Joyce Frieden

WASHINGTON — A congressional committee wrestled with whether or how much to regulate or impose standards on imaging procedures at a hearing last month on managing Medicare's imaging costs.

“I'm concerned about putting in a whole group of new structures [to monitor imaging procedures] because the system is structure-heavy already,” said Rep. Nancy Johnson (R-Conn.), chair of the health subcommittee of the House Ways and Means Committee. “I'm not sure putting in more oversight is really what we need.”

Mark Miller, Ph.D., executive director of the Medicare Payment Advisory Commission (MedPAC), testified that the growth in the volume of imaging services such as PET scans, CT scans, and MRIs performed on Medicare beneficiaries “is growing at twice the rate of all physician services.” And what worries MedPAC, he continued, is that increasing the amount of imaging being done does not necessarily mean the quality of care is getting any better.

“There is a threefold variation in the use of these services among the Medicare population, and it's not linked to health care quality,” Dr. Miller said. “It's more [related to the] availability of services and practice style.”

MedPAC also is concerned about the wide variability in imaging quality, he said. “There is variation in the quality of the images produced and in the quality of image interpretation.” He said the 17 MedPAC commissioners would like to see the Department of Health and Human Services set quality standards for imaging providers.

“Some people characterize this recommendation as directed toward limiting imaging to radiologists only and billing for imaging to radiologists only,” Dr. Miller said, alluding to the perceived “turf war” going on between radiologists and other imaging providers. “That is not correct. We believe the standard should apply to all physicians” who do imaging.

Subcommittee member Rep. Jim Ramstad (R-Minn.) said he was happy to hear that imaging would not be restricted to radiologists. “I would hate to see this become nothing more than a turf battle,” he said. “It seems to me that overutilization is a complex issue, involving factors like defensive medicine, provider preference, and consumer demand for the best test.”

The subcommittee also heard from representatives for cardiology and radiology groups, each of which took opposing positions on the increase in imaging volume. “We are deeply concerned with the exponential growth in office-based imaging by those who may lack the education, training, equipment, and clinical personnel to safely and effectively use these studies,” said James Borgstede, M.D., chair of the American College of Radiology's board of chancellors. “For this reason, the ACR supports many of the MedPAC recommendations that link Medicare reimbursement to quality, safety, and training standards for physicians and facilities which provide medical imaging services.”

Kim Williams, M.D., speaking on behalf of the American College of Cardiology, said there was “no credible evidence” to support the idea that office-based imaging was of poor quality. “Patients are really the issue, not the turf wars frequently discussed in the literature of the American College of Radiology,” he said. “Office-based medical imaging performed by well-trained specialists is good patient care.”

Cardiologists are especially concerned about a MedPAC recommendation involving ownership of imaging equipment. Under the current laws against physician self-referral, physicians cannot refer patients to an imaging center in which they have direct ownership. Dr. Williams urged the subcommittee not to remove a provision in the law that exempts nuclear medicine.

The subcommittee also considered the issue of whether to lower reimbursement for multiple imaging procedures performed in the same visit—specifically, lowering the amount paid for each subsequent image after the first one. Dr. Borgstede noted that the American Medical Association's CPT Editorial Panel has recommended such a reduction, but it will apply to the first image as well. That change will take effect next January, he said.

WASHINGTON — A congressional committee wrestled with whether or how much to regulate or impose standards on imaging procedures at a hearing last month on managing Medicare's imaging costs.

“I'm concerned about putting in a whole group of new structures [to monitor imaging procedures] because the system is structure-heavy already,” said Rep. Nancy Johnson (R-Conn.), chair of the health subcommittee of the House Ways and Means Committee. “I'm not sure putting in more oversight is really what we need.”

Mark Miller, Ph.D., executive director of the Medicare Payment Advisory Commission (MedPAC), testified that the growth in the volume of imaging services such as PET scans, CT scans, and MRIs performed on Medicare beneficiaries “is growing at twice the rate of all physician services.” And what worries MedPAC, he continued, is that increasing the amount of imaging being done does not necessarily mean the quality of care is getting any better.

“There is a threefold variation in the use of these services among the Medicare population, and it's not linked to health care quality,” Dr. Miller said. “It's more [related to the] availability of services and practice style.”

MedPAC also is concerned about the wide variability in imaging quality, he said. “There is variation in the quality of the images produced and in the quality of image interpretation.” He said the 17 MedPAC commissioners would like to see the Department of Health and Human Services set quality standards for imaging providers.

“Some people characterize this recommendation as directed toward limiting imaging to radiologists only and billing for imaging to radiologists only,” Dr. Miller said, alluding to the perceived “turf war” going on between radiologists and other imaging providers. “That is not correct. We believe the standard should apply to all physicians” who do imaging.

Subcommittee member Rep. Jim Ramstad (R-Minn.) said he was happy to hear that imaging would not be restricted to radiologists. “I would hate to see this become nothing more than a turf battle,” he said. “It seems to me that overutilization is a complex issue, involving factors like defensive medicine, provider preference, and consumer demand for the best test.”

The subcommittee also heard from representatives for cardiology and radiology groups, each of which took opposing positions on the increase in imaging volume. “We are deeply concerned with the exponential growth in office-based imaging by those who may lack the education, training, equipment, and clinical personnel to safely and effectively use these studies,” said James Borgstede, M.D., chair of the American College of Radiology's board of chancellors. “For this reason, the ACR supports many of the MedPAC recommendations that link Medicare reimbursement to quality, safety, and training standards for physicians and facilities which provide medical imaging services.”

Kim Williams, M.D., speaking on behalf of the American College of Cardiology, said there was “no credible evidence” to support the idea that office-based imaging was of poor quality. “Patients are really the issue, not the turf wars frequently discussed in the literature of the American College of Radiology,” he said. “Office-based medical imaging performed by well-trained specialists is good patient care.”

Cardiologists are especially concerned about a MedPAC recommendation involving ownership of imaging equipment. Under the current laws against physician self-referral, physicians cannot refer patients to an imaging center in which they have direct ownership. Dr. Williams urged the subcommittee not to remove a provision in the law that exempts nuclear medicine.

The subcommittee also considered the issue of whether to lower reimbursement for multiple imaging procedures performed in the same visit—specifically, lowering the amount paid for each subsequent image after the first one. Dr. Borgstede noted that the American Medical Association's CPT Editorial Panel has recommended such a reduction, but it will apply to the first image as well. That change will take effect next January, he said.

WASHINGTON — A congressional committee wrestled with whether or how much to regulate or impose standards on imaging procedures at a hearing last month on managing Medicare's imaging costs.

“I'm concerned about putting in a whole group of new structures [to monitor imaging procedures] because the system is structure-heavy already,” said Rep. Nancy Johnson (R-Conn.), chair of the health subcommittee of the House Ways and Means Committee. “I'm not sure putting in more oversight is really what we need.”

Mark Miller, Ph.D., executive director of the Medicare Payment Advisory Commission (MedPAC), testified that the growth in the volume of imaging services such as PET scans, CT scans, and MRIs performed on Medicare beneficiaries “is growing at twice the rate of all physician services.” And what worries MedPAC, he continued, is that increasing the amount of imaging being done does not necessarily mean the quality of care is getting any better.

“There is a threefold variation in the use of these services among the Medicare population, and it's not linked to health care quality,” Dr. Miller said. “It's more [related to the] availability of services and practice style.”

MedPAC also is concerned about the wide variability in imaging quality, he said. “There is variation in the quality of the images produced and in the quality of image interpretation.” He said the 17 MedPAC commissioners would like to see the Department of Health and Human Services set quality standards for imaging providers.

“Some people characterize this recommendation as directed toward limiting imaging to radiologists only and billing for imaging to radiologists only,” Dr. Miller said, alluding to the perceived “turf war” going on between radiologists and other imaging providers. “That is not correct. We believe the standard should apply to all physicians” who do imaging.

Subcommittee member Rep. Jim Ramstad (R-Minn.) said he was happy to hear that imaging would not be restricted to radiologists. “I would hate to see this become nothing more than a turf battle,” he said. “It seems to me that overutilization is a complex issue, involving factors like defensive medicine, provider preference, and consumer demand for the best test.”

The subcommittee also heard from representatives for cardiology and radiology groups, each of which took opposing positions on the increase in imaging volume. “We are deeply concerned with the exponential growth in office-based imaging by those who may lack the education, training, equipment, and clinical personnel to safely and effectively use these studies,” said James Borgstede, M.D., chair of the American College of Radiology's board of chancellors. “For this reason, the ACR supports many of the MedPAC recommendations that link Medicare reimbursement to quality, safety, and training standards for physicians and facilities which provide medical imaging services.”

Kim Williams, M.D., speaking on behalf of the American College of Cardiology, said there was “no credible evidence” to support the idea that office-based imaging was of poor quality. “Patients are really the issue, not the turf wars frequently discussed in the literature of the American College of Radiology,” he said. “Office-based medical imaging performed by well-trained specialists is good patient care.”

Cardiologists are especially concerned about a MedPAC recommendation involving ownership of imaging equipment. Under the current laws against physician self-referral, physicians cannot refer patients to an imaging center in which they have direct ownership. Dr. Williams urged the subcommittee not to remove a provision in the law that exempts nuclear medicine.

The subcommittee also considered the issue of whether to lower reimbursement for multiple imaging procedures performed in the same visit—specifically, lowering the amount paid for each subsequent image after the first one. Dr. Borgstede noted that the American Medical Association's CPT Editorial Panel has recommended such a reduction, but it will apply to the first image as well. That change will take effect next January, he said.

WASHINGTON — Sixty-year-old Janice Ramsey used to have something in common with other Deltona, Fla., residents—she was a small business owner who had health insurance. That changed 7 years ago.

Ms. Ramsey's problems started when she switched health insurance plans. “I purchased a new individual plan because the old one was a little high,” she said at a press briefing sponsored by the American Diabetes Association and Georgetown University. “I had the plan for a year and a half, and then I went to use it.” She needed the coverage to help pay for some blood work, which revealed that she had type 2 diabetes.

Once the claims for the tests were submitted, the insurer took another look at Ms. Ramsey's policy. “The plan said I must have had diabetes before I took their coverage, and they dropped me,” she said. “I was out all the premiums I had [paid].”

She then found coverage through an association health plan—one that covers members of trade associations and other small groups. After paying premiums for 18 months, she had trouble again.

“I found out that the policy I had bought was fraudulent,” she said. “I had to use it because [the doctors] thought I was having a heart attack, and I went in for a catheterization. They didn't pay a dime.”

She was stuck with $23,000 in bills, which she eventually paid back. The plan then went bankrupt, and “they were not licensed in Florida, so the insurance commissioner told me I didn't have a chance to get any money back,” she added.

Since then, Ms. Ramsey has tried to get other coverage, to no avail. “I've contacted a lot of companies, and the answer is the same, 'Sorry, we cannot help you; you have diabetes,'” she said. She is hoping that she can hang on for another 5 years, when she'll be eligible for Medicare.

Ms. Ramsey's case is not uncommon, according to Karen Pollitz, project director at the Georgetown University Health Policy Institute and lead author of a report analyzing 850 case studies of diabetes patients who have had problems obtaining or keeping adequate health care coverage. “Even before we began this report, there were studies providing evidence that people who have serious or chronic illnesses are disadvantaged in the insurance system in the U.S. today,” she said.

On average, about 2 million Americans lose their health insurance every month, Ms. Pollitz noted. “Some move right on to the next plan, some are uninsured for a month or two, and some are uninsured for a very long time before they manage to regain their coverage.” However, the burden is not spread equally, since people in poor health are twice as likely to be without insurance for a lengthy spell as those in good health.

People with diabetes need coverage that meets the three A's: accessibility, affordability, and adequacy, she continued. “Most people's problems [were caused by] a transition in coverage; people had lost their prior coverage or were about to lose their coverage and had encountered obstacles or penalties that made it harder to move on to their next coverage.”

Ms. Pollitz and colleagues attempted to resolve the patients' insurance problems, with little success. For example, 377 people who had lost their job-based coverage were eligible for coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), but after they saw what the premiums would be—much more expensive than the premiums they paid on their earlier policies—only 15 people were able to enroll.

Further, 87 people were eligible for individual coverage under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), but only 11 were able to buy the coverage. And 344 people lived in states that had high-risk pools to help the uninsured, but only 7 ended up enrolling. As for Medicaid, although a “large number” of patients had very low incomes—less than $1,000 per month—only 6 ended up being able to enroll in Medicaid, she said.

State high-risk pools were a good example of coverage barriers, according to Ms. Pollitz. Some of the pools were not very accessible; many had waiting lists or were closed to new enrollments. In Florida, where Ms. Ramsey lives, the high-risk pool “has been closed to new enrollees for more than a decade,” she noted.

Affordability is another problem with high-risk pools, since the coverage always costs 50%-100% more than what a private individual insurance policy would cost. For example, in Illinois, premiums can range as high as $1,084 per month, she said. The plans also are age rated, so the costs can grow three to four times in size as beneficiaries approach age 65.

Adequacy is also an issue with high-risk pool policies, Ms. Pollitz said. “High-risk pools often exclude preexisting conditions, so the thing that makes you eligible in the first place is excluded for 6-12 months.” Some pools also have limits on coverage for prescription drugs and mental health care.

On the private insurance side, the high-deductible policies that are increasing in popularity “really hit people with diabetes,” she said, noting that supplies for diabetes patients, such as medications, test strips, and insulin, can range from $350 to $800 per month, depending on whether the patient is experiencing complications. “Those costs really add up.”

The features of health insurance that hurt diabetes patients and others with chronic illnesses “were all adopted for reasons that were perfectly logical,” such as keeping insurance companies solvent, protecting insurers from adverse selection, or being able to offer cheaper premiums. “But those [features] tended to have been adopted one change at a time, so it was hard to step back and take a look at the big picture,” Ms. Pollitz said.

She added that the perspective of chronically ill patients “is a very important one to adopt when looking at proposals to change the health insurance system, because if change won't make it better for people who are sick, then what's the point?”

WASHINGTON — Sixty-year-old Janice Ramsey used to have something in common with other Deltona, Fla., residents—she was a small business owner who had health insurance. That changed 7 years ago.

Ms. Ramsey's problems started when she switched health insurance plans. “I purchased a new individual plan because the old one was a little high,” she said at a press briefing sponsored by the American Diabetes Association and Georgetown University. “I had the plan for a year and a half, and then I went to use it.” She needed the coverage to help pay for some blood work, which revealed that she had type 2 diabetes.

Once the claims for the tests were submitted, the insurer took another look at Ms. Ramsey's policy. “The plan said I must have had diabetes before I took their coverage, and they dropped me,” she said. “I was out all the premiums I had [paid].”

She then found coverage through an association health plan—one that covers members of trade associations and other small groups. After paying premiums for 18 months, she had trouble again.

“I found out that the policy I had bought was fraudulent,” she said. “I had to use it because [the doctors] thought I was having a heart attack, and I went in for a catheterization. They didn't pay a dime.”

She was stuck with $23,000 in bills, which she eventually paid back. The plan then went bankrupt, and “they were not licensed in Florida, so the insurance commissioner told me I didn't have a chance to get any money back,” she added.

Since then, Ms. Ramsey has tried to get other coverage, to no avail. “I've contacted a lot of companies, and the answer is the same, 'Sorry, we cannot help you; you have diabetes,'” she said. She is hoping that she can hang on for another 5 years, when she'll be eligible for Medicare.

Ms. Ramsey's case is not uncommon, according to Karen Pollitz, project director at the Georgetown University Health Policy Institute and lead author of a report analyzing 850 case studies of diabetes patients who have had problems obtaining or keeping adequate health care coverage. “Even before we began this report, there were studies providing evidence that people who have serious or chronic illnesses are disadvantaged in the insurance system in the U.S. today,” she said.

On average, about 2 million Americans lose their health insurance every month, Ms. Pollitz noted. “Some move right on to the next plan, some are uninsured for a month or two, and some are uninsured for a very long time before they manage to regain their coverage.” However, the burden is not spread equally, since people in poor health are twice as likely to be without insurance for a lengthy spell as those in good health.

People with diabetes need coverage that meets the three A's: accessibility, affordability, and adequacy, she continued. “Most people's problems [were caused by] a transition in coverage; people had lost their prior coverage or were about to lose their coverage and had encountered obstacles or penalties that made it harder to move on to their next coverage.”

Ms. Pollitz and colleagues attempted to resolve the patients' insurance problems, with little success. For example, 377 people who had lost their job-based coverage were eligible for coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), but after they saw what the premiums would be—much more expensive than the premiums they paid on their earlier policies—only 15 people were able to enroll.

Further, 87 people were eligible for individual coverage under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), but only 11 were able to buy the coverage. And 344 people lived in states that had high-risk pools to help the uninsured, but only 7 ended up enrolling. As for Medicaid, although a “large number” of patients had very low incomes—less than $1,000 per month—only 6 ended up being able to enroll in Medicaid, she said.

State high-risk pools were a good example of coverage barriers, according to Ms. Pollitz. Some of the pools were not very accessible; many had waiting lists or were closed to new enrollments. In Florida, where Ms. Ramsey lives, the high-risk pool “has been closed to new enrollees for more than a decade,” she noted.

Affordability is another problem with high-risk pools, since the coverage always costs 50%-100% more than what a private individual insurance policy would cost. For example, in Illinois, premiums can range as high as $1,084 per month, she said. The plans also are age rated, so the costs can grow three to four times in size as beneficiaries approach age 65.

Adequacy is also an issue with high-risk pool policies, Ms. Pollitz said. “High-risk pools often exclude preexisting conditions, so the thing that makes you eligible in the first place is excluded for 6-12 months.” Some pools also have limits on coverage for prescription drugs and mental health care.

On the private insurance side, the high-deductible policies that are increasing in popularity “really hit people with diabetes,” she said, noting that supplies for diabetes patients, such as medications, test strips, and insulin, can range from $350 to $800 per month, depending on whether the patient is experiencing complications. “Those costs really add up.”

The features of health insurance that hurt diabetes patients and others with chronic illnesses “were all adopted for reasons that were perfectly logical,” such as keeping insurance companies solvent, protecting insurers from adverse selection, or being able to offer cheaper premiums. “But those [features] tended to have been adopted one change at a time, so it was hard to step back and take a look at the big picture,” Ms. Pollitz said.

She added that the perspective of chronically ill patients “is a very important one to adopt when looking at proposals to change the health insurance system, because if change won't make it better for people who are sick, then what's the point?”

WASHINGTON — Sixty-year-old Janice Ramsey used to have something in common with other Deltona, Fla., residents—she was a small business owner who had health insurance. That changed 7 years ago.

Ms. Ramsey's problems started when she switched health insurance plans. “I purchased a new individual plan because the old one was a little high,” she said at a press briefing sponsored by the American Diabetes Association and Georgetown University. “I had the plan for a year and a half, and then I went to use it.” She needed the coverage to help pay for some blood work, which revealed that she had type 2 diabetes.

Once the claims for the tests were submitted, the insurer took another look at Ms. Ramsey's policy. “The plan said I must have had diabetes before I took their coverage, and they dropped me,” she said. “I was out all the premiums I had [paid].”

She then found coverage through an association health plan—one that covers members of trade associations and other small groups. After paying premiums for 18 months, she had trouble again.

“I found out that the policy I had bought was fraudulent,” she said. “I had to use it because [the doctors] thought I was having a heart attack, and I went in for a catheterization. They didn't pay a dime.”

She was stuck with $23,000 in bills, which she eventually paid back. The plan then went bankrupt, and “they were not licensed in Florida, so the insurance commissioner told me I didn't have a chance to get any money back,” she added.

Since then, Ms. Ramsey has tried to get other coverage, to no avail. “I've contacted a lot of companies, and the answer is the same, 'Sorry, we cannot help you; you have diabetes,'” she said. She is hoping that she can hang on for another 5 years, when she'll be eligible for Medicare.

Ms. Ramsey's case is not uncommon, according to Karen Pollitz, project director at the Georgetown University Health Policy Institute and lead author of a report analyzing 850 case studies of diabetes patients who have had problems obtaining or keeping adequate health care coverage. “Even before we began this report, there were studies providing evidence that people who have serious or chronic illnesses are disadvantaged in the insurance system in the U.S. today,” she said.

On average, about 2 million Americans lose their health insurance every month, Ms. Pollitz noted. “Some move right on to the next plan, some are uninsured for a month or two, and some are uninsured for a very long time before they manage to regain their coverage.” However, the burden is not spread equally, since people in poor health are twice as likely to be without insurance for a lengthy spell as those in good health.

People with diabetes need coverage that meets the three A's: accessibility, affordability, and adequacy, she continued. “Most people's problems [were caused by] a transition in coverage; people had lost their prior coverage or were about to lose their coverage and had encountered obstacles or penalties that made it harder to move on to their next coverage.”

Ms. Pollitz and colleagues attempted to resolve the patients' insurance problems, with little success. For example, 377 people who had lost their job-based coverage were eligible for coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), but after they saw what the premiums would be—much more expensive than the premiums they paid on their earlier policies—only 15 people were able to enroll.

Further, 87 people were eligible for individual coverage under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), but only 11 were able to buy the coverage. And 344 people lived in states that had high-risk pools to help the uninsured, but only 7 ended up enrolling. As for Medicaid, although a “large number” of patients had very low incomes—less than $1,000 per month—only 6 ended up being able to enroll in Medicaid, she said.

State high-risk pools were a good example of coverage barriers, according to Ms. Pollitz. Some of the pools were not very accessible; many had waiting lists or were closed to new enrollments. In Florida, where Ms. Ramsey lives, the high-risk pool “has been closed to new enrollees for more than a decade,” she noted.

Affordability is another problem with high-risk pools, since the coverage always costs 50%-100% more than what a private individual insurance policy would cost. For example, in Illinois, premiums can range as high as $1,084 per month, she said. The plans also are age rated, so the costs can grow three to four times in size as beneficiaries approach age 65.

Adequacy is also an issue with high-risk pool policies, Ms. Pollitz said. “High-risk pools often exclude preexisting conditions, so the thing that makes you eligible in the first place is excluded for 6-12 months.” Some pools also have limits on coverage for prescription drugs and mental health care.

On the private insurance side, the high-deductible policies that are increasing in popularity “really hit people with diabetes,” she said, noting that supplies for diabetes patients, such as medications, test strips, and insulin, can range from $350 to $800 per month, depending on whether the patient is experiencing complications. “Those costs really add up.”

The features of health insurance that hurt diabetes patients and others with chronic illnesses “were all adopted for reasons that were perfectly logical,” such as keeping insurance companies solvent, protecting insurers from adverse selection, or being able to offer cheaper premiums. “But those [features] tended to have been adopted one change at a time, so it was hard to step back and take a look at the big picture,” Ms. Pollitz said.

She added that the perspective of chronically ill patients “is a very important one to adopt when looking at proposals to change the health insurance system, because if change won't make it better for people who are sick, then what's the point?”

WASHINGTON — The Centers for Medicare and Medicaid Services is jumping on the pay-for-performance bandwagon, but members of a physician advisory group warned CMS officials to be careful how they go about it.

“I'm only hoping that you'll structure this so that the quality indicators will be that you've [performed] certain processes, not necessarily the outcome [of them],” said Laura B. Powers, M.D., a Knoxville, Tenn., neurologist and member of the Practicing Physicians Advisory Council.

For example, outcomes are not good in terminal patients, Dr. Powers told this newspaper. “What outcome are they going to measure with an amyotrophic lateral sclerosis patient who is definitely going to die?” she said. Instead, Medicare should assess whether the physician has followed appropriate standards of care for terminal patients.

Trent Haywood, M.D., acting deputy chief clinical officer at the agency, said CMS has debated that very issue. “There has been a lot of discussion about what is the right thing [to measure]. We've always said that we think it's both,” he said. “We definitely want process measures … and the current financial structure is also easier for measuring processes, because that's the way we traditionally pay people.”

However, he added, “our goal is toward getting some evidence of outcomes. The process measures we normally collect are always related to outcomes.”

Council member Peter Grimm, D.O., a radiation oncologist in Seattle, said he believes that outcomes are the most important thing to measure. “You have to have outcomes as the bottom line,” said Dr. Grimm, who runs a quality assurance business involving 300 physicians. “I don't care how people get there. I just care that they get there.”

In his testimony to the council, Dr. Haywood outlined the various steps Medicare is taking to introduce pay for performance into physician reimbursement, including demonstration projects with hospitals and group practices. But Dr. Grimm still was not satisfied.

“One thing I didn't hear is how you verify these [performance] data,” he said. “You have to have a third party evaluate it.”

Geraldine O'Shea, D.O., an internist in Jackson, Calif., said that she is concerned about the impact of pay for performance on the doctor-patient relationship.

“Could it discourage physicians from caring for noncompliant patients?” she asked. “And how do these programs ensure the most up-to-date guidelines are being used? How can we get this out to know that this is the benchmark we're going to be measured at?”

There are different ways to address patient compliance, Dr. Haywood said. “If you lean more heavily on process measures, that takes care of part of that problem, because those process measures look at whether you prescribed something or did something. But because we still want to look at outcomes measurement, we also talk about ways in which you allow that patient to be excluded. You can have documentation saying, 'Provided counseling and patient refused.'”

Council member Barbara McAneney, M.D., an oncologist in Albuquerque, N.M., said she was concerned about the expense of the computer system that would be required for physicians to keep track of their outcomes data.

“The electronic medical record (EMR) that our practice purchased some years ago is now completely inadequate because it's not searchable for tumor stage, size, or treatment,” she said. “So I have been shopping for an EMR.

“The most recent quote I got for the EMR that can provide the functions I want … for a practice of nine physicians, they want $400,000,” she continued. “Well, my Medicare drug money just went away, the physician fee schedule is going down, and the [Medicare payment formula] is going to nail us 30% over the next 6 years. Where am I going to find $400,000 to put in an EMR that I can search and find all stage II breast cancer patients, and see whether they got their chemotherapy, and how they are doing, and by the way, how many of them are on Vioxx, and I have got to call them up and get them off it? All these kinds of issues are really going to have to be addressed.”

Dr. Haywood agreed. “You're articulating some of the barriers we face as we continue to try to work through this process,” he said. “We've started to map out strategies to address some of those issues.” Right now the agency is discussing the idea of certifying EMR systems to help physicians decide which ones to purchase.

WASHINGTON — The Centers for Medicare and Medicaid Services is jumping on the pay-for-performance bandwagon, but members of a physician advisory group warned CMS officials to be careful how they go about it.

“I'm only hoping that you'll structure this so that the quality indicators will be that you've [performed] certain processes, not necessarily the outcome [of them],” said Laura B. Powers, M.D., a Knoxville, Tenn., neurologist and member of the Practicing Physicians Advisory Council.

For example, outcomes are not good in terminal patients, Dr. Powers told this newspaper. “What outcome are they going to measure with an amyotrophic lateral sclerosis patient who is definitely going to die?” she said. Instead, Medicare should assess whether the physician has followed appropriate standards of care for terminal patients.

Trent Haywood, M.D., acting deputy chief clinical officer at the agency, said CMS has debated that very issue. “There has been a lot of discussion about what is the right thing [to measure]. We've always said that we think it's both,” he said. “We definitely want process measures … and the current financial structure is also easier for measuring processes, because that's the way we traditionally pay people.”

However, he added, “our goal is toward getting some evidence of outcomes. The process measures we normally collect are always related to outcomes.”

Council member Peter Grimm, D.O., a radiation oncologist in Seattle, said he believes that outcomes are the most important thing to measure. “You have to have outcomes as the bottom line,” said Dr. Grimm, who runs a quality assurance business involving 300 physicians. “I don't care how people get there. I just care that they get there.”

In his testimony to the council, Dr. Haywood outlined the various steps Medicare is taking to introduce pay for performance into physician reimbursement, including demonstration projects with hospitals and group practices. But Dr. Grimm still was not satisfied.

“One thing I didn't hear is how you verify these [performance] data,” he said. “You have to have a third party evaluate it.”

Geraldine O'Shea, D.O., an internist in Jackson, Calif., said that she is concerned about the impact of pay for performance on the doctor-patient relationship.

“Could it discourage physicians from caring for noncompliant patients?” she asked. “And how do these programs ensure the most up-to-date guidelines are being used? How can we get this out to know that this is the benchmark we're going to be measured at?”

There are different ways to address patient compliance, Dr. Haywood said. “If you lean more heavily on process measures, that takes care of part of that problem, because those process measures look at whether you prescribed something or did something. But because we still want to look at outcomes measurement, we also talk about ways in which you allow that patient to be excluded. You can have documentation saying, 'Provided counseling and patient refused.'”

Council member Barbara McAneney, M.D., an oncologist in Albuquerque, N.M., said she was concerned about the expense of the computer system that would be required for physicians to keep track of their outcomes data.

“The electronic medical record (EMR) that our practice purchased some years ago is now completely inadequate because it's not searchable for tumor stage, size, or treatment,” she said. “So I have been shopping for an EMR.

“The most recent quote I got for the EMR that can provide the functions I want … for a practice of nine physicians, they want $400,000,” she continued. “Well, my Medicare drug money just went away, the physician fee schedule is going down, and the [Medicare payment formula] is going to nail us 30% over the next 6 years. Where am I going to find $400,000 to put in an EMR that I can search and find all stage II breast cancer patients, and see whether they got their chemotherapy, and how they are doing, and by the way, how many of them are on Vioxx, and I have got to call them up and get them off it? All these kinds of issues are really going to have to be addressed.”

Dr. Haywood agreed. “You're articulating some of the barriers we face as we continue to try to work through this process,” he said. “We've started to map out strategies to address some of those issues.” Right now the agency is discussing the idea of certifying EMR systems to help physicians decide which ones to purchase.

WASHINGTON — The Centers for Medicare and Medicaid Services is jumping on the pay-for-performance bandwagon, but members of a physician advisory group warned CMS officials to be careful how they go about it.

“I'm only hoping that you'll structure this so that the quality indicators will be that you've [performed] certain processes, not necessarily the outcome [of them],” said Laura B. Powers, M.D., a Knoxville, Tenn., neurologist and member of the Practicing Physicians Advisory Council.

For example, outcomes are not good in terminal patients, Dr. Powers told this newspaper. “What outcome are they going to measure with an amyotrophic lateral sclerosis patient who is definitely going to die?” she said. Instead, Medicare should assess whether the physician has followed appropriate standards of care for terminal patients.

Trent Haywood, M.D., acting deputy chief clinical officer at the agency, said CMS has debated that very issue. “There has been a lot of discussion about what is the right thing [to measure]. We've always said that we think it's both,” he said. “We definitely want process measures … and the current financial structure is also easier for measuring processes, because that's the way we traditionally pay people.”

However, he added, “our goal is toward getting some evidence of outcomes. The process measures we normally collect are always related to outcomes.”

Council member Peter Grimm, D.O., a radiation oncologist in Seattle, said he believes that outcomes are the most important thing to measure. “You have to have outcomes as the bottom line,” said Dr. Grimm, who runs a quality assurance business involving 300 physicians. “I don't care how people get there. I just care that they get there.”

In his testimony to the council, Dr. Haywood outlined the various steps Medicare is taking to introduce pay for performance into physician reimbursement, including demonstration projects with hospitals and group practices. But Dr. Grimm still was not satisfied.

“One thing I didn't hear is how you verify these [performance] data,” he said. “You have to have a third party evaluate it.”

Geraldine O'Shea, D.O., an internist in Jackson, Calif., said that she is concerned about the impact of pay for performance on the doctor-patient relationship.

“Could it discourage physicians from caring for noncompliant patients?” she asked. “And how do these programs ensure the most up-to-date guidelines are being used? How can we get this out to know that this is the benchmark we're going to be measured at?”

There are different ways to address patient compliance, Dr. Haywood said. “If you lean more heavily on process measures, that takes care of part of that problem, because those process measures look at whether you prescribed something or did something. But because we still want to look at outcomes measurement, we also talk about ways in which you allow that patient to be excluded. You can have documentation saying, 'Provided counseling and patient refused.'”

Council member Barbara McAneney, M.D., an oncologist in Albuquerque, N.M., said she was concerned about the expense of the computer system that would be required for physicians to keep track of their outcomes data.

“The electronic medical record (EMR) that our practice purchased some years ago is now completely inadequate because it's not searchable for tumor stage, size, or treatment,” she said. “So I have been shopping for an EMR.

“The most recent quote I got for the EMR that can provide the functions I want … for a practice of nine physicians, they want $400,000,” she continued. “Well, my Medicare drug money just went away, the physician fee schedule is going down, and the [Medicare payment formula] is going to nail us 30% over the next 6 years. Where am I going to find $400,000 to put in an EMR that I can search and find all stage II breast cancer patients, and see whether they got their chemotherapy, and how they are doing, and by the way, how many of them are on Vioxx, and I have got to call them up and get them off it? All these kinds of issues are really going to have to be addressed.”

Dr. Haywood agreed. “You're articulating some of the barriers we face as we continue to try to work through this process,” he said. “We've started to map out strategies to address some of those issues.” Right now the agency is discussing the idea of certifying EMR systems to help physicians decide which ones to purchase.

WASHINGTON – Despite their growing popularity, health savings accounts are not a good solution to the problem of rising health care costs, at least not for California state employees and retirees, Fred Buenrostro said at a health care congress sponsored by the Wall Street Journal and CNBC.

Mr. Buenrostro is chief executive officer at the California Public Employees' Retirement System (CalPERS), which is the second largest health care purchaser in the country.

CalPERS, based in Sacramento, provides health benefits to more than 1.2 million employees, retirees, and family members. In California, out-of-pocket health care premiums have nearly tripled in 5 years, and Gov. Arnold Schwarzenegger (R) is seeking to cut the amount of premium assistance the state gives to employees and retirees.

So “CalPERS, like other employers, is hearing the call of consumer-driven health care,” including health savings accounts. “We are resisting it because we don't want our highway workers, our police officers, our firefighters, our office workers, to switch from our defined benefits health care model to a defined contribution model,” he said. “We oppose putting our members at risk in such a complex, broken market.”

Under a defined benefit plan like those that offered by CalPERS, employers agree to pay for a particular level of benefits, no matter what the cost of the plan is.

But under a defined contribution plan, the employer pays only a certain amount toward the cost of an insurance policy; any additional costs must be paid by the enrollee. So CalPERS is trying other ways to cut health care costs. One technique is to avoid doing business with providers that the plan perceives to be too high cost. “Two years ago, we dropped two big HMO partners because their prices went over the top,” Mr. Buenrostro said.

The plan is also using generic drugs in 95% of cases, and giving members incentives to buy mail-order drugs.

CalPERS has extended the length of its PPO contracts to improve its negotiating position, and is encouraging members to use “centers of excellence” for various procedures. CalPERS also is talking with other purchasers about price inequities of health care in local markets, and plans to convene a conference of purchasers on this issue later in the year.

One big part of controlling CalPERS' costs has been getting the best price for hospital services. Between 2001 and 2003, hospital prices rose 60%, which was “just unaffordable,” he said. CalPERS partnered with California Blue Shield to do an analysis of the costs, Mr. Buenrostro said.

“Blue Shield came up with what was then a shocking discovery: In many cases there was no correlation between price and quality,” Mr. Buenrostro continued. “I thought they were kidding.”

For example, Blue Shield found that the cost of chemotherapy could range from $135,000 to $300,000.

As a result of the analysis, CalPERS notified 38 hospitals and 17 physician practices that they were in danger of being dropped from the CalPERS provider network unless they dropped their costs and agreed to undergo performance assessments.

The proposed change would have saved the plan $36 million in the first year and $50 million for the next few years.

After negotiations with the hospitals and scrutiny from the state insurance department, CalPERS ended up dropping 24 hospitals and several physician practices as of January.

The result? About 32,000 members were forced to switch their primary care physicians. The move resulted in complaints from CalPERS members as well as from some California legislators.

Despite those complaints, Mr. Buenrostro said he has no regrets. “It will save tens of millions of dollars for our members and the taxpayers [who pay our salaries],” he said.

In addition, the decision helped CalPERS keep its HMO and PPO premium increases for members under 65 at 9.9% “without any takeaways or any increases in copays or deductibles. We're pretty proud of that.”

Despite CalPERS' success, the state of California, like other employers, is not able to solve the long-range health care cost problem by acting on its own, Mr. Buenrostro said.

“We can only solve this problem if we get a national solution.”

WASHINGTON – Despite their growing popularity, health savings accounts are not a good solution to the problem of rising health care costs, at least not for California state employees and retirees, Fred Buenrostro said at a health care congress sponsored by the Wall Street Journal and CNBC.

Mr. Buenrostro is chief executive officer at the California Public Employees' Retirement System (CalPERS), which is the second largest health care purchaser in the country.

CalPERS, based in Sacramento, provides health benefits to more than 1.2 million employees, retirees, and family members. In California, out-of-pocket health care premiums have nearly tripled in 5 years, and Gov. Arnold Schwarzenegger (R) is seeking to cut the amount of premium assistance the state gives to employees and retirees.

So “CalPERS, like other employers, is hearing the call of consumer-driven health care,” including health savings accounts. “We are resisting it because we don't want our highway workers, our police officers, our firefighters, our office workers, to switch from our defined benefits health care model to a defined contribution model,” he said. “We oppose putting our members at risk in such a complex, broken market.”

Under a defined benefit plan like those that offered by CalPERS, employers agree to pay for a particular level of benefits, no matter what the cost of the plan is.

But under a defined contribution plan, the employer pays only a certain amount toward the cost of an insurance policy; any additional costs must be paid by the enrollee. So CalPERS is trying other ways to cut health care costs. One technique is to avoid doing business with providers that the plan perceives to be too high cost. “Two years ago, we dropped two big HMO partners because their prices went over the top,” Mr. Buenrostro said.

The plan is also using generic drugs in 95% of cases, and giving members incentives to buy mail-order drugs.

CalPERS has extended the length of its PPO contracts to improve its negotiating position, and is encouraging members to use “centers of excellence” for various procedures. CalPERS also is talking with other purchasers about price inequities of health care in local markets, and plans to convene a conference of purchasers on this issue later in the year.

One big part of controlling CalPERS' costs has been getting the best price for hospital services. Between 2001 and 2003, hospital prices rose 60%, which was “just unaffordable,” he said. CalPERS partnered with California Blue Shield to do an analysis of the costs, Mr. Buenrostro said.

“Blue Shield came up with what was then a shocking discovery: In many cases there was no correlation between price and quality,” Mr. Buenrostro continued. “I thought they were kidding.”

For example, Blue Shield found that the cost of chemotherapy could range from $135,000 to $300,000.

As a result of the analysis, CalPERS notified 38 hospitals and 17 physician practices that they were in danger of being dropped from the CalPERS provider network unless they dropped their costs and agreed to undergo performance assessments.

The proposed change would have saved the plan $36 million in the first year and $50 million for the next few years.

After negotiations with the hospitals and scrutiny from the state insurance department, CalPERS ended up dropping 24 hospitals and several physician practices as of January.

The result? About 32,000 members were forced to switch their primary care physicians. The move resulted in complaints from CalPERS members as well as from some California legislators.

Despite those complaints, Mr. Buenrostro said he has no regrets. “It will save tens of millions of dollars for our members and the taxpayers [who pay our salaries],” he said.

In addition, the decision helped CalPERS keep its HMO and PPO premium increases for members under 65 at 9.9% “without any takeaways or any increases in copays or deductibles. We're pretty proud of that.”

Despite CalPERS' success, the state of California, like other employers, is not able to solve the long-range health care cost problem by acting on its own, Mr. Buenrostro said.

“We can only solve this problem if we get a national solution.”

WASHINGTON – Despite their growing popularity, health savings accounts are not a good solution to the problem of rising health care costs, at least not for California state employees and retirees, Fred Buenrostro said at a health care congress sponsored by the Wall Street Journal and CNBC.

Mr. Buenrostro is chief executive officer at the California Public Employees' Retirement System (CalPERS), which is the second largest health care purchaser in the country.

CalPERS, based in Sacramento, provides health benefits to more than 1.2 million employees, retirees, and family members. In California, out-of-pocket health care premiums have nearly tripled in 5 years, and Gov. Arnold Schwarzenegger (R) is seeking to cut the amount of premium assistance the state gives to employees and retirees.

So “CalPERS, like other employers, is hearing the call of consumer-driven health care,” including health savings accounts. “We are resisting it because we don't want our highway workers, our police officers, our firefighters, our office workers, to switch from our defined benefits health care model to a defined contribution model,” he said. “We oppose putting our members at risk in such a complex, broken market.”

Under a defined benefit plan like those that offered by CalPERS, employers agree to pay for a particular level of benefits, no matter what the cost of the plan is.

But under a defined contribution plan, the employer pays only a certain amount toward the cost of an insurance policy; any additional costs must be paid by the enrollee. So CalPERS is trying other ways to cut health care costs. One technique is to avoid doing business with providers that the plan perceives to be too high cost. “Two years ago, we dropped two big HMO partners because their prices went over the top,” Mr. Buenrostro said.

The plan is also using generic drugs in 95% of cases, and giving members incentives to buy mail-order drugs.

CalPERS has extended the length of its PPO contracts to improve its negotiating position, and is encouraging members to use “centers of excellence” for various procedures. CalPERS also is talking with other purchasers about price inequities of health care in local markets, and plans to convene a conference of purchasers on this issue later in the year.

One big part of controlling CalPERS' costs has been getting the best price for hospital services. Between 2001 and 2003, hospital prices rose 60%, which was “just unaffordable,” he said. CalPERS partnered with California Blue Shield to do an analysis of the costs, Mr. Buenrostro said.

“Blue Shield came up with what was then a shocking discovery: In many cases there was no correlation between price and quality,” Mr. Buenrostro continued. “I thought they were kidding.”

For example, Blue Shield found that the cost of chemotherapy could range from $135,000 to $300,000.

As a result of the analysis, CalPERS notified 38 hospitals and 17 physician practices that they were in danger of being dropped from the CalPERS provider network unless they dropped their costs and agreed to undergo performance assessments.

The proposed change would have saved the plan $36 million in the first year and $50 million for the next few years.

After negotiations with the hospitals and scrutiny from the state insurance department, CalPERS ended up dropping 24 hospitals and several physician practices as of January.

The result? About 32,000 members were forced to switch their primary care physicians. The move resulted in complaints from CalPERS members as well as from some California legislators.

Despite those complaints, Mr. Buenrostro said he has no regrets. “It will save tens of millions of dollars for our members and the taxpayers [who pay our salaries],” he said.

In addition, the decision helped CalPERS keep its HMO and PPO premium increases for members under 65 at 9.9% “without any takeaways or any increases in copays or deductibles. We're pretty proud of that.”

Despite CalPERS' success, the state of California, like other employers, is not able to solve the long-range health care cost problem by acting on its own, Mr. Buenrostro said.

“We can only solve this problem if we get a national solution.”

WASHINGTON – People who have suffered adverse outcomes because of drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law, known as the Class Action Fairness Act of 2005, would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was greater than $5 million and involved citizens in different states. The law also outlines circumstances in which federal courts can decline to hear class-action cases.

Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class-action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. “There are only 678 federal trial judges in the system, but there are 9,200 state judges in courts of general jurisdiction,” said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a citizen watchdog group.

“So you're talking about cases ordinarily divided up among 9,200 judges and squeezing them into the courtrooms of 678 judges. Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court [already].”

Many physician organizations, including the American Medical Association and the American College of Physicians, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. A few consumer groups, however, such as the Campaign for Tobacco-Free Kids, lamented the effect that the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable for years of misleading Americans about the dangers of tobacco.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases … knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims whom the class-action device originally was designed to benefit,” the administration said in a statement.

The law will affect only those cases filed after the bill was signed, noted Ms. Aldebron.

WASHINGTON – People who have suffered adverse outcomes because of drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law, known as the Class Action Fairness Act of 2005, would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was greater than $5 million and involved citizens in different states. The law also outlines circumstances in which federal courts can decline to hear class-action cases.

Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class-action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. “There are only 678 federal trial judges in the system, but there are 9,200 state judges in courts of general jurisdiction,” said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a citizen watchdog group.

“So you're talking about cases ordinarily divided up among 9,200 judges and squeezing them into the courtrooms of 678 judges. Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court [already].”

Many physician organizations, including the American Medical Association and the American College of Physicians, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. A few consumer groups, however, such as the Campaign for Tobacco-Free Kids, lamented the effect that the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable for years of misleading Americans about the dangers of tobacco.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases … knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims whom the class-action device originally was designed to benefit,” the administration said in a statement.

The law will affect only those cases filed after the bill was signed, noted Ms. Aldebron.

WASHINGTON – People who have suffered adverse outcomes because of drugs or medical devices may face more delays in suing manufacturers for damages now that federal class-action lawsuit legislation has been signed into law.

The law, known as the Class Action Fairness Act of 2005, would move from state court to federal court any class-action lawsuit in which the amount of damages claimed was greater than $5 million and involved citizens in different states. The law also outlines circumstances in which federal courts can decline to hear class-action cases.

Proponents of the law, which passed in both the House and Senate in record time, say that it will help decrease the number of “junk lawsuits” that are clogging up the state courts.

“America's employers and consumers are the big winners,” Tom Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. “Reform of the class-action lawsuit system will reduce frivolous lawsuits, spur business investment, and help restore sanity to our nation's legal system.”

Critics of the bill, however, say that it will deprive citizens of their right to sue when they are injured by a defective product. “There are only 678 federal trial judges in the system, but there are 9,200 state judges in courts of general jurisdiction,” said Jillian Aldebron, counsel and communications coordinator for Public Citizen's Congress Watch, a citizen watchdog group.

“So you're talking about cases ordinarily divided up among 9,200 judges and squeezing them into the courtrooms of 678 judges. Even if they are willing to hear the cases, it's going to take years, and these cases take years in state court [already].”

Many physician organizations, including the American Medical Association and the American College of Physicians, have declined to take a stand on the bill; their efforts are more focused on tort reform legislation affecting medical malpractice cases. A few consumer groups, however, such as the Campaign for Tobacco-Free Kids, lamented the effect that the bill would have on health care-related cases.

“Class-action lawsuits have been an important tool in efforts to hold the tobacco industry accountable,” the group's president, Matthew L. Myers, said in a statement. “This bill will deprive citizens of a state of the right to have their cases heard in their own courts, further overburden the federal courts, and make it more difficult for tobacco companies to be held accountable for years of misleading Americans about the dangers of tobacco.”

Senior citizens' lobby AARP also opposed the bill. “We felt that there wasn't an adequate basis for consumers no longer having the option of bringing a multistate case in state court,” said Larry White, senior legislative representative. “We acknowledge there are abuses on both sides in the system, but when you in essence say that the federal courts will have jurisdiction of these cases … knowing the federal courts oftentimes don't certify those cases, you're in essence saying people who have been genuinely harmed don't have options.”

According to the Bush administration, the law will help consumers. “The bill will remove significant burdens on class-action litigants and provide greater protections for the victims whom the class-action device originally was designed to benefit,” the administration said in a statement.

The law will affect only those cases filed after the bill was signed, noted Ms. Aldebron.

Policy & Practice

Child Well-Being Index for 2005

Violence and risky behaviors among children, such as teen birth, smoking, and use of alcohol and illegal drugs, have declined dramatically during the last 30 years, but high obesity rates are problematic, according to the 2005 Index of Child Well-Being released by the Foundation for Child Development. The overall child-health score in 2003 was 17% below 1975 levels, mainly because of obesity. “It took a generation for overweight and obesity to reach these extreme levels, and it's going to take at least a generation to turn those levels back,” said Kenneth Land, Ph.D., developer of the index and a sociologist at Duke University. In the meantime, violent crime has dropped by more than 64% since 1975, and childhood victimization from violent crime has fallen by more than 38%. Those percentages may rise again, however, as “a strong national economy and increased federal funding for community policing are no longer in play,” Dr. Land said. Births to teenage mothers have dropped by nearly 37%. Smoking continues to decline, but the rate of binge drinking increased slightly, from 27.9% in 2003 to 29.2% in 2004, the study found.

Public Mental Health Spending

The percentage of mental health and substance abuse services paid for with public funding is increasing, according to a study by Substance Abuse and Mental Health Services Administration (SAMHSA). Public sources paid for 63% of mental health spending in 2001, up from 57% 10 years earlier. Similarly, the percentage of substance abuse treatment paid for by public sources rose from 62% to 76% over the same period, the study found. Public spending includes Medicaid, Medicare, and spending by all levels of government–federal, state, and local. “Overall, we have seen a decline in inpatient spending and a shift to publicly financed care,” said SAMHSA administrator Charles Curie. “As we continue to work to improve the community-based services available to people in need, it is clear the public sector is now the major financial driver.”

Zyprexa Patent Upheld

A U.S. District Court upheld the patent held by Eli Lilly & Co. on olanzapine (Zyprexa), an antipsychotic drug that accounts for about one-third of Lilly's revenue; net sales in the United States were $2.4 billion in 2004. Two generic drug makers, Ivax Corp. and Teva Pharmaceuticals Industries Ltd. argued that the patent for the drug should never have been issued because Zyprexa was already covered by another patent. Lilly, however, contended that its drug was different from previously patented medications. The judge dismissed all claims against Lilly, noting among other findings that “defendants have failed to prove by clear and convincing evidence that anyone associated with the prosecution of the [Zyprexa] patent misrepresented or concealed … information with an intent to deceive the Patent and Trademark Office.” Ivax officials expressed disappointment with the ruling. “Ivax continues to strongly believe that the Zyprexa patent is invalid and we immediately intend to aggressively pursue all remedies available to us, including appealing this decision to the U.S. Court of Appeals,” the company said in a statement. But Lilly officials hailed the ruling, saying it “sends a clear message on the strength of” the patent.

Preventing Teen Substance Abuse

School-based social skills programs are the best way to reduce substance abuse in adolescents, a Cochrane Review report found. The authors looked at 32 reports and classified the results based on the sorts of interventions used. They found three main types of intervention: increasing students' knowledge of the damaging effects of drugs; building self-esteem to prevent teens from using drugs to feel socially accepted; and peer-based social skills training that included strong role models and equipped people with the skills to “say no” to drugs. “Programs which develop individuals' social skills are the most effective form of school-level intervention in preventing early drug use,” says Fabrizio Faggiano, M.D., professor at the University of Piemonte Orientale, Novara, Italy. “Applying this program at a school level would prevent 1 out of 5 new initiators, which corresponds to a 20% decrease in the prevalence of drug use.”

Uninsured Projections

The plight of the uninsured isn't likely to be resolved anytime soon. More than 1 in 4 American workers under the age of 65 will be uninsured in 2013–nearly 56 million people–driven by the increasing inability to afford health insurance, reports a Health Affairs Web-exclusive article. Because growth in per capita health spending is expected to outpace median personal income by 2.4% every year, health care coverage will continue to decline, because more Americans will find it unaffordable. “It is unlikely that we will be able to solve the problem of the uninsured without some form of universal health insurance requiring contributions from some combination of employers, employees, and taxpayers,” the study said. Children have fared slightly better than adults, mostly because of coverage afforded by the State Children's Health Insurance Program. The researchers estimated that for every 1% increase in the percentage of uninsured adult workers from 1979-2002, there was only a 0.45% increase in the percentage of uninsured children. The researchers based estimates of the uninsured on federal projections of health spending, personal income, and other population characteristics.

Policy & Practice

Child Well-Being Index for 2005

Violence and risky behaviors among children, such as teen birth, smoking, and use of alcohol and illegal drugs, have declined dramatically during the last 30 years, but high obesity rates are problematic, according to the 2005 Index of Child Well-Being released by the Foundation for Child Development. The overall child-health score in 2003 was 17% below 1975 levels, mainly because of obesity. “It took a generation for overweight and obesity to reach these extreme levels, and it's going to take at least a generation to turn those levels back,” said Kenneth Land, Ph.D., developer of the index and a sociologist at Duke University. In the meantime, violent crime has dropped by more than 64% since 1975, and childhood victimization from violent crime has fallen by more than 38%. Those percentages may rise again, however, as “a strong national economy and increased federal funding for community policing are no longer in play,” Dr. Land said. Births to teenage mothers have dropped by nearly 37%. Smoking continues to decline, but the rate of binge drinking increased slightly, from 27.9% in 2003 to 29.2% in 2004, the study found.

Public Mental Health Spending

The percentage of mental health and substance abuse services paid for with public funding is increasing, according to a study by Substance Abuse and Mental Health Services Administration (SAMHSA). Public sources paid for 63% of mental health spending in 2001, up from 57% 10 years earlier. Similarly, the percentage of substance abuse treatment paid for by public sources rose from 62% to 76% over the same period, the study found. Public spending includes Medicaid, Medicare, and spending by all levels of government–federal, state, and local. “Overall, we have seen a decline in inpatient spending and a shift to publicly financed care,” said SAMHSA administrator Charles Curie. “As we continue to work to improve the community-based services available to people in need, it is clear the public sector is now the major financial driver.”

Zyprexa Patent Upheld

A U.S. District Court upheld the patent held by Eli Lilly & Co. on olanzapine (Zyprexa), an antipsychotic drug that accounts for about one-third of Lilly's revenue; net sales in the United States were $2.4 billion in 2004. Two generic drug makers, Ivax Corp. and Teva Pharmaceuticals Industries Ltd. argued that the patent for the drug should never have been issued because Zyprexa was already covered by another patent. Lilly, however, contended that its drug was different from previously patented medications. The judge dismissed all claims against Lilly, noting among other findings that “defendants have failed to prove by clear and convincing evidence that anyone associated with the prosecution of the [Zyprexa] patent misrepresented or concealed … information with an intent to deceive the Patent and Trademark Office.” Ivax officials expressed disappointment with the ruling. “Ivax continues to strongly believe that the Zyprexa patent is invalid and we immediately intend to aggressively pursue all remedies available to us, including appealing this decision to the U.S. Court of Appeals,” the company said in a statement. But Lilly officials hailed the ruling, saying it “sends a clear message on the strength of” the patent.

Preventing Teen Substance Abuse

School-based social skills programs are the best way to reduce substance abuse in adolescents, a Cochrane Review report found. The authors looked at 32 reports and classified the results based on the sorts of interventions used. They found three main types of intervention: increasing students' knowledge of the damaging effects of drugs; building self-esteem to prevent teens from using drugs to feel socially accepted; and peer-based social skills training that included strong role models and equipped people with the skills to “say no” to drugs. “Programs which develop individuals' social skills are the most effective form of school-level intervention in preventing early drug use,” says Fabrizio Faggiano, M.D., professor at the University of Piemonte Orientale, Novara, Italy. “Applying this program at a school level would prevent 1 out of 5 new initiators, which corresponds to a 20% decrease in the prevalence of drug use.”

Uninsured Projections

The plight of the uninsured isn't likely to be resolved anytime soon. More than 1 in 4 American workers under the age of 65 will be uninsured in 2013–nearly 56 million people–driven by the increasing inability to afford health insurance, reports a Health Affairs Web-exclusive article. Because growth in per capita health spending is expected to outpace median personal income by 2.4% every year, health care coverage will continue to decline, because more Americans will find it unaffordable. “It is unlikely that we will be able to solve the problem of the uninsured without some form of universal health insurance requiring contributions from some combination of employers, employees, and taxpayers,” the study said. Children have fared slightly better than adults, mostly because of coverage afforded by the State Children's Health Insurance Program. The researchers estimated that for every 1% increase in the percentage of uninsured adult workers from 1979-2002, there was only a 0.45% increase in the percentage of uninsured children. The researchers based estimates of the uninsured on federal projections of health spending, personal income, and other population characteristics.

Policy & Practice

Child Well-Being Index for 2005

Violence and risky behaviors among children, such as teen birth, smoking, and use of alcohol and illegal drugs, have declined dramatically during the last 30 years, but high obesity rates are problematic, according to the 2005 Index of Child Well-Being released by the Foundation for Child Development. The overall child-health score in 2003 was 17% below 1975 levels, mainly because of obesity. “It took a generation for overweight and obesity to reach these extreme levels, and it's going to take at least a generation to turn those levels back,” said Kenneth Land, Ph.D., developer of the index and a sociologist at Duke University. In the meantime, violent crime has dropped by more than 64% since 1975, and childhood victimization from violent crime has fallen by more than 38%. Those percentages may rise again, however, as “a strong national economy and increased federal funding for community policing are no longer in play,” Dr. Land said. Births to teenage mothers have dropped by nearly 37%. Smoking continues to decline, but the rate of binge drinking increased slightly, from 27.9% in 2003 to 29.2% in 2004, the study found.

Public Mental Health Spending

The percentage of mental health and substance abuse services paid for with public funding is increasing, according to a study by Substance Abuse and Mental Health Services Administration (SAMHSA). Public sources paid for 63% of mental health spending in 2001, up from 57% 10 years earlier. Similarly, the percentage of substance abuse treatment paid for by public sources rose from 62% to 76% over the same period, the study found. Public spending includes Medicaid, Medicare, and spending by all levels of government–federal, state, and local. “Overall, we have seen a decline in inpatient spending and a shift to publicly financed care,” said SAMHSA administrator Charles Curie. “As we continue to work to improve the community-based services available to people in need, it is clear the public sector is now the major financial driver.”

Zyprexa Patent Upheld

A U.S. District Court upheld the patent held by Eli Lilly & Co. on olanzapine (Zyprexa), an antipsychotic drug that accounts for about one-third of Lilly's revenue; net sales in the United States were $2.4 billion in 2004. Two generic drug makers, Ivax Corp. and Teva Pharmaceuticals Industries Ltd. argued that the patent for the drug should never have been issued because Zyprexa was already covered by another patent. Lilly, however, contended that its drug was different from previously patented medications. The judge dismissed all claims against Lilly, noting among other findings that “defendants have failed to prove by clear and convincing evidence that anyone associated with the prosecution of the [Zyprexa] patent misrepresented or concealed … information with an intent to deceive the Patent and Trademark Office.” Ivax officials expressed disappointment with the ruling. “Ivax continues to strongly believe that the Zyprexa patent is invalid and we immediately intend to aggressively pursue all remedies available to us, including appealing this decision to the U.S. Court of Appeals,” the company said in a statement. But Lilly officials hailed the ruling, saying it “sends a clear message on the strength of” the patent.

Preventing Teen Substance Abuse

School-based social skills programs are the best way to reduce substance abuse in adolescents, a Cochrane Review report found. The authors looked at 32 reports and classified the results based on the sorts of interventions used. They found three main types of intervention: increasing students' knowledge of the damaging effects of drugs; building self-esteem to prevent teens from using drugs to feel socially accepted; and peer-based social skills training that included strong role models and equipped people with the skills to “say no” to drugs. “Programs which develop individuals' social skills are the most effective form of school-level intervention in preventing early drug use,” says Fabrizio Faggiano, M.D., professor at the University of Piemonte Orientale, Novara, Italy. “Applying this program at a school level would prevent 1 out of 5 new initiators, which corresponds to a 20% decrease in the prevalence of drug use.”

Uninsured Projections

The plight of the uninsured isn't likely to be resolved anytime soon. More than 1 in 4 American workers under the age of 65 will be uninsured in 2013–nearly 56 million people–driven by the increasing inability to afford health insurance, reports a Health Affairs Web-exclusive article. Because growth in per capita health spending is expected to outpace median personal income by 2.4% every year, health care coverage will continue to decline, because more Americans will find it unaffordable. “It is unlikely that we will be able to solve the problem of the uninsured without some form of universal health insurance requiring contributions from some combination of employers, employees, and taxpayers,” the study said. Children have fared slightly better than adults, mostly because of coverage afforded by the State Children's Health Insurance Program. The researchers estimated that for every 1% increase in the percentage of uninsured adult workers from 1979-2002, there was only a 0.45% increase in the percentage of uninsured children. The researchers based estimates of the uninsured on federal projections of health spending, personal income, and other population characteristics.

As the public focuses on problems with the safety and cost of prescription drugs, insurers are training their sights on a different cost issue: imaging procedures.

On average, costs of imaging–especially high-tech procedures, such as MRI, CT, and magnetic resonance angiograms–have been going up 20% a year for the last several years, according to Thomas Dehn, M.D., cofounder of National Imaging Associates, a radiology utilization-management firm in Hackensack, N.J.

“Some will say it's the aging of the population, but the key issue is really demand,” said Dr. Dehn, the company's executive vice president and chief medical officer. “Patients are bright. They're good consumers. They want a shoulder MRI if their shoulder hurts.”

Physician demand is also an important part of the equation, he said. “If you have physicians who want increased [patient volume] in their offices, it is possible that rather than spending cognitive time, for which they're poorly reimbursed, they may choose to use a technical alternative.”

For example, a doctor trying to figure out the source of a patient's chronic headaches “may get frustrated and refer the patient for an MRI of the brain, just to show them they're normal,” Dr. Dehn said. “The treating physician knows in the back of his mind that there isn't going to be anything [there], but it will calm the patient down.”

As to which physicians are responsible for the increase in imaging, the answer depends on whom you ask. The American College of Radiology contends that the growth is largely due to self-referral by nonradiologists who have bought their own imaging equipment. But others say that all specialties are doing more imaging, largely because of improved technology and the improvement in care that it brings.

Whatever the reason that more scans are being done, insurers have decided they've had enough. Take Highmark Blue Cross and Blue Shield, a Pittsburgh-based insurer whose imaging costs have risen to $500 million annually in the last few years.

One Highmark strategy for paring down its imaging costs is to develop a smaller network of imaging providers. To be included in Highmark's network, outpatient imaging centers must now offer multiple imaging modalities, such as mammography, MRIs, CTs, and bone densitometry.

“We were seeing many facilities that were single modality–just CT or just MRI,” said Cary Vinson, M.D., Highmark's vice president of quality and medical performance management. “They were being set up by for-profit companies to siphon away high-margin procedures from hospitals and other multimodality freestanding facilities. We were seeing access problems for referring physicians because the single modality centers were outcompeting the multimodality centers, and they couldn't keep up.”

In addition to credentialing the imaging centers, Highmark is going to start requiring providers to preauthorize all CT, MRI, and PET scans. At first, while everyone adapts to the new system, the preauthorization procedure will be voluntary and no procedures will be denied. But eventually–perhaps by the end of this year–the preauthorization will become mandatory, Dr. Vinson said.

Harvard Pilgrim Health Care (HPHC) of Wellesley, Mass., is taking a slightly different approach. Instead of mandatory preauthorization, HPHC is using a “soft denial” process in which physicians must call for imaging preauthorization but can overrule a negative decision.

“We made a decision based on our network being a very sophisticated, highly academic referral environment, that a hard denial program might not be best way to go,” said William Corwin, M.D., the plan's medical director for utilization management and clinical policy. “Instead, we elected to use a more consultative approach.” The program started in July, so no concrete results are available yet, he noted.

Plans that start a preauthorization program must first figure out who should be authorized to perform scans. At Highmark, the plan tried to be as inclusive as possible, Dr. Vinson said.

“In some cases within a specialty, we tried to determine who was qualified and who was not,” he said. “For instance, for breast ultrasound, we listed radiologists, but we also included surgeons with breast ultrasound certification from the American Society of Breast Surgeons.”

Highmark ran into a turf battle as it tried to credential providers. The American College of Cardiology and the American College of Radiology “definitely have differences of opinion about who's qualified and who's not” when it comes to cardiology-related imaging exams, Dr. Vinson said. “Highmark took the approach of accepting either society's qualifications. They clearly wanted us to decide between the two, and we would not do that.”

To design their preauthorization programs, both Highmark and Harvard Pilgrim worked with National Imaging Associates, which now has “more than two dozen” clients nationwide and is active in 32 states, according to Dr. Dehn.

He predicts that at least one more specialty will come into the picture, as more and more molecular imaging is being done to design tumor-specific antibodies. “You may have immunologists who are doing diagnostic imaging,” he said.

As the public focuses on problems with the safety and cost of prescription drugs, insurers are training their sights on a different cost issue: imaging procedures.

On average, costs of imaging–especially high-tech procedures, such as MRI, CT, and magnetic resonance angiograms–have been going up 20% a year for the last several years, according to Thomas Dehn, M.D., cofounder of National Imaging Associates, a radiology utilization-management firm in Hackensack, N.J.

“Some will say it's the aging of the population, but the key issue is really demand,” said Dr. Dehn, the company's executive vice president and chief medical officer. “Patients are bright. They're good consumers. They want a shoulder MRI if their shoulder hurts.”

Physician demand is also an important part of the equation, he said. “If you have physicians who want increased [patient volume] in their offices, it is possible that rather than spending cognitive time, for which they're poorly reimbursed, they may choose to use a technical alternative.”

For example, a doctor trying to figure out the source of a patient's chronic headaches “may get frustrated and refer the patient for an MRI of the brain, just to show them they're normal,” Dr. Dehn said. “The treating physician knows in the back of his mind that there isn't going to be anything [there], but it will calm the patient down.”

As to which physicians are responsible for the increase in imaging, the answer depends on whom you ask. The American College of Radiology contends that the growth is largely due to self-referral by nonradiologists who have bought their own imaging equipment. But others say that all specialties are doing more imaging, largely because of improved technology and the improvement in care that it brings.

Whatever the reason that more scans are being done, insurers have decided they've had enough. Take Highmark Blue Cross and Blue Shield, a Pittsburgh-based insurer whose imaging costs have risen to $500 million annually in the last few years.

One Highmark strategy for paring down its imaging costs is to develop a smaller network of imaging providers. To be included in Highmark's network, outpatient imaging centers must now offer multiple imaging modalities, such as mammography, MRIs, CTs, and bone densitometry.

“We were seeing many facilities that were single modality–just CT or just MRI,” said Cary Vinson, M.D., Highmark's vice president of quality and medical performance management. “They were being set up by for-profit companies to siphon away high-margin procedures from hospitals and other multimodality freestanding facilities. We were seeing access problems for referring physicians because the single modality centers were outcompeting the multimodality centers, and they couldn't keep up.”

In addition to credentialing the imaging centers, Highmark is going to start requiring providers to preauthorize all CT, MRI, and PET scans. At first, while everyone adapts to the new system, the preauthorization procedure will be voluntary and no procedures will be denied. But eventually–perhaps by the end of this year–the preauthorization will become mandatory, Dr. Vinson said.

Harvard Pilgrim Health Care (HPHC) of Wellesley, Mass., is taking a slightly different approach. Instead of mandatory preauthorization, HPHC is using a “soft denial” process in which physicians must call for imaging preauthorization but can overrule a negative decision.

“We made a decision based on our network being a very sophisticated, highly academic referral environment, that a hard denial program might not be best way to go,” said William Corwin, M.D., the plan's medical director for utilization management and clinical policy. “Instead, we elected to use a more consultative approach.” The program started in July, so no concrete results are available yet, he noted.

Plans that start a preauthorization program must first figure out who should be authorized to perform scans. At Highmark, the plan tried to be as inclusive as possible, Dr. Vinson said.

“In some cases within a specialty, we tried to determine who was qualified and who was not,” he said. “For instance, for breast ultrasound, we listed radiologists, but we also included surgeons with breast ultrasound certification from the American Society of Breast Surgeons.”

Highmark ran into a turf battle as it tried to credential providers. The American College of Cardiology and the American College of Radiology “definitely have differences of opinion about who's qualified and who's not” when it comes to cardiology-related imaging exams, Dr. Vinson said. “Highmark took the approach of accepting either society's qualifications. They clearly wanted us to decide between the two, and we would not do that.”

To design their preauthorization programs, both Highmark and Harvard Pilgrim worked with National Imaging Associates, which now has “more than two dozen” clients nationwide and is active in 32 states, according to Dr. Dehn.

He predicts that at least one more specialty will come into the picture, as more and more molecular imaging is being done to design tumor-specific antibodies. “You may have immunologists who are doing diagnostic imaging,” he said.

As the public focuses on problems with the safety and cost of prescription drugs, insurers are training their sights on a different cost issue: imaging procedures.

On average, costs of imaging–especially high-tech procedures, such as MRI, CT, and magnetic resonance angiograms–have been going up 20% a year for the last several years, according to Thomas Dehn, M.D., cofounder of National Imaging Associates, a radiology utilization-management firm in Hackensack, N.J.

“Some will say it's the aging of the population, but the key issue is really demand,” said Dr. Dehn, the company's executive vice president and chief medical officer. “Patients are bright. They're good consumers. They want a shoulder MRI if their shoulder hurts.”

Physician demand is also an important part of the equation, he said. “If you have physicians who want increased [patient volume] in their offices, it is possible that rather than spending cognitive time, for which they're poorly reimbursed, they may choose to use a technical alternative.”

For example, a doctor trying to figure out the source of a patient's chronic headaches “may get frustrated and refer the patient for an MRI of the brain, just to show them they're normal,” Dr. Dehn said. “The treating physician knows in the back of his mind that there isn't going to be anything [there], but it will calm the patient down.”

As to which physicians are responsible for the increase in imaging, the answer depends on whom you ask. The American College of Radiology contends that the growth is largely due to self-referral by nonradiologists who have bought their own imaging equipment. But others say that all specialties are doing more imaging, largely because of improved technology and the improvement in care that it brings.

Whatever the reason that more scans are being done, insurers have decided they've had enough. Take Highmark Blue Cross and Blue Shield, a Pittsburgh-based insurer whose imaging costs have risen to $500 million annually in the last few years.

One Highmark strategy for paring down its imaging costs is to develop a smaller network of imaging providers. To be included in Highmark's network, outpatient imaging centers must now offer multiple imaging modalities, such as mammography, MRIs, CTs, and bone densitometry.

“We were seeing many facilities that were single modality–just CT or just MRI,” said Cary Vinson, M.D., Highmark's vice president of quality and medical performance management. “They were being set up by for-profit companies to siphon away high-margin procedures from hospitals and other multimodality freestanding facilities. We were seeing access problems for referring physicians because the single modality centers were outcompeting the multimodality centers, and they couldn't keep up.”

In addition to credentialing the imaging centers, Highmark is going to start requiring providers to preauthorize all CT, MRI, and PET scans. At first, while everyone adapts to the new system, the preauthorization procedure will be voluntary and no procedures will be denied. But eventually–perhaps by the end of this year–the preauthorization will become mandatory, Dr. Vinson said.

Harvard Pilgrim Health Care (HPHC) of Wellesley, Mass., is taking a slightly different approach. Instead of mandatory preauthorization, HPHC is using a “soft denial” process in which physicians must call for imaging preauthorization but can overrule a negative decision.

“We made a decision based on our network being a very sophisticated, highly academic referral environment, that a hard denial program might not be best way to go,” said William Corwin, M.D., the plan's medical director for utilization management and clinical policy. “Instead, we elected to use a more consultative approach.” The program started in July, so no concrete results are available yet, he noted.

Plans that start a preauthorization program must first figure out who should be authorized to perform scans. At Highmark, the plan tried to be as inclusive as possible, Dr. Vinson said.

“In some cases within a specialty, we tried to determine who was qualified and who was not,” he said. “For instance, for breast ultrasound, we listed radiologists, but we also included surgeons with breast ultrasound certification from the American Society of Breast Surgeons.”

Highmark ran into a turf battle as it tried to credential providers. The American College of Cardiology and the American College of Radiology “definitely have differences of opinion about who's qualified and who's not” when it comes to cardiology-related imaging exams, Dr. Vinson said. “Highmark took the approach of accepting either society's qualifications. They clearly wanted us to decide between the two, and we would not do that.”

To design their preauthorization programs, both Highmark and Harvard Pilgrim worked with National Imaging Associates, which now has “more than two dozen” clients nationwide and is active in 32 states, according to Dr. Dehn.

He predicts that at least one more specialty will come into the picture, as more and more molecular imaging is being done to design tumor-specific antibodies. “You may have immunologists who are doing diagnostic imaging,” he said.

WASHINGTON — Congress is considering giving the Food and Drug Administration more authority over the pharmaceutical companies it deals with, but some legislators are warning against doing too much too fast.

“Changes to drug safety … must be carefully considered to make sure they don't unduly impact patient access,” Sen. Mike Enzi (R-Wyo.), chair of the Senate Health, Education, Labor, and Pensions Committee, said at a hearing on FDA oversight. “Congress needs to engage in strong oversight to maintain public confidence in the FDA.”

Sandra Kweder, M.D., deputy director of the Office of New Drugs at the FDA's Center for Drug Evaluation and Research, told the Senate committee that in order to ensure drug safety, it would be helpful if the FDA had more clout. She noted that it took a lot of back-and-forth haggling just to get some earlier warnings added to drug labels.

“The most important lapse [with the safety concerns surrounding Vioxx] was the delay it took to get the information into the labeling; it took over a year,” she said. “I think stronger ability to require changes in labeling would be very helpful.”

The committee's ranking member, Sen. Edward Kennedy (D-Mass.), also spoke in favor of giving the agency greater labeling authority. “The FDA needs clear authority to require relabeling of a drug after approval once a risk is found,” he said.

Some observers said although giving the agency more authority over label changes is a good idea, it only goes so far. “We all know product labeling does not change provider behavior very much,” said Arthur Levin, director of the Center for Medical Consumers in New York and the consumer representative on the FDA's Drug Safety and Risk Management advisory committee. Even if FDA does get more labeling authority, “we shouldn't count on it protecting the public from harm,” Mr. Levin said at a teleconference announcing the release of a new survey on consumer attitudes toward the FDA.

The survey of 1,000 adults nationwide was performed by pollster Celinda Lake and sponsored by a coalition of consumer groups. The results showed only 14% had a great deal of confidence in the FDA's ability to ensure prescription drug safety.

Another subject discussed at the hearing was the secrecy of clinical trial data. “I'd like to emphasize the importance of open access to data from clinical trials, including negative trials and unpublished research,” said David Fassler, M.D., a child and adolescent psychiatrist in Burlington, Vt., who testified on behalf of the American Academy of Child and Adolescent Psychiatry and the American Psychiatric Association.

In 2004, when Dr. Fassler testified on whether there was a link between selective serotonin reuptake inhibitors (SSRIs) and suicide, “there were only four studies in the published literature on [the use of] SSRIs in adolescents. But I later learned that there were 11 unpublished studies whose results had been submitted to FDA. Parents clearly need access to this kind of evidence.”

WASHINGTON — Congress is considering giving the Food and Drug Administration more authority over the pharmaceutical companies it deals with, but some legislators are warning against doing too much too fast.

“Changes to drug safety … must be carefully considered to make sure they don't unduly impact patient access,” Sen. Mike Enzi (R-Wyo.), chair of the Senate Health, Education, Labor, and Pensions Committee, said at a hearing on FDA oversight. “Congress needs to engage in strong oversight to maintain public confidence in the FDA.”

Sandra Kweder, M.D., deputy director of the Office of New Drugs at the FDA's Center for Drug Evaluation and Research, told the Senate committee that in order to ensure drug safety, it would be helpful if the FDA had more clout. She noted that it took a lot of back-and-forth haggling just to get some earlier warnings added to drug labels.

“The most important lapse [with the safety concerns surrounding Vioxx] was the delay it took to get the information into the labeling; it took over a year,” she said. “I think stronger ability to require changes in labeling would be very helpful.”

The committee's ranking member, Sen. Edward Kennedy (D-Mass.), also spoke in favor of giving the agency greater labeling authority. “The FDA needs clear authority to require relabeling of a drug after approval once a risk is found,” he said.

Some observers said although giving the agency more authority over label changes is a good idea, it only goes so far. “We all know product labeling does not change provider behavior very much,” said Arthur Levin, director of the Center for Medical Consumers in New York and the consumer representative on the FDA's Drug Safety and Risk Management advisory committee. Even if FDA does get more labeling authority, “we shouldn't count on it protecting the public from harm,” Mr. Levin said at a teleconference announcing the release of a new survey on consumer attitudes toward the FDA.

The survey of 1,000 adults nationwide was performed by pollster Celinda Lake and sponsored by a coalition of consumer groups. The results showed only 14% had a great deal of confidence in the FDA's ability to ensure prescription drug safety.

Another subject discussed at the hearing was the secrecy of clinical trial data. “I'd like to emphasize the importance of open access to data from clinical trials, including negative trials and unpublished research,” said David Fassler, M.D., a child and adolescent psychiatrist in Burlington, Vt., who testified on behalf of the American Academy of Child and Adolescent Psychiatry and the American Psychiatric Association.

In 2004, when Dr. Fassler testified on whether there was a link between selective serotonin reuptake inhibitors (SSRIs) and suicide, “there were only four studies in the published literature on [the use of] SSRIs in adolescents. But I later learned that there were 11 unpublished studies whose results had been submitted to FDA. Parents clearly need access to this kind of evidence.”

WASHINGTON — Congress is considering giving the Food and Drug Administration more authority over the pharmaceutical companies it deals with, but some legislators are warning against doing too much too fast.

“Changes to drug safety … must be carefully considered to make sure they don't unduly impact patient access,” Sen. Mike Enzi (R-Wyo.), chair of the Senate Health, Education, Labor, and Pensions Committee, said at a hearing on FDA oversight. “Congress needs to engage in strong oversight to maintain public confidence in the FDA.”

Sandra Kweder, M.D., deputy director of the Office of New Drugs at the FDA's Center for Drug Evaluation and Research, told the Senate committee that in order to ensure drug safety, it would be helpful if the FDA had more clout. She noted that it took a lot of back-and-forth haggling just to get some earlier warnings added to drug labels.

“The most important lapse [with the safety concerns surrounding Vioxx] was the delay it took to get the information into the labeling; it took over a year,” she said. “I think stronger ability to require changes in labeling would be very helpful.”

The committee's ranking member, Sen. Edward Kennedy (D-Mass.), also spoke in favor of giving the agency greater labeling authority. “The FDA needs clear authority to require relabeling of a drug after approval once a risk is found,” he said.

Some observers said although giving the agency more authority over label changes is a good idea, it only goes so far. “We all know product labeling does not change provider behavior very much,” said Arthur Levin, director of the Center for Medical Consumers in New York and the consumer representative on the FDA's Drug Safety and Risk Management advisory committee. Even if FDA does get more labeling authority, “we shouldn't count on it protecting the public from harm,” Mr. Levin said at a teleconference announcing the release of a new survey on consumer attitudes toward the FDA.

The survey of 1,000 adults nationwide was performed by pollster Celinda Lake and sponsored by a coalition of consumer groups. The results showed only 14% had a great deal of confidence in the FDA's ability to ensure prescription drug safety.

Another subject discussed at the hearing was the secrecy of clinical trial data. “I'd like to emphasize the importance of open access to data from clinical trials, including negative trials and unpublished research,” said David Fassler, M.D., a child and adolescent psychiatrist in Burlington, Vt., who testified on behalf of the American Academy of Child and Adolescent Psychiatry and the American Psychiatric Association.

In 2004, when Dr. Fassler testified on whether there was a link between selective serotonin reuptake inhibitors (SSRIs) and suicide, “there were only four studies in the published literature on [the use of] SSRIs in adolescents. But I later learned that there were 11 unpublished studies whose results had been submitted to FDA. Parents clearly need access to this kind of evidence.”

WASHINGTON — Medicare providers in California, Florida, and New York, beware: Someone may be watching you.

This month, the Centers for Medicare and Medicaid Services (CMS) starts its recovery audit demonstration project, a three-state experiment using outside contractors to spot Medicare overpayments and underpayments.

“My understanding is that these are contractors who will look at Medicare claims and find claims which were inappropriately paid, and the monies recovered will mostly return to Medicare, but a percentage will be paid to the contractors,” William Rogers, M.D., director of CMS's Physician Regulatory Issues Team, said at a meeting of the Practicing Physicians Advisory Council (PPAC). Medicare “is going to see if it's a helpful addition to our current efforts to prevent fraud,” he said.

Members of PPAC, which advises Medicare on physician issues, wanted more information. “If it's going to become more widespread, I'd like to hear more about it,” said Robert L. Urata, M.D., a family physician in Juneau, Alaska. CMS officials told council members that more information would be forthcoming at a future meeting.

Dr. Urata isn't the only one with questions. The American College of Physicians is apprehensive about the project. “We are concerned that the financial incentive for the contractor is to find errors and to recoup money—that whole bounty hunter approach,” said Brett Baker, the ACP's director of regulatory affairs. “That may cause a lot of disruption to a lot of people who may not have billed in error but still have to go through a disruption for that decision to be made.”

According to the demonstration project's “statement of work,” contractors may look for both overpayments and underpayments, noncovered or incorrectly coded services, and duplicate services.

However, contractors are not to look for overpayments or underpayments that stem from miscoding of the evaluation and management service, for example, billing for a level 4 visit when the medical record only supports a level 3 visit. They are to look for incorrect payments arising from evaluation and management services that are not reasonable and necessary, and violations of Medicare's global surgery payment rules even in cases involving evaluation and management services.

Mr. Baker said ACP “appreciates the sensitivity to the complexity in selecting the level of service, since it's been demonstrated that informed and knowledgeable people can have differences of opinion on what is an appropriate level of service.”

He also praised CMS for the improvements it has made in its auditing process. “Years ago, Medicare would look at a small number of claims and then extrapolate errors and say, 'You owe us $100,000.'”

Now the agency conducts an analysis of physicians' billing profiles and looks for statistical outliers. Mr. Baker said the ACP is encouraging CMS to become more sophisticated in its analysis—for example, by looking at factors such as the number of hospitalizations a particular patient has had—to see whether there might be reasons for that bill to be outside the norm.

WASHINGTON — Medicare providers in California, Florida, and New York, beware: Someone may be watching you.

This month, the Centers for Medicare and Medicaid Services (CMS) starts its recovery audit demonstration project, a three-state experiment using outside contractors to spot Medicare overpayments and underpayments.

“My understanding is that these are contractors who will look at Medicare claims and find claims which were inappropriately paid, and the monies recovered will mostly return to Medicare, but a percentage will be paid to the contractors,” William Rogers, M.D., director of CMS's Physician Regulatory Issues Team, said at a meeting of the Practicing Physicians Advisory Council (PPAC). Medicare “is going to see if it's a helpful addition to our current efforts to prevent fraud,” he said.

Members of PPAC, which advises Medicare on physician issues, wanted more information. “If it's going to become more widespread, I'd like to hear more about it,” said Robert L. Urata, M.D., a family physician in Juneau, Alaska. CMS officials told council members that more information would be forthcoming at a future meeting.

Dr. Urata isn't the only one with questions. The American College of Physicians is apprehensive about the project. “We are concerned that the financial incentive for the contractor is to find errors and to recoup money—that whole bounty hunter approach,” said Brett Baker, the ACP's director of regulatory affairs. “That may cause a lot of disruption to a lot of people who may not have billed in error but still have to go through a disruption for that decision to be made.”

According to the demonstration project's “statement of work,” contractors may look for both overpayments and underpayments, noncovered or incorrectly coded services, and duplicate services.

However, contractors are not to look for overpayments or underpayments that stem from miscoding of the evaluation and management service, for example, billing for a level 4 visit when the medical record only supports a level 3 visit. They are to look for incorrect payments arising from evaluation and management services that are not reasonable and necessary, and violations of Medicare's global surgery payment rules even in cases involving evaluation and management services.

Mr. Baker said ACP “appreciates the sensitivity to the complexity in selecting the level of service, since it's been demonstrated that informed and knowledgeable people can have differences of opinion on what is an appropriate level of service.”

He also praised CMS for the improvements it has made in its auditing process. “Years ago, Medicare would look at a small number of claims and then extrapolate errors and say, 'You owe us $100,000.'”

Now the agency conducts an analysis of physicians' billing profiles and looks for statistical outliers. Mr. Baker said the ACP is encouraging CMS to become more sophisticated in its analysis—for example, by looking at factors such as the number of hospitalizations a particular patient has had—to see whether there might be reasons for that bill to be outside the norm.

WASHINGTON — Medicare providers in California, Florida, and New York, beware: Someone may be watching you.

This month, the Centers for Medicare and Medicaid Services (CMS) starts its recovery audit demonstration project, a three-state experiment using outside contractors to spot Medicare overpayments and underpayments.

“My understanding is that these are contractors who will look at Medicare claims and find claims which were inappropriately paid, and the monies recovered will mostly return to Medicare, but a percentage will be paid to the contractors,” William Rogers, M.D., director of CMS's Physician Regulatory Issues Team, said at a meeting of the Practicing Physicians Advisory Council (PPAC). Medicare “is going to see if it's a helpful addition to our current efforts to prevent fraud,” he said.

Members of PPAC, which advises Medicare on physician issues, wanted more information. “If it's going to become more widespread, I'd like to hear more about it,” said Robert L. Urata, M.D., a family physician in Juneau, Alaska. CMS officials told council members that more information would be forthcoming at a future meeting.

Dr. Urata isn't the only one with questions. The American College of Physicians is apprehensive about the project. “We are concerned that the financial incentive for the contractor is to find errors and to recoup money—that whole bounty hunter approach,” said Brett Baker, the ACP's director of regulatory affairs. “That may cause a lot of disruption to a lot of people who may not have billed in error but still have to go through a disruption for that decision to be made.”

According to the demonstration project's “statement of work,” contractors may look for both overpayments and underpayments, noncovered or incorrectly coded services, and duplicate services.

However, contractors are not to look for overpayments or underpayments that stem from miscoding of the evaluation and management service, for example, billing for a level 4 visit when the medical record only supports a level 3 visit. They are to look for incorrect payments arising from evaluation and management services that are not reasonable and necessary, and violations of Medicare's global surgery payment rules even in cases involving evaluation and management services.

Mr. Baker said ACP “appreciates the sensitivity to the complexity in selecting the level of service, since it's been demonstrated that informed and knowledgeable people can have differences of opinion on what is an appropriate level of service.”

He also praised CMS for the improvements it has made in its auditing process. “Years ago, Medicare would look at a small number of claims and then extrapolate errors and say, 'You owe us $100,000.'”

Now the agency conducts an analysis of physicians' billing profiles and looks for statistical outliers. Mr. Baker said the ACP is encouraging CMS to become more sophisticated in its analysis—for example, by looking at factors such as the number of hospitalizations a particular patient has had—to see whether there might be reasons for that bill to be outside the norm.

WASHINGTON — Members of a Medicare physician advisory group have reservations about the Centers for Medicare and Medicaid Services' proposed new program for paying for physician-administered outpatient drugs under Medicare Part B.

Medicare currently pays physicians the average sales price (ASP) of the drug—a number that is supposed to represent the total paid for the drug by all buyers divided by the number of units sold—plus an additional 6%. But under the proposed rule, beginning next year physicians would have a choice: They could either stick with the current system or obtain the drugs directly from a vendor that will be selected by Medicare via a competitive bidding process.

The system would require that physicians choose one system or the other for all the drugs commonly furnished to their specialty; they could not get reimbursed ASP plus 6% for one drug and then buy another drug directly from the vendor, according to Don Thompson, director of outpatient services at CMS's Center for Medicare Management.

But Ronald Castellanos, M.D., a Cape Coral, Fla., urologist and chairman of the Practicing Physicians Advisory Council, said at a council meeting that an all-or-nothing system wouldn't work very well in his practice. “There are certain drugs that I use that I can't buy for ASP plus 6%.”

Mr. Thompson said that while Dr. Castellanos couldn't pick and choose what system he would use for which drug, he could try to influence which urology drugs will be included in the program. “The categories could be structured differently; your comment [on the proposed rule] could be, 'I think the category should include these drugs and not these other drugs,'” Mr. Thompson said at the meeting. “But once a drug is in a category, the physician cannot opt in and out for that drug.”

Dr. Castellanos proposed that the council, which advises Medicare on matters of interest to physicians, urge CMS to revise the rule to allow physicians to pick and choose which system they would use “on a drug-by-drug basis.” That recommendation passed easily.

Both Dr. Castellanos and council member Barbara McAneny, M.D., an Albuquerque oncologist, expressed concern about what would happen to beneficiaries—usually, those without Medicare supplemental coverage—who couldn't afford the drug copays. “I want manufacturers to show up with free drugs for patients who have no bucks,” Dr. McAneny said. “Physicians, because we're not good businessmen, have eaten that money, but now it's hard to do that because we're not making enough on ASP plus 6%.”

Dr. Castellanos wondered whether the drug vendors who are going to contract with Medicare would be required to provide drugs for beneficiaries even if they didn't have the needed copays.

“The contractor would be required to supply that drug to you,” Mr. Thompson replied. “There's no separate requirement for vendors that would be any different from physicians,” who can waive the copay on a case-by-case basis, he said.

WASHINGTON — Members of a Medicare physician advisory group have reservations about the Centers for Medicare and Medicaid Services' proposed new program for paying for physician-administered outpatient drugs under Medicare Part B.

Medicare currently pays physicians the average sales price (ASP) of the drug—a number that is supposed to represent the total paid for the drug by all buyers divided by the number of units sold—plus an additional 6%. But under the proposed rule, beginning next year physicians would have a choice: They could either stick with the current system or obtain the drugs directly from a vendor that will be selected by Medicare via a competitive bidding process.

The system would require that physicians choose one system or the other for all the drugs commonly furnished to their specialty; they could not get reimbursed ASP plus 6% for one drug and then buy another drug directly from the vendor, according to Don Thompson, director of outpatient services at CMS's Center for Medicare Management.

But Ronald Castellanos, M.D., a Cape Coral, Fla., urologist and chairman of the Practicing Physicians Advisory Council, said at a council meeting that an all-or-nothing system wouldn't work very well in his practice. “There are certain drugs that I use that I can't buy for ASP plus 6%.”

Mr. Thompson said that while Dr. Castellanos couldn't pick and choose what system he would use for which drug, he could try to influence which urology drugs will be included in the program. “The categories could be structured differently; your comment [on the proposed rule] could be, 'I think the category should include these drugs and not these other drugs,'” Mr. Thompson said at the meeting. “But once a drug is in a category, the physician cannot opt in and out for that drug.”

Dr. Castellanos proposed that the council, which advises Medicare on matters of interest to physicians, urge CMS to revise the rule to allow physicians to pick and choose which system they would use “on a drug-by-drug basis.” That recommendation passed easily.

Both Dr. Castellanos and council member Barbara McAneny, M.D., an Albuquerque oncologist, expressed concern about what would happen to beneficiaries—usually, those without Medicare supplemental coverage—who couldn't afford the drug copays. “I want manufacturers to show up with free drugs for patients who have no bucks,” Dr. McAneny said. “Physicians, because we're not good businessmen, have eaten that money, but now it's hard to do that because we're not making enough on ASP plus 6%.”

Dr. Castellanos wondered whether the drug vendors who are going to contract with Medicare would be required to provide drugs for beneficiaries even if they didn't have the needed copays.

“The contractor would be required to supply that drug to you,” Mr. Thompson replied. “There's no separate requirement for vendors that would be any different from physicians,” who can waive the copay on a case-by-case basis, he said.

WASHINGTON — Members of a Medicare physician advisory group have reservations about the Centers for Medicare and Medicaid Services' proposed new program for paying for physician-administered outpatient drugs under Medicare Part B.

Medicare currently pays physicians the average sales price (ASP) of the drug—a number that is supposed to represent the total paid for the drug by all buyers divided by the number of units sold—plus an additional 6%. But under the proposed rule, beginning next year physicians would have a choice: They could either stick with the current system or obtain the drugs directly from a vendor that will be selected by Medicare via a competitive bidding process.

The system would require that physicians choose one system or the other for all the drugs commonly furnished to their specialty; they could not get reimbursed ASP plus 6% for one drug and then buy another drug directly from the vendor, according to Don Thompson, director of outpatient services at CMS's Center for Medicare Management.

But Ronald Castellanos, M.D., a Cape Coral, Fla., urologist and chairman of the Practicing Physicians Advisory Council, said at a council meeting that an all-or-nothing system wouldn't work very well in his practice. “There are certain drugs that I use that I can't buy for ASP plus 6%.”

Mr. Thompson said that while Dr. Castellanos couldn't pick and choose what system he would use for which drug, he could try to influence which urology drugs will be included in the program. “The categories could be structured differently; your comment [on the proposed rule] could be, 'I think the category should include these drugs and not these other drugs,'” Mr. Thompson said at the meeting. “But once a drug is in a category, the physician cannot opt in and out for that drug.”

Dr. Castellanos proposed that the council, which advises Medicare on matters of interest to physicians, urge CMS to revise the rule to allow physicians to pick and choose which system they would use “on a drug-by-drug basis.” That recommendation passed easily.

Both Dr. Castellanos and council member Barbara McAneny, M.D., an Albuquerque oncologist, expressed concern about what would happen to beneficiaries—usually, those without Medicare supplemental coverage—who couldn't afford the drug copays. “I want manufacturers to show up with free drugs for patients who have no bucks,” Dr. McAneny said. “Physicians, because we're not good businessmen, have eaten that money, but now it's hard to do that because we're not making enough on ASP plus 6%.”

Dr. Castellanos wondered whether the drug vendors who are going to contract with Medicare would be required to provide drugs for beneficiaries even if they didn't have the needed copays.

“The contractor would be required to supply that drug to you,” Mr. Thompson replied. “There's no separate requirement for vendors that would be any different from physicians,” who can waive the copay on a case-by-case basis, he said.