News in brief - Feb. 24, 2003

N.J. lawmakers offer liability reform bill - OIG calls for equal payments for outpatient, ASC services - Kansas mulls tax on drugs

N.J. lawmakers offer liability reform bill

Just days after New Jersey physicians protested high medical liability insurance premiums, state lawmakers reached a bipartisan compromise they say would limit physicians' exposure in medical malpractice cases without hurting patients' legal recourse.

Doctors' liability would be limited to $300,000 or less for noneconomic awards, and a fund would be created to pay for awards higher than $300,000, said Sen. Joseph F. Vitale, who is co-chair of the Senate Health, Human Services and Senior Citizens Committee. "In that way, patients' rights are not sacrificed to end the medical malpractice insurance crisis facing physicians in New Jersey," he said.

The agreement came out of a Feb. 4 joint meeting between Vitale's committee and the Senate Commerce Committee. The bill, known as the New Jersey Health Care Access and Patient Protection Act, also calls for a pre-suit discovery period so that physicians who are not responsible won't be named in a lawsuit.

OIG calls for equal payments for outpatient, ASC services

Medicare could save more than $1 billion a year by equalizing payments for services provided in hospital outpatient departments and ambulatory surgical centers, Health and Human Services Inspector General Janet Rehnquist said.

Under current law, outpatient rates differ by as much as 200%. Rehnquist said the program could save up to $1 billion by lowering rates that are higher in outpatient departments to the ASC level and another $100 million by lowering rates that are higher in ASCs to the outpatient level.

"In the absence of a compelling reason for a payment differential, the amount Medicare pays for a procedure should be based on the service and not the setting," Rehnquist said. "We are calling for immediate action to correct this imbalance."

Earlier this year, the Medicare Payment Advisory Commission recommended that Medicare ensure ASC rates do not exceed outpatient rates but maintained that outpatient departments incur higher costs than ASCs.

Kansas mulls tax on drugs

The state's lawmakers are considering a repeal of the tax exemption for prescription drugs and other medical consumer products, such as hearing aids, eyeglasses and wheelchairs. The exemption costs Kansas an estimated $53.6 million a year in revenue.

Cash-strapped states are being forced to look for new ways to raise revenue, but local pharmacists are questioning the wisdom of causing the cost of prescription drugs to increase even further. Drug spending is the fastest growing segment of health care spending. Recent reports suggest that many seniors are already having difficulty filling their prescriptions because of the high cost of drugs.