July 2009 Archives

July 31, 2009

OIG Allows Pharmaceutical Manufacturer to Create Free Physician Assistance Program

OIG issued Advisory Opinion 09-08 allowing Requestor--"a pharmaceutical and healthcare company that develops, manufactures, and markets pharmaceutical products--to develop a Program "that will make available at no charge certain of its drug products to indigent patients without prescription drug coverage." The OIG determined that the Program falls under the umbrella of a Bulk Replacement Model, in which healthcare facilities can apply for pharmaceuticals in bulk rather than individually, maximizing efficiency and practicality.

The OIG stated that its central concern with this model is "whether the Program may be a vehicle through which Requestor offers or pays remuneration to Participating Hospitals either: (1) to induce Participating Hospitals to purchase or order (or arrange for, or recommend, the purchasing or ordering of) the Requestor's products that are payable by a Federal health care program; or (2) to influence the prescribing patterns of physicians at Participating Hospitals with respect to the Requestor's products that are payable by a Federal health care program." For the following reasons, the OIG determined that the risk of violating the anti-kickback statute and imposing civil monetary penalties (CMP) are low or non-existent:

1. because the Requestor will be admitting hospitals based on the hospital's size and disproportionate share (DSH) percentage rankings, the Requestor can ensure that the hospitals with the greatest number of indigent patients will be served with the Program;
2. because the Program involves outpatient drugs and the Requestor will ship the drugs out each quarter based on the drugs dispensed during the previous quarter, the Participating Hospitals will not obtain excess drugs;
3. the Participating Hospitals will not receive any fees for participating in the Program;
4. the physicians at the Participating Hospitals will not receive any fees for prescribing Program Drugs;
5. the Program's transparency where "the terms [are] documented in a written, signed agreement between Requestor and each Participating Hospital that covers all of the Program Drugs to be provided;"
6. those who receive the Program Drugs do not have prescription drug coverage and are among the financially needy; and
7. because Requestor is not a provider, practitioner, or supplier, CMP is not implicated.

Thus, for the foregoing reasons, the Program would not receive OIG scrutiny.

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July 30, 2009

OIG Allows Joint Venture of Ambulatory Surgery Center by a Hospital and LLC

OIG permitted joint venture of Ambulatory Surgery Center (ASC) by a hospital and LLC. In its Advisory Opinion 09-09 released yesterday, the Office of Inspector General (OIG) analyzed a situation in which a Hospital and an LLC (Surgeon LLC), owned by seven orthopedic surgeons (Surgeon Investors), would jointly own a company that will own and operate an ASC (Hospital-Surgeon ASC). Among other considerations, the OIG considered whether this arrangement posed a violation to the Federal anti-kickback statute. The OIG concluded that it did not and thus, the OIG "would not impose administrative sanctions on...the 'Requestors.'"

While the anti-kickback statute does have "a safe harbor for investment income from ASCs jointly-owned by physicians and hospitals," the OIG considered reasons why the proposed arrangement would not be protected under the safe harbor and how the proposed arrangement would pose "a minimal risk under the anti-kickback statute."

The first concern was whether or not the Hospital would be able to minimize its influence over referrals. Because the Hospital would go to great lengths to ensure there were no internal referrals (for instance, the employees of the hospital will not refer to the Hospital-Surgeon ASC and the Hospital will not track referrals), the OIG determined that "the ability of the Hospital to direct or influence referrals to the Hospital-Surgeon ASC or to its Surgeon investors is significantly constrained." The second concern was whether having a "pass through" entity (i.e., using the Surgeon LLC to own a Company that owns and operates the Hospital-Surgeon ASC) to hold the investment interests in the ASC would increase a risk of fraud and abuse. The OIG determined that this arrangement is no different than each Surgeon Investor directly owning part of the Hospital-Surgeon ASC (which is the method under the anti-kickback safe harbor) and is, thus, permissible. Finally, the OIG considered whether "obtaining appraisals of the tangible assets of the ASCs at the time of their merger, with either party (the Surgeon LLC or the Hospital) contributing cash, if necessary to equalize the value of their respective contributions" is an adequate method of giving the investors returns on their investments. The OIG concluded that there is a low risk of abuse associated with this method.

Concluding that the aforementioned concerns posed a low-minimum risk of fraud and abuse, the OIG determined that the proposed arrangement probably would not result in administrative sanctions from the OIG.

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July 29, 2009

UPDATE: The Red Flags Rule Postponed!

FTC postponed Red Flags. As many entities have been scrambling to get their anti-identity theft programs in place by August 1, the Federal Trade Commission (FTC) announced that it would be pushing back enforcement of the Red Flags Rule until November 1. The purpose of this is to continue to educate entities regarding the Red Flags Rule and their obligations under it. The FTC plans to make available additional guidance for low-risk entities as many of them are uncertain about their roles and obligations under the Red Flags Rule. For entities that have are unsure about whether or not the Red Flags Rule applies to them or have not yet adopted an anti-identity theft program should consult with a qualified healthcare law firm to assist.

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July 24, 2009

Recovery Audit Contractors And Medicare Audits: What Can Hospitals and Health Systems Expect as the RAC Program Expands Nationwide?

Get ready: the Centers for Medicare and Medicaid Services (CMS or Medicare) Recovery Audit Contractor (RAC) program has been made permanent and is expanding nationwide. All Medicare providers and suppliers should begin to prepare now for increased Medicare scrutiny. Hospitals and health systems nationwide can expect RAC auditing activity and overpayment requests beginning in 2009, and providers in nineteen states can expect this activity to begin as soon as February 2009. This Member Briefing will provide a history and overview of the RAC program and will provide guidance to legal counsel representing hospitals and health systems that soon may find themselves subject to RAC audits.

To read the remainder of this article, click here.

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July 23, 2009

Recent Developments and Key Legal Issues Impacting Diagnostic Imaging Services, Part 2

This article is the second part of a 2 part series addressing recent federal regulatory action targeting diagnostic imaging arrangements. Part 1 (published in the January/February 2009 issue of Radiology Management) focused solely on some of the more significant changes to the federal Stark regulations. Part 2 will summarize some of the significant regulatory actions contained in the 2009 Medicare Final Physician Fee Schedule addressing the Medicare antimarkup provisions and issues relating to independent diagnostic testing facilities (IDTFs). Additionally, this article will address anticipated Medicare audit activity for diagnostic imaging providers in connection with the Medicare Recovery Audit Contractor Program. Industry stakeholders should anticipate, and be attentive to, further regulatory action addressing imaging arrangements. On October 30, 2008, CMS displayed the 2009 Medicare Final Physician Fee Schedule (2009 MFPFS). This article summarizes the anti-markup provisions and the IDTF enrollment requirements contained in the 2009 MFPFS.

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July 22, 2009

Recent Developments and Key Legal Issues Impacting Diagnostic Imaging Services, Part 1

In recent years, the diagnostic imaging services industry has been intensively scrutinized by the federal government, as evidenced by heightened regulatory action targeting certain diagnostic imaging arrangements, such as changes to the federal Stark Law (that restrict the flexibility of structuring diagnostic imaging arrangements), expansion of the federal anti-markup prohibition, changes to the independent diagnostic testing facility (IDTF) performance standards, and implementation of payment changes related to the way imaging services are paid under the physician fee schedule. Industry stakeholders should anticipate, and be attentive to, future regulatory changes, as the Centers for Medicare and Medicaid Services (CMS) is expected to continue to focus on areas such as diagnostic imaging, which it believes are vulnerable to patient and program abuse, and which is among the fastest growing set of services paid for under Medicare Part B physician fee schedule.

To read the remainder of this article, click here.

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July 21, 2009

The Continued Relevance of the Stark Law's IOASE: In-Office Imaging Arrangements Remain Viable

Recent legislative initiatives to restrict (or eliminate) the Stark Law's In-Office Ancillary Services Exception (IOASE) are by no means a new phenomenon. Rather, over the last few years, the Centers for Medicare and Medicaid Services (CMS) has introduced several significant proposals targeting the provision of diagnostic imaging (and other ancillary services) in the physician office setting, through proposed changes to the Stark regulations, independent diagnostic testing facility (IDTF) regulations, and other Medicare reimbursement regulations (such as the Medicare Anti-Markup Rule [AMR]). Despite these proposals, however, the IOASE remains intact and the prospect of a near-term wholesale elimination of the IOASE appears remote. This article provides a brief overview of the IOASE and examines some recent CMS legislative initiatives directed at diagnostic imaging arrangements. Finally, this article discusses the current status of the IOASE, which permits (and, we expect, will continue to permit) appropriately structured diagnostic imaging arrangements in the physician office setting.

To read the remainder of this article, click here.

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July 20, 2009

CBO Says Healthcare Bill is NOT Budget Neutral

The Affordable Health Choices Act (Act) has been hotly contested by many Republicans, some Democrats, and now, is being put in place by Congressional Budget Office (CBO). The CBO is the final authority when it comes to the cost of legislation and it announced that the Act is not "budget neutral" like President Obama and many Congressmen allege.

According to the CBO, the Act will add roughly $240 billion to the federal deficit. To pay for the Act, the CBO states that there would be a roughly $583 billion increase in federal revenues and a $245 billion in savings by reforming the Medicare and Medicaid physician payment formula. This new healthcare plan is to provide healthcare coverage for 97% of Americans.

According to Peter Orszag--the Director of the Office of Management and Budget--and Kathleen Sebelius--the Health and Human Services Secretary--the legislation is incomplete, thus CBO's projection is inaccurate. Orszag explained this past weekend that the "new policy...is budget neutral over the first decade." He continued to defend the Act by stating that the CBO projection included the current Medicare payment rates for physicians. Orszag continues to explain that "everyone anticipates that even absent healthcare reform, that would be taken care of. If you take that off the table, in terms of new policy, the House bill is deficit neutral." The supporters of the bill avidly maintain that the bill is incomplete and that the inconsistencies and holes that are being discovered will be finalized prior to passing the bill into law. Additionally, the fact that the bill could yield a $6 billion surplus over the next ten years would offset spending, making the Act budget neutral.

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July 16, 2009

2010 Proposed Physician Fee Schedule - Advanced Imaging Updates

According to the 2010 Proposed Physician Fee Schedule (PPFS), as of January 1, 2012, the Center for Medicare and Medicaid Services (CMS) proposes that Medicare payment be made only for the technical component (TC) of advanced diagnostic imaging services to suppliers who have met the accreditation requirements set forth by the Secretary. According to CMs, the new rule will set forth the criteria for designating organizations to accredit suppliers furnishing the technical component. Additionally, the new rule would ensure that the criteria used by an accreditation organization meet minimum standards for each imaging modality. "Advanced diagnostic imaging services" is defined in the PPFS as "diagnostic magnetic resonance imaging, computed tomography, nuclear medicine, and positron emission tomography."
The proposed regulation requires medical directors and supervising physicians to have a number of qualifications including having proper training in advanced imaging services through a residency program; having the expertise to be a medical director or supervising physician; having completed continuing medical education courses pertaining to advanced imaging services; and any other requirements the Secretary deems appropriate. Additionally, suppliers have a number of requirements, including implementing a quality control program ensuring "the technical quality of diagnostic images produced by the supplier;" ensuring the equipment meets performance specifications; and ensuring the safety of personnel.
To become an accredited supplier, the independent accreditation organization must submit an application to CMS including, but not limited to, the following information:
- A detailed description of how the organization's accreditation criteria satisfy the statutory standards;
- An agreement conforming the accreditation requirements with any statutory Medicare changes;
- A description of the organization's knowledge and experience in the advanced diagnostic imaging field; and
- Any other requirements designated by CMS.
Once an application has been sent, CMS will send a notification stating whether or not the organization's application has been accepted or denied. For denied applications, applicants have an opportunity to ask for reconsideration, resubmit the application, or withdraw the application.
For those organizations that have been accredited, CMS will conduct validation audits to ensure that those organizations maintain the criteria and follow the procedures necessary for an entity supplying advanced diagnostic imaging. The audits will be conducted on a representative sample of accredited suppliers. If an organization is determined to fail the audit, its accreditation will be revoked.
Following audits, CMS will be alerted to entities that display the following:
- A 10% rate of disparity between findings by the accreditation organization and findings by CMS or its contractor on standards that did not constitute immediate jeopardy to patient health and safety if not met;
- Any disparity between findings by the accreditation organization and findings by CMS or its contractor on standards that constitute immediate jeopardy to patient health and safety if not met; or
- Widespread or systematic problems in the organization's accreditation process such that the accreditation no longer provided assurance that suppliers met or exceeded the Medicare requirements, irrespective of the rate disparity.
After further review of the organizations displaying any of these signs, those organizations will be evaluated and will be subject to having their approval withdrawn if they display any of the following:
- The organization no longer provides sufficient assurance that the suppliers meet the requirements of the Act;
- Anything that constitutes a significant hazard to public health; or
- The organization failed to meet is application or reapplication procedures.
For organizations that fail the audit, CMS will send a notice of intent to withdraw approval. Those organizations may ask for reconsideration.

Continue reading "2010 Proposed Physician Fee Schedule - Advanced Imaging Updates" »

July 14, 2009

The Blue Has Given Us the Green to See the Long-Awaited Healthcare Bill

House Democrats released the long-awaited healthcare bill today. In its 1018 pages, it describes its 10-year, $1 trillion venture that includes the highly controversial government insurance plan. As Democrats have publicized, this bill will greatly expand healthcare insurance coverage to Americans without insurance and, at the same time, slow the increasing cost of healthcare while providing improved medical outcomes.

Among other things, the bill calls for increased income tax on the highest income tax bracket. It is with this increased taxes that has rendered some fiscally conservative Democrats hesitant to approve the bill, and one of the many reasons nearly all Republicans oppose it. Democrats hope to have the legislation approved prior to the August recess.

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July 10, 2009

Following Other States, Michigan's Attorney General Looks to Implement a Michigan Office of Medicaid Inspector General

Wednesday, Michigan's Attorney General--Michael Cox--alongside Republican legislators supported a bill being drafted by the Michigan legislature that would create a Michigan Office of Medicaid Inspector General (OMIG). This office would convert the already-in-place Medicaid Fraud Control Unit to an office that audits Medicaid activities and helps detect and prevent Medicaid fraud by having the power to monitor and audit Medicaid systems and records that are independent of Michigan's Department of Community Health. Cox says that Michigan tax payers will benefit greatly from this as the state spends roughly $10 billion a year for Medicaid, alone.

Michigan is not the only state implementing a state OMIG. Florida, Illinois, New Jersey, New York, and Texas all have their own state-OMIGs. New York, for instance, has reported great success in recovering over to $500 million in a single year.

Concerns that creating this office would be costly are rebutted by Cox's contention that because an auditing body already exists, there would be very little costs associated with simply moving the auditing body somewhere else. Additionally, Governor, Jennifer Granholm states that she is concerned about potential breaches of privacy when auditors are given unrestricted access to Medicaid patient records.

This new move by Cox could be the beginning of many as he plans to run for Governor of Michigan in 2010.

Continue reading "Following Other States, Michigan's Attorney General Looks to Implement a Michigan Office of Medicaid Inspector General" »

July 9, 2009

The Red Flags Era is Approaching, Are You Ready?

The August 1st Red Flags start date is quickly approaching and many creditors (yes, that means you, doctors) are preparing themselves for the new regulations. For those entities that have not drawn up their Red Flags programs yet, there is still time and the Federal Trade Commission (FTC) has provided useful information on its website for low risk entities that takes minutes to complete. After filling this out, the only remaining steps are having it approved by the entity's board of directors and implementing it.

There are entities, however, that have already begun their identity theft prevention programs and the Report on Medicare Compliance published "Surprises Arise as Hospitals Struggle with FTC's Red Flags Rule" an article enumerating some of the obstacles that some entities have faced thus far. It is important to keep these obstacles in mind when drawing up and implementing your Red Flags program.

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July 9, 2009

Attention All Anesthesiologists - The 2010 CMS Proposed Physician Fee Schedule Has Been Posted!

If you're a physician, the Centers for Medicare and Medicaid Services (CMS) Proposed Physician Fee Schedule for 2010 affects you. As a matter of fact, according to the proposed rule, Medicare will cut spending on physician services by 21.5% beginning in January 2010. The finalized fee schedule will be released in November. For anesthesiologists, in particular, the national average anesthesia conversion factor of $20.92 will decrease to $16.42! But a cut in the average conversion factor is not the only change in store for anesthesiologists if this proposition is finalized.

For teaching anesthesiologists, there are changes. For example, teaching anesthesiologists who are involved in two concurrent resident cases will receive 100% payment for both cases. The proposed rule also addresses mixed concurrent case scenarios. CMS has determined that in a mixed concurrent case scenario (e.g., one resident case and one CRNA case going on concurrently), CMS will pay the unreduced fee schedule rate for the teaching resident case and the medically directed rate for the CRNA case. In the medically directed CRNA room, the CRNA and the anesthesiologist will each be permitted to bill fifty percent (50%) if the medical direction requirements are met. CMS also takes a narrow controversial view of hand-offs in the teaching scenario. An issue also arises as to the effect on a teaching case if the anesthesiologist is involved in more than one additional medically directed case. In the proposed rule, CMS clarifies that in order for the anesthesiologist to receive 100% payment for the teaching resident case, the teaching case must be the only case or must be concurrent to only one other case that is being medically directed by the anesthesiologist. The rules for teaching CRNAs have also changed to benefit CRNAs. A CRNA teaching students in two concurrent cases will receive the unreduced fee schedule amount for each case as long as the CRNA is not being medically directed by an anesthesiologist. CRNAs and anesthesiologists should be informed on these particular provisions for the upcoming calendar year. To see more details on these changes, please visit the 2010 CMS Proposed Physician Fee Schedule and our synopsis of the changes on our anesthesia specialty page.

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July 2, 2009

OIG Permits Giving Free Nutritional Supplements to End-Stage Renal Disease Patients

An Office of Inspector General (OIG) Advisory Opinion, OIG Advisory Opinion No. 09-06, was released addressing the issue of whether or not "expanding an existing program that provides free oral nutritional supplements to malnourished end-stage renal disease patients who are on dialysis" would violate the civil monetary penalty provision or the anti-kickback statute.

The Requestor (the individual(s) requesting the opinion) operates dialysis facilities serving patients with end-stage renal disease (ESRD). Many of these patients, as a result of their ESRD, suffer from malnutrition. When ESRD patients consume oral nutritional supplements, it has shown improved health including "decreased risks of hospitalization, infection, and mortality." Unfortunately, according to Requestor, many of these patients will not take the supplements on their own, even if the physician recommends it, because they do not taste good. The Requestor currently conducts a small-scale program that provides a three-month supply of the nutritional supplements per year per patient. The Requestor wants to expand this program on a larger scale taking into account the following considerations:
- The patient would only be eligible for the program if s/he met certain requirements set by the Requestor;
- The Requestor would only provide the nutritional supplements upon the patient's physician's request , when medically necessary;
- The Requestor would deliver the dose to the patient with certain conditions including taking the dose at dialysis facility and consuming the dose within a certain time frame of the dialysis treatment;
- Once the patient is ineligible, the nutritional supplements would no longer be provided to the patient;
- There would be not advertising of the nutritional supplements to anyone; and
- Nobody would claim the cost of the nutritional supplements on the Federal health care program cost report in any way.

In its analysis, the OIG was "particularly concerned that dialysis facilities might induce beneficiaries to obtain Federally payable items and services by offering them the [nutritional] [s]upplements when they are not, in fact, part of a targeted, properly structured, and clinically appropriate treatment modality." Noting the reasons why Congress restricted giveaways related to Medicare and Medicaid, the OIG concluded that the program "poses a low risk of fraud and abuse." Furthermore, the OIG mentions that the risk of abuse is "effectively minimize[d]" due to the aforementioned considerations.

As the OIG notes, the program could raise remuneration issues under the anti-kickback statute; however because of the aforementioned considerations and safeguards, the OIG concluded that the program would not result in the OIG imposing sanctions for violating the civil monetary penalty provision or the anti-kickback statute.

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July 2, 2009

OIG Says OK to Paying Groups for Imposing Cost-Saving Opportunities

An Office of Inspector General (OIG) Advisory Opinion, OIG Advisory Opinion No. 09-06, was released addressing the issue of whether or not "an existing arrangement in which a hospital has agreed to share with a cardiology group, a vascular surgical group, and an interventional radiology group a percentage of the hospital's cost savings arising from the physicians' implementation of a number of cost-reduction measures in certain cardiac catheterization procedures (the "Arrangement") would violate the anti-kickback statute or impose civil monetary penalties for "a hospital's payment to a physician to induce the reduction or limitation of services to Medicare or Medicaid beneficiaries under the physician's direct care."

The Arrangement involved a hospital agreeing to pay a cardiology group, radiology group, and a vascular surgical group a "share of the cost savings directly attributable to specific changes in that particular [g]roup's cardiac catheterization procedures. " To develop the Arrangement, the Program Administrator conducted a study and identified 21 specific cost-saving opportunities with respect to cardiac catheterization procedures. After the groups and the hospital reviewed the opportunities, they adopted the recommendations and conclusions.

"The Arrangement contained several safeguards intended to protect against inappropriate reductions in services." The safeguards include, ensuring that the individual physicians made patient-by-patient determinations regarding the most appropriate device or supply to be used in the procedures; ensuring that the physicians could still access the same selection of devices and supplies; and ensuring that the money gained through the Arrangement was not a result of limiting the availability of devices and supplies. Additionally, to ensure the quality of care did not decrease, the Program Administrator monitored the performance of the covered cardiac catheterization procedures.

The Arrangement also contained three limitations on payment. Firstly, compared to the base year, if the number of cases that were payable by a Federal healthcare program increased, there would be no sharing of cost savings for the additional cases. Secondly, if there was an indication of significant changes in patient referrals to other hospitals, the physician would be terminated from participating in the Arrangement. Finally, groups would not receive more than 50% of that group's share of the "projected cost savings identified in the base year."
The Program Administrator found that there were "substantial cost-savings opportunities...without any adverse impact on the quality of patient care."
The OIG recognized that the Arrangement could be beneficial in many ways, but enumerated four concerns it had regarding the Arrangement:
1. Stinting on patient care;
2. "Cherry picking" health patients and steering sicker (and more costly) patients to hospitals that do not offer such arrangements;
3. Payments in exchange for patient referrals; and
4. Unfair competition (a "race to the bottom") among hospitals offering cost-savings programs to foster physician loyalty and to attract more referrals.
Furthermore, the OIG stated that the Arrangement implicates three Federal laws: the civil monetary penalty (§ 1128A(b)(1)-(2) of the Social Security Act), the anti-kickback statute (§ 1128BB(b)), and the physician self-referral law.

Regarding the civil monetary penalty, the OIG evaluated, and ultimately determined that, "the Arrangement induces physicians to reduce or limit items or services;" however, 'the Arrangement has several features that, in combination, provide sufficient safeguards so that we would not seek sanctions...."

Regarding the anti-kickback statute, the OIG determined that "[t]he safe harbor for personal services and management contracts...is potentially applicable to the Arrangement." Determining that the Arrangement does not exactly fit the exception because the groups received a percentage and not an aggregate compensation set in advance, the OIG determined that it would not impose sanctions; however, illegal remuneration could be possible, though the Arrangement poses a "low risk of fraud or abuse under the anti-kickback statute."

Thus, though this Arrangement is not perfect, the OIG determined that it contains sufficient safeguards to protect against OIG sanctions and, possibly, violations of federal law.

Continue reading "OIG Says OK to Paying Groups for Imposing Cost-Saving Opportunities" »

July 2, 2009

MA and VT Ban Gifts to Doctors

Doctors, say goodbye to your free vacations, mugs, and even pens you get from pharmaceutical companies. If you live in Massachusetts or Vermont, the state has passed regulations banning physicians from receiving gifts from pharmaceutical companies. In Vermont, getting a free meal is also banned while Massachusetts limits it. This regulation grows out of a recent movement to keep drug companies from inducing physicians to prescribe their pharmaceuticals, thus cutting costs in prescription drugs.

In Massachusetts, applicable companies will be required to disclose any payments made to physicians and hospitals for research aimed at promoting a particular product. The first disclosures are due July 1, 2010.

Opponents of the regulation are concerned that the regulation will limit the information to opinion-shaping and prominent opinion-shaping physicians and prominent teaching hospitals. Additionally, Robert Coughlin, president of the Massachusetts Biotechnology Council says, "Massachusetts is now seen as the most unfriendly state in the nation toward industry...In these tough economic times, you don't want to send a chilling message to an industry that's a growth industry."

Other states aren't far behind Massachusetts and Vermont; Oregon, Texas, Connecticut, Colorado, Illinois, and Maryland are all considering passing regulations banning all gift giving.

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July 2, 2009

Significant Medicare Payment Cuts Contemplated Under Obama Health Plan

The Obama administration announced yesterday, July 1, 2009, as reported in the Wall Street Journal, that it plans to significantly reduce Medicare payments to physicians, in particular, imaging services and specialists. The purpose of this policy change is to increase the number of primary care physicians to meet the demand of an aging population and the new wave of people who will qualify for insurance coverage if Congress approves the Obama health plan in its current form.

These changes will result in reducing Medicare payments for imaging services and specialists while increasing Medicare payments for primary care physicians by 6 - 8% next year. Other specialists, such as cardiologists, will experience comparatively greater cuts amounting to approximately 11% (with even more substantial reductions for certain procedures, such as echocardiograms and cardiac catheterizations). Radiologists are slated to experience a 20% cut for certain high-end imaging services (e.g., MRI and CT). These cuts are projected to save around $220 million between 2010 and 2014.

Proponents of this change argue that lowering the income gap between different physicians--primary care physicians and specialists--is a necessary change to the medical field. Opponents to the change contend that this change will limit and erode the ability to effectively treat, and make advances, in areas such as heart disease.

To the extent that these proposals are enacted, specialists and other imaging providers will need to re-evaluate certain elements of their business structure, and seek other means to lawfully maximize revenue. A number of different approaches, which are specific to each group's/providers specific composition/payor mix/risk tolerance, can be deployed to adapt to these changes.

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