Mary Ellen Schneider

The Bush administration's budget proposal for fiscal 2008 could be bad news for physicians and hospitals.

The proposal, which was sent to Congress on Feb. 5, seeks about $600 billion in net outlays to finance the Centers for Medicare and Medicaid Services including Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), a $29.2 billion increase over projected 2007 levels. However, the budget also includes legislative proposals that would trim about $4.3 billion from the Medicare program for the fiscal year and $252 billion over 10 years.

In addition, it also calls for Medicaid reforms that would result in about $28 billion in savings in that program over 10 years.

The president's plan outlines a number of provider payment changes including: reducing the update factor for inpatient hospitals, outpatient hospitals, hospices, and ambulance services 0.65% each year starting in fiscal year 2008; freezing the update for skilled nursing facilities and inpatient rehabilitation facilities in 2008; freezing updates for home health agencies in 2008; and reducing the update for ambulatory surgical centers for 0.65% starting in 2010.

The proposed budget does not address payments to physicians under Medicare, calling into question whether physicians will get relief from a projected 5%–10% cut in Medicare reimbursement slated for January 2008. However, Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, said she has “no doubt” that proposals to address the sustainable growth rate formula—which is used to determine physician payments under Medicare—will be on the table for discussion with Congress.

The reductions in traditional entitlement programs such as Medicare, Medicaid, and Social Security are necessary to avoid tax increases, deficits, or cuts in benefits, President Bush wrote in an accompanying statement to Congress.

But the fate of the Bush proposal already is in doubt in the Democrat-controlled Congress. “I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it either,” Rep. John Spratt (D-S.C.), chairman of the House Budget Committee, said in a statement.

Physicians organizations also took aim at the proposed budget. Dr. James T. Dove, president-elect of the American College of Cardiology, said the budget fell short in several areas, particularly in the lack of proposals to fix the physician payment formula. “Unless we can work together to put in place a more sustainable payment system for physicians, patients will suffer,” Dr. Dove said in a statement.

Officials at the American Medical Association echoed those comments in their reaction to the president's budget request. “Over the next 8 years, Medicare payments to physicians will be slashed by nearly 40%, while practice costs increase about 20%. Without adequate funding, physicians cannot make needed investments in health information technology and quality improvement, and seniors' access to health care is placed at risk,” Dr. Cecil B. Wilson, AMA board chair, said in a statement.

The president's budget proposal also came under fire from the American Hospital Association, which called it “devastating news” for children, seniors, and the disabled.

The president's plan would reauthorize SCHIP for 5 years and spend nearly $5 billion on the program over that period. However, it would refocus the program to children at or below 200% of poverty, a smaller group than many states currently target with their programs. But that level of funding would actually reduce SCHIP spending in fiscal year 2008, according to the American College of Physicians. Officials at the ACP called on Congress to provide additional funds to SCHIP so that it could be expanded to reach more low-income children and their parents.

President Bush also seeks the standard deduction for health insurance that he outlined in his State of the Union address in January. His proposal aims to make it more affordable for workers who do not get health care coverage through their employers to obtain insurance. It includes a $15,000 standard deduction for health insurance for any family covered by at least a catastrophic health insurance policy, regardless of whether it was purchased individually or by an employer.

The Bush administration's budget proposal for fiscal 2008 could be bad news for physicians and hospitals.

The proposal, which was sent to Congress on Feb. 5, seeks about $600 billion in net outlays to finance the Centers for Medicare and Medicaid Services including Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), a $29.2 billion increase over projected 2007 levels. However, the budget also includes legislative proposals that would trim about $4.3 billion from the Medicare program for the fiscal year and $252 billion over 10 years.

In addition, it also calls for Medicaid reforms that would result in about $28 billion in savings in that program over 10 years.

The president's plan outlines a number of provider payment changes including: reducing the update factor for inpatient hospitals, outpatient hospitals, hospices, and ambulance services 0.65% each year starting in fiscal year 2008; freezing the update for skilled nursing facilities and inpatient rehabilitation facilities in 2008; freezing updates for home health agencies in 2008; and reducing the update for ambulatory surgical centers for 0.65% starting in 2010.

The proposed budget does not address payments to physicians under Medicare, calling into question whether physicians will get relief from a projected 5%–10% cut in Medicare reimbursement slated for January 2008. However, Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, said she has “no doubt” that proposals to address the sustainable growth rate formula—which is used to determine physician payments under Medicare—will be on the table for discussion with Congress.

The reductions in traditional entitlement programs such as Medicare, Medicaid, and Social Security are necessary to avoid tax increases, deficits, or cuts in benefits, President Bush wrote in an accompanying statement to Congress.

But the fate of the Bush proposal already is in doubt in the Democrat-controlled Congress. “I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it either,” Rep. John Spratt (D-S.C.), chairman of the House Budget Committee, said in a statement.

Physicians organizations also took aim at the proposed budget. Dr. James T. Dove, president-elect of the American College of Cardiology, said the budget fell short in several areas, particularly in the lack of proposals to fix the physician payment formula. “Unless we can work together to put in place a more sustainable payment system for physicians, patients will suffer,” Dr. Dove said in a statement.

Officials at the American Medical Association echoed those comments in their reaction to the president's budget request. “Over the next 8 years, Medicare payments to physicians will be slashed by nearly 40%, while practice costs increase about 20%. Without adequate funding, physicians cannot make needed investments in health information technology and quality improvement, and seniors' access to health care is placed at risk,” Dr. Cecil B. Wilson, AMA board chair, said in a statement.

The president's budget proposal also came under fire from the American Hospital Association, which called it “devastating news” for children, seniors, and the disabled.

The president's plan would reauthorize SCHIP for 5 years and spend nearly $5 billion on the program over that period. However, it would refocus the program to children at or below 200% of poverty, a smaller group than many states currently target with their programs. But that level of funding would actually reduce SCHIP spending in fiscal year 2008, according to the American College of Physicians. Officials at the ACP called on Congress to provide additional funds to SCHIP so that it could be expanded to reach more low-income children and their parents.

President Bush also seeks the standard deduction for health insurance that he outlined in his State of the Union address in January. His proposal aims to make it more affordable for workers who do not get health care coverage through their employers to obtain insurance. It includes a $15,000 standard deduction for health insurance for any family covered by at least a catastrophic health insurance policy, regardless of whether it was purchased individually or by an employer.

The Bush administration's budget proposal for fiscal 2008 could be bad news for physicians and hospitals.

The proposal, which was sent to Congress on Feb. 5, seeks about $600 billion in net outlays to finance the Centers for Medicare and Medicaid Services including Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), a $29.2 billion increase over projected 2007 levels. However, the budget also includes legislative proposals that would trim about $4.3 billion from the Medicare program for the fiscal year and $252 billion over 10 years.

In addition, it also calls for Medicaid reforms that would result in about $28 billion in savings in that program over 10 years.

The president's plan outlines a number of provider payment changes including: reducing the update factor for inpatient hospitals, outpatient hospitals, hospices, and ambulance services 0.65% each year starting in fiscal year 2008; freezing the update for skilled nursing facilities and inpatient rehabilitation facilities in 2008; freezing updates for home health agencies in 2008; and reducing the update for ambulatory surgical centers for 0.65% starting in 2010.

The proposed budget does not address payments to physicians under Medicare, calling into question whether physicians will get relief from a projected 5%–10% cut in Medicare reimbursement slated for January 2008. However, Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, said she has “no doubt” that proposals to address the sustainable growth rate formula—which is used to determine physician payments under Medicare—will be on the table for discussion with Congress.

The reductions in traditional entitlement programs such as Medicare, Medicaid, and Social Security are necessary to avoid tax increases, deficits, or cuts in benefits, President Bush wrote in an accompanying statement to Congress.

But the fate of the Bush proposal already is in doubt in the Democrat-controlled Congress. “I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it either,” Rep. John Spratt (D-S.C.), chairman of the House Budget Committee, said in a statement.

Physicians organizations also took aim at the proposed budget. Dr. James T. Dove, president-elect of the American College of Cardiology, said the budget fell short in several areas, particularly in the lack of proposals to fix the physician payment formula. “Unless we can work together to put in place a more sustainable payment system for physicians, patients will suffer,” Dr. Dove said in a statement.

Officials at the American Medical Association echoed those comments in their reaction to the president's budget request. “Over the next 8 years, Medicare payments to physicians will be slashed by nearly 40%, while practice costs increase about 20%. Without adequate funding, physicians cannot make needed investments in health information technology and quality improvement, and seniors' access to health care is placed at risk,” Dr. Cecil B. Wilson, AMA board chair, said in a statement.

The president's budget proposal also came under fire from the American Hospital Association, which called it “devastating news” for children, seniors, and the disabled.

The president's plan would reauthorize SCHIP for 5 years and spend nearly $5 billion on the program over that period. However, it would refocus the program to children at or below 200% of poverty, a smaller group than many states currently target with their programs. But that level of funding would actually reduce SCHIP spending in fiscal year 2008, according to the American College of Physicians. Officials at the ACP called on Congress to provide additional funds to SCHIP so that it could be expanded to reach more low-income children and their parents.

President Bush also seeks the standard deduction for health insurance that he outlined in his State of the Union address in January. His proposal aims to make it more affordable for workers who do not get health care coverage through their employers to obtain insurance. It includes a $15,000 standard deduction for health insurance for any family covered by at least a catastrophic health insurance policy, regardless of whether it was purchased individually or by an employer.

BOSTON — In the fall of 2005, the Tennessee Department of Health launched a campaign to vaccinate students in one county school system with a live attenuated intranasal influenza virus vaccine.

About 46% of the county's 24,281 students were vaccinated, and the campaign had widespread support from physicians in the area. However, some physicians may have been overly cautious in their advice to patients, according to results of a survey of more than 300 physicians in the county.

Rand Carpenter, D.V.M., of the Tennessee Department of Health, presented an analysis of the vaccination campaign at the annual meeting of the American Public Health Association.

As part of the campaign, donated live attenuated intranasal influenza virus vaccine was offered free to kindergarten through 12th -grade students and staff in the Knox County school system, which includes Knoxville, Tenn. The program lasted from October through December 2005. The live influenza virus vaccine was licensed in 2003 for use among healthy individuals aged 5–49 years.

All 598 pediatric and adult physicians in the county received surveys and about 56% responded (337 physicians). About 80% of those who responded were aware of the campaign (268 physicians). Of those who were aware of the campaign, 73% (196 physicians) gave advice to patients regarding the live influenza virus vaccine. Of those giving advice, about 94% (185 physicians) recommended participation for eligible patients.

However, state health officials noticed that some patients were confused by their physician's advice and that some of the information given by providers potentially limited the campaign's success, he said.

Physicians gave several reasons for advising patients against participating in the vaccination program. The most frequent reasons included having asthma, being immunocompromised or living with an immunocompromised household contact, having a chronic disease, egg allergy, or Guillain-Barré syndrome, or being pregnant or lactating or having a household contact who is pregnant or nursing.

Having an immunocompromised close contact is only a consideration among caregivers for people with bone marrow transplant in the hospital settings, Dr. Carpenter said. In addition, the live virus vaccine is not contraindicated in nursing patients and pregnant or nursing household contacts.

BOSTON — In the fall of 2005, the Tennessee Department of Health launched a campaign to vaccinate students in one county school system with a live attenuated intranasal influenza virus vaccine.

About 46% of the county's 24,281 students were vaccinated, and the campaign had widespread support from physicians in the area. However, some physicians may have been overly cautious in their advice to patients, according to results of a survey of more than 300 physicians in the county.

Rand Carpenter, D.V.M., of the Tennessee Department of Health, presented an analysis of the vaccination campaign at the annual meeting of the American Public Health Association.

As part of the campaign, donated live attenuated intranasal influenza virus vaccine was offered free to kindergarten through 12th -grade students and staff in the Knox County school system, which includes Knoxville, Tenn. The program lasted from October through December 2005. The live influenza virus vaccine was licensed in 2003 for use among healthy individuals aged 5–49 years.

All 598 pediatric and adult physicians in the county received surveys and about 56% responded (337 physicians). About 80% of those who responded were aware of the campaign (268 physicians). Of those who were aware of the campaign, 73% (196 physicians) gave advice to patients regarding the live influenza virus vaccine. Of those giving advice, about 94% (185 physicians) recommended participation for eligible patients.

However, state health officials noticed that some patients were confused by their physician's advice and that some of the information given by providers potentially limited the campaign's success, he said.

Physicians gave several reasons for advising patients against participating in the vaccination program. The most frequent reasons included having asthma, being immunocompromised or living with an immunocompromised household contact, having a chronic disease, egg allergy, or Guillain-Barré syndrome, or being pregnant or lactating or having a household contact who is pregnant or nursing.

Having an immunocompromised close contact is only a consideration among caregivers for people with bone marrow transplant in the hospital settings, Dr. Carpenter said. In addition, the live virus vaccine is not contraindicated in nursing patients and pregnant or nursing household contacts.

BOSTON — In the fall of 2005, the Tennessee Department of Health launched a campaign to vaccinate students in one county school system with a live attenuated intranasal influenza virus vaccine.

About 46% of the county's 24,281 students were vaccinated, and the campaign had widespread support from physicians in the area. However, some physicians may have been overly cautious in their advice to patients, according to results of a survey of more than 300 physicians in the county.

Rand Carpenter, D.V.M., of the Tennessee Department of Health, presented an analysis of the vaccination campaign at the annual meeting of the American Public Health Association.

As part of the campaign, donated live attenuated intranasal influenza virus vaccine was offered free to kindergarten through 12th -grade students and staff in the Knox County school system, which includes Knoxville, Tenn. The program lasted from October through December 2005. The live influenza virus vaccine was licensed in 2003 for use among healthy individuals aged 5–49 years.

All 598 pediatric and adult physicians in the county received surveys and about 56% responded (337 physicians). About 80% of those who responded were aware of the campaign (268 physicians). Of those who were aware of the campaign, 73% (196 physicians) gave advice to patients regarding the live influenza virus vaccine. Of those giving advice, about 94% (185 physicians) recommended participation for eligible patients.

However, state health officials noticed that some patients were confused by their physician's advice and that some of the information given by providers potentially limited the campaign's success, he said.

Physicians gave several reasons for advising patients against participating in the vaccination program. The most frequent reasons included having asthma, being immunocompromised or living with an immunocompromised household contact, having a chronic disease, egg allergy, or Guillain-Barré syndrome, or being pregnant or lactating or having a household contact who is pregnant or nursing.

Having an immunocompromised close contact is only a consideration among caregivers for people with bone marrow transplant in the hospital settings, Dr. Carpenter said. In addition, the live virus vaccine is not contraindicated in nursing patients and pregnant or nursing household contacts.

Officials at the Centers for Medicare and Medicaid Services are proposing to expand coverage for carotid artery stenting to patients younger than 80 years old who are at high risk for carotid endarterectomy and have asymptomatic carotid artery stenosis of 80% or greater.

Under the proposed national coverage determination, a surgeon would perform a consultation to ascertain a patient's high-risk status.

The proposal also spells out coverage for patients 80 years of age and older with either symptomatic stenosis of 70% or greater or asymptomatic stenosis of 80% or greater. Because of safety concerns in that age group, carotid artery stenting would be allowed in this group only when it is performed in a Food and Drug Administration Category B Investigational Device Exemption trial, an FDA-approved postapproval study, or under Medicare clinical trial policy.

If finalized the proposal would replace the current CMS coverage policy under which patients at high risk for carotid endarterectomy (CEA) with asymptomatic carotid artery stenosis of greater than 80% can be covered only when carotid artery stenting procedures are performed in an FDA Category B Investigational Device Exemption trial, an FDA-approved postapproval study, or in accordance with Medicare clinical trial policy.

Over the last 6 years, CMS officials have expanded coverage of percutaneous transluminal angioplasty and carotid artery stenting in three separate national coverage decisions. Most recently, in November 2006, CMS established Medicare coverage for percutaneous transluminal angioplasty and stenting of intracranial vessels for the treatment of cerebral artery stenosis of 50% or greater in patients with intracranial atherosclerotic disease as part of an FDA-approved Category B clinical trial.

In proposing the expansion of coverage for patients with asymptomatic carotid artery stenosis, CMS relied on evidence from external and internal technology assessments, clinical reviews, and postapproval studies.

Two postapproval studies (CAPTURE and CASES-PMS) showed that carotid artery stenting outcomes were similar by provider experience and in settings outside clinical trials.

The trials also did not raise safety concerns about carotid artery stenting in asymptomatic patients with stenosis of 80% or greater, according to CMS.

CMS officials concluded that the evidence is “sufficient” to find that percutaneous transluminal angioplasty with carotid artery stenting improves health outcomes for patients who are at high risk for CEA surgery and have asymptomatic carotid artery stenosis of 80% or greater. However, carotid artery stenting is not covered in the absence of distal embolic protection, even when technical difficulties prevent it from being deployed, according to CMS.

Although at press time, the Society for Cardiovascular Angiography and Interventions (SCAI) was still reviewing the CMS coverage proposal, Dr. Michael J. Cowley, cochair of the carotid and neurovascular interventions committee for SCAI, said he sees the expansion of coverage as a step in the right direction. However, he expects that the SCAI committee may have concerns about some aspects of the proposal. For example, the requirement to obtain a surgical consult to determine that a patient is high risk is unnecessary and could mean additional costs, he said.

The American Association of Neurological Surgeons was still reviewing the proposed coverage decision at press time. However, in comments to CMS in 2004, the group raised concerns about expanding Medicare coverage for carotid stenting to asymptomatic patients. At that time, the group said that the available data suggested that carotid angioplasty and stenting may be inferior to medical treatment for the prevention of stroke in asymptomatic patients.

CMS is expected to issue a final decision sometime in May.

Officials at the Centers for Medicare and Medicaid Services are proposing to expand coverage for carotid artery stenting to patients younger than 80 years old who are at high risk for carotid endarterectomy and have asymptomatic carotid artery stenosis of 80% or greater.

Under the proposed national coverage determination, a surgeon would perform a consultation to ascertain a patient's high-risk status.

The proposal also spells out coverage for patients 80 years of age and older with either symptomatic stenosis of 70% or greater or asymptomatic stenosis of 80% or greater. Because of safety concerns in that age group, carotid artery stenting would be allowed in this group only when it is performed in a Food and Drug Administration Category B Investigational Device Exemption trial, an FDA-approved postapproval study, or under Medicare clinical trial policy.

If finalized the proposal would replace the current CMS coverage policy under which patients at high risk for carotid endarterectomy (CEA) with asymptomatic carotid artery stenosis of greater than 80% can be covered only when carotid artery stenting procedures are performed in an FDA Category B Investigational Device Exemption trial, an FDA-approved postapproval study, or in accordance with Medicare clinical trial policy.

Over the last 6 years, CMS officials have expanded coverage of percutaneous transluminal angioplasty and carotid artery stenting in three separate national coverage decisions. Most recently, in November 2006, CMS established Medicare coverage for percutaneous transluminal angioplasty and stenting of intracranial vessels for the treatment of cerebral artery stenosis of 50% or greater in patients with intracranial atherosclerotic disease as part of an FDA-approved Category B clinical trial.

In proposing the expansion of coverage for patients with asymptomatic carotid artery stenosis, CMS relied on evidence from external and internal technology assessments, clinical reviews, and postapproval studies.

Two postapproval studies (CAPTURE and CASES-PMS) showed that carotid artery stenting outcomes were similar by provider experience and in settings outside clinical trials.

The trials also did not raise safety concerns about carotid artery stenting in asymptomatic patients with stenosis of 80% or greater, according to CMS.

CMS officials concluded that the evidence is “sufficient” to find that percutaneous transluminal angioplasty with carotid artery stenting improves health outcomes for patients who are at high risk for CEA surgery and have asymptomatic carotid artery stenosis of 80% or greater. However, carotid artery stenting is not covered in the absence of distal embolic protection, even when technical difficulties prevent it from being deployed, according to CMS.

Although at press time, the Society for Cardiovascular Angiography and Interventions (SCAI) was still reviewing the CMS coverage proposal, Dr. Michael J. Cowley, cochair of the carotid and neurovascular interventions committee for SCAI, said he sees the expansion of coverage as a step in the right direction. However, he expects that the SCAI committee may have concerns about some aspects of the proposal. For example, the requirement to obtain a surgical consult to determine that a patient is high risk is unnecessary and could mean additional costs, he said.

The American Association of Neurological Surgeons was still reviewing the proposed coverage decision at press time. However, in comments to CMS in 2004, the group raised concerns about expanding Medicare coverage for carotid stenting to asymptomatic patients. At that time, the group said that the available data suggested that carotid angioplasty and stenting may be inferior to medical treatment for the prevention of stroke in asymptomatic patients.

CMS is expected to issue a final decision sometime in May.

Officials at the Centers for Medicare and Medicaid Services are proposing to expand coverage for carotid artery stenting to patients younger than 80 years old who are at high risk for carotid endarterectomy and have asymptomatic carotid artery stenosis of 80% or greater.

Under the proposed national coverage determination, a surgeon would perform a consultation to ascertain a patient's high-risk status.

The proposal also spells out coverage for patients 80 years of age and older with either symptomatic stenosis of 70% or greater or asymptomatic stenosis of 80% or greater. Because of safety concerns in that age group, carotid artery stenting would be allowed in this group only when it is performed in a Food and Drug Administration Category B Investigational Device Exemption trial, an FDA-approved postapproval study, or under Medicare clinical trial policy.

If finalized the proposal would replace the current CMS coverage policy under which patients at high risk for carotid endarterectomy (CEA) with asymptomatic carotid artery stenosis of greater than 80% can be covered only when carotid artery stenting procedures are performed in an FDA Category B Investigational Device Exemption trial, an FDA-approved postapproval study, or in accordance with Medicare clinical trial policy.

Over the last 6 years, CMS officials have expanded coverage of percutaneous transluminal angioplasty and carotid artery stenting in three separate national coverage decisions. Most recently, in November 2006, CMS established Medicare coverage for percutaneous transluminal angioplasty and stenting of intracranial vessels for the treatment of cerebral artery stenosis of 50% or greater in patients with intracranial atherosclerotic disease as part of an FDA-approved Category B clinical trial.

In proposing the expansion of coverage for patients with asymptomatic carotid artery stenosis, CMS relied on evidence from external and internal technology assessments, clinical reviews, and postapproval studies.

Two postapproval studies (CAPTURE and CASES-PMS) showed that carotid artery stenting outcomes were similar by provider experience and in settings outside clinical trials.

The trials also did not raise safety concerns about carotid artery stenting in asymptomatic patients with stenosis of 80% or greater, according to CMS.

CMS officials concluded that the evidence is “sufficient” to find that percutaneous transluminal angioplasty with carotid artery stenting improves health outcomes for patients who are at high risk for CEA surgery and have asymptomatic carotid artery stenosis of 80% or greater. However, carotid artery stenting is not covered in the absence of distal embolic protection, even when technical difficulties prevent it from being deployed, according to CMS.

Although at press time, the Society for Cardiovascular Angiography and Interventions (SCAI) was still reviewing the CMS coverage proposal, Dr. Michael J. Cowley, cochair of the carotid and neurovascular interventions committee for SCAI, said he sees the expansion of coverage as a step in the right direction. However, he expects that the SCAI committee may have concerns about some aspects of the proposal. For example, the requirement to obtain a surgical consult to determine that a patient is high risk is unnecessary and could mean additional costs, he said.

The American Association of Neurological Surgeons was still reviewing the proposed coverage decision at press time. However, in comments to CMS in 2004, the group raised concerns about expanding Medicare coverage for carotid stenting to asymptomatic patients. At that time, the group said that the available data suggested that carotid angioplasty and stenting may be inferior to medical treatment for the prevention of stroke in asymptomatic patients.

CMS is expected to issue a final decision sometime in May.

FDA's $2 Billion Budget

The Bush administration is requesting $2.1 billion for the Food and Drug Administration in fiscal 2008, a 5% increase from the 2007 request. The agency still has not received its final appropriation for fiscal 2007, so the exact amount it will receive for that year is not known yet. The budget includes $444 million in user fees from industry, including a new program to charge generic drug makers fees to review their products. The agency estimates that generic companies will contribute $16 million in fiscal 2008. In a statement, Generic Pharmaceutical Association CEO Kathleen Jaeger said the decision to seek user fees “will not bring generic medicines to consumers faster as long as brand companies are still permitted to use tactics that delay market entry.” The budget also includes $11 million for improving drug safety (this does not include user fee funds that will also go to that effort) and $7 million to boost medical device safety and to speed up device review. The agency also is requesting $13 million to move about 1,300 employees of the Center for Devices and Radiological Health to offices at the FDA's new White Oak, Md., campus. The FDA has been gradually moving its operations to the new facilities. The Washington-based consumer-, patient-, and industry-supported Coalition for a Stronger FDA said the budget did not go far enough. It is seeking at least $175 million more, including greater increases for food, drug, and medical device safety.

Medicare Generic Drug Use Rises

Generic drugs accounted for 60% of prescriptions dispensed to either Part D or Medicare Advantage plan beneficiaries for the first three quarters of 2006, the Centers for Medicare and Medicaid Services announced. Generic drug use in Part D enrollees is 13% higher than for Americans who receive benefits through private payers, said CMS. In comparison, generics accounted for 53% of prescriptions dispensed to privately insured Americans last year. Greater use of generics will translate into lower costs for the Part D program and possibly expanded coverage for beneficiaries, said CMS. “We will continue to promote generics where they are available as an important strategy to keep the new drug benefit affordable over the long term,” said acting administrator Leslie Norwalk in a statement.

Family Practice Priorities in 2007

In the coming legislative year, family physicians want to increase health care coverage, raise payments, safeguard or expand their scope of practice, and promote public health initiatives, according to a survey of chapters of the American Academy of Family Physicians. AAFP said that 95% of the chapters had responded as of mid-January. Diana Ewert, AAFP senior manager for government relations, said in a statement that AAFP chapters are increasingly taking on advocacy at the local level. The chapters said they want to expand Medicaid or the State Children's Health Insurance Program to broaden access to care. They also were concerned about prescriptive authority for nonphysicians and addressing public health issues like tobacco control, vaccine distribution, obesity, and preparation for pandemic influenza. Finally, physicians said they had new concerns about the growth of retail health clinics

Disclosing Financial Conflicts

Experts from Johns Hopkins University, Duke University, and Wake Forest University have designed model language aimed at helping researchers disclose their financial conflicts to research participants in a meaningful way. The model language was published in the January/February issue of IRB: Ethics and Human Research. Included is a standard disclosure for situations in which there is a financial interest that does not represent a measurable risk to patients. The model also includes language to describe salary support, money received outside of a study, per capita payments, and unrestricted finders' fees, among other common conflicts. “This is language that can help these institutions craft better written materials. It can also serve as a model for how to accurately phrase disclosure in discussions with potential research subjects,” Dr. Jeremy Sugarman, the lead author and professor at Johns Hopkins University, Baltimore, said in a statement. “It could also be expanded and presented in other formats, such as stand-alone pamphlets or videos about clinical research.”

Health IT Privacy Milestones

Federal health officials must develop an overall strategy for protecting patient privacy as health information technologies take off, according to a report from the Government Accountability Office. Although the Health and Human Services department considers consumer privacy a top priority and has made some initial progress in that area, a more comprehensive approach is needed, the GAO report concluded. Specifically, HHS officials need to set milestones for integrating privacy-related initiatives and select an entity responsible for implementing these initiatives. However, in comments on the report, HHS officials said setting specific milestones would hamper their ability to incorporate stakeholder ideas as they move forward. Since 2005, HHS has awarded several contracts aimed at addressing the privacy of personal health information exchanged within an electronic national health information network. In 2006, an HHS contractor selected sites to perform assessments of privacy and security policies. Also in 2006, the National Committee on Vital and Health Statistics and the American Health Information Community worked on privacy and security issues related to a nationwide health information network.

FDA's $2 Billion Budget

The Bush administration is requesting $2.1 billion for the Food and Drug Administration in fiscal 2008, a 5% increase from the 2007 request. The agency still has not received its final appropriation for fiscal 2007, so the exact amount it will receive for that year is not known yet. The budget includes $444 million in user fees from industry, including a new program to charge generic drug makers fees to review their products. The agency estimates that generic companies will contribute $16 million in fiscal 2008. In a statement, Generic Pharmaceutical Association CEO Kathleen Jaeger said the decision to seek user fees “will not bring generic medicines to consumers faster as long as brand companies are still permitted to use tactics that delay market entry.” The budget also includes $11 million for improving drug safety (this does not include user fee funds that will also go to that effort) and $7 million to boost medical device safety and to speed up device review. The agency also is requesting $13 million to move about 1,300 employees of the Center for Devices and Radiological Health to offices at the FDA's new White Oak, Md., campus. The FDA has been gradually moving its operations to the new facilities. The Washington-based consumer-, patient-, and industry-supported Coalition for a Stronger FDA said the budget did not go far enough. It is seeking at least $175 million more, including greater increases for food, drug, and medical device safety.

Medicare Generic Drug Use Rises

Generic drugs accounted for 60% of prescriptions dispensed to either Part D or Medicare Advantage plan beneficiaries for the first three quarters of 2006, the Centers for Medicare and Medicaid Services announced. Generic drug use in Part D enrollees is 13% higher than for Americans who receive benefits through private payers, said CMS. In comparison, generics accounted for 53% of prescriptions dispensed to privately insured Americans last year. Greater use of generics will translate into lower costs for the Part D program and possibly expanded coverage for beneficiaries, said CMS. “We will continue to promote generics where they are available as an important strategy to keep the new drug benefit affordable over the long term,” said acting administrator Leslie Norwalk in a statement.

Family Practice Priorities in 2007

In the coming legislative year, family physicians want to increase health care coverage, raise payments, safeguard or expand their scope of practice, and promote public health initiatives, according to a survey of chapters of the American Academy of Family Physicians. AAFP said that 95% of the chapters had responded as of mid-January. Diana Ewert, AAFP senior manager for government relations, said in a statement that AAFP chapters are increasingly taking on advocacy at the local level. The chapters said they want to expand Medicaid or the State Children's Health Insurance Program to broaden access to care. They also were concerned about prescriptive authority for nonphysicians and addressing public health issues like tobacco control, vaccine distribution, obesity, and preparation for pandemic influenza. Finally, physicians said they had new concerns about the growth of retail health clinics

Disclosing Financial Conflicts

Experts from Johns Hopkins University, Duke University, and Wake Forest University have designed model language aimed at helping researchers disclose their financial conflicts to research participants in a meaningful way. The model language was published in the January/February issue of IRB: Ethics and Human Research. Included is a standard disclosure for situations in which there is a financial interest that does not represent a measurable risk to patients. The model also includes language to describe salary support, money received outside of a study, per capita payments, and unrestricted finders' fees, among other common conflicts. “This is language that can help these institutions craft better written materials. It can also serve as a model for how to accurately phrase disclosure in discussions with potential research subjects,” Dr. Jeremy Sugarman, the lead author and professor at Johns Hopkins University, Baltimore, said in a statement. “It could also be expanded and presented in other formats, such as stand-alone pamphlets or videos about clinical research.”

Health IT Privacy Milestones

Federal health officials must develop an overall strategy for protecting patient privacy as health information technologies take off, according to a report from the Government Accountability Office. Although the Health and Human Services department considers consumer privacy a top priority and has made some initial progress in that area, a more comprehensive approach is needed, the GAO report concluded. Specifically, HHS officials need to set milestones for integrating privacy-related initiatives and select an entity responsible for implementing these initiatives. However, in comments on the report, HHS officials said setting specific milestones would hamper their ability to incorporate stakeholder ideas as they move forward. Since 2005, HHS has awarded several contracts aimed at addressing the privacy of personal health information exchanged within an electronic national health information network. In 2006, an HHS contractor selected sites to perform assessments of privacy and security policies. Also in 2006, the National Committee on Vital and Health Statistics and the American Health Information Community worked on privacy and security issues related to a nationwide health information network.

FDA's $2 Billion Budget

The Bush administration is requesting $2.1 billion for the Food and Drug Administration in fiscal 2008, a 5% increase from the 2007 request. The agency still has not received its final appropriation for fiscal 2007, so the exact amount it will receive for that year is not known yet. The budget includes $444 million in user fees from industry, including a new program to charge generic drug makers fees to review their products. The agency estimates that generic companies will contribute $16 million in fiscal 2008. In a statement, Generic Pharmaceutical Association CEO Kathleen Jaeger said the decision to seek user fees “will not bring generic medicines to consumers faster as long as brand companies are still permitted to use tactics that delay market entry.” The budget also includes $11 million for improving drug safety (this does not include user fee funds that will also go to that effort) and $7 million to boost medical device safety and to speed up device review. The agency also is requesting $13 million to move about 1,300 employees of the Center for Devices and Radiological Health to offices at the FDA's new White Oak, Md., campus. The FDA has been gradually moving its operations to the new facilities. The Washington-based consumer-, patient-, and industry-supported Coalition for a Stronger FDA said the budget did not go far enough. It is seeking at least $175 million more, including greater increases for food, drug, and medical device safety.

Medicare Generic Drug Use Rises

Generic drugs accounted for 60% of prescriptions dispensed to either Part D or Medicare Advantage plan beneficiaries for the first three quarters of 2006, the Centers for Medicare and Medicaid Services announced. Generic drug use in Part D enrollees is 13% higher than for Americans who receive benefits through private payers, said CMS. In comparison, generics accounted for 53% of prescriptions dispensed to privately insured Americans last year. Greater use of generics will translate into lower costs for the Part D program and possibly expanded coverage for beneficiaries, said CMS. “We will continue to promote generics where they are available as an important strategy to keep the new drug benefit affordable over the long term,” said acting administrator Leslie Norwalk in a statement.

Family Practice Priorities in 2007

In the coming legislative year, family physicians want to increase health care coverage, raise payments, safeguard or expand their scope of practice, and promote public health initiatives, according to a survey of chapters of the American Academy of Family Physicians. AAFP said that 95% of the chapters had responded as of mid-January. Diana Ewert, AAFP senior manager for government relations, said in a statement that AAFP chapters are increasingly taking on advocacy at the local level. The chapters said they want to expand Medicaid or the State Children's Health Insurance Program to broaden access to care. They also were concerned about prescriptive authority for nonphysicians and addressing public health issues like tobacco control, vaccine distribution, obesity, and preparation for pandemic influenza. Finally, physicians said they had new concerns about the growth of retail health clinics

Disclosing Financial Conflicts

Experts from Johns Hopkins University, Duke University, and Wake Forest University have designed model language aimed at helping researchers disclose their financial conflicts to research participants in a meaningful way. The model language was published in the January/February issue of IRB: Ethics and Human Research. Included is a standard disclosure for situations in which there is a financial interest that does not represent a measurable risk to patients. The model also includes language to describe salary support, money received outside of a study, per capita payments, and unrestricted finders' fees, among other common conflicts. “This is language that can help these institutions craft better written materials. It can also serve as a model for how to accurately phrase disclosure in discussions with potential research subjects,” Dr. Jeremy Sugarman, the lead author and professor at Johns Hopkins University, Baltimore, said in a statement. “It could also be expanded and presented in other formats, such as stand-alone pamphlets or videos about clinical research.”

Health IT Privacy Milestones

Federal health officials must develop an overall strategy for protecting patient privacy as health information technologies take off, according to a report from the Government Accountability Office. Although the Health and Human Services department considers consumer privacy a top priority and has made some initial progress in that area, a more comprehensive approach is needed, the GAO report concluded. Specifically, HHS officials need to set milestones for integrating privacy-related initiatives and select an entity responsible for implementing these initiatives. However, in comments on the report, HHS officials said setting specific milestones would hamper their ability to incorporate stakeholder ideas as they move forward. Since 2005, HHS has awarded several contracts aimed at addressing the privacy of personal health information exchanged within an electronic national health information network. In 2006, an HHS contractor selected sites to perform assessments of privacy and security policies. Also in 2006, the National Committee on Vital and Health Statistics and the American Health Information Community worked on privacy and security issues related to a nationwide health information network.

Over the last decade, health care within the Department of Veterans Affairs has transformed itself from a notorious near failure to a national model for quality improvement, leaving many asking how they can incorporate those lessons.

The answer may lie in part with the department's electronic health record system. Known as VistA (Veterans Health Information Systems and Technology Architecture), the system recently received the Innovations in American Government Award–a top honor from Harvard University's Kennedy School of Government.

The award was given to seven government programs that each took a unique approach to meeting community needs. All recipients were given a $100,000 grant to share the factors behind their success.

For Dr. Douglas J. Turner, it's clear that the VA is doing something right when it comes to health information technology (IT). Dr. Turner, who is chief of general surgery for the VA Maryland Health Care System at the Baltimore VA Medical Center and is on the surgery faculty at the University of Maryland, Baltimore, has a foot in both the VA system and the private sector.

At the University of Maryland Medical Center, he works with at least two different computer systems for reporting patient variables as well as consulting with several different electronic and paper sources to get the information he needs to see patients.

In contrast, at the VA, every clinic is connected in the VistA system with a single patient identifier. “Everything is in the computer,” Dr. Turner said.

The VA computerized patient record system, which sits atop the VistA platform, includes the physician's notes, lab results, and results of consults and surgical procedures. It also generally includes information from visits made outside the system. A hard copy of the clinical record from an outside visit can be scanned into the VA system and made available within a day, Dr. Turner said.

Quality of care has improved since the implementation of VistA, Dr. Turner said. The system includes a check for drug-drug interactions plus several other alerts that let the physician know what's been going on with the patient since the last visit. “Hands down, I would take the VA computer [system] anywhere,” Dr. Turner concluded.

VA officials began building the first generation of the computerized patient record system in the late 1980s out of a need to deal with the increasing number of veterans coming into the system, while resources remained tight, said Linda Fischetti, R.N., acting chief health informatics officer at the Veterans Health Administration's Office of Information. “We had to find ways that we could reduce redundancies and care for more patients.”

And the move to an electronic system was driven largely by clinicians who said they needed better tools. “We had clinicians actively saying, 'We need this, we need this, we need this,'” Ms. Fischetti said.

The idea was to create a single system with robust functionality in every health care environment–the inpatient hospital, the outpatient hospital, the long-term care facility, and clinics within the community. The current system is the second generation and VA officials continue to modernize it, Ms. Fischetti said. Today the system allows VA clinicians access to complete historical information on their patients, as well as real-time clinical reminders and real-time decision support.

The No. 1 lesson from the VA experience is that the system must be driven by the needs of the clinician, Ms. Fischetti said. The system also needs to do more than just replace the paper chart. If the health IT product does not add value for physicians, she said, they might not adopt it.

She noted, however, that the VA, as both the payer and provider of health care services, distinguishes itself from most of the care providers in the United States. “We are definitely different because we have the alignment of the payer and provider within our own enterprise.”

While the VA is a unique system, there are lessons that can be applied in large hospital systems and even in solo physician practices, said Tom Leary, director of federal affairs at the Healthcare Information and Management Systems Society.

For example, successful adoption of a health IT system requires buy-in from clinician leadership. Clinician use of a system can be mandated to some extent in any organization, but it does not produce the same results unless physicians and nurses want to use the technology, Mr. Leary said.

Success also depends on getting a return on investment–improvement in quality and cost-effectiveness of care–as seen in VistA.

These ideas are applicable as well to the small practice, Mr. Leary said, where the return may be an improvement not only in quality of care for patients, but also in quality of life for providers.

Physicians have the opportunity to provide better care, without, for example, having to drive back to the office on the weekend to answer a call about a patient, he said. Other systems can also learn from the VA's approach to designing the system with the needs of its clinicians in mind, said Dr. Dennis Weaver, acting chief medical officer for the National Alliance for Health Information Technology.

“You've got to build it for the clinicians,” he said.

Over the last decade, health care within the Department of Veterans Affairs has transformed itself from a notorious near failure to a national model for quality improvement, leaving many asking how they can incorporate those lessons.

The answer may lie in part with the department's electronic health record system. Known as VistA (Veterans Health Information Systems and Technology Architecture), the system recently received the Innovations in American Government Award–a top honor from Harvard University's Kennedy School of Government.

The award was given to seven government programs that each took a unique approach to meeting community needs. All recipients were given a $100,000 grant to share the factors behind their success.

For Dr. Douglas J. Turner, it's clear that the VA is doing something right when it comes to health information technology (IT). Dr. Turner, who is chief of general surgery for the VA Maryland Health Care System at the Baltimore VA Medical Center and is on the surgery faculty at the University of Maryland, Baltimore, has a foot in both the VA system and the private sector.

At the University of Maryland Medical Center, he works with at least two different computer systems for reporting patient variables as well as consulting with several different electronic and paper sources to get the information he needs to see patients.

In contrast, at the VA, every clinic is connected in the VistA system with a single patient identifier. “Everything is in the computer,” Dr. Turner said.

The VA computerized patient record system, which sits atop the VistA platform, includes the physician's notes, lab results, and results of consults and surgical procedures. It also generally includes information from visits made outside the system. A hard copy of the clinical record from an outside visit can be scanned into the VA system and made available within a day, Dr. Turner said.

Quality of care has improved since the implementation of VistA, Dr. Turner said. The system includes a check for drug-drug interactions plus several other alerts that let the physician know what's been going on with the patient since the last visit. “Hands down, I would take the VA computer [system] anywhere,” Dr. Turner concluded.

VA officials began building the first generation of the computerized patient record system in the late 1980s out of a need to deal with the increasing number of veterans coming into the system, while resources remained tight, said Linda Fischetti, R.N., acting chief health informatics officer at the Veterans Health Administration's Office of Information. “We had to find ways that we could reduce redundancies and care for more patients.”

And the move to an electronic system was driven largely by clinicians who said they needed better tools. “We had clinicians actively saying, 'We need this, we need this, we need this,'” Ms. Fischetti said.

The idea was to create a single system with robust functionality in every health care environment–the inpatient hospital, the outpatient hospital, the long-term care facility, and clinics within the community. The current system is the second generation and VA officials continue to modernize it, Ms. Fischetti said. Today the system allows VA clinicians access to complete historical information on their patients, as well as real-time clinical reminders and real-time decision support.

The No. 1 lesson from the VA experience is that the system must be driven by the needs of the clinician, Ms. Fischetti said. The system also needs to do more than just replace the paper chart. If the health IT product does not add value for physicians, she said, they might not adopt it.

She noted, however, that the VA, as both the payer and provider of health care services, distinguishes itself from most of the care providers in the United States. “We are definitely different because we have the alignment of the payer and provider within our own enterprise.”

While the VA is a unique system, there are lessons that can be applied in large hospital systems and even in solo physician practices, said Tom Leary, director of federal affairs at the Healthcare Information and Management Systems Society.

For example, successful adoption of a health IT system requires buy-in from clinician leadership. Clinician use of a system can be mandated to some extent in any organization, but it does not produce the same results unless physicians and nurses want to use the technology, Mr. Leary said.

Success also depends on getting a return on investment–improvement in quality and cost-effectiveness of care–as seen in VistA.

These ideas are applicable as well to the small practice, Mr. Leary said, where the return may be an improvement not only in quality of care for patients, but also in quality of life for providers.

Physicians have the opportunity to provide better care, without, for example, having to drive back to the office on the weekend to answer a call about a patient, he said. Other systems can also learn from the VA's approach to designing the system with the needs of its clinicians in mind, said Dr. Dennis Weaver, acting chief medical officer for the National Alliance for Health Information Technology.

“You've got to build it for the clinicians,” he said.

Over the last decade, health care within the Department of Veterans Affairs has transformed itself from a notorious near failure to a national model for quality improvement, leaving many asking how they can incorporate those lessons.

The answer may lie in part with the department's electronic health record system. Known as VistA (Veterans Health Information Systems and Technology Architecture), the system recently received the Innovations in American Government Award–a top honor from Harvard University's Kennedy School of Government.

The award was given to seven government programs that each took a unique approach to meeting community needs. All recipients were given a $100,000 grant to share the factors behind their success.

For Dr. Douglas J. Turner, it's clear that the VA is doing something right when it comes to health information technology (IT). Dr. Turner, who is chief of general surgery for the VA Maryland Health Care System at the Baltimore VA Medical Center and is on the surgery faculty at the University of Maryland, Baltimore, has a foot in both the VA system and the private sector.

At the University of Maryland Medical Center, he works with at least two different computer systems for reporting patient variables as well as consulting with several different electronic and paper sources to get the information he needs to see patients.

In contrast, at the VA, every clinic is connected in the VistA system with a single patient identifier. “Everything is in the computer,” Dr. Turner said.

The VA computerized patient record system, which sits atop the VistA platform, includes the physician's notes, lab results, and results of consults and surgical procedures. It also generally includes information from visits made outside the system. A hard copy of the clinical record from an outside visit can be scanned into the VA system and made available within a day, Dr. Turner said.

Quality of care has improved since the implementation of VistA, Dr. Turner said. The system includes a check for drug-drug interactions plus several other alerts that let the physician know what's been going on with the patient since the last visit. “Hands down, I would take the VA computer [system] anywhere,” Dr. Turner concluded.

VA officials began building the first generation of the computerized patient record system in the late 1980s out of a need to deal with the increasing number of veterans coming into the system, while resources remained tight, said Linda Fischetti, R.N., acting chief health informatics officer at the Veterans Health Administration's Office of Information. “We had to find ways that we could reduce redundancies and care for more patients.”

And the move to an electronic system was driven largely by clinicians who said they needed better tools. “We had clinicians actively saying, 'We need this, we need this, we need this,'” Ms. Fischetti said.

The idea was to create a single system with robust functionality in every health care environment–the inpatient hospital, the outpatient hospital, the long-term care facility, and clinics within the community. The current system is the second generation and VA officials continue to modernize it, Ms. Fischetti said. Today the system allows VA clinicians access to complete historical information on their patients, as well as real-time clinical reminders and real-time decision support.

The No. 1 lesson from the VA experience is that the system must be driven by the needs of the clinician, Ms. Fischetti said. The system also needs to do more than just replace the paper chart. If the health IT product does not add value for physicians, she said, they might not adopt it.

She noted, however, that the VA, as both the payer and provider of health care services, distinguishes itself from most of the care providers in the United States. “We are definitely different because we have the alignment of the payer and provider within our own enterprise.”

While the VA is a unique system, there are lessons that can be applied in large hospital systems and even in solo physician practices, said Tom Leary, director of federal affairs at the Healthcare Information and Management Systems Society.

For example, successful adoption of a health IT system requires buy-in from clinician leadership. Clinician use of a system can be mandated to some extent in any organization, but it does not produce the same results unless physicians and nurses want to use the technology, Mr. Leary said.

Success also depends on getting a return on investment–improvement in quality and cost-effectiveness of care–as seen in VistA.

These ideas are applicable as well to the small practice, Mr. Leary said, where the return may be an improvement not only in quality of care for patients, but also in quality of life for providers.

Physicians have the opportunity to provide better care, without, for example, having to drive back to the office on the weekend to answer a call about a patient, he said. Other systems can also learn from the VA's approach to designing the system with the needs of its clinicians in mind, said Dr. Dennis Weaver, acting chief medical officer for the National Alliance for Health Information Technology.

“You've got to build it for the clinicians,” he said.

Hospitals are reluctant to offer physicians a portion of the savings generated by reducing clinical costs–a concept known as gainsharing–because of legal fears, D. McCarty Thornton, said during an audioconference on gainsharing sponsored by the Integrated Healthcare Association.

“It's clear, I think, that gainsharing is not on the fast track,” said Mr. Thornton, a partner with the law firm of Sonnenschein, Nath, and Rosenthal LLP, based in Washington.

In the long run, gainsharing approaches that can save money without affecting patient care are likely to take hold, he said, but first hospitals need clarification from Congress, the Health and Human Services secretary, and the Office of Inspector General about what arrangements are allowed.

In 1999, the HHS Office of Inspector General issued a special advisory bulletin saying that the civil monetary penalty provision of the Social Security Act prohibits most gainsharing arrangements. Under that provision, hospitals are prohibited from making payments to physicians to reduce or limit services to Medicare and Medicaid beneficiaries.

The bulletin said that these types of arrangements could also trigger the antikickback provisions of the Social Security Act, which prohibit arrangements used to influence the referral of patients in federal health care programs.

“Historically, the office has been somewhat leery of gainsharing arrangements,” said Catherine A. Martin, OIG senior counsel.

Since the 1999 bulletin, the OIG has issued several advisory opinions that outline gainsharing arrangements that would be allowable. In general, in order to give the green light to a gainsharing arrangement, the OIG looks for transparency and accountability, quality of care controls, and safeguards against kickbacks, Ms. Martin said.

In order to be transparent, any actions taken to save costs need to be clearly and separately identified and fully disclosed to patients. Hospitals must also put in place controls to ensure that cost savings do not result in the inappropriate reduction of services. OIG officials also want to see ongoing monitoring of quality by the hospital and an independent outside reviewer, Ms. Martin said.

But the OIG is not the only regulator that hospitals and physicians need to consider when embarking on gainsharing arrangements, Ms. Martin said. Hospitals and physicians must also keep from running afoul of the Stark self-referral prohibitions, which fall under the purview of the Centers for Medicare and Medicaid Services. In addition, gainsharing arrangements must meet Internal Revenue Service rules, and hospitals are at risk for private lawsuits, she said.

But the industry is keeping an eye on two demonstration projects that test the gainsharing concept in the Medicare fee-for-service program. Both projects are set to begin this year.

The first project, which is required under the Deficit Reduction Act of 2005, will involve six hospitals and will focus on quality and efficiency for inpatient episodes and during the 30-day postdischarge period.

The DRA provision waives civil monetary penalty restrictions that would otherwise prohibit gainsharing.

The second project will focus on physician groups and integrated delivery systems and their affiliated hospitals. The demonstration will include inpatient episodes, as well as the pre- and posthospital care over the duration of the project. This demonstration was mandated the Medicare Modernization Act of 2003.

Participants in both demonstrations will be required to standardize quality and efficiency improvement initiatives, internal cost savings measurement, and physician payment methodology, said Lisa R. Waters, a project officer with the division of payment policy demonstrations at CMS.

Hospitals are reluctant to offer physicians a portion of the savings generated by reducing clinical costs–a concept known as gainsharing–because of legal fears, D. McCarty Thornton, said during an audioconference on gainsharing sponsored by the Integrated Healthcare Association.

“It's clear, I think, that gainsharing is not on the fast track,” said Mr. Thornton, a partner with the law firm of Sonnenschein, Nath, and Rosenthal LLP, based in Washington.

In the long run, gainsharing approaches that can save money without affecting patient care are likely to take hold, he said, but first hospitals need clarification from Congress, the Health and Human Services secretary, and the Office of Inspector General about what arrangements are allowed.

In 1999, the HHS Office of Inspector General issued a special advisory bulletin saying that the civil monetary penalty provision of the Social Security Act prohibits most gainsharing arrangements. Under that provision, hospitals are prohibited from making payments to physicians to reduce or limit services to Medicare and Medicaid beneficiaries.

The bulletin said that these types of arrangements could also trigger the antikickback provisions of the Social Security Act, which prohibit arrangements used to influence the referral of patients in federal health care programs.

“Historically, the office has been somewhat leery of gainsharing arrangements,” said Catherine A. Martin, OIG senior counsel.

Since the 1999 bulletin, the OIG has issued several advisory opinions that outline gainsharing arrangements that would be allowable. In general, in order to give the green light to a gainsharing arrangement, the OIG looks for transparency and accountability, quality of care controls, and safeguards against kickbacks, Ms. Martin said.

In order to be transparent, any actions taken to save costs need to be clearly and separately identified and fully disclosed to patients. Hospitals must also put in place controls to ensure that cost savings do not result in the inappropriate reduction of services. OIG officials also want to see ongoing monitoring of quality by the hospital and an independent outside reviewer, Ms. Martin said.

But the OIG is not the only regulator that hospitals and physicians need to consider when embarking on gainsharing arrangements, Ms. Martin said. Hospitals and physicians must also keep from running afoul of the Stark self-referral prohibitions, which fall under the purview of the Centers for Medicare and Medicaid Services. In addition, gainsharing arrangements must meet Internal Revenue Service rules, and hospitals are at risk for private lawsuits, she said.

But the industry is keeping an eye on two demonstration projects that test the gainsharing concept in the Medicare fee-for-service program. Both projects are set to begin this year.

The first project, which is required under the Deficit Reduction Act of 2005, will involve six hospitals and will focus on quality and efficiency for inpatient episodes and during the 30-day postdischarge period.

The DRA provision waives civil monetary penalty restrictions that would otherwise prohibit gainsharing.

The second project will focus on physician groups and integrated delivery systems and their affiliated hospitals. The demonstration will include inpatient episodes, as well as the pre- and posthospital care over the duration of the project. This demonstration was mandated the Medicare Modernization Act of 2003.

Participants in both demonstrations will be required to standardize quality and efficiency improvement initiatives, internal cost savings measurement, and physician payment methodology, said Lisa R. Waters, a project officer with the division of payment policy demonstrations at CMS.

Hospitals are reluctant to offer physicians a portion of the savings generated by reducing clinical costs–a concept known as gainsharing–because of legal fears, D. McCarty Thornton, said during an audioconference on gainsharing sponsored by the Integrated Healthcare Association.

“It's clear, I think, that gainsharing is not on the fast track,” said Mr. Thornton, a partner with the law firm of Sonnenschein, Nath, and Rosenthal LLP, based in Washington.

In the long run, gainsharing approaches that can save money without affecting patient care are likely to take hold, he said, but first hospitals need clarification from Congress, the Health and Human Services secretary, and the Office of Inspector General about what arrangements are allowed.

In 1999, the HHS Office of Inspector General issued a special advisory bulletin saying that the civil monetary penalty provision of the Social Security Act prohibits most gainsharing arrangements. Under that provision, hospitals are prohibited from making payments to physicians to reduce or limit services to Medicare and Medicaid beneficiaries.

The bulletin said that these types of arrangements could also trigger the antikickback provisions of the Social Security Act, which prohibit arrangements used to influence the referral of patients in federal health care programs.

“Historically, the office has been somewhat leery of gainsharing arrangements,” said Catherine A. Martin, OIG senior counsel.

Since the 1999 bulletin, the OIG has issued several advisory opinions that outline gainsharing arrangements that would be allowable. In general, in order to give the green light to a gainsharing arrangement, the OIG looks for transparency and accountability, quality of care controls, and safeguards against kickbacks, Ms. Martin said.

In order to be transparent, any actions taken to save costs need to be clearly and separately identified and fully disclosed to patients. Hospitals must also put in place controls to ensure that cost savings do not result in the inappropriate reduction of services. OIG officials also want to see ongoing monitoring of quality by the hospital and an independent outside reviewer, Ms. Martin said.

But the OIG is not the only regulator that hospitals and physicians need to consider when embarking on gainsharing arrangements, Ms. Martin said. Hospitals and physicians must also keep from running afoul of the Stark self-referral prohibitions, which fall under the purview of the Centers for Medicare and Medicaid Services. In addition, gainsharing arrangements must meet Internal Revenue Service rules, and hospitals are at risk for private lawsuits, she said.

But the industry is keeping an eye on two demonstration projects that test the gainsharing concept in the Medicare fee-for-service program. Both projects are set to begin this year.

The first project, which is required under the Deficit Reduction Act of 2005, will involve six hospitals and will focus on quality and efficiency for inpatient episodes and during the 30-day postdischarge period.

The DRA provision waives civil monetary penalty restrictions that would otherwise prohibit gainsharing.

The second project will focus on physician groups and integrated delivery systems and their affiliated hospitals. The demonstration will include inpatient episodes, as well as the pre- and posthospital care over the duration of the project. This demonstration was mandated the Medicare Modernization Act of 2003.

Participants in both demonstrations will be required to standardize quality and efficiency improvement initiatives, internal cost savings measurement, and physician payment methodology, said Lisa R. Waters, a project officer with the division of payment policy demonstrations at CMS.

The Bush administration's budget proposal for fiscal 2008 could be bad news for physicians and hospitals.

The proposal, which was sent to Congress on Feb. 5, seeks about $600 billion in net outlays to finance the Centers for Medicare and Medicaid Services including Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), a $29.2 billion increase over projected 2007 levels. However, the budget also includes legislative proposals that would trim about $4.3 billion from the Medicare program for the fiscal year and $252 billion over 10 years.

In addition, it also calls for Medicaid reforms that would result in about $28 billion in savings in that program over 10 years.

The president's plan outlines a number of provider payment changes including reducing the update factor for inpatient hospitals, outpatient hospitals, hospices, and ambulance services 0.65% each year starting in fiscal year 2008; freezing the update for skilled nursing facilities and inpatient rehabilitation facilities in 2008; freezing updates for home health agencies in 2008; and reducing the update for ambulatory surgical centers for 0.65% starting in 2010.

The proposed budget does not address payments to physicians under Medicare, calling into question whether physicians will get relief from a projected 5%–10% cut in Medicare reimbursement slated for January 2008. However, Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, said she has “no doubt” that proposals to address the sustainable growth rate formula–which is used to determine physician payments under Medicare–will be on the table for discussion with Congress.

Reductions in traditional entitlement programs such as Medicare, Medicaid, and Social Security are necessary to avoid tax increases, deficits, or cuts in benefits, President Bush wrote in an accompanying statement to Congress.

But the fate of the Bush proposal already is in doubt in the Democrat-controlled Congress. “I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it, either,” Rep. John Spratt (D-S.C.), chairman of the House Budget Committee, said in a statement.

Physicians organizations also took aim at the proposed budget. Dr. James T. Dove, president-elect of the American College of Cardiology, said the budget fell short in several areas, particularly in the lack of proposals to fix the physician payment formula. “Unless we can work together to put in place a more sustainable payment system for physicians, patients will suffer,” Dr. Dove said in a statement.

Officials at the American Medical Association echoed those comments in their reaction to the president's budget request. “Over the next 8 years, Medicare payments to physicians will be slashed by nearly 40%, while practice costs increase about 20%. Without adequate funding, physicians cannot make needed investments in health information technology and quality improvement, and seniors' access to health care is placed at risk,” Dr. Cecil B. Wilson, AMA board chair, said in a statement.

The president's budget proposal also came under fire from the American Hospital Association, which called it “devastating news” for children, seniors, and the disabled.

The president's plan would reauthorize SCHIP for 5 years and spend nearly $5 billion on the program over that period. However, it would refocus the program to children at or below 200% of poverty, a smaller group than many states currently target with their programs.

But that level of funding would actually reduce SCHIP spending in fiscal year 2008, according to the American College of Physicians.

Officials at the ACP called on Congress to provide additional funds to SCHIP so that it could be expanded to reach more low-income children and their parents.

President Bush also seeks the standard deduction for health insurance that he outlined in his State of the Union address in January. His proposal aims to make it more affordable for workers who do not get health care coverage through their employers to obtain insurance.

It includes a $15,000 standard deduction for health insurance for any family covered by at least a catastrophic health insurance policy, regardless of whether it was purchased individually or by an employer.

The president proposed that the Health and Human Services secretary will work with Congress to redirect a portion of institutional payments so that states can help low-income residents purchase health insurance.

Under the plan, association health plans would be established so that small employers and other organizations can negotiate for lower insurance costs.

The Bush administration's budget proposal for fiscal 2008 could be bad news for physicians and hospitals.

The proposal, which was sent to Congress on Feb. 5, seeks about $600 billion in net outlays to finance the Centers for Medicare and Medicaid Services including Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), a $29.2 billion increase over projected 2007 levels. However, the budget also includes legislative proposals that would trim about $4.3 billion from the Medicare program for the fiscal year and $252 billion over 10 years.

In addition, it also calls for Medicaid reforms that would result in about $28 billion in savings in that program over 10 years.

The president's plan outlines a number of provider payment changes including reducing the update factor for inpatient hospitals, outpatient hospitals, hospices, and ambulance services 0.65% each year starting in fiscal year 2008; freezing the update for skilled nursing facilities and inpatient rehabilitation facilities in 2008; freezing updates for home health agencies in 2008; and reducing the update for ambulatory surgical centers for 0.65% starting in 2010.

The proposed budget does not address payments to physicians under Medicare, calling into question whether physicians will get relief from a projected 5%–10% cut in Medicare reimbursement slated for January 2008. However, Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, said she has “no doubt” that proposals to address the sustainable growth rate formula–which is used to determine physician payments under Medicare–will be on the table for discussion with Congress.

Reductions in traditional entitlement programs such as Medicare, Medicaid, and Social Security are necessary to avoid tax increases, deficits, or cuts in benefits, President Bush wrote in an accompanying statement to Congress.

But the fate of the Bush proposal already is in doubt in the Democrat-controlled Congress. “I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it, either,” Rep. John Spratt (D-S.C.), chairman of the House Budget Committee, said in a statement.

Physicians organizations also took aim at the proposed budget. Dr. James T. Dove, president-elect of the American College of Cardiology, said the budget fell short in several areas, particularly in the lack of proposals to fix the physician payment formula. “Unless we can work together to put in place a more sustainable payment system for physicians, patients will suffer,” Dr. Dove said in a statement.

Officials at the American Medical Association echoed those comments in their reaction to the president's budget request. “Over the next 8 years, Medicare payments to physicians will be slashed by nearly 40%, while practice costs increase about 20%. Without adequate funding, physicians cannot make needed investments in health information technology and quality improvement, and seniors' access to health care is placed at risk,” Dr. Cecil B. Wilson, AMA board chair, said in a statement.

The president's budget proposal also came under fire from the American Hospital Association, which called it “devastating news” for children, seniors, and the disabled.

The president's plan would reauthorize SCHIP for 5 years and spend nearly $5 billion on the program over that period. However, it would refocus the program to children at or below 200% of poverty, a smaller group than many states currently target with their programs.

But that level of funding would actually reduce SCHIP spending in fiscal year 2008, according to the American College of Physicians.

Officials at the ACP called on Congress to provide additional funds to SCHIP so that it could be expanded to reach more low-income children and their parents.

President Bush also seeks the standard deduction for health insurance that he outlined in his State of the Union address in January. His proposal aims to make it more affordable for workers who do not get health care coverage through their employers to obtain insurance.

It includes a $15,000 standard deduction for health insurance for any family covered by at least a catastrophic health insurance policy, regardless of whether it was purchased individually or by an employer.

The president proposed that the Health and Human Services secretary will work with Congress to redirect a portion of institutional payments so that states can help low-income residents purchase health insurance.

Under the plan, association health plans would be established so that small employers and other organizations can negotiate for lower insurance costs.

The Bush administration's budget proposal for fiscal 2008 could be bad news for physicians and hospitals.

The proposal, which was sent to Congress on Feb. 5, seeks about $600 billion in net outlays to finance the Centers for Medicare and Medicaid Services including Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), a $29.2 billion increase over projected 2007 levels. However, the budget also includes legislative proposals that would trim about $4.3 billion from the Medicare program for the fiscal year and $252 billion over 10 years.

In addition, it also calls for Medicaid reforms that would result in about $28 billion in savings in that program over 10 years.

The president's plan outlines a number of provider payment changes including reducing the update factor for inpatient hospitals, outpatient hospitals, hospices, and ambulance services 0.65% each year starting in fiscal year 2008; freezing the update for skilled nursing facilities and inpatient rehabilitation facilities in 2008; freezing updates for home health agencies in 2008; and reducing the update for ambulatory surgical centers for 0.65% starting in 2010.

The proposed budget does not address payments to physicians under Medicare, calling into question whether physicians will get relief from a projected 5%–10% cut in Medicare reimbursement slated for January 2008. However, Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, said she has “no doubt” that proposals to address the sustainable growth rate formula–which is used to determine physician payments under Medicare–will be on the table for discussion with Congress.

Reductions in traditional entitlement programs such as Medicare, Medicaid, and Social Security are necessary to avoid tax increases, deficits, or cuts in benefits, President Bush wrote in an accompanying statement to Congress.

But the fate of the Bush proposal already is in doubt in the Democrat-controlled Congress. “I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it, either,” Rep. John Spratt (D-S.C.), chairman of the House Budget Committee, said in a statement.

Physicians organizations also took aim at the proposed budget. Dr. James T. Dove, president-elect of the American College of Cardiology, said the budget fell short in several areas, particularly in the lack of proposals to fix the physician payment formula. “Unless we can work together to put in place a more sustainable payment system for physicians, patients will suffer,” Dr. Dove said in a statement.

Officials at the American Medical Association echoed those comments in their reaction to the president's budget request. “Over the next 8 years, Medicare payments to physicians will be slashed by nearly 40%, while practice costs increase about 20%. Without adequate funding, physicians cannot make needed investments in health information technology and quality improvement, and seniors' access to health care is placed at risk,” Dr. Cecil B. Wilson, AMA board chair, said in a statement.

The president's budget proposal also came under fire from the American Hospital Association, which called it “devastating news” for children, seniors, and the disabled.

The president's plan would reauthorize SCHIP for 5 years and spend nearly $5 billion on the program over that period. However, it would refocus the program to children at or below 200% of poverty, a smaller group than many states currently target with their programs.

But that level of funding would actually reduce SCHIP spending in fiscal year 2008, according to the American College of Physicians.

Officials at the ACP called on Congress to provide additional funds to SCHIP so that it could be expanded to reach more low-income children and their parents.

President Bush also seeks the standard deduction for health insurance that he outlined in his State of the Union address in January. His proposal aims to make it more affordable for workers who do not get health care coverage through their employers to obtain insurance.

It includes a $15,000 standard deduction for health insurance for any family covered by at least a catastrophic health insurance policy, regardless of whether it was purchased individually or by an employer.

The president proposed that the Health and Human Services secretary will work with Congress to redirect a portion of institutional payments so that states can help low-income residents purchase health insurance.

Under the plan, association health plans would be established so that small employers and other organizations can negotiate for lower insurance costs.

Custody of Mentally Ill Addressed

New federal legislation aims to help parents obtain mental health treatment for their children without losing custody. The bill (H.R. 687/S. 382), which was introduced in both the House and the Senate, would authorize $100 million in family support grants to states that chose to end the practice of forcing parents to relinquish custody of mentally ill children to state agencies to receive mental health services. The legislation was prompted by an April 2003 report from the Government Accountability Office, which found that more than 12,000 children from 19 states were placed in the juvenile justice system to receive mental health treatment in 2001. “It is simply unconscionable that families are forced to choose between custody of their children and the mental health services they desperately need,” Rep. Jim Ramstad (R-Minn.), one of the sponsors of the legislation, said in a statement. “No parent should face this impossible choice, yet too many families are forced to lose custody to save their children.”

Katrina's EmotionaI Impact

Mississippi children and families displaced by Hurricane Katrina continue to have emotional problems, according to a report from Columbia University and the Children's Health Fund. The researchers interviewed 576 adults from randomly selected households displaced by the hurricane and found that more than half of the parents reported that at least one child in the family had experienced emotional or behavioral issues following Katrina, but only 29% had sought some form of professional help. “Our ongoing clinical work with children in the [Federal Emergency Management Agency] trailers and this latest study suggests that as many as one in three children are already suffering from significant mental health, behavioral, and school-related problems,” Dr. Irwin Redlener, president of the Children's Health Fund, said in a statement. “This means that, extrapolating from our data, at least 25,000–35,000 children are already in serious trouble, with enormous consequences for the future.” There was also a significant emotional strain on parents. About 62% of caregivers surveyed scored low on a standardized mental health instrument, suggesting high levels of clinical anxiety, depression, and posttraumatic stress disorder.

NIDA Educates Physicians

The National Institute on Drug Abuse is establishing four Centers of Excellence for Physician Information in an effort to help improve the treatment of addiction in primary care practices. The centers will seek to educate medical students and resident physicians in internal medicine, family practice, and pediatrics in the areas of prescription drug abuse, methamphetamine abuse and addiction, and comorbid substance abuse and mental illness. Officials at the centers will focus on identifying knowledge gaps about drug addiction, developing educational materials that target those gaps, and identifying ways of delivering the information. The centers are being set up at Creighton University, the University of Pennsylvania in collaboration with Drexel University, the University of North Dakota, and the Massachusetts Consortium of Medical Schools.

FDA's $2 Billion Budget

The Bush administration is requesting $2.1 billion for the Food and Drug Administration in fiscal 2008, a 5% increase from the previous year's request. The agency still has not received its final appropriation for fiscal 2007, so the exact amount it will receive for that year is not yet known. The budget includes $444 million in user fees from industry, including a new program aimed at charging generic drug makers fees to review their products. The agency estimates that generic companies will contribute $16 million in fiscal 2008. In a statement, Generic Pharmaceutical Association CEO Kathleen Jaeger said the decision to seek user fees “will not bring generic medicines to consumers faster as long as brand companies are still permitted to use tactics that delay market entry.” The agency is requesting $13 million to move about 1,300 employees of the Center for Devices and Radiological Health to offices at its new White Oak, Md., campus. The FDA has been gradually moving its operations to the new facilities. The consumer-, patient-, and industry-supported Coalition for a Stronger FDA, based in Washingon, said the budget did not go far enough. It is seeking at least $175 million more, including greater increases for food, drug, and medical device safety.

Disclosing Financial Conflicts

Experts from Johns Hopkins University, Duke University, and Wake Forest University have designed model language aimed at helping researchers disclose financial conflicts to medical research participants in a meaningful way. The model language was published in the January/February issue of IRB: Ethics and Human Research. Included is a standard disclosure for situations in which there is a financial interest that does not represent a measurable risk to patients. The model also includes language that researchers can use to describe salary support, money received outside of a study, per capita payments, and unrestricted finders' fees, among other common conflicts. “This is language that can help these institutions craft better written materials. It can also serve as a model for how to accurately phrase disclosure in discussions with potential research subjects,” Dr. Jeremy Sugarman, the lead author and professor at Johns Hopkins University, Baltimore, said in a statement. “It could also be expanded and presented in other formats, such as stand-alone pamphlets or videos about clinical research.”

Custody of Mentally Ill Addressed

New federal legislation aims to help parents obtain mental health treatment for their children without losing custody. The bill (H.R. 687/S. 382), which was introduced in both the House and the Senate, would authorize $100 million in family support grants to states that chose to end the practice of forcing parents to relinquish custody of mentally ill children to state agencies to receive mental health services. The legislation was prompted by an April 2003 report from the Government Accountability Office, which found that more than 12,000 children from 19 states were placed in the juvenile justice system to receive mental health treatment in 2001. “It is simply unconscionable that families are forced to choose between custody of their children and the mental health services they desperately need,” Rep. Jim Ramstad (R-Minn.), one of the sponsors of the legislation, said in a statement. “No parent should face this impossible choice, yet too many families are forced to lose custody to save their children.”

Katrina's EmotionaI Impact

Mississippi children and families displaced by Hurricane Katrina continue to have emotional problems, according to a report from Columbia University and the Children's Health Fund. The researchers interviewed 576 adults from randomly selected households displaced by the hurricane and found that more than half of the parents reported that at least one child in the family had experienced emotional or behavioral issues following Katrina, but only 29% had sought some form of professional help. “Our ongoing clinical work with children in the [Federal Emergency Management Agency] trailers and this latest study suggests that as many as one in three children are already suffering from significant mental health, behavioral, and school-related problems,” Dr. Irwin Redlener, president of the Children's Health Fund, said in a statement. “This means that, extrapolating from our data, at least 25,000–35,000 children are already in serious trouble, with enormous consequences for the future.” There was also a significant emotional strain on parents. About 62% of caregivers surveyed scored low on a standardized mental health instrument, suggesting high levels of clinical anxiety, depression, and posttraumatic stress disorder.

NIDA Educates Physicians

The National Institute on Drug Abuse is establishing four Centers of Excellence for Physician Information in an effort to help improve the treatment of addiction in primary care practices. The centers will seek to educate medical students and resident physicians in internal medicine, family practice, and pediatrics in the areas of prescription drug abuse, methamphetamine abuse and addiction, and comorbid substance abuse and mental illness. Officials at the centers will focus on identifying knowledge gaps about drug addiction, developing educational materials that target those gaps, and identifying ways of delivering the information. The centers are being set up at Creighton University, the University of Pennsylvania in collaboration with Drexel University, the University of North Dakota, and the Massachusetts Consortium of Medical Schools.

FDA's $2 Billion Budget

The Bush administration is requesting $2.1 billion for the Food and Drug Administration in fiscal 2008, a 5% increase from the previous year's request. The agency still has not received its final appropriation for fiscal 2007, so the exact amount it will receive for that year is not yet known. The budget includes $444 million in user fees from industry, including a new program aimed at charging generic drug makers fees to review their products. The agency estimates that generic companies will contribute $16 million in fiscal 2008. In a statement, Generic Pharmaceutical Association CEO Kathleen Jaeger said the decision to seek user fees “will not bring generic medicines to consumers faster as long as brand companies are still permitted to use tactics that delay market entry.” The agency is requesting $13 million to move about 1,300 employees of the Center for Devices and Radiological Health to offices at its new White Oak, Md., campus. The FDA has been gradually moving its operations to the new facilities. The consumer-, patient-, and industry-supported Coalition for a Stronger FDA, based in Washingon, said the budget did not go far enough. It is seeking at least $175 million more, including greater increases for food, drug, and medical device safety.

Disclosing Financial Conflicts

Experts from Johns Hopkins University, Duke University, and Wake Forest University have designed model language aimed at helping researchers disclose financial conflicts to medical research participants in a meaningful way. The model language was published in the January/February issue of IRB: Ethics and Human Research. Included is a standard disclosure for situations in which there is a financial interest that does not represent a measurable risk to patients. The model also includes language that researchers can use to describe salary support, money received outside of a study, per capita payments, and unrestricted finders' fees, among other common conflicts. “This is language that can help these institutions craft better written materials. It can also serve as a model for how to accurately phrase disclosure in discussions with potential research subjects,” Dr. Jeremy Sugarman, the lead author and professor at Johns Hopkins University, Baltimore, said in a statement. “It could also be expanded and presented in other formats, such as stand-alone pamphlets or videos about clinical research.”

Custody of Mentally Ill Addressed

New federal legislation aims to help parents obtain mental health treatment for their children without losing custody. The bill (H.R. 687/S. 382), which was introduced in both the House and the Senate, would authorize $100 million in family support grants to states that chose to end the practice of forcing parents to relinquish custody of mentally ill children to state agencies to receive mental health services. The legislation was prompted by an April 2003 report from the Government Accountability Office, which found that more than 12,000 children from 19 states were placed in the juvenile justice system to receive mental health treatment in 2001. “It is simply unconscionable that families are forced to choose between custody of their children and the mental health services they desperately need,” Rep. Jim Ramstad (R-Minn.), one of the sponsors of the legislation, said in a statement. “No parent should face this impossible choice, yet too many families are forced to lose custody to save their children.”

Katrina's EmotionaI Impact

Mississippi children and families displaced by Hurricane Katrina continue to have emotional problems, according to a report from Columbia University and the Children's Health Fund. The researchers interviewed 576 adults from randomly selected households displaced by the hurricane and found that more than half of the parents reported that at least one child in the family had experienced emotional or behavioral issues following Katrina, but only 29% had sought some form of professional help. “Our ongoing clinical work with children in the [Federal Emergency Management Agency] trailers and this latest study suggests that as many as one in three children are already suffering from significant mental health, behavioral, and school-related problems,” Dr. Irwin Redlener, president of the Children's Health Fund, said in a statement. “This means that, extrapolating from our data, at least 25,000–35,000 children are already in serious trouble, with enormous consequences for the future.” There was also a significant emotional strain on parents. About 62% of caregivers surveyed scored low on a standardized mental health instrument, suggesting high levels of clinical anxiety, depression, and posttraumatic stress disorder.

NIDA Educates Physicians

The National Institute on Drug Abuse is establishing four Centers of Excellence for Physician Information in an effort to help improve the treatment of addiction in primary care practices. The centers will seek to educate medical students and resident physicians in internal medicine, family practice, and pediatrics in the areas of prescription drug abuse, methamphetamine abuse and addiction, and comorbid substance abuse and mental illness. Officials at the centers will focus on identifying knowledge gaps about drug addiction, developing educational materials that target those gaps, and identifying ways of delivering the information. The centers are being set up at Creighton University, the University of Pennsylvania in collaboration with Drexel University, the University of North Dakota, and the Massachusetts Consortium of Medical Schools.

FDA's $2 Billion Budget

The Bush administration is requesting $2.1 billion for the Food and Drug Administration in fiscal 2008, a 5% increase from the previous year's request. The agency still has not received its final appropriation for fiscal 2007, so the exact amount it will receive for that year is not yet known. The budget includes $444 million in user fees from industry, including a new program aimed at charging generic drug makers fees to review their products. The agency estimates that generic companies will contribute $16 million in fiscal 2008. In a statement, Generic Pharmaceutical Association CEO Kathleen Jaeger said the decision to seek user fees “will not bring generic medicines to consumers faster as long as brand companies are still permitted to use tactics that delay market entry.” The agency is requesting $13 million to move about 1,300 employees of the Center for Devices and Radiological Health to offices at its new White Oak, Md., campus. The FDA has been gradually moving its operations to the new facilities. The consumer-, patient-, and industry-supported Coalition for a Stronger FDA, based in Washingon, said the budget did not go far enough. It is seeking at least $175 million more, including greater increases for food, drug, and medical device safety.

Disclosing Financial Conflicts

Experts from Johns Hopkins University, Duke University, and Wake Forest University have designed model language aimed at helping researchers disclose financial conflicts to medical research participants in a meaningful way. The model language was published in the January/February issue of IRB: Ethics and Human Research. Included is a standard disclosure for situations in which there is a financial interest that does not represent a measurable risk to patients. The model also includes language that researchers can use to describe salary support, money received outside of a study, per capita payments, and unrestricted finders' fees, among other common conflicts. “This is language that can help these institutions craft better written materials. It can also serve as a model for how to accurately phrase disclosure in discussions with potential research subjects,” Dr. Jeremy Sugarman, the lead author and professor at Johns Hopkins University, Baltimore, said in a statement. “It could also be expanded and presented in other formats, such as stand-alone pamphlets or videos about clinical research.”

The clock is ticking for physicians to sign up for a National Provider Identifier, the new 10-digit number that will be used by Medicare, Medicaid, and many private health plans to process claims.

The deadline for registering for an NPI number is May 23.

Physicians who are not using an NPI after that date could experience cash flow disruptions, according to the Centers for Medicare and Medicaid Services.

The transition to a single identifier that can be used across health plans is required under the Health Insurance Portability and Accountability Act (HIPAA) of 1996. Most health plans and all health care clearinghouses must begin using NPIs to process physicians' claims in standard transactions by May 23. Small health plans have another year to become compliant.

“The NPI is the new standard identifying number for all health care billing transactions, not just for billing Medicare or Medicaid. National standards like the NPI will make electronic data exchanges a viable and preferable alternative to paper processing for healthcare providers and health plans alike,” said Aaron Hase, a CMS spokesman. As of Jan. 29, more than 1.6 million NPIs had been assigned, according to CMS.

Physicians and other health care providers can apply for an NPI online or by using a paper application. In addition, organizations like hospitals or professional associations can submit applications for several physicians in an electronic file.

Officials at CMS are urging physicians who haven't yet signed up to do so soon. A physician who submits a properly completed electronic application could have his or her NPI in 10 days. However, it can take 120 days to do the remaining work to use it, Mr. Hase said. The preparation includes working on internal billing systems; coordinating with billing services, vendors, and clearinghouses; and testing the new identifier with payers, he said.

So far, the process of obtaining an NPI has been relatively easy, said Brian Whitman, senior analyst for regulatory and insurer affairs at the American College of Physicians. The application process itself takes only about 10 minutes, he said.

As the May deadline approaches and more physicians get registered, the next question is how widely CMS plans to disseminate the NPIs. CMS officials have said they are considering creating a directory of NPIs that could be available to physicians and office staff.

Physicians can apply for an NPI online at https://nppes.cms.hhs.gov

The clock is ticking for physicians to sign up for a National Provider Identifier, the new 10-digit number that will be used by Medicare, Medicaid, and many private health plans to process claims.

The deadline for registering for an NPI number is May 23.

Physicians who are not using an NPI after that date could experience cash flow disruptions, according to the Centers for Medicare and Medicaid Services.

The transition to a single identifier that can be used across health plans is required under the Health Insurance Portability and Accountability Act (HIPAA) of 1996. Most health plans and all health care clearinghouses must begin using NPIs to process physicians' claims in standard transactions by May 23. Small health plans have another year to become compliant.

“The NPI is the new standard identifying number for all health care billing transactions, not just for billing Medicare or Medicaid. National standards like the NPI will make electronic data exchanges a viable and preferable alternative to paper processing for healthcare providers and health plans alike,” said Aaron Hase, a CMS spokesman. As of Jan. 29, more than 1.6 million NPIs had been assigned, according to CMS.

Physicians and other health care providers can apply for an NPI online or by using a paper application. In addition, organizations like hospitals or professional associations can submit applications for several physicians in an electronic file.

Officials at CMS are urging physicians who haven't yet signed up to do so soon. A physician who submits a properly completed electronic application could have his or her NPI in 10 days. However, it can take 120 days to do the remaining work to use it, Mr. Hase said. The preparation includes working on internal billing systems; coordinating with billing services, vendors, and clearinghouses; and testing the new identifier with payers, he said.

So far, the process of obtaining an NPI has been relatively easy, said Brian Whitman, senior analyst for regulatory and insurer affairs at the American College of Physicians. The application process itself takes only about 10 minutes, he said.

As the May deadline approaches and more physicians get registered, the next question is how widely CMS plans to disseminate the NPIs. CMS officials have said they are considering creating a directory of NPIs that could be available to physicians and office staff.

Physicians can apply for an NPI online at https://nppes.cms.hhs.gov

The clock is ticking for physicians to sign up for a National Provider Identifier, the new 10-digit number that will be used by Medicare, Medicaid, and many private health plans to process claims.

The deadline for registering for an NPI number is May 23.

Physicians who are not using an NPI after that date could experience cash flow disruptions, according to the Centers for Medicare and Medicaid Services.

The transition to a single identifier that can be used across health plans is required under the Health Insurance Portability and Accountability Act (HIPAA) of 1996. Most health plans and all health care clearinghouses must begin using NPIs to process physicians' claims in standard transactions by May 23. Small health plans have another year to become compliant.

“The NPI is the new standard identifying number for all health care billing transactions, not just for billing Medicare or Medicaid. National standards like the NPI will make electronic data exchanges a viable and preferable alternative to paper processing for healthcare providers and health plans alike,” said Aaron Hase, a CMS spokesman. As of Jan. 29, more than 1.6 million NPIs had been assigned, according to CMS.

Physicians and other health care providers can apply for an NPI online or by using a paper application. In addition, organizations like hospitals or professional associations can submit applications for several physicians in an electronic file.

Officials at CMS are urging physicians who haven't yet signed up to do so soon. A physician who submits a properly completed electronic application could have his or her NPI in 10 days. However, it can take 120 days to do the remaining work to use it, Mr. Hase said. The preparation includes working on internal billing systems; coordinating with billing services, vendors, and clearinghouses; and testing the new identifier with payers, he said.

So far, the process of obtaining an NPI has been relatively easy, said Brian Whitman, senior analyst for regulatory and insurer affairs at the American College of Physicians. The application process itself takes only about 10 minutes, he said.

As the May deadline approaches and more physicians get registered, the next question is how widely CMS plans to disseminate the NPIs. CMS officials have said they are considering creating a directory of NPIs that could be available to physicians and office staff.

Physicians can apply for an NPI online at https://nppes.cms.hhs.gov

The Bush administration's budget proposal for fiscal 2008 could be bad news for physicians and hospitals.

The proposal, sent to Congress in early February, seeks about $600 billion in net outlays to finance the Centers for Medicare and Medicaid Services including Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), a $29.2 billion increase over projected 2007 levels. But the budget also includes legislative proposals that would trim about $4.3 billion from the Medicare program this year and $252 billion over 10 years.

It also calls for Medicaid reforms that would save about $28 billion over 10 years.

The president's plan outlines several provider payment changes, including reducing the update factor for hospitals, hospices, and ambulance services 0.65% each year starting in fiscal year 2008, and freezing the update for skilled nursing facilities and inpatient rehabilitation facilities in 2008.

The proposed budget does not address payments to physicians under Medicare, calling into question whether physicians will get relief from a projected 5%-10% cut in Medicare reimbursement slated for January 2008. However, Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, said she has “no doubt” that proposals to address the sustainable growth rate formula—which is used to determine physician payments under Medicare—will be on the table for discussion with Congress.

The reductions in traditional entitlement programs such as Medicare, Medicaid, and Social Security are necessary to avoid tax increases, deficits, or cuts in benefits, President Bush wrote in an accompanying statement to Congress.

But the fate of the Bush proposal already is in doubt in the Democrat-controlled Congress. “I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it either,” Rep. John Spratt (D-S.C.), chairman of the House Budget Committee, said in a statement.

Physicians organizations also took aim at the proposed budget. Dr. James T. Dove, president-elect of the American College of Cardiology, said the budget fell short in several areas, particularly in the lack of proposals to fix the physician payment formula. “Unless we can work together to put in place a more sustainable payment system for physicians, patients will suffer,” Dr. Dove said in a statement.

Officials at the American Medical Association echoed those comments in their reaction to the president's budget request. “Over the next 8 years, Medicare payments to physicians will be slashed by nearly 40%, while practice costs increase about 20%. Without adequate funding, physicians cannot make needed investments in health information technology and quality improvement, and seniors' access to health care is placed at risk,” Dr. Cecil B. Wilson, AMA board chair, said in a statement.

The president's proposal also came under fire from the American Hospital Association, which called it “devastating news” for children, seniors, and the disabled.

The president's plan would reauthorize SCHIP for 5 years and spend nearly $5 billion on the program over that period. However, it would refocus the program to children at or below 200% of poverty, a smaller group than many states currently target. That level of funding would actually reduce SCHIP spending in fiscal year 2008, according to the American College of Physicians. Officials at the ACP called on Congress to provide additional funds so that SCHIP could be expanded.

President Bush also seeks the standard deduction for health insurance he outlined in his State of the Union address.

The Bush administration's budget proposal for fiscal 2008 could be bad news for physicians and hospitals.

The proposal, sent to Congress in early February, seeks about $600 billion in net outlays to finance the Centers for Medicare and Medicaid Services including Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), a $29.2 billion increase over projected 2007 levels. But the budget also includes legislative proposals that would trim about $4.3 billion from the Medicare program this year and $252 billion over 10 years.

It also calls for Medicaid reforms that would save about $28 billion over 10 years.

The president's plan outlines several provider payment changes, including reducing the update factor for hospitals, hospices, and ambulance services 0.65% each year starting in fiscal year 2008, and freezing the update for skilled nursing facilities and inpatient rehabilitation facilities in 2008.

The proposed budget does not address payments to physicians under Medicare, calling into question whether physicians will get relief from a projected 5%-10% cut in Medicare reimbursement slated for January 2008. However, Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, said she has “no doubt” that proposals to address the sustainable growth rate formula—which is used to determine physician payments under Medicare—will be on the table for discussion with Congress.

The reductions in traditional entitlement programs such as Medicare, Medicaid, and Social Security are necessary to avoid tax increases, deficits, or cuts in benefits, President Bush wrote in an accompanying statement to Congress.

But the fate of the Bush proposal already is in doubt in the Democrat-controlled Congress. “I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it either,” Rep. John Spratt (D-S.C.), chairman of the House Budget Committee, said in a statement.

Physicians organizations also took aim at the proposed budget. Dr. James T. Dove, president-elect of the American College of Cardiology, said the budget fell short in several areas, particularly in the lack of proposals to fix the physician payment formula. “Unless we can work together to put in place a more sustainable payment system for physicians, patients will suffer,” Dr. Dove said in a statement.

Officials at the American Medical Association echoed those comments in their reaction to the president's budget request. “Over the next 8 years, Medicare payments to physicians will be slashed by nearly 40%, while practice costs increase about 20%. Without adequate funding, physicians cannot make needed investments in health information technology and quality improvement, and seniors' access to health care is placed at risk,” Dr. Cecil B. Wilson, AMA board chair, said in a statement.

The president's proposal also came under fire from the American Hospital Association, which called it “devastating news” for children, seniors, and the disabled.

The president's plan would reauthorize SCHIP for 5 years and spend nearly $5 billion on the program over that period. However, it would refocus the program to children at or below 200% of poverty, a smaller group than many states currently target. That level of funding would actually reduce SCHIP spending in fiscal year 2008, according to the American College of Physicians. Officials at the ACP called on Congress to provide additional funds so that SCHIP could be expanded.

President Bush also seeks the standard deduction for health insurance he outlined in his State of the Union address.

The Bush administration's budget proposal for fiscal 2008 could be bad news for physicians and hospitals.

The proposal, sent to Congress in early February, seeks about $600 billion in net outlays to finance the Centers for Medicare and Medicaid Services including Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), a $29.2 billion increase over projected 2007 levels. But the budget also includes legislative proposals that would trim about $4.3 billion from the Medicare program this year and $252 billion over 10 years.

It also calls for Medicaid reforms that would save about $28 billion over 10 years.

The president's plan outlines several provider payment changes, including reducing the update factor for hospitals, hospices, and ambulance services 0.65% each year starting in fiscal year 2008, and freezing the update for skilled nursing facilities and inpatient rehabilitation facilities in 2008.

The proposed budget does not address payments to physicians under Medicare, calling into question whether physicians will get relief from a projected 5%-10% cut in Medicare reimbursement slated for January 2008. However, Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, said she has “no doubt” that proposals to address the sustainable growth rate formula—which is used to determine physician payments under Medicare—will be on the table for discussion with Congress.

The reductions in traditional entitlement programs such as Medicare, Medicaid, and Social Security are necessary to avoid tax increases, deficits, or cuts in benefits, President Bush wrote in an accompanying statement to Congress.

But the fate of the Bush proposal already is in doubt in the Democrat-controlled Congress. “I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it either,” Rep. John Spratt (D-S.C.), chairman of the House Budget Committee, said in a statement.

Physicians organizations also took aim at the proposed budget. Dr. James T. Dove, president-elect of the American College of Cardiology, said the budget fell short in several areas, particularly in the lack of proposals to fix the physician payment formula. “Unless we can work together to put in place a more sustainable payment system for physicians, patients will suffer,” Dr. Dove said in a statement.

Officials at the American Medical Association echoed those comments in their reaction to the president's budget request. “Over the next 8 years, Medicare payments to physicians will be slashed by nearly 40%, while practice costs increase about 20%. Without adequate funding, physicians cannot make needed investments in health information technology and quality improvement, and seniors' access to health care is placed at risk,” Dr. Cecil B. Wilson, AMA board chair, said in a statement.

The president's proposal also came under fire from the American Hospital Association, which called it “devastating news” for children, seniors, and the disabled.

The president's plan would reauthorize SCHIP for 5 years and spend nearly $5 billion on the program over that period. However, it would refocus the program to children at or below 200% of poverty, a smaller group than many states currently target. That level of funding would actually reduce SCHIP spending in fiscal year 2008, according to the American College of Physicians. Officials at the ACP called on Congress to provide additional funds so that SCHIP could be expanded.

President Bush also seeks the standard deduction for health insurance he outlined in his State of the Union address.