News in brief - June 7, 2004

Iowa tort reform legislation rejected - Study finds EDs face financial woes - Medicare pays more for managed care - Hospitals ready to report quality data - Illegal immigrant ID bill defeated - Health costs worry small firms - Reimportation lawsuit filed in Minn.

Iowa tort reform legislation rejected

Iowa Gov. Thomas Vilsack in May vetoed the tort reform measure supported by the Iowa Medical Society. The legislation would have capped noneconomic damage awards in medical malpractice cases at $250,000. Iowa doctors see the award limit as necessary to keep liability insurance available and affordable.

In his veto message, Vilsack acknowledged Iowa's liability insurance problems but said the bill was not the answer. "This proposal does nothing to discourage frivolous suits and only penalizes those with legitimate claims who have the greatest injuries," he stated.

Study finds EDs face financial woes

A new Centers for Disease Control and Prevention study found that heavy caseloads of uninsured and Medicaid patients have put many of the nation's emergency departments at financial risk.

More than one-third of EDs have a high "safety-net burden," meaning that the percentage of visits by Medicaid patients or the percentage of uninsured patients exceeded 30%, or the combined Medicaid and uninsured rates exceeded 40%.

These EDs were generally in areas with high poverty and unemployment, and they treated a higher percentage of children and African-Americans. Hospitals in the South (61.3%) were more likely to have a high burden, while hospitals in the Midwest (16%) were least likely.

The study also found that less than half of hospitals with high safety-net burdens received federal disproportionate share hospital payments intended to target facilities that treat large numbers of low-income patients.

The study's authors said the results suggested that hospitals are struggling to cover the added costs of the Emergency Medical Treatment and Active Labor Act, which requires EDs to evaluate and stabilize all patients regardless of ability to pay.

Medicare pays more for managed care

Medicare spending per beneficiary enrolled in managed care plans in 2004 will average 8.4% more than that for beneficiaries in the traditional fee-for-service program. According to a study by the Commonwealth Fund, Medicare will spend $552 more for each of the 5 million Medicare Advantage enrollees, for a total of $2.75 billion in 2004.

Last year's Medicare reform bill increased payments to health plans with the aim of stabilizing the Medicare managed care program, which had seen the departure of many plans. According to the Centers for Medicare & Medicaid Services, plans will use 42% of the additional payments to increase reimbursement to health care practitioners. Another 31% will be used by plans to reduce premiums for enrollees, and 17% will go toward enhancing existing benefits.

Hospitals ready to report quality data

About 90% of the nation's hospitals have signed up with the Centers for Medicare & Medicaid Services to report quality data.

In May, CMS reported 3,449 of the 3,900 eligible hospitals had registered to publicly report quality data, up from 2,727 in February. About a third of the registered hospitals are reporting at least one measure on all three clinical conditions covered by the initiative: heart attack, heart failure and pneumonia. Some 227 hospitals are reporting results for all 10 measures adopted for the initiative.

Under the Medicare Modernization Act of 2003, hospitals that do not report quality data beginning July 1 will receive a 0.4 percentage point reduction in Medicare pay in fiscal 2005.

Illegal immigrant ID bill defeated

Legislation requiring emergency department physicians to report undocumented immigrants to the Homeland Security Dept. was overwhelmingly defeated when it recently came up for a House vote.

The bill, sponsored by Rep. Dana Rohrabacher (R, Calif.), also would have exempted hospitals from federal requirements to treat undocumented immigrants except in cases of imminently life-threatening conditions. Those who did receive emergency services or their employers would have been held responsible for the cost of that care under the measure.

Hospitals spend an estimated $1.5 billion a year treating undocumented immigrants. Immigrant advocacy groups called the bill discriminatory, and hospitals balked at the notion of being turned into enforcement agencies.

Health costs worry small firms

While the cost of providing health care coverage to employees has remained the No. 1 concern for small businesses since 1986, the percentage of firms that said it was a top concern has risen dramatically to 66% this year, according to a poll by the National Federation of Independent Business and Wells Fargo. In 2000, 47% of businesses listed health care costs as the top concern.

"No other single problem can touch health care costs in terms of either the unanimity or intensity of concern it generates among small-business owners," said Bruce D. Phillips, a senior research fellow with NFIB. More than half of America's uninsured own or work for a small business. This had led some experts to predict that the uninsured could become a major election year issue.

Reimportation lawsuit filed in Minn.

The fight between seniors and the pharmaceutical industry has landed in court. The Minnesota Senior Federation has filed a lawsuit charging nine companies with conspiring to restrict supplies to Canadian online pharmacies that are reimporting drugs.

The suit seeks to end the alleged boycott of the Internet pharmacies and recover damages for every American who could have purchased discounted drugs from Canada over the past two years. Several drug companies named in the lawsuit maintain that their actions have been consistent with U.S. laws and regulations.

The federation's actions were applauded by Minnesota Gov. Tim Pawlenty, who has been a leading voice in support of reimportation. Pawlenty also recently announced a program to allow state employees and their dependents to get some prescription drugs from Canada at no cost.