CMS proceeds with drug benefit
The Centers for Medicare and Medicaid Services issued a final regulation for establishing a prescription-drug discount program for Medicare beneficiaries, despite an ongoing federal court case challenging its authority to do so. "We're going to proceed as if we had the authority," CMS Administrator Thomas Scully said. Last fall, pharmacy trade groups won a court victory requiring a written regulation for the program. CMS' proposed regulation, published in February, drew a second lawsuit and the National Association of Chain Drug Stores said it may return to court because the final regulation still doesn't address its concerns, including how much of the program's costs retail pharmacists will have to bear. Under the final regulation, the CMS will endorse sponsors of prescription-drug cards that offer rebates or discounts on brand-name or generic drugs. The CMS said it expects the initiative to save beneficiaries up to 15%. The program should start early next year, and officials hope it will be included in a Medicare drug bill later this year, Scully said. A House-passed prescription-drug plan includes provisions for the program.
Whistleblower cases split up
Dozens of 8-year-old whistleblower lawsuits accusing U.S. hospitals of illegally billing Medicare for experimental devices were broken up into individual cases, after being consolidated in Seattle years ago, and transferred to the home federal courts of the named hospitals. At the same time, U.S. District Court in Seattle dismissed the whistleblower lawsuits against about 50 hospitals, most of which had liability of less than $100,000, sources close to the case said. The lawsuits, filed by a former device salesman, accused roughly 130 hospitals of defrauding Medicare by more than $200 million from 1987 to 1995. Perhaps 65 hospitals still have charges pending against them. In addition to the 50 cases that were dismissed, 14 hospitals are known to have reached settlements with the federal government, paying a collective $29 million.
Mount Sinai hit with more fines
New York state's health department levied new fines totaling $66,000 against Mount Sinai Medical Center, New York, for 33 new violations identified in an expanded investigation of 92 patient-care complaints. Investigators said they confirmed problems in 53 of the 92 complaints received since March, when health officials fined the hospital $48,000 for 18 deficiencies in the postoperative care of a liver donor who died. The new violations include serious quality-of-care deficiencies in 11 cases. Nine of the cases involved the hospital's troublesome liver transplant program. The others involved a delay in emergency surgery and the premature discharge of a kidney-transplant patient. Mount Sinai responded in a written statement that most of the problems occurred before 2002 and have already been addressed and corrected. The hospital said it continues to work closely with health officials to address the issues.
HHS bulletin warns against gifts
HHS' inspector general's office posted a special advisory bulletin on its Web site reiterating earlier warnings against offering gifts and other inducements to Medicaid and Medicare beneficiaries. The bulletin, the agency's first since June 2001, is an attempt to expand and clarify guidance on providers' business and marketing practices and is not a response to a rash of complaints, a spokeswoman said. It includes "bright-line guidance" specifying that individual gifts cannot exceed $10 in retail value and no beneficiary can receive gifts with a total value in excess of $50 in a single year. The exceptions are certain inducements protected by statute, such as cost-sharing waivers based on proven need and incentives for preventive care. Additional statutory exemptions are being considered, and HHS may solicit public comment on exempting complimentary transportation and clinical studies.
HMA to buy W.Va. hospital
Nearly four years after filing for bankruptcy, 132-bed Logan (W.Va.) General Hospital said its board agreed to sell the hospital to investor-owned Health Management Associates, Naples, Fla. The hospital did not disclose terms of the sale in its news release and HMA declined to make any officials available for comment. The sale is contingent on proceeds being available to fund a healthcare charitable foundation for Logan County and on approval from the U.S. Bankruptcy Court in Charleston, where the hospital filed for Chapter 11 protection in October 1998. HMA operates 43 hospitals.
Nurses sue Group Health
Thirteen registered nurses, represented by their union, sued Group Health Cooperative, Seattle, in an attempt to block the planned closing of the birthing center at Group Health's flagship, 125-bed Eastside Hospital, Redmond, Wash. The suit was filed in King County Superior Court, Seattle. The nurses said they fear the birthing center's closure is a preliminary move to shutting down the entire hospital. Their union, Service Employees International Union Local 1199, has speculated the system wants to sell the hospital's 15-acre property to neighboring Microsoft Corp. Group Health, an integrated system and 600,000-member HMO, announced the birthing center's closure earlier this month, citing staffing shortages and declining birth rates, and said it would make a decision about the hospital's future by year-end. The system has laid off about 120 people this year as part of a move to reduce its budget by $30 million.