News in brief - Aug. 8, 2005

Pay-for-performance for Medicaid - Coverage of impotence drugs may end - U.S. appeals tobacco ruling to Supreme Court

Pay-for-performance for Medicaid

Although much of the Washington debate about pay-for-performance has revolved around Medicare, federal officials are working on plans to expand performance-based reimbursement in the Medicaid program.

The Centers for Medicare & Medicaid Services is studying programs that several states have launched to pay doctors based on their quality of care, said Terris King, deputy director at the CMS Office of Clinical Standards and Quality, at a recent event.

Federal officials hope other states will take up the lead once the agency shows how pay-for-performance can work to improve quality within the low-income health program, he said.

Medicare already is using a pilot program to experiment with reimbursing physicians based on how well they improve patient outcomes and save money for the federal government. Lawmakers are considering legislation that would expand the concept to include all Medicare doctors within several years.

The Medicare pilot program, unveiled earlier this year, encountered criticism because of its initial focus on cutting costs rather than improving care. Federal officials decided not to commit any additional resources to making the performance-based payments to doctors.

Coverage of impotence drugs may end

The federal government would be unable to pay for any erectile dysfunction drugs next year under a spending bill that Senate appropriators approved last month.

The House already has passed a spending bill for the Dept. of Health and Human Services that would ban Medicare and Medicaid from covering medications prescribed only to treat impotence. If the full Senate passes the HHS funding measure with the language intact, negotiators from both houses would need to reconcile the two versions.

Medicare will begin covering prescription drugs in January 2006. Medicaid pays for impotence drugs now. Lawmakers estimate that banning erectile dysfunction medication coverage for the fiscal year would save the programs more than $100 million.

U.S. appeals tobacco ruling to Supreme Court

The Dept. of Justice last month asked the U.S. Supreme Court to review an appellate court ruling that said the government could not force tobacco companies to turn over an estimated $280 billion in profits.

The U.S. Court of Appeals for the District of Columbia ruled 2-1 that federal anti-racketeering laws don't allow the government to seek remedies aimed at past wrongs. But the government argues the appellate court ruling is inconsistent with prior Supreme Court decisions.

The government, which filed its case in 1999, alleges that cigarette companies engaged in a scheme to defraud the public over the past 50 years in violation of the Racketeer Influenced Corrupt Organizations Act.