The House, by a 250-151 vote, passed a $602 billion spending bill that would set 2006 funding for HHS and the Education and Labor departments. The bill would give the CMS $401 billion for mandatory and discretionary spending, $95.8 billion more than in fiscal 2005. The bill sets aside $890 million for implementation of the new Medicare drug benefit, which will kick in Jan. 1. The bill also would cut funding for rural health programs by about $30 million and funding for healthcare workforce development and retention by $253 million. The appropriations process is far from over. The Senate next month is scheduled to begin tackling its own spending bill. Congress must then agree on a compromise bill to send to the White House.
Guidant issues another advisory
Guidant Corp. cautioned doctors for the second time in a week about a potential safety problem with some of its implantable defibrillators. In what the Food and Drug Administration might classify as another recall (See related story, p. 20), doctors were advised to discontinue using five different devices until Guidant could complete its evaluation of the devices. The problem rests with a magnetic switch in the devices, which may become stuck, inhibiting the device's ability to treat an abnormal heart rhythm. It also could accelerate battery depletion. Guidant said it confirmed four occurrences of the problem out of approximately 46,000 devices in use, and a fifth occurrence is suspected. The devices were replaced in the four patients. Apart from the replacements, there have been no patient injuries to date, Guidant said. The warning included two devices that Guidant said previously had problems that could be fixed through reprogramming in the doctor's office.
GPO group, lobbyist to part ways
The Health Industry Group Purchasing Association will not renew its public policy and management contract with consulting firm Robert Betz Associates when its five-year contract ends Dec. 31, the consulting firm said. The HIGPA board could not be reached for comment. The board voted 8-5 against renewing the contract as the GPO trade group moves to reorganize its structure, according to a spokeswoman at Robert Betz Associates. The group wants to hire its own permanent staff, the spokeswoman said. RBA President Robert Betz has had a relationship with HIGPA and its predecessor organizations for 15 years. He now serves as the trade group's president and chief executive officer.
Boston Scientific settles case
Boston Scientific Corp. will pay $74 million to settle a 6-year-old criminal investigation by the U.S. Justice Department regarding the company's 1998 voluntary recall of a stent system it no longer manufacturers. Boston Scientific did not admit wrongdoing. The government accused the company of shipping "adulterated and misbranded medical devices" to hospitals from Aug. 12, 1998, to Oct. 5, 1998. In a news release, the company said, "We believe that Boston Scientific and its employees acted legally, responsibly and appropriately at all times. We elected to settle this lingering matter so we could put it behind us."
Universal care for kids proposed
Rep. Pete Stark (D-Calif.) and Sen. Jay Rockefeller (D-W.Va.) introduced legislation to provide universal healthcare for children, regardless of family income. Parents would choose to enroll their children in private plans or a government program such as Medicaid, with a separate program, Medikids, picking up any gaps in coverage. There would be no premiums or cost-sharing for families earning less than 150% of the federal poverty level and reduced premiums and cost-sharing for families between 150% and 300% of the poverty level. Everyone else would pay 25% of annual premiums and full cost-sharing charges.
HealthSouth legal uncertainty
Cases involving accounting fraud at HealthSouth Corp., Birmingham, Ala., appeared to take steps back. The judge in the criminal case against Richard Scrushy, HealthSouth's founder and former chief executive officer, instructed the jury to restart deliberations after one juror was replaced for health reasons. The jurors, considering 36 charges against Scrushy, adjourned June 24 without reaching a verdict. Meanwhile, the 11th U.S. Circuit Court of Appeals in Atlanta vacated sentences for former HealthSouth executives Mike Martin and Richard Botts, who pleaded guilty to charges related to the fraud. The appellate court asked the judge in the case to explain the sentences, which were less than the prosecution had requested. The new sentences could be harsher than the six months of home detention and five years of probation the two initially received.
Aetna to add HMS Healthcare
Aetna, Hartford, Conn., agreed to acquire HMS Healthcare, Denver, for $390 million in cash to expand its local provider networks in Colorado and Michigan and to enter the network-rental business. Privately held HMS leases its network of about 500 hospitals and 60,000 physicians to health plans and self-insured employers covering about 1.5 million people in five states. It operates under the names PPOM, Flora Health Network, Sloans Lake Preferred Health and Mountain Medical Affiliates. Aetna said it expects the deal to close in the third quarter, pending regulatory approval, and to boost earnings in the first year.