in hospitals and post-acute facilities,” White House Deputy Chief of Staff Nancy-Ann DeParle said.

Source Alicia Ault/Elsevier Global Medical News

WASHINGTON – Obama administration officials last month previewed impending regulations on how Medicare will bundle payments to hospitals.

“In the weeks ahead, we'll be launching a series of different models that give providers the opportunity to receive bundled payment and keep the savings they generate,” White House Deputy Chief of Staff Nancy-Ann DeParle said at the forum. “These models will cover care in hospitals and post-acute facilities,” she said, adding that interested providers would be able to start using the models this year.

In 2013, the administration plans to start a second bundled payment program “that will help get us another step closer to the ultimate goal – higher quality health care at a lower cost,” she said.

The bundled payment program initially will target “high-impact areas,” Ms. DeParle said without elaborating as to which areas. However, she said, the program would likely hew closely to the principles delineated in a white paper issued by the Center for American Progress, a Washington-based think tank. In that report, the Center recommended a bundling program that “focuses on high-volume conditions for which interventions are well established and supported by clinical guidelines, and for which, despite those guidelines, actual treatments (and related costs) vary substantially.”

The Center also urged the government to design payment methods to promote collaboration among providers, by either offering a single bundled payment amount to be divided, or an alternative method that pays each individual involved in the episode “an amount that blends existing payment methods with financial incentives based on the combined performance of all providers involved in the episode.

Initial payments should reflect the current costs of care and reward efficient delivery. Providers should also be required to publicly report quality measures. Finally, said the Center, providers should inform beneficiaries about the program and give them the option to get care from providers who aren't a part of the bundled pay program.

Dr. Richard Gilfillan, acting director of the Center for Medicare and Medicaid Innovation, one of the Centers for Medicare and Medicaid Services, said that the bundled payment program is “about care improvement.”

Though he said he needed “to be a little vague here because I can't make announcements about exactly what we're going to do and when,” he did provide some details on where the CMS is leaning.

The easiest program to initiate will be bundling payment retrospectively for an acute-care episode, especially bundling hospital and physician payments together in a gain-sharing arrangement. “That's an attractive opportunity,” said Dr. Gilfillan, who noted that the agency has a demonstration project of that concept in New York and New Jersey.

CMS is also looking at retrospectively bundling acute with post-acute care and for post-acute care only, he said.

Prospective bundled payment will be more difficult, said Dr. Gilfillan, former CEO of the Geisinger Health Plan in Danville, Penn. That is the insurance arm of the Geisinger Health System, which has been viewed as a model for bundled payments and accountable care organizations (ACOs).

CMS has multiple demonstration projects bundling physician and hospital pay for an acute episode. Noting that the CMS has a system in place to execute this concept, he said, “We're interested in seeing more of that.”

The agency is not set up for an acute plus post-acute episode prospective payment, and is even less prepared for post-acute prospective payment. Down the road, the CMS will look at chronic care bundled payment, Dr. Gilfillan said.

The agency initially will build on what it has already established. And, he said, the CMS is “going to start small initially but build for scaling.” The bundled payment initiative will also likely “engage people who may not be ready to engage in ACOs,” and it could possibly “form the framework for ACOs.”

Francois de Brantes, executive director of the Health Care Incentives Improvement Institute (HCI3), told attendees that the bundled payment program may help speed the transformation to collaborative care that the ACO model envisions. HCI3 is involved in several private sector efforts to improve quality of care and bundle payments.

But he said, “while hospital-based episodes are appealing because you're dealing with a relatively reduced number of providers around the country, that's not where the savings are. The savings are in chronic care.”

The first models for bundled payments “will cover care in hospitals and post-acute facilities,” White House Deputy Chief of Staff Nancy-Ann DeParle said.

Source Alicia Ault/Elsevier Global Medical News

The Centers for Medicare and Medicaid Services proposed that physician fees for 2012 would be reduced by 29.5%, even as the head of the agency vowed that the cuts would not occur. The proposed rule was released in the Federal Register July 1.

The reduction is required by the Sustainable Growth Rate (SGR) formula that was part of the Balanced Budget Act of 1997. But Dr. Donald M. Berwick, CMS administrator, said in a statement that the agency is hoping to find a way to avoid the statutory decrease.

“This payment cut would have serious consequences and we cannot and will not allow it to happen,” Dr. Berwick said. “We need a permanent SGR fix to solve this problem once and for all. That's why the president's budget and his fiscal framework call for averting these cuts and why we are determined to pass and implement a permanent and sustainable fix.”

Dr. Peter W. Carmel, president of the American Medical Association, said the reductions called for by the SGR formula are a constant threat to physicians' stability. “We are pleased that there is support from the administration and bi-partisan members of congress for permanent reform of this broken system, but agreement is not enough,” said Dr. Carmel, in a statement.

The AMA has been seeking a review and revision of the Medicare Economic Index (MEI), a measure of cost increases that affect physician practices. Dr. Carmel said that such a review was promised in the 2011 Medicare Physician Fee Schedule final rule, but the newly released proposed rule for 2012 shows it has not yet begun. “Revisions in the MEI could significantly reduce the legislative cost of permanent reform of the Medicare physician payment formula,” said Dr. Carmel.

The reductions could be deeper for some specialties – including cardiology – based on the impact of the Physician Practice Information Survey. The changes would reflect the third year of a 4-year transition to new practice expense relative value units. American College of Cardiology CEO Jack Lewin put this in perspective: “The 2010 payment rule was devastatingly bad. The 2011 rule was nowhere near as bad as that, and this one for 2012 is not full of apparent surprises. The 2012 rule has the third year of residual cuts that originated in 2010, but the impact next year averages out about negative 1%. The big impact would be the SGR cut of 29.5% if it were not waived – which it will be for a year at least I presume,” he wrote in his ACCinTouch blog.

And more payment changes may be looming. The CMS said in a statement that it is proposing to continue its efforts to identify what it calls “potentially misvalued codes.” As part of those efforts, it will be taking a look at all evaluation and management (E/M) codes to determine if they are undervalued. The agency also proposes to examine the highest non–E/M expenditure codes for each specialty to see if they are overvalued.

The agency will be looking at three cardiology codes that are potentially misvalued: data for cardiovascular stress test (93015), extracranial study (93880), and complete ECG (93000). According to ACC, these will be reviewed by the RUC for presentation to CMS before July 2012.

The agency said that the reviews will improve payment accuracy, in particular ensuring that primary care services are appropriately reimbursed. It's the first time the agency has looked across all specialties, according to the CMS.

Diagnostic imaging has been a target for Medicare, and it is again in this proposal. The agency wants to extend the multiple procedure payment reduction (MPPR) policy to the professional component of advanced imaging services, which includes CT) scans, MRI, and ultrasound. The agency said the reduction would affect about 100 types of services. It is also the first time that the CMS has taken aim at the professional component of these services. That component would be reduced by 50% for subsequent procedures furnished to the same patient, on the same day, in the same session, resulting in an estimated $200 million in savings, according to the CMS.

For the first time, the agency is proposing quality and cost measures to be used in setting incentive payments for physicians who provide higher quality and more efficient care. That lays the groundwork for 2015, when the Affordable Care Act requires the CMS to begin making payment adjustments for certain physicians and physician groups. The requirement goes into effect for all physicians in 2017. The agency is proposing to use 2013 as the initial performance year.

In other issues addressed by the proposed rule, CMS seeks to add smoking cessation to the list of services that can be provided through telehealth. In the future, new services would be examined according to the clinical benefit they provide rather than on whether they are equivalent to a corresponding in-person service.

Finally, the CMS proposed some changes to the Physician Quality Reporting System, the ePrescribing Incentive Program, and the Electronic Health Records Incentive Program. The agency, for instance, is expanding the ways physicians can qualify for incentive payments under the meaningful use criteria.

Comments to the proposed rule can be submitted until Aug. 30 at www.regulations.gov

The Centers for Medicare and Medicaid Services proposed that physician fees for 2012 would be reduced by 29.5%, even as the head of the agency vowed that the cuts would not occur. The proposed rule was released in the Federal Register July 1.

The reduction is required by the Sustainable Growth Rate (SGR) formula that was part of the Balanced Budget Act of 1997. But Dr. Donald M. Berwick, CMS administrator, said in a statement that the agency is hoping to find a way to avoid the statutory decrease.

“This payment cut would have serious consequences and we cannot and will not allow it to happen,” Dr. Berwick said. “We need a permanent SGR fix to solve this problem once and for all. That's why the president's budget and his fiscal framework call for averting these cuts and why we are determined to pass and implement a permanent and sustainable fix.”

Dr. Peter W. Carmel, president of the American Medical Association, said the reductions called for by the SGR formula are a constant threat to physicians' stability. “We are pleased that there is support from the administration and bi-partisan members of congress for permanent reform of this broken system, but agreement is not enough,” said Dr. Carmel, in a statement.

The AMA has been seeking a review and revision of the Medicare Economic Index (MEI), a measure of cost increases that affect physician practices. Dr. Carmel said that such a review was promised in the 2011 Medicare Physician Fee Schedule final rule, but the newly released proposed rule for 2012 shows it has not yet begun. “Revisions in the MEI could significantly reduce the legislative cost of permanent reform of the Medicare physician payment formula,” said Dr. Carmel.

The reductions could be deeper for some specialties – including cardiology – based on the impact of the Physician Practice Information Survey. The changes would reflect the third year of a 4-year transition to new practice expense relative value units. American College of Cardiology CEO Jack Lewin put this in perspective: “The 2010 payment rule was devastatingly bad. The 2011 rule was nowhere near as bad as that, and this one for 2012 is not full of apparent surprises. The 2012 rule has the third year of residual cuts that originated in 2010, but the impact next year averages out about negative 1%. The big impact would be the SGR cut of 29.5% if it were not waived – which it will be for a year at least I presume,” he wrote in his ACCinTouch blog.

And more payment changes may be looming. The CMS said in a statement that it is proposing to continue its efforts to identify what it calls “potentially misvalued codes.” As part of those efforts, it will be taking a look at all evaluation and management (E/M) codes to determine if they are undervalued. The agency also proposes to examine the highest non–E/M expenditure codes for each specialty to see if they are overvalued.

The agency will be looking at three cardiology codes that are potentially misvalued: data for cardiovascular stress test (93015), extracranial study (93880), and complete ECG (93000). According to ACC, these will be reviewed by the RUC for presentation to CMS before July 2012.

The agency said that the reviews will improve payment accuracy, in particular ensuring that primary care services are appropriately reimbursed. It's the first time the agency has looked across all specialties, according to the CMS.

Diagnostic imaging has been a target for Medicare, and it is again in this proposal. The agency wants to extend the multiple procedure payment reduction (MPPR) policy to the professional component of advanced imaging services, which includes CT) scans, MRI, and ultrasound. The agency said the reduction would affect about 100 types of services. It is also the first time that the CMS has taken aim at the professional component of these services. That component would be reduced by 50% for subsequent procedures furnished to the same patient, on the same day, in the same session, resulting in an estimated $200 million in savings, according to the CMS.

For the first time, the agency is proposing quality and cost measures to be used in setting incentive payments for physicians who provide higher quality and more efficient care. That lays the groundwork for 2015, when the Affordable Care Act requires the CMS to begin making payment adjustments for certain physicians and physician groups. The requirement goes into effect for all physicians in 2017. The agency is proposing to use 2013 as the initial performance year.

In other issues addressed by the proposed rule, CMS seeks to add smoking cessation to the list of services that can be provided through telehealth. In the future, new services would be examined according to the clinical benefit they provide rather than on whether they are equivalent to a corresponding in-person service.

Finally, the CMS proposed some changes to the Physician Quality Reporting System, the ePrescribing Incentive Program, and the Electronic Health Records Incentive Program. The agency, for instance, is expanding the ways physicians can qualify for incentive payments under the meaningful use criteria.

Comments to the proposed rule can be submitted until Aug. 30 at www.regulations.gov

The Centers for Medicare and Medicaid Services proposed that physician fees for 2012 would be reduced by 29.5%, even as the head of the agency vowed that the cuts would not occur. The proposed rule was released in the Federal Register July 1.

The reduction is required by the Sustainable Growth Rate (SGR) formula that was part of the Balanced Budget Act of 1997. But Dr. Donald M. Berwick, CMS administrator, said in a statement that the agency is hoping to find a way to avoid the statutory decrease.

“This payment cut would have serious consequences and we cannot and will not allow it to happen,” Dr. Berwick said. “We need a permanent SGR fix to solve this problem once and for all. That's why the president's budget and his fiscal framework call for averting these cuts and why we are determined to pass and implement a permanent and sustainable fix.”

Dr. Peter W. Carmel, president of the American Medical Association, said the reductions called for by the SGR formula are a constant threat to physicians' stability. “We are pleased that there is support from the administration and bi-partisan members of congress for permanent reform of this broken system, but agreement is not enough,” said Dr. Carmel, in a statement.

The AMA has been seeking a review and revision of the Medicare Economic Index (MEI), a measure of cost increases that affect physician practices. Dr. Carmel said that such a review was promised in the 2011 Medicare Physician Fee Schedule final rule, but the newly released proposed rule for 2012 shows it has not yet begun. “Revisions in the MEI could significantly reduce the legislative cost of permanent reform of the Medicare physician payment formula,” said Dr. Carmel.

The reductions could be deeper for some specialties – including cardiology – based on the impact of the Physician Practice Information Survey. The changes would reflect the third year of a 4-year transition to new practice expense relative value units. American College of Cardiology CEO Jack Lewin put this in perspective: “The 2010 payment rule was devastatingly bad. The 2011 rule was nowhere near as bad as that, and this one for 2012 is not full of apparent surprises. The 2012 rule has the third year of residual cuts that originated in 2010, but the impact next year averages out about negative 1%. The big impact would be the SGR cut of 29.5% if it were not waived – which it will be for a year at least I presume,” he wrote in his ACCinTouch blog.

And more payment changes may be looming. The CMS said in a statement that it is proposing to continue its efforts to identify what it calls “potentially misvalued codes.” As part of those efforts, it will be taking a look at all evaluation and management (E/M) codes to determine if they are undervalued. The agency also proposes to examine the highest non–E/M expenditure codes for each specialty to see if they are overvalued.

The agency will be looking at three cardiology codes that are potentially misvalued: data for cardiovascular stress test (93015), extracranial study (93880), and complete ECG (93000). According to ACC, these will be reviewed by the RUC for presentation to CMS before July 2012.

The agency said that the reviews will improve payment accuracy, in particular ensuring that primary care services are appropriately reimbursed. It's the first time the agency has looked across all specialties, according to the CMS.

Diagnostic imaging has been a target for Medicare, and it is again in this proposal. The agency wants to extend the multiple procedure payment reduction (MPPR) policy to the professional component of advanced imaging services, which includes CT) scans, MRI, and ultrasound. The agency said the reduction would affect about 100 types of services. It is also the first time that the CMS has taken aim at the professional component of these services. That component would be reduced by 50% for subsequent procedures furnished to the same patient, on the same day, in the same session, resulting in an estimated $200 million in savings, according to the CMS.

For the first time, the agency is proposing quality and cost measures to be used in setting incentive payments for physicians who provide higher quality and more efficient care. That lays the groundwork for 2015, when the Affordable Care Act requires the CMS to begin making payment adjustments for certain physicians and physician groups. The requirement goes into effect for all physicians in 2017. The agency is proposing to use 2013 as the initial performance year.

In other issues addressed by the proposed rule, CMS seeks to add smoking cessation to the list of services that can be provided through telehealth. In the future, new services would be examined according to the clinical benefit they provide rather than on whether they are equivalent to a corresponding in-person service.

Finally, the CMS proposed some changes to the Physician Quality Reporting System, the ePrescribing Incentive Program, and the Electronic Health Records Incentive Program. The agency, for instance, is expanding the ways physicians can qualify for incentive payments under the meaningful use criteria.

Comments to the proposed rule can be submitted until Aug. 30 at www.regulations.gov

WASHINGTON – Despite a huge increase in the number of Americans who will have insurance coverage when the main provisions of the Affordable Care Act take effect in 2014, the nation’s overall health spending in that year is projected to rise only 2% above the expected yearly average increase for the rest of the decade, economists from the Centers for Medicare and Medicaid Services said July 27.

The 8% growth in spending expected in 2014 is in line with the average 5.8% annual rise in health spending expected each year from 2010 to 2020 and is relatively small given that, by 2014, an estimated 23 million more Americans will have health insurance coverage under the Affordable Care Act (ACA), said Sean P. Keehan, an economist in the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS).

Over the next decade, the ACA is projected to add only a tenth of a percentage point to the nation’s overall health spending, Mr. Keehan and his colleagues reported in the journal Health Affairs (August [doi:10.1377/hlthaff.2011.0662]).

The ACA is expected to drive a 20% increase in Medicaid costs and a 9% increase in private insurance spending in 2014. The economists said that many of the newly insured Americans will be younger and healthier than are the existing populations covered by Medicaid and private insurance.

With the new coverage, they are likely to use more physician services (a projected 9% increase in 2014) and pharmaceuticals (a projected 11% increase in 2014), the authors said.

The increases in spending will not be offset by Medicare cuts in the first year, according to the report, an actuarial and econometric analysis of data from the 2011 Medicare Trustees Report, done under a current-law framework.

The projections could be substantially affected by the outcome of the ongoing federal debt ceiling talks and, in a few years, by any potential changes in the Medicare Sustainable Growth Rate (SGR) formula.

In 2012, the SGR calls for an-almost 30% cut in Medicare physician payments. If that happens, Medicare spending would only grow by 1.7%, instead of by 5.9%, according to the study. If the Congress decides to try an alternative, such as tying fee increases to the Medicare Economic Index, Medicare spending would rise by 6.6%.

The impact of the SGR on both Medicare and total health spending is very large, Medicare chief actuary Rick Foster said in an interview. Medicare accounts for roughly 20% of the nation’s total health spending and physician services are a large chunk of Medicare spending, he said. If Congress approves a total replacement of the SGR – which is estimated to cost approximately $300 billion over 10 years– that money would be directly added to total spending, Mr. Foster said.

In 2010, the growth in health spending was, for the second year in a row, near a historic low, driven largely by the recession. The $2.6 trillion represented almost 18% of the gross domestic product (GDP). That was about the same share as the previous year, as both health spending and the GDP grew relatively slowly, according to the report.

Medicare spending growth slowed because of less spending on private Medicare Advantage plans. Private health insurance spending grew only 2.6% in 2010, as more people lost jobs and coverage. Americans for the second year in a row also spent less out-of-pocket.

Overall, spending on physician and clinical services grew only 2.4% in 2010. The economists said they expect that figure to rebound by 4% in 2011, but to slow again in 2012, largely because of the SGR cut. That year, physician spending may only rise by 0.8%.

With many major provisions of the ACA taking effect in 2014, physician spending is expected to grow by 8.9% that year, a $17.8 billion increase over what would have been expected without health reform, according to the report.

The CMS economists highlighted several other trends. Going forward, federal, state, and local governments are expected to become ever-larger payers and financiers of health care. Currently, Medicare and Medicaid (combining federal and state contributions) pay about 36% of the nation’s health bills. By 2020, that is expected to grow to 40%. In 2010, federal, state, and local governments financed 43% of the nation’s health bill through direct payments and subsidies. By 2020, that is expected to reach 49%.

The growth will come from Medicare’s expansion because of retiring Baby Boomers, Medicaid expansions through the ACA, and federal subsidies for Americans covered under the health exchanges.

The authors are all employees of the Centers for Medicare and Medicaid Services.

WASHINGTON – Despite a huge increase in the number of Americans who will have insurance coverage when the main provisions of the Affordable Care Act take effect in 2014, the nation’s overall health spending in that year is projected to rise only 2% above the expected yearly average increase for the rest of the decade, economists from the Centers for Medicare and Medicaid Services said July 27.

The 8% growth in spending expected in 2014 is in line with the average 5.8% annual rise in health spending expected each year from 2010 to 2020 and is relatively small given that, by 2014, an estimated 23 million more Americans will have health insurance coverage under the Affordable Care Act (ACA), said Sean P. Keehan, an economist in the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS).

Over the next decade, the ACA is projected to add only a tenth of a percentage point to the nation’s overall health spending, Mr. Keehan and his colleagues reported in the journal Health Affairs (August [doi:10.1377/hlthaff.2011.0662]).

The ACA is expected to drive a 20% increase in Medicaid costs and a 9% increase in private insurance spending in 2014. The economists said that many of the newly insured Americans will be younger and healthier than are the existing populations covered by Medicaid and private insurance.

With the new coverage, they are likely to use more physician services (a projected 9% increase in 2014) and pharmaceuticals (a projected 11% increase in 2014), the authors said.

The increases in spending will not be offset by Medicare cuts in the first year, according to the report, an actuarial and econometric analysis of data from the 2011 Medicare Trustees Report, done under a current-law framework.

The projections could be substantially affected by the outcome of the ongoing federal debt ceiling talks and, in a few years, by any potential changes in the Medicare Sustainable Growth Rate (SGR) formula.

In 2012, the SGR calls for an-almost 30% cut in Medicare physician payments. If that happens, Medicare spending would only grow by 1.7%, instead of by 5.9%, according to the study. If the Congress decides to try an alternative, such as tying fee increases to the Medicare Economic Index, Medicare spending would rise by 6.6%.

The impact of the SGR on both Medicare and total health spending is very large, Medicare chief actuary Rick Foster said in an interview. Medicare accounts for roughly 20% of the nation’s total health spending and physician services are a large chunk of Medicare spending, he said. If Congress approves a total replacement of the SGR – which is estimated to cost approximately $300 billion over 10 years– that money would be directly added to total spending, Mr. Foster said.

In 2010, the growth in health spending was, for the second year in a row, near a historic low, driven largely by the recession. The $2.6 trillion represented almost 18% of the gross domestic product (GDP). That was about the same share as the previous year, as both health spending and the GDP grew relatively slowly, according to the report.

Medicare spending growth slowed because of less spending on private Medicare Advantage plans. Private health insurance spending grew only 2.6% in 2010, as more people lost jobs and coverage. Americans for the second year in a row also spent less out-of-pocket.

Overall, spending on physician and clinical services grew only 2.4% in 2010. The economists said they expect that figure to rebound by 4% in 2011, but to slow again in 2012, largely because of the SGR cut. That year, physician spending may only rise by 0.8%.

With many major provisions of the ACA taking effect in 2014, physician spending is expected to grow by 8.9% that year, a $17.8 billion increase over what would have been expected without health reform, according to the report.

The CMS economists highlighted several other trends. Going forward, federal, state, and local governments are expected to become ever-larger payers and financiers of health care. Currently, Medicare and Medicaid (combining federal and state contributions) pay about 36% of the nation’s health bills. By 2020, that is expected to grow to 40%. In 2010, federal, state, and local governments financed 43% of the nation’s health bill through direct payments and subsidies. By 2020, that is expected to reach 49%.

The growth will come from Medicare’s expansion because of retiring Baby Boomers, Medicaid expansions through the ACA, and federal subsidies for Americans covered under the health exchanges.

The authors are all employees of the Centers for Medicare and Medicaid Services.

WASHINGTON – Despite a huge increase in the number of Americans who will have insurance coverage when the main provisions of the Affordable Care Act take effect in 2014, the nation’s overall health spending in that year is projected to rise only 2% above the expected yearly average increase for the rest of the decade, economists from the Centers for Medicare and Medicaid Services said July 27.

The 8% growth in spending expected in 2014 is in line with the average 5.8% annual rise in health spending expected each year from 2010 to 2020 and is relatively small given that, by 2014, an estimated 23 million more Americans will have health insurance coverage under the Affordable Care Act (ACA), said Sean P. Keehan, an economist in the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS).

Over the next decade, the ACA is projected to add only a tenth of a percentage point to the nation’s overall health spending, Mr. Keehan and his colleagues reported in the journal Health Affairs (August [doi:10.1377/hlthaff.2011.0662]).

The ACA is expected to drive a 20% increase in Medicaid costs and a 9% increase in private insurance spending in 2014. The economists said that many of the newly insured Americans will be younger and healthier than are the existing populations covered by Medicaid and private insurance.

With the new coverage, they are likely to use more physician services (a projected 9% increase in 2014) and pharmaceuticals (a projected 11% increase in 2014), the authors said.

The increases in spending will not be offset by Medicare cuts in the first year, according to the report, an actuarial and econometric analysis of data from the 2011 Medicare Trustees Report, done under a current-law framework.

The projections could be substantially affected by the outcome of the ongoing federal debt ceiling talks and, in a few years, by any potential changes in the Medicare Sustainable Growth Rate (SGR) formula.

In 2012, the SGR calls for an-almost 30% cut in Medicare physician payments. If that happens, Medicare spending would only grow by 1.7%, instead of by 5.9%, according to the study. If the Congress decides to try an alternative, such as tying fee increases to the Medicare Economic Index, Medicare spending would rise by 6.6%.

The impact of the SGR on both Medicare and total health spending is very large, Medicare chief actuary Rick Foster said in an interview. Medicare accounts for roughly 20% of the nation’s total health spending and physician services are a large chunk of Medicare spending, he said. If Congress approves a total replacement of the SGR – which is estimated to cost approximately $300 billion over 10 years– that money would be directly added to total spending, Mr. Foster said.

In 2010, the growth in health spending was, for the second year in a row, near a historic low, driven largely by the recession. The $2.6 trillion represented almost 18% of the gross domestic product (GDP). That was about the same share as the previous year, as both health spending and the GDP grew relatively slowly, according to the report.

Medicare spending growth slowed because of less spending on private Medicare Advantage plans. Private health insurance spending grew only 2.6% in 2010, as more people lost jobs and coverage. Americans for the second year in a row also spent less out-of-pocket.

Overall, spending on physician and clinical services grew only 2.4% in 2010. The economists said they expect that figure to rebound by 4% in 2011, but to slow again in 2012, largely because of the SGR cut. That year, physician spending may only rise by 0.8%.

With many major provisions of the ACA taking effect in 2014, physician spending is expected to grow by 8.9% that year, a $17.8 billion increase over what would have been expected without health reform, according to the report.

The CMS economists highlighted several other trends. Going forward, federal, state, and local governments are expected to become ever-larger payers and financiers of health care. Currently, Medicare and Medicaid (combining federal and state contributions) pay about 36% of the nation’s health bills. By 2020, that is expected to grow to 40%. In 2010, federal, state, and local governments financed 43% of the nation’s health bill through direct payments and subsidies. By 2020, that is expected to reach 49%.

The growth will come from Medicare’s expansion because of retiring Baby Boomers, Medicaid expansions through the ACA, and federal subsidies for Americans covered under the health exchanges.

The authors are all employees of the Centers for Medicare and Medicaid Services.

WASHINGTON – Obama administration officials on July 18 previewed impending regulations on how Medicare will bundle payments to hospitals.

"In the weeks ahead, we’ll be launching a series of different models that give providers the opportunity to receive bundled payment and keep the savings they generate," White House Deputy Chief of Staff Nancy-Ann DeParle said at the forum. "These models will cover care in hospitals and post-acute facilities," she said, adding that interested providers would be able to start using the models this year.

In 2013, the administration plans to start a second bundled payment program "that will help get us another step closer to the ultimate goal – higher quality health care at a lower cost," Ms. DeParle said.

The bundled payment program initially will target "high-impact areas," Ms. DeParle said without elaborating as to which areas. However, she said, the program would likely hew closely the principles delineated in a white paper issued by the Center for American Progress, a Washington-based think tank.

In that report, the Center recommended a bundling program that "focuses on high-volume conditions for which interventions are well established and supported by clinical guidelines, and for which, despite those guidelines, actual treatments (and related costs) vary substantially."

The Center also urged the government to design payment methods to promote collaboration among providers, by either offering a single bundled payment amount to be divided, or an alternative method that pays each individual involved in the episode "an amount that blends existing payment methods with financial incentives based on the combined performance of all providers involved in the episode.

Initial payments should reflect the current costs of care and reward efficient delivery. Providers should also be required to publicly report quality measures. Finally, said the Center, providers should inform beneficiaries about the program and give them the option to get care from providers who aren’t a part of the bundled pay program.

Dr. Richard Gilfillan, acting director of the Center for Medicare and Medicaid Innovation, one of the Centers for Medicare and Medicaid Services, said that the bundled payment program is "about care improvement."

Though he said he needed "to be a little vague here because I can’t make announcements about exactly what we’re going to do and when," he did provide some details on where the CMS is leaning.

The easiest program to initiate will be bundling payment retrospectively for an acute-care episode, especially bundling hospital and physician payments together in a gain-sharing arrangement. "That’s an attractive opportunity," said Dr. Gilfillan, who noted that the agency has a demonstration project of that concept in New York and New Jersey.

CMS is also looking at retrospectively bundling acute with post-acute care and for post-acute care only, he said.

Prospective bundled payment will be more difficult, said Dr. Gilfillan, former CEO of the Geisinger Health Plan in Danville, Penn. That is the insurance arm of the Geisinger Health System, which has been viewed as a model for bundled payments and accountable care organizations (ACOs).

CMS has multiple demonstration projects bundling physician and hospital pay for an acute episode. Noting that the CMS has a system in place to execute this concept, he said, "We’re interested in seeing more of that."

The agency is not set up for an acute plus post-acute episode prospective payment, and is even less prepared for post-acute prospective payment.

Down the road, the CMS will look at chronic care bundled payment, Dr. Gilfillan said.

The agency initially will build on what it has already established. And, he said, the CMS is "going to start small initially but build for scaling."

He said the bundled payment initiative will have other positive effects. "We think it’s going to engage people who may not be ready to engage in ACOs," and that it could possibly "form the framework for ACOs."

Francois de Brantes, executive director of the Health Care Incentives Improvement Institute (HCI3), told forum attendees that the bundled payment program may "help in accelerating that transformation" to collaborative care that the ACO model envisions. HCI3 is involved in several private sector efforts to improve quality of care and bundle payments.

But he said, "while hospital-based episodes are appealing because you’re dealing with a relatively reduced number of providers around the country, that’s not where the savings are. The savings are in chronic care."

WASHINGTON – Obama administration officials on July 18 previewed impending regulations on how Medicare will bundle payments to hospitals.

"In the weeks ahead, we’ll be launching a series of different models that give providers the opportunity to receive bundled payment and keep the savings they generate," White House Deputy Chief of Staff Nancy-Ann DeParle said at the forum. "These models will cover care in hospitals and post-acute facilities," she said, adding that interested providers would be able to start using the models this year.

In 2013, the administration plans to start a second bundled payment program "that will help get us another step closer to the ultimate goal – higher quality health care at a lower cost," Ms. DeParle said.

The bundled payment program initially will target "high-impact areas," Ms. DeParle said without elaborating as to which areas. However, she said, the program would likely hew closely the principles delineated in a white paper issued by the Center for American Progress, a Washington-based think tank.

In that report, the Center recommended a bundling program that "focuses on high-volume conditions for which interventions are well established and supported by clinical guidelines, and for which, despite those guidelines, actual treatments (and related costs) vary substantially."

The Center also urged the government to design payment methods to promote collaboration among providers, by either offering a single bundled payment amount to be divided, or an alternative method that pays each individual involved in the episode "an amount that blends existing payment methods with financial incentives based on the combined performance of all providers involved in the episode.

Initial payments should reflect the current costs of care and reward efficient delivery. Providers should also be required to publicly report quality measures. Finally, said the Center, providers should inform beneficiaries about the program and give them the option to get care from providers who aren’t a part of the bundled pay program.

Dr. Richard Gilfillan, acting director of the Center for Medicare and Medicaid Innovation, one of the Centers for Medicare and Medicaid Services, said that the bundled payment program is "about care improvement."

Though he said he needed "to be a little vague here because I can’t make announcements about exactly what we’re going to do and when," he did provide some details on where the CMS is leaning.

The easiest program to initiate will be bundling payment retrospectively for an acute-care episode, especially bundling hospital and physician payments together in a gain-sharing arrangement. "That’s an attractive opportunity," said Dr. Gilfillan, who noted that the agency has a demonstration project of that concept in New York and New Jersey.

CMS is also looking at retrospectively bundling acute with post-acute care and for post-acute care only, he said.

Prospective bundled payment will be more difficult, said Dr. Gilfillan, former CEO of the Geisinger Health Plan in Danville, Penn. That is the insurance arm of the Geisinger Health System, which has been viewed as a model for bundled payments and accountable care organizations (ACOs).

CMS has multiple demonstration projects bundling physician and hospital pay for an acute episode. Noting that the CMS has a system in place to execute this concept, he said, "We’re interested in seeing more of that."

The agency is not set up for an acute plus post-acute episode prospective payment, and is even less prepared for post-acute prospective payment.

Down the road, the CMS will look at chronic care bundled payment, Dr. Gilfillan said.

The agency initially will build on what it has already established. And, he said, the CMS is "going to start small initially but build for scaling."

He said the bundled payment initiative will have other positive effects. "We think it’s going to engage people who may not be ready to engage in ACOs," and that it could possibly "form the framework for ACOs."

Francois de Brantes, executive director of the Health Care Incentives Improvement Institute (HCI3), told forum attendees that the bundled payment program may "help in accelerating that transformation" to collaborative care that the ACO model envisions. HCI3 is involved in several private sector efforts to improve quality of care and bundle payments.

But he said, "while hospital-based episodes are appealing because you’re dealing with a relatively reduced number of providers around the country, that’s not where the savings are. The savings are in chronic care."

WASHINGTON – Obama administration officials on July 18 previewed impending regulations on how Medicare will bundle payments to hospitals.

"In the weeks ahead, we’ll be launching a series of different models that give providers the opportunity to receive bundled payment and keep the savings they generate," White House Deputy Chief of Staff Nancy-Ann DeParle said at the forum. "These models will cover care in hospitals and post-acute facilities," she said, adding that interested providers would be able to start using the models this year.

In 2013, the administration plans to start a second bundled payment program "that will help get us another step closer to the ultimate goal – higher quality health care at a lower cost," Ms. DeParle said.

The bundled payment program initially will target "high-impact areas," Ms. DeParle said without elaborating as to which areas. However, she said, the program would likely hew closely the principles delineated in a white paper issued by the Center for American Progress, a Washington-based think tank.

In that report, the Center recommended a bundling program that "focuses on high-volume conditions for which interventions are well established and supported by clinical guidelines, and for which, despite those guidelines, actual treatments (and related costs) vary substantially."

The Center also urged the government to design payment methods to promote collaboration among providers, by either offering a single bundled payment amount to be divided, or an alternative method that pays each individual involved in the episode "an amount that blends existing payment methods with financial incentives based on the combined performance of all providers involved in the episode.

Initial payments should reflect the current costs of care and reward efficient delivery. Providers should also be required to publicly report quality measures. Finally, said the Center, providers should inform beneficiaries about the program and give them the option to get care from providers who aren’t a part of the bundled pay program.

Dr. Richard Gilfillan, acting director of the Center for Medicare and Medicaid Innovation, one of the Centers for Medicare and Medicaid Services, said that the bundled payment program is "about care improvement."

Though he said he needed "to be a little vague here because I can’t make announcements about exactly what we’re going to do and when," he did provide some details on where the CMS is leaning.

The easiest program to initiate will be bundling payment retrospectively for an acute-care episode, especially bundling hospital and physician payments together in a gain-sharing arrangement. "That’s an attractive opportunity," said Dr. Gilfillan, who noted that the agency has a demonstration project of that concept in New York and New Jersey.

CMS is also looking at retrospectively bundling acute with post-acute care and for post-acute care only, he said.

Prospective bundled payment will be more difficult, said Dr. Gilfillan, former CEO of the Geisinger Health Plan in Danville, Penn. That is the insurance arm of the Geisinger Health System, which has been viewed as a model for bundled payments and accountable care organizations (ACOs).

CMS has multiple demonstration projects bundling physician and hospital pay for an acute episode. Noting that the CMS has a system in place to execute this concept, he said, "We’re interested in seeing more of that."

The agency is not set up for an acute plus post-acute episode prospective payment, and is even less prepared for post-acute prospective payment.

Down the road, the CMS will look at chronic care bundled payment, Dr. Gilfillan said.

The agency initially will build on what it has already established. And, he said, the CMS is "going to start small initially but build for scaling."

He said the bundled payment initiative will have other positive effects. "We think it’s going to engage people who may not be ready to engage in ACOs," and that it could possibly "form the framework for ACOs."

Francois de Brantes, executive director of the Health Care Incentives Improvement Institute (HCI3), told forum attendees that the bundled payment program may "help in accelerating that transformation" to collaborative care that the ACO model envisions. HCI3 is involved in several private sector efforts to improve quality of care and bundle payments.

But he said, "while hospital-based episodes are appealing because you’re dealing with a relatively reduced number of providers around the country, that’s not where the savings are. The savings are in chronic care."

As expected, the Centers for Medicare and Medicaid Services proposed that physician fees for 2012 would be reduced by 29.5%. The proposed rule was released in the Federal Register on July 1.

The reduction is required by the Sustainable Growth Rate (SGR) formula that was included as part of the Balanced Budget Act of 1997. But Dr. Donald M. Berwick, CMS administrator, said in a statement that the agency is hoping to find a way to avoid the statutory decrease.

"This payment cut would have serious consequences and we cannot and will not allow it to happen," according to Dr. Berwick.

"We need a permanent SGR fix to solve this problem once and for all.

"That’s why the president’s budget and his fiscal framework call for averting these cuts and why we are determined to pass and implement a permanent and sustainable fix," he added.

The reductions could even be deeper for some specialties – especially for radiation oncology and diagnostic imaging – based on the impact of the Physician Practice Information Survey. The changes would reflect the third year of a 4-year transition to new practice expense relative value units.

And more payment changes may be looming. The CMS said in a statement that it is proposing to continue its efforts to identify what it calls "potentially misvalued codes."

As part of those efforts, it will be taking a look at all evaluation and management (E/M) codes to determine if they are undervalued. The agency also proposes to examine the highest non–E/M expenditure codes for each specialty to see if they are overvalued.

The agency said that the reviews will improve payment accuracy, in particular ensuring that primary care services are appropriately reimbursed. It’s the first time the agency has looked across all specialties, according to the CMS.

"We believe strong efforts are needed to evaluate Medicare’s fee schedule to ensure that it is paying accurately and ensuring that Medicare beneficiaries continue to have access to vital services, such as primary care services," Jonathan Blum, director of the Center for Medicare, said in a statement.

Diagnostic imaging has been a target for Medicare, and it is again in this proposal. The agency wants to extend the multiple procedure payment reduction (MPPR) policy to the professional component of advanced imaging services, which includes computed tomography (CT) scans, MRI, and ultrasound. The agency said the reduction would affect about 100 types of services. It is also the first time that the CMS has taken aim at the professional component of these services. That component would be reduced by 50% for subsequent procedures furnished to the same patient, on the same day, in the same session, resulting in an estimated $200 million in savings, according to the CMS.

For the first time, the agency is proposing quality and cost measures to be used in setting incentive payments for physicians who provide higher quality and more efficient care. That lays the groundwork for 2015, when the Affordable Care Act requires the CMS to begin making payment adjustments for certain physicians and physician groups.

The requirement is scheduled to go into effect for all physicians in 2017. The agency is proposing to use 2013 as the initial performance year.

In other issues addressed by the proposed rule, CMS seeks to add smoking cessation to the list of services that can be provided through telehealth. In the future, new services would be examined according to the clinical benefit they provide rather than on whether they are equivalent to a corresponding in-person service.

Finally, the CMS proposed some changes to the Physician Quality Reporting System, the ePrescribing Incentive Program, and the Electronic Health Records Incentive Program. The agency, for instance, is expanding the ways physicians can qualify for incentive payments under the meaningful use criteria.

Comments to the proposed rule can be submitted until Aug. 30 at http://www.regulations.gov; a final rule is expected to be released by Nov. 1.n

As expected, the Centers for Medicare and Medicaid Services proposed that physician fees for 2012 would be reduced by 29.5%. The proposed rule was released in the Federal Register on July 1.

The reduction is required by the Sustainable Growth Rate (SGR) formula that was included as part of the Balanced Budget Act of 1997. But Dr. Donald M. Berwick, CMS administrator, said in a statement that the agency is hoping to find a way to avoid the statutory decrease.

"This payment cut would have serious consequences and we cannot and will not allow it to happen," according to Dr. Berwick.

"We need a permanent SGR fix to solve this problem once and for all.

"That’s why the president’s budget and his fiscal framework call for averting these cuts and why we are determined to pass and implement a permanent and sustainable fix," he added.

The reductions could even be deeper for some specialties – especially for radiation oncology and diagnostic imaging – based on the impact of the Physician Practice Information Survey. The changes would reflect the third year of a 4-year transition to new practice expense relative value units.

And more payment changes may be looming. The CMS said in a statement that it is proposing to continue its efforts to identify what it calls "potentially misvalued codes."

As part of those efforts, it will be taking a look at all evaluation and management (E/M) codes to determine if they are undervalued. The agency also proposes to examine the highest non–E/M expenditure codes for each specialty to see if they are overvalued.

The agency said that the reviews will improve payment accuracy, in particular ensuring that primary care services are appropriately reimbursed. It’s the first time the agency has looked across all specialties, according to the CMS.

"We believe strong efforts are needed to evaluate Medicare’s fee schedule to ensure that it is paying accurately and ensuring that Medicare beneficiaries continue to have access to vital services, such as primary care services," Jonathan Blum, director of the Center for Medicare, said in a statement.

Diagnostic imaging has been a target for Medicare, and it is again in this proposal. The agency wants to extend the multiple procedure payment reduction (MPPR) policy to the professional component of advanced imaging services, which includes computed tomography (CT) scans, MRI, and ultrasound. The agency said the reduction would affect about 100 types of services. It is also the first time that the CMS has taken aim at the professional component of these services. That component would be reduced by 50% for subsequent procedures furnished to the same patient, on the same day, in the same session, resulting in an estimated $200 million in savings, according to the CMS.

For the first time, the agency is proposing quality and cost measures to be used in setting incentive payments for physicians who provide higher quality and more efficient care. That lays the groundwork for 2015, when the Affordable Care Act requires the CMS to begin making payment adjustments for certain physicians and physician groups.

The requirement is scheduled to go into effect for all physicians in 2017. The agency is proposing to use 2013 as the initial performance year.

In other issues addressed by the proposed rule, CMS seeks to add smoking cessation to the list of services that can be provided through telehealth. In the future, new services would be examined according to the clinical benefit they provide rather than on whether they are equivalent to a corresponding in-person service.

Finally, the CMS proposed some changes to the Physician Quality Reporting System, the ePrescribing Incentive Program, and the Electronic Health Records Incentive Program. The agency, for instance, is expanding the ways physicians can qualify for incentive payments under the meaningful use criteria.

Comments to the proposed rule can be submitted until Aug. 30 at http://www.regulations.gov; a final rule is expected to be released by Nov. 1.n

As expected, the Centers for Medicare and Medicaid Services proposed that physician fees for 2012 would be reduced by 29.5%. The proposed rule was released in the Federal Register on July 1.

The reduction is required by the Sustainable Growth Rate (SGR) formula that was included as part of the Balanced Budget Act of 1997. But Dr. Donald M. Berwick, CMS administrator, said in a statement that the agency is hoping to find a way to avoid the statutory decrease.

"This payment cut would have serious consequences and we cannot and will not allow it to happen," according to Dr. Berwick.

"We need a permanent SGR fix to solve this problem once and for all.

"That’s why the president’s budget and his fiscal framework call for averting these cuts and why we are determined to pass and implement a permanent and sustainable fix," he added.

The reductions could even be deeper for some specialties – especially for radiation oncology and diagnostic imaging – based on the impact of the Physician Practice Information Survey. The changes would reflect the third year of a 4-year transition to new practice expense relative value units.

And more payment changes may be looming. The CMS said in a statement that it is proposing to continue its efforts to identify what it calls "potentially misvalued codes."

As part of those efforts, it will be taking a look at all evaluation and management (E/M) codes to determine if they are undervalued. The agency also proposes to examine the highest non–E/M expenditure codes for each specialty to see if they are overvalued.

The agency said that the reviews will improve payment accuracy, in particular ensuring that primary care services are appropriately reimbursed. It’s the first time the agency has looked across all specialties, according to the CMS.

"We believe strong efforts are needed to evaluate Medicare’s fee schedule to ensure that it is paying accurately and ensuring that Medicare beneficiaries continue to have access to vital services, such as primary care services," Jonathan Blum, director of the Center for Medicare, said in a statement.

Diagnostic imaging has been a target for Medicare, and it is again in this proposal. The agency wants to extend the multiple procedure payment reduction (MPPR) policy to the professional component of advanced imaging services, which includes computed tomography (CT) scans, MRI, and ultrasound. The agency said the reduction would affect about 100 types of services. It is also the first time that the CMS has taken aim at the professional component of these services. That component would be reduced by 50% for subsequent procedures furnished to the same patient, on the same day, in the same session, resulting in an estimated $200 million in savings, according to the CMS.

For the first time, the agency is proposing quality and cost measures to be used in setting incentive payments for physicians who provide higher quality and more efficient care. That lays the groundwork for 2015, when the Affordable Care Act requires the CMS to begin making payment adjustments for certain physicians and physician groups.

The requirement is scheduled to go into effect for all physicians in 2017. The agency is proposing to use 2013 as the initial performance year.

In other issues addressed by the proposed rule, CMS seeks to add smoking cessation to the list of services that can be provided through telehealth. In the future, new services would be examined according to the clinical benefit they provide rather than on whether they are equivalent to a corresponding in-person service.

Finally, the CMS proposed some changes to the Physician Quality Reporting System, the ePrescribing Incentive Program, and the Electronic Health Records Incentive Program. The agency, for instance, is expanding the ways physicians can qualify for incentive payments under the meaningful use criteria.

Comments to the proposed rule can be submitted until Aug. 30 at http://www.regulations.gov; a final rule is expected to be released by Nov. 1.n

The persistent shortages of several medications, especially injectable and infusion products, are now affecting virtually every hospital department, according to data released July 12.

The American Hospital Association (AHA) and the American Society of Health System Pharmacists (ASHP) surveyed their memberships and found that 99.5% of hospitals had experienced one or more drug shortages in the last 6 months. Most hospitals reported delaying treatment or rationing certain products, and almost all said that the shortages have led to increased drug costs.

This is not the first time the shortages have been reported to be a major problem. But it appears from the new data that shortages have grown from affecting mostly oncology departments to affecting the majority of clinical care areas at the hospital.

The AHA survey included responses from 820 hospitals, collected during June 2011. Of all respondents, 90%-95% said that within the last 6 months they had experienced shortages of medications for the following clinical uses: surgery and anesthesia, emergency care, cardiovascular, gastrointestinal/nutrition, and pain management. Shortages were also noted in infectious diseases, oncology, neurology, endocrinology, obstetrics/gynecology, allergy, and psychiatry.

Three-quarters of hospitals said they rarely or never received advance notice of the shortages.

Strategies to deal with the shortages varied. The vast majority of hospitals reported that they purchased a more expensive alternative or bought excess inventory. Three-quarters of respondents either bought a more expensive therapeutic alternative or product from a direct manufacturer.

In a separate study published online July 12 in the American Journal of Health-System Pharmacists, researchers from the University of Michigan and the ASHP reported that the number of shortages in 2010 (211) was the highest ever recorded in a single year . The researchers surveyed ASHP members about the impact of 30 recent shortages; 353 pharmacists responded.

Overall, pharmacists spent about 9 hours a week managing shortages, with an estimated annual labor cost of $216 million. Shortages seemed to hit bigger hospitals harder. When asked if drug shortages created an increased burden, 97% of respondents agreed or strongly agreed; 93% said shortages increased costs, and 55% said shortages compromised care (Am. J. Health-Syst. Pharm. 2011;68:e13-e21 [doi:10.2146/ajhp110210]).

"Our results confirm what prior surveys have shown: Pharmacy directors believe that the burden of drug shortages continues to increase and that drug shortages have changed clinical practice and compromised patient care," the investigators wrote. The investigators reported no conflicts of interest.

The shortage problem is attracting more attention in Congress. In February, Sen. Amy Klobuchar (D-Minn.) introduced the Preserving Access to Life-Saving Medications Act (S. 296), which would give the Food and Drug Administration the authority to require early notification from pharmaceutical companies when a shortage appears to be imminent. At press time, the bill had 11 cosponsors.

Rep. Diana DeGette (D-Col.) and Rep. Tom Rooney (R-Fla.) introduced the bill in the House in mid-July. "The early warning system this bill creates represents an immediate safeguard to help prevent sudden shortages of these life-saving medications," Rep. DeGette said in a statement.

The persistent shortages of several medications, especially injectable and infusion products, are now affecting virtually every hospital department, according to data released July 12.

The American Hospital Association (AHA) and the American Society of Health System Pharmacists (ASHP) surveyed their memberships and found that 99.5% of hospitals had experienced one or more drug shortages in the last 6 months. Most hospitals reported delaying treatment or rationing certain products, and almost all said that the shortages have led to increased drug costs.

This is not the first time the shortages have been reported to be a major problem. But it appears from the new data that shortages have grown from affecting mostly oncology departments to affecting the majority of clinical care areas at the hospital.

The AHA survey included responses from 820 hospitals, collected during June 2011. Of all respondents, 90%-95% said that within the last 6 months they had experienced shortages of medications for the following clinical uses: surgery and anesthesia, emergency care, cardiovascular, gastrointestinal/nutrition, and pain management. Shortages were also noted in infectious diseases, oncology, neurology, endocrinology, obstetrics/gynecology, allergy, and psychiatry.

Three-quarters of hospitals said they rarely or never received advance notice of the shortages.

Strategies to deal with the shortages varied. The vast majority of hospitals reported that they purchased a more expensive alternative or bought excess inventory. Three-quarters of respondents either bought a more expensive therapeutic alternative or product from a direct manufacturer.

In a separate study published online July 12 in the American Journal of Health-System Pharmacists, researchers from the University of Michigan and the ASHP reported that the number of shortages in 2010 (211) was the highest ever recorded in a single year . The researchers surveyed ASHP members about the impact of 30 recent shortages; 353 pharmacists responded.

Overall, pharmacists spent about 9 hours a week managing shortages, with an estimated annual labor cost of $216 million. Shortages seemed to hit bigger hospitals harder. When asked if drug shortages created an increased burden, 97% of respondents agreed or strongly agreed; 93% said shortages increased costs, and 55% said shortages compromised care (Am. J. Health-Syst. Pharm. 2011;68:e13-e21 [doi:10.2146/ajhp110210]).

"Our results confirm what prior surveys have shown: Pharmacy directors believe that the burden of drug shortages continues to increase and that drug shortages have changed clinical practice and compromised patient care," the investigators wrote. The investigators reported no conflicts of interest.

The shortage problem is attracting more attention in Congress. In February, Sen. Amy Klobuchar (D-Minn.) introduced the Preserving Access to Life-Saving Medications Act (S. 296), which would give the Food and Drug Administration the authority to require early notification from pharmaceutical companies when a shortage appears to be imminent. At press time, the bill had 11 cosponsors.

Rep. Diana DeGette (D-Col.) and Rep. Tom Rooney (R-Fla.) introduced the bill in the House in mid-July. "The early warning system this bill creates represents an immediate safeguard to help prevent sudden shortages of these life-saving medications," Rep. DeGette said in a statement.

The persistent shortages of several medications, especially injectable and infusion products, are now affecting virtually every hospital department, according to data released July 12.

The American Hospital Association (AHA) and the American Society of Health System Pharmacists (ASHP) surveyed their memberships and found that 99.5% of hospitals had experienced one or more drug shortages in the last 6 months. Most hospitals reported delaying treatment or rationing certain products, and almost all said that the shortages have led to increased drug costs.

This is not the first time the shortages have been reported to be a major problem. But it appears from the new data that shortages have grown from affecting mostly oncology departments to affecting the majority of clinical care areas at the hospital.

The AHA survey included responses from 820 hospitals, collected during June 2011. Of all respondents, 90%-95% said that within the last 6 months they had experienced shortages of medications for the following clinical uses: surgery and anesthesia, emergency care, cardiovascular, gastrointestinal/nutrition, and pain management. Shortages were also noted in infectious diseases, oncology, neurology, endocrinology, obstetrics/gynecology, allergy, and psychiatry.

Three-quarters of hospitals said they rarely or never received advance notice of the shortages.

Strategies to deal with the shortages varied. The vast majority of hospitals reported that they purchased a more expensive alternative or bought excess inventory. Three-quarters of respondents either bought a more expensive therapeutic alternative or product from a direct manufacturer.

In a separate study published online July 12 in the American Journal of Health-System Pharmacists, researchers from the University of Michigan and the ASHP reported that the number of shortages in 2010 (211) was the highest ever recorded in a single year . The researchers surveyed ASHP members about the impact of 30 recent shortages; 353 pharmacists responded.

Overall, pharmacists spent about 9 hours a week managing shortages, with an estimated annual labor cost of $216 million. Shortages seemed to hit bigger hospitals harder. When asked if drug shortages created an increased burden, 97% of respondents agreed or strongly agreed; 93% said shortages increased costs, and 55% said shortages compromised care (Am. J. Health-Syst. Pharm. 2011;68:e13-e21 [doi:10.2146/ajhp110210]).

"Our results confirm what prior surveys have shown: Pharmacy directors believe that the burden of drug shortages continues to increase and that drug shortages have changed clinical practice and compromised patient care," the investigators wrote. The investigators reported no conflicts of interest.

The shortage problem is attracting more attention in Congress. In February, Sen. Amy Klobuchar (D-Minn.) introduced the Preserving Access to Life-Saving Medications Act (S. 296), which would give the Food and Drug Administration the authority to require early notification from pharmaceutical companies when a shortage appears to be imminent. At press time, the bill had 11 cosponsors.

Rep. Diana DeGette (D-Col.) and Rep. Tom Rooney (R-Fla.) introduced the bill in the House in mid-July. "The early warning system this bill creates represents an immediate safeguard to help prevent sudden shortages of these life-saving medications," Rep. DeGette said in a statement.

The Centers for Medicare and Medicaid Services (CMS) has determined that the evidence supports the conclusion that the prostate cancer vaccine sipuleucel-T, better known as Provenge, is an effective therapy and should be covered for Medicare beneficiaries.

The national coverage decision in favor of the autologous cellular therapy is an important one for sipuleucel-T’s maker, Dendreon, and for patients. The CMS said that prostate cancer is the most common noncutaneous cancer in American men, leading to some 192,000 new cases each year and 27,000 deaths.

But the decision is also controversial. The estimated cost per three-dose, 4-week treatment is $93,000, according to the Santa Monica, Calif.-based Prostate Cancer Foundation, which funded some of the investigators who were involved in the pivotal phase III approval study of Provenge. That study, published in the New England Journal of Medicine, estimated that sipuleucel-T therapy resulted in a median 4 months’ additional overall survival (N. Engl. J. Med. 2010; 363:411-422).

Based on that trial and two others, the Food and Drug Administration (FDA) approved sipuleucel-T in April 2010 for castration-resistant, metastatic prostate cancer. Subsequently, a Medicare Evidence Development & Coverage Advisory Committee met in November 2010 to consider whether the federal health program should cover sipuleucel-T. The panelists expressed middling confidence that the immunotherapy was safe and effective for its labeled indication, but a low level of confidence in general; the panel found intermediate confidence on the evidence for labeled use, and very low confidence on off-label use.

When the CMS issued its initial proposal in June 2010, it received 657 comments. In all, 94% were in favor of coverage. The agency said that only 67 (10%) were submitted by physicians, 23 (3%) by other health care providers, 55 (8%) by patients, 44 (8%) by professional groups or advocacy organizations, 18 (3%) by researchers or investigators, 10 (1%) by attorneys, and 15 (2.3%) by industry representatives or investors.

The vast majority, 455 (69%), were submitted by the general public. The CMS noted the unusual aspect of the comments; some were "submitted via a legal representative to preserve anonymity in light of alleged death threats. Others alleged that there were efforts afoot to manipulate Dendreon’s stock price. Some commenters assumed false identities. One – J. Mengala MD/PHD/VDRL/STD/AWOL – appeared to be patently phony, with VDRL referring to Venereal Disease Research Laboratory, a test for syphilis; STD to sexually transmitted disease; and AWOL to away without leave. Added the agency, "We believe the commenter is referencing Josef Mengele, a notorious German physician noted for performing cruel experiments on concentration camp prisoners."

Because of these issues, the CMS said it was in doubt "about the evidentiary weight that may reasonably be assigned to certain of the public comments."

When it issued its proposed decision in March 2011, the agency received 590 comments, again with the vast majority in favor of coverage. And, once again, most were submitted by members of the general public.

After the FDA approval in 2010, Dendreon said it would most likely not be able to meet demand for the vaccine, due to manufacturing capacity issues. The day that the CMS announced its decision to cover the therapy, Dendreon issued a statement that it had recently received FDA approval of a manufacturing facility in Los Angeles, giving it expanded capacity.

Dendreon CEO Mitchell H. Gold said in the statement, "The increased capacity and positive National Coverage Decision by CMS in conjunction with the patient assistance programs will ensure patients who may benefit from treatment with Provenge have increased access to it."

The Centers for Medicare and Medicaid Services (CMS) has determined that the evidence supports the conclusion that the prostate cancer vaccine sipuleucel-T, better known as Provenge, is an effective therapy and should be covered for Medicare beneficiaries.

The national coverage decision in favor of the autologous cellular therapy is an important one for sipuleucel-T’s maker, Dendreon, and for patients. The CMS said that prostate cancer is the most common noncutaneous cancer in American men, leading to some 192,000 new cases each year and 27,000 deaths.

But the decision is also controversial. The estimated cost per three-dose, 4-week treatment is $93,000, according to the Santa Monica, Calif.-based Prostate Cancer Foundation, which funded some of the investigators who were involved in the pivotal phase III approval study of Provenge. That study, published in the New England Journal of Medicine, estimated that sipuleucel-T therapy resulted in a median 4 months’ additional overall survival (N. Engl. J. Med. 2010; 363:411-422).

Based on that trial and two others, the Food and Drug Administration (FDA) approved sipuleucel-T in April 2010 for castration-resistant, metastatic prostate cancer. Subsequently, a Medicare Evidence Development & Coverage Advisory Committee met in November 2010 to consider whether the federal health program should cover sipuleucel-T. The panelists expressed middling confidence that the immunotherapy was safe and effective for its labeled indication, but a low level of confidence in general; the panel found intermediate confidence on the evidence for labeled use, and very low confidence on off-label use.

When the CMS issued its initial proposal in June 2010, it received 657 comments. In all, 94% were in favor of coverage. The agency said that only 67 (10%) were submitted by physicians, 23 (3%) by other health care providers, 55 (8%) by patients, 44 (8%) by professional groups or advocacy organizations, 18 (3%) by researchers or investigators, 10 (1%) by attorneys, and 15 (2.3%) by industry representatives or investors.

The vast majority, 455 (69%), were submitted by the general public. The CMS noted the unusual aspect of the comments; some were "submitted via a legal representative to preserve anonymity in light of alleged death threats. Others alleged that there were efforts afoot to manipulate Dendreon’s stock price. Some commenters assumed false identities. One – J. Mengala MD/PHD/VDRL/STD/AWOL – appeared to be patently phony, with VDRL referring to Venereal Disease Research Laboratory, a test for syphilis; STD to sexually transmitted disease; and AWOL to away without leave. Added the agency, "We believe the commenter is referencing Josef Mengele, a notorious German physician noted for performing cruel experiments on concentration camp prisoners."

Because of these issues, the CMS said it was in doubt "about the evidentiary weight that may reasonably be assigned to certain of the public comments."

When it issued its proposed decision in March 2011, the agency received 590 comments, again with the vast majority in favor of coverage. And, once again, most were submitted by members of the general public.

After the FDA approval in 2010, Dendreon said it would most likely not be able to meet demand for the vaccine, due to manufacturing capacity issues. The day that the CMS announced its decision to cover the therapy, Dendreon issued a statement that it had recently received FDA approval of a manufacturing facility in Los Angeles, giving it expanded capacity.

Dendreon CEO Mitchell H. Gold said in the statement, "The increased capacity and positive National Coverage Decision by CMS in conjunction with the patient assistance programs will ensure patients who may benefit from treatment with Provenge have increased access to it."

The Centers for Medicare and Medicaid Services (CMS) has determined that the evidence supports the conclusion that the prostate cancer vaccine sipuleucel-T, better known as Provenge, is an effective therapy and should be covered for Medicare beneficiaries.

The national coverage decision in favor of the autologous cellular therapy is an important one for sipuleucel-T’s maker, Dendreon, and for patients. The CMS said that prostate cancer is the most common noncutaneous cancer in American men, leading to some 192,000 new cases each year and 27,000 deaths.

But the decision is also controversial. The estimated cost per three-dose, 4-week treatment is $93,000, according to the Santa Monica, Calif.-based Prostate Cancer Foundation, which funded some of the investigators who were involved in the pivotal phase III approval study of Provenge. That study, published in the New England Journal of Medicine, estimated that sipuleucel-T therapy resulted in a median 4 months’ additional overall survival (N. Engl. J. Med. 2010; 363:411-422).

Based on that trial and two others, the Food and Drug Administration (FDA) approved sipuleucel-T in April 2010 for castration-resistant, metastatic prostate cancer. Subsequently, a Medicare Evidence Development & Coverage Advisory Committee met in November 2010 to consider whether the federal health program should cover sipuleucel-T. The panelists expressed middling confidence that the immunotherapy was safe and effective for its labeled indication, but a low level of confidence in general; the panel found intermediate confidence on the evidence for labeled use, and very low confidence on off-label use.

When the CMS issued its initial proposal in June 2010, it received 657 comments. In all, 94% were in favor of coverage. The agency said that only 67 (10%) were submitted by physicians, 23 (3%) by other health care providers, 55 (8%) by patients, 44 (8%) by professional groups or advocacy organizations, 18 (3%) by researchers or investigators, 10 (1%) by attorneys, and 15 (2.3%) by industry representatives or investors.

The vast majority, 455 (69%), were submitted by the general public. The CMS noted the unusual aspect of the comments; some were "submitted via a legal representative to preserve anonymity in light of alleged death threats. Others alleged that there were efforts afoot to manipulate Dendreon’s stock price. Some commenters assumed false identities. One – J. Mengala MD/PHD/VDRL/STD/AWOL – appeared to be patently phony, with VDRL referring to Venereal Disease Research Laboratory, a test for syphilis; STD to sexually transmitted disease; and AWOL to away without leave. Added the agency, "We believe the commenter is referencing Josef Mengele, a notorious German physician noted for performing cruel experiments on concentration camp prisoners."

Because of these issues, the CMS said it was in doubt "about the evidentiary weight that may reasonably be assigned to certain of the public comments."

When it issued its proposed decision in March 2011, the agency received 590 comments, again with the vast majority in favor of coverage. And, once again, most were submitted by members of the general public.

After the FDA approval in 2010, Dendreon said it would most likely not be able to meet demand for the vaccine, due to manufacturing capacity issues. The day that the CMS announced its decision to cover the therapy, Dendreon issued a statement that it had recently received FDA approval of a manufacturing facility in Los Angeles, giving it expanded capacity.

Dendreon CEO Mitchell H. Gold said in the statement, "The increased capacity and positive National Coverage Decision by CMS in conjunction with the patient assistance programs will ensure patients who may benefit from treatment with Provenge have increased access to it."

CHICAGO – After 5 years of discussion and attempts at passage, the American Medical Association’s House of Delegates adopted a conflict of interest policy to help guide physicians on the ethics of receiving pharmaceutical or device company funding for continuing medical education.

The House was asked to approve a report on financial arrangements prepared by the AMA Council on Ethical and Judicial Affairs (CEJA). But because so many members continued to be divided on what the AMA policy should be, the Reference Committee on Amendments to Constitution and Bylaws recommended that delegates put off any formal action and refer the matter yet again, this time to the AMA Board of Trustees.

When the resolution to refer came to the House floor, the vote was close, with 48% of delegates wanting to put off any action, and 52% voting against referral. Delegates were then asked whether to adopt the CEJA report. The vote was less ambiguous, with 60% voting in favor of adoption.

The report was supported by primary care delegations and many state delegations. Dr. Lori J. Heim, board chair of the American Academy of Family Physicians, said on the House floor that the latest iteration of the report addressed her organization’s concerns and should be adopted.

"I hope we can deal with this today rather than refer it back," said Dr. Heim, a family physician and hospitalist in Laurinburg, N.C. "The CEJA has found a compromise that we can all live with."

Dr. William Golden, a delegate from the American College of Physicians, and a professor of medicine and public health at the University of Arkansas, Little Rock, said on the House floor that "version 5.0 is ready for distribution," and urged passage of the policy.

Several delegates said that although most specialty societies have conflict of interest policies, it was important for the AMA to have its own.

But some delegates from surgical societies said that passage of the policy might harm important relationships between surgeons and industry. The American College of Surgeons spoke against adoption of the policy.

In the report, the CEJA said it recognized that it could have looked more broadly at conflict of interest issues, but decided to focus on pharmaceutical, biotechnology, and medical device company sponsorship of continuing medical education.

"Narrowing our focus to CME allows us to explore the complex considerations at stake in a manageable context and to provide practical ethical guidance on issues that increasingly challenge physicians as professionals," according to the CEJA report.

The CEJA concluded that "physicians should strive to avoid financial relationships with industry."

Instead, physicians should "cultivate alternative sources of support, should design and conduct educational activities so as to reduce costs, and should insist that content developers and faculty members not have problematic ties with industry, to ensure independent, unbiased, high-quality educational programming that best meets physicians’ needs and is accessible and affordable for all practitioners," according to the report.

The report recognized that "it is not always feasible, or necessarily desirable, for professional education to disengage from industry completely." In the cases where industry funding could not be avoided, "vigorous efforts must be made to mitigate the potential influence of financial relationships."

CHICAGO – After 5 years of discussion and attempts at passage, the American Medical Association’s House of Delegates adopted a conflict of interest policy to help guide physicians on the ethics of receiving pharmaceutical or device company funding for continuing medical education.

The House was asked to approve a report on financial arrangements prepared by the AMA Council on Ethical and Judicial Affairs (CEJA). But because so many members continued to be divided on what the AMA policy should be, the Reference Committee on Amendments to Constitution and Bylaws recommended that delegates put off any formal action and refer the matter yet again, this time to the AMA Board of Trustees.

When the resolution to refer came to the House floor, the vote was close, with 48% of delegates wanting to put off any action, and 52% voting against referral. Delegates were then asked whether to adopt the CEJA report. The vote was less ambiguous, with 60% voting in favor of adoption.

The report was supported by primary care delegations and many state delegations. Dr. Lori J. Heim, board chair of the American Academy of Family Physicians, said on the House floor that the latest iteration of the report addressed her organization’s concerns and should be adopted.

"I hope we can deal with this today rather than refer it back," said Dr. Heim, a family physician and hospitalist in Laurinburg, N.C. "The CEJA has found a compromise that we can all live with."

Dr. William Golden, a delegate from the American College of Physicians, and a professor of medicine and public health at the University of Arkansas, Little Rock, said on the House floor that "version 5.0 is ready for distribution," and urged passage of the policy.

Several delegates said that although most specialty societies have conflict of interest policies, it was important for the AMA to have its own.

But some delegates from surgical societies said that passage of the policy might harm important relationships between surgeons and industry. The American College of Surgeons spoke against adoption of the policy.

In the report, the CEJA said it recognized that it could have looked more broadly at conflict of interest issues, but decided to focus on pharmaceutical, biotechnology, and medical device company sponsorship of continuing medical education.

"Narrowing our focus to CME allows us to explore the complex considerations at stake in a manageable context and to provide practical ethical guidance on issues that increasingly challenge physicians as professionals," according to the CEJA report.

The CEJA concluded that "physicians should strive to avoid financial relationships with industry."

Instead, physicians should "cultivate alternative sources of support, should design and conduct educational activities so as to reduce costs, and should insist that content developers and faculty members not have problematic ties with industry, to ensure independent, unbiased, high-quality educational programming that best meets physicians’ needs and is accessible and affordable for all practitioners," according to the report.

The report recognized that "it is not always feasible, or necessarily desirable, for professional education to disengage from industry completely." In the cases where industry funding could not be avoided, "vigorous efforts must be made to mitigate the potential influence of financial relationships."

CHICAGO – After 5 years of discussion and attempts at passage, the American Medical Association’s House of Delegates adopted a conflict of interest policy to help guide physicians on the ethics of receiving pharmaceutical or device company funding for continuing medical education.

The House was asked to approve a report on financial arrangements prepared by the AMA Council on Ethical and Judicial Affairs (CEJA). But because so many members continued to be divided on what the AMA policy should be, the Reference Committee on Amendments to Constitution and Bylaws recommended that delegates put off any formal action and refer the matter yet again, this time to the AMA Board of Trustees.

When the resolution to refer came to the House floor, the vote was close, with 48% of delegates wanting to put off any action, and 52% voting against referral. Delegates were then asked whether to adopt the CEJA report. The vote was less ambiguous, with 60% voting in favor of adoption.

The report was supported by primary care delegations and many state delegations. Dr. Lori J. Heim, board chair of the American Academy of Family Physicians, said on the House floor that the latest iteration of the report addressed her organization’s concerns and should be adopted.

"I hope we can deal with this today rather than refer it back," said Dr. Heim, a family physician and hospitalist in Laurinburg, N.C. "The CEJA has found a compromise that we can all live with."

Dr. William Golden, a delegate from the American College of Physicians, and a professor of medicine and public health at the University of Arkansas, Little Rock, said on the House floor that "version 5.0 is ready for distribution," and urged passage of the policy.

Several delegates said that although most specialty societies have conflict of interest policies, it was important for the AMA to have its own.

But some delegates from surgical societies said that passage of the policy might harm important relationships between surgeons and industry. The American College of Surgeons spoke against adoption of the policy.

In the report, the CEJA said it recognized that it could have looked more broadly at conflict of interest issues, but decided to focus on pharmaceutical, biotechnology, and medical device company sponsorship of continuing medical education.

"Narrowing our focus to CME allows us to explore the complex considerations at stake in a manageable context and to provide practical ethical guidance on issues that increasingly challenge physicians as professionals," according to the CEJA report.

The CEJA concluded that "physicians should strive to avoid financial relationships with industry."

Instead, physicians should "cultivate alternative sources of support, should design and conduct educational activities so as to reduce costs, and should insist that content developers and faculty members not have problematic ties with industry, to ensure independent, unbiased, high-quality educational programming that best meets physicians’ needs and is accessible and affordable for all practitioners," according to the report.

The report recognized that "it is not always feasible, or necessarily desirable, for professional education to disengage from industry completely." In the cases where industry funding could not be avoided, "vigorous efforts must be made to mitigate the potential influence of financial relationships."

CHICAGO – After 5 years of discussion and attempts at passage, the American Medical Association’s House of Delegates adopted a conflict of interest policy to help guide physicians on the ethics of receiving pharmaceutical or device company funding for continuing medical education.

The House was asked to approve a report on financial arrangements prepared by the AMA Council on Ethical and Judicial Affairs (CEJA). But because so many members continued to be divided on what the AMA policy should be, the Reference Committee on Amendments to Constitution and Bylaws recommended that delegates put off any formal action and refer the matter yet again, this time to the AMA Board of Trustees.

When the resolution to refer came to the House floor, the vote was close, with 48% of delegates wanting to put off any action, and 52% voting against referral. Delegates were then asked whether to adopt the CEJA report. The vote was less ambiguous, with 60% voting in favor of adoption.

The report was supported by primary care delegations and many state delegations. Dr. Lori J. Heim, board chair of the American Academy of Family Physicians, said on the House floor that the latest iteration of the report addressed her organization’s concerns and should be adopted.

"I hope we can deal with this today rather than refer it back," said Dr. Heim, a family physician and hospitalist in Laurinburg, N.C. "The CEJA has found a compromise that we can all live with."

Dr. William Golden, a delegate from the American College of Physicians, and a professor of medicine and public health at the University of Arkansas, Little Rock, said on the House floor that "version 5.0 is ready for distribution," and urged passage of the policy.

Several delegates said that although most specialty societies have conflict of interest policies, it was important for the AMA to have its own.

But some delegates from surgical societies said that passage of the policy might harm important relationships between surgeons and industry. The American College of Surgeons spoke against adoption of the policy.

In the report, the CEJA said it recognized that it could have looked more broadly at conflict of interest issues, but decided to focus on pharmaceutical, biotechnology, and medical device company sponsorship of continuing medical education.

"Narrowing our focus to CME allows us to explore the complex considerations at stake in a manageable context and to provide practical ethical guidance on issues that increasingly challenge physicians as professionals," according to the CEJA report.

The CEJA concluded that "physicians should strive to avoid financial relationships with industry."

Instead, physicians should "cultivate alternative sources of support, should design and conduct educational activities so as to reduce costs, and should insist that content developers and faculty members not have problematic ties with industry, to ensure independent, unbiased, high-quality educational programming that best meets physicians’ needs and is accessible and affordable for all practitioners," according to the report.

The report recognized that "it is not always feasible, or necessarily desirable, for professional education to disengage from industry completely." In the cases where industry funding could not be avoided, "vigorous efforts must be made to mitigate the potential influence of financial relationships."

CHICAGO – After 5 years of discussion and attempts at passage, the American Medical Association’s House of Delegates adopted a conflict of interest policy to help guide physicians on the ethics of receiving pharmaceutical or device company funding for continuing medical education.

The House was asked to approve a report on financial arrangements prepared by the AMA Council on Ethical and Judicial Affairs (CEJA). But because so many members continued to be divided on what the AMA policy should be, the Reference Committee on Amendments to Constitution and Bylaws recommended that delegates put off any formal action and refer the matter yet again, this time to the AMA Board of Trustees.

When the resolution to refer came to the House floor, the vote was close, with 48% of delegates wanting to put off any action, and 52% voting against referral. Delegates were then asked whether to adopt the CEJA report. The vote was less ambiguous, with 60% voting in favor of adoption.

The report was supported by primary care delegations and many state delegations. Dr. Lori J. Heim, board chair of the American Academy of Family Physicians, said on the House floor that the latest iteration of the report addressed her organization’s concerns and should be adopted.

"I hope we can deal with this today rather than refer it back," said Dr. Heim, a family physician and hospitalist in Laurinburg, N.C. "The CEJA has found a compromise that we can all live with."

Dr. William Golden, a delegate from the American College of Physicians, and a professor of medicine and public health at the University of Arkansas, Little Rock, said on the House floor that "version 5.0 is ready for distribution," and urged passage of the policy.

Several delegates said that although most specialty societies have conflict of interest policies, it was important for the AMA to have its own.

But some delegates from surgical societies said that passage of the policy might harm important relationships between surgeons and industry. The American College of Surgeons spoke against adoption of the policy.

In the report, the CEJA said it recognized that it could have looked more broadly at conflict of interest issues, but decided to focus on pharmaceutical, biotechnology, and medical device company sponsorship of continuing medical education.

"Narrowing our focus to CME allows us to explore the complex considerations at stake in a manageable context and to provide practical ethical guidance on issues that increasingly challenge physicians as professionals," according to the CEJA report.

The CEJA concluded that "physicians should strive to avoid financial relationships with industry."

Instead, physicians should "cultivate alternative sources of support, should design and conduct educational activities so as to reduce costs, and should insist that content developers and faculty members not have problematic ties with industry, to ensure independent, unbiased, high-quality educational programming that best meets physicians’ needs and is accessible and affordable for all practitioners," according to the report.

The report recognized that "it is not always feasible, or necessarily desirable, for professional education to disengage from industry completely." In the cases where industry funding could not be avoided, "vigorous efforts must be made to mitigate the potential influence of financial relationships."

CHICAGO – After 5 years of discussion and attempts at passage, the American Medical Association’s House of Delegates adopted a conflict of interest policy to help guide physicians on the ethics of receiving pharmaceutical or device company funding for continuing medical education.

The House was asked to approve a report on financial arrangements prepared by the AMA Council on Ethical and Judicial Affairs (CEJA). But because so many members continued to be divided on what the AMA policy should be, the Reference Committee on Amendments to Constitution and Bylaws recommended that delegates put off any formal action and refer the matter yet again, this time to the AMA Board of Trustees.

When the resolution to refer came to the House floor, the vote was close, with 48% of delegates wanting to put off any action, and 52% voting against referral. Delegates were then asked whether to adopt the CEJA report. The vote was less ambiguous, with 60% voting in favor of adoption.

The report was supported by primary care delegations and many state delegations. Dr. Lori J. Heim, board chair of the American Academy of Family Physicians, said on the House floor that the latest iteration of the report addressed her organization’s concerns and should be adopted.

"I hope we can deal with this today rather than refer it back," said Dr. Heim, a family physician and hospitalist in Laurinburg, N.C. "The CEJA has found a compromise that we can all live with."

Dr. William Golden, a delegate from the American College of Physicians, and a professor of medicine and public health at the University of Arkansas, Little Rock, said on the House floor that "version 5.0 is ready for distribution," and urged passage of the policy.

Several delegates said that although most specialty societies have conflict of interest policies, it was important for the AMA to have its own.

But some delegates from surgical societies said that passage of the policy might harm important relationships between surgeons and industry. The American College of Surgeons spoke against adoption of the policy.

In the report, the CEJA said it recognized that it could have looked more broadly at conflict of interest issues, but decided to focus on pharmaceutical, biotechnology, and medical device company sponsorship of continuing medical education.

"Narrowing our focus to CME allows us to explore the complex considerations at stake in a manageable context and to provide practical ethical guidance on issues that increasingly challenge physicians as professionals," according to the CEJA report.

The CEJA concluded that "physicians should strive to avoid financial relationships with industry."

Instead, physicians should "cultivate alternative sources of support, should design and conduct educational activities so as to reduce costs, and should insist that content developers and faculty members not have problematic ties with industry, to ensure independent, unbiased, high-quality educational programming that best meets physicians’ needs and is accessible and affordable for all practitioners," according to the report.

The report recognized that "it is not always feasible, or necessarily desirable, for professional education to disengage from industry completely." In the cases where industry funding could not be avoided, "vigorous efforts must be made to mitigate the potential influence of financial relationships."

CHICAGO – After 5 years of discussion and attempts at passage, the American Medical Association’s House of Delegates adopted a conflict of interest policy to help guide physicians on the ethics of receiving pharmaceutical or device company funding for continuing medical education.

The House was asked to approve a report on financial arrangements prepared by the AMA Council on Ethical and Judicial Affairs (CEJA). But because so many members continued to be divided on what the AMA policy should be, the Reference Committee on Amendments to Constitution and Bylaws recommended that delegates put off any formal action and refer the matter yet again, this time to the AMA Board of Trustees.

When the resolution to refer came to the House floor, the vote was close, with 48% of delegates wanting to put off any action, and 52% voting against referral. Delegates were then asked whether to adopt the CEJA report. The vote was less ambiguous, with 60% voting in favor of adoption.

The report was supported by primary care delegations and many state delegations. Dr. Lori J. Heim, board chair of the American Academy of Family Physicians, said on the House floor that the latest iteration of the report addressed her organization’s concerns and should be adopted.

"I hope we can deal with this today rather than refer it back," said Dr. Heim, a family physician and hospitalist in Laurinburg, N.C. "The CEJA has found a compromise that we can all live with."

Dr. William Golden, a delegate from the American College of Physicians, and a professor of medicine and public health at the University of Arkansas, Little Rock, said on the House floor that "version 5.0 is ready for distribution," and urged passage of the policy.

Several delegates said that although most specialty societies have conflict of interest policies, it was important for the AMA to have its own.

But some delegates from surgical societies said that passage of the policy might harm important relationships between surgeons and industry. The American College of Surgeons spoke against adoption of the policy.

In the report, the CEJA said it recognized that it could have looked more broadly at conflict of interest issues, but decided to focus on pharmaceutical, biotechnology, and medical device company sponsorship of continuing medical education.

"Narrowing our focus to CME allows us to explore the complex considerations at stake in a manageable context and to provide practical ethical guidance on issues that increasingly challenge physicians as professionals," according to the CEJA report.

The CEJA concluded that "physicians should strive to avoid financial relationships with industry."

Instead, physicians should "cultivate alternative sources of support, should design and conduct educational activities so as to reduce costs, and should insist that content developers and faculty members not have problematic ties with industry, to ensure independent, unbiased, high-quality educational programming that best meets physicians’ needs and is accessible and affordable for all practitioners," according to the report.

The report recognized that "it is not always feasible, or necessarily desirable, for professional education to disengage from industry completely." In the cases where industry funding could not be avoided, "vigorous efforts must be made to mitigate the potential influence of financial relationships."

CHICAGO – After 5 years of discussion and attempts at passage, the American Medical Association’s House of Delegates adopted a conflict of interest policy to help guide physicians on the ethics of receiving pharmaceutical or device company funding for continuing medical education.

The House was asked to approve a report on financial arrangements prepared by the AMA Council on Ethical and Judicial Affairs (CEJA). But because so many members continued to be divided on what the AMA policy should be, the Reference Committee on Amendments to Constitution and Bylaws recommended that delegates put off any formal action and refer the matter yet again, this time to the AMA Board of Trustees.

When the resolution to refer came to the House floor, the vote was close, with 48% of delegates wanting to put off any action, and 52% voting against referral. Delegates were then asked whether to adopt the CEJA report. The vote was less ambiguous, with 60% voting in favor of adoption.

The report was supported by primary care delegations and many state delegations. Dr. Lori J. Heim, board chair of the American Academy of Family Physicians, said on the House floor that the latest iteration of the report addressed her organization’s concerns and should be adopted.

"I hope we can deal with this today rather than refer it back," said Dr. Heim, a family physician and hospitalist in Laurinburg, N.C. "The CEJA has found a compromise that we can all live with."

Dr. William Golden, a delegate from the American College of Physicians, and a professor of medicine and public health at the University of Arkansas, Little Rock, said on the House floor that "version 5.0 is ready for distribution," and urged passage of the policy.

Several delegates said that although most specialty societies have conflict of interest policies, it was important for the AMA to have its own.

But some delegates from surgical societies said that passage of the policy might harm important relationships between surgeons and industry. The American College of Surgeons spoke against adoption of the policy.

In the report, the CEJA said it recognized that it could have looked more broadly at conflict of interest issues, but decided to focus on pharmaceutical, biotechnology, and medical device company sponsorship of continuing medical education.

"Narrowing our focus to CME allows us to explore the complex considerations at stake in a manageable context and to provide practical ethical guidance on issues that increasingly challenge physicians as professionals," according to the CEJA report.

The CEJA concluded that "physicians should strive to avoid financial relationships with industry."

Instead, physicians should "cultivate alternative sources of support, should design and conduct educational activities so as to reduce costs, and should insist that content developers and faculty members not have problematic ties with industry, to ensure independent, unbiased, high-quality educational programming that best meets physicians’ needs and is accessible and affordable for all practitioners," according to the report.

The report recognized that "it is not always feasible, or necessarily desirable, for professional education to disengage from industry completely." In the cases where industry funding could not be avoided, "vigorous efforts must be made to mitigate the potential influence of financial relationships."

CHICAGO – After 5 years of discussion and attempts at passage, the American Medical Association’s House of Delegates adopted a conflict of interest policy to help guide physicians on the ethics of receiving pharmaceutical or device company funding for continuing medical education.

The House was asked to approve a report on financial arrangements prepared by the AMA Council on Ethical and Judicial Affairs (CEJA). But because so many members continued to be divided on what the AMA policy should be, the Reference Committee on Amendments to Constitution and Bylaws recommended that delegates put off any formal action and refer the matter yet again, this time to the AMA Board of Trustees.

When the resolution to refer came to the House floor, the vote was close, with 48% of delegates wanting to put off any action, and 52% voting against referral. Delegates were then asked whether to adopt the CEJA report. The vote was less ambiguous, with 60% voting in favor of adoption.

The report was supported by primary care delegations and many state delegations. Dr. Lori J. Heim, board chair of the American Academy of Family Physicians, said on the House floor that the latest iteration of the report addressed her organization’s concerns and should be adopted.

"I hope we can deal with this today rather than refer it back," said Dr. Heim, a family physician and hospitalist in Laurinburg, N.C. "The CEJA has found a compromise that we can all live with."

Dr. William Golden, a delegate from the American College of Physicians, and a professor of medicine and public health at the University of Arkansas, Little Rock, said on the House floor that "version 5.0 is ready for distribution," and urged passage of the policy.

Several delegates said that although most specialty societies have conflict of interest policies, it was important for the AMA to have its own.

But some delegates from surgical societies said that passage of the policy might harm important relationships between surgeons and industry. The American College of Surgeons spoke against adoption of the policy.

In the report, the CEJA said it recognized that it could have looked more broadly at conflict of interest issues, but decided to focus on pharmaceutical, biotechnology, and medical device company sponsorship of continuing medical education.

"Narrowing our focus to CME allows us to explore the complex considerations at stake in a manageable context and to provide practical ethical guidance on issues that increasingly challenge physicians as professionals," according to the CEJA report.

The CEJA concluded that "physicians should strive to avoid financial relationships with industry."

Instead, physicians should "cultivate alternative sources of support, should design and conduct educational activities so as to reduce costs, and should insist that content developers and faculty members not have problematic ties with industry, to ensure independent, unbiased, high-quality educational programming that best meets physicians’ needs and is accessible and affordable for all practitioners," according to the report.

The report recognized that "it is not always feasible, or necessarily desirable, for professional education to disengage from industry completely." In the cases where industry funding could not be avoided, "vigorous efforts must be made to mitigate the potential influence of financial relationships."