News in brief - March 14, 2011

AMA ends red flags lawsuit against FTC

The Litigation Center of the American Medical Association and the State Medical Societies has ended its lawsuit against the Federal Trade Commission over the agency's so-called red flags rule, citing a new federal statute and a favorable ruling in a related case.

The red flags rule was the result of the FTC's interpretation of the Fair and Accurate Transactions Act of 2003, which was created to tighten security of financial data held by banks and credit card companies. Physicians initially were considered creditors under the rule, meaning that they would be required to implement identity theft prevention and detection programs in their practices. The AMA and other physician organizations argued that the regulation would become a bureaucratic burden for health professionals who already are subject to regulations ensuring the safeguarding of patient information. In May 2010, the Litigation Center sued the FTC.

On Dec. 18, 2010, President Obama signed legislation into law that excluded physicians from being considered creditors under the rule. A federal appeals court on March 4 dismissed a similar lawsuit against the FTC lodged by attorneys who had been subject to the red flags rule, stating that the new statute rendered the original FTC interpretation of the 2003 legislation moot.

Saying the court's decision reinforces the intent of the new law to exclude physicians, the Litigation Center on March 7 announced it was formally dropping its suit.

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Medical liability bill modeled after Texas law introduced

Rep. Michael Burgess, MD (R, Texas), reintroduced legislation in the U.S. House that he said would tackle the problem of unnecessary lawsuits against physicians.

The Medical Justice Act mirrors a law adopted in Dr. Burgess' home state of Texas in 2003. The bill, which Dr. Burgess has introduced numerous times, would cap the noneconomic damages a person can recover in injury and wrongful death cases to $250,000. Total damages would be capped at $1.4 million, a figure that would rise with inflation.

"We need national, across-the-board change in the tort reform system, and my bill would do just that," Dr. Burgess said. "Runaway lawsuits are unnecessary and costly, and reforming medical liability must be a part of the national health care debate."

Another medical liability reform bill, the Help Efficient, Accessible, Low-cost Timely Healthcare Act, sponsored by Rep. Phil Gingrey, MD (R, Ga.), was approved by the House Judiciary Committee on Feb. 16. It is based on a long-time California liability statute and heads to the House floor for consideration.

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Medicare cuts recommended in report on duplicative spending

A Government Accountability Office analysis identified potential savings opportunities in the Medicare program, auditors said in a March 1 report targeting duplicative federal spending.

Billions of tax dollars could be saved from 81 areas of the federal government, according to "Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue." In the Medicare program, the GAO recommends profiling physician practice patterns to encourage more efficiency, improving management of imaging services, restructuring payments for home oxygen and reforming payments when physician services overlap.

The Centers for Medicare & Medicaid Services has taken steps to address these areas, GAO said. For instance, the Medicare agency implemented a multiple procedure payment reduction on certain therapy services in 2011. But more congressional scrutiny of these issues might be needed to reduce duplicative spending further, the report said.

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Tobacco companies sue over government safety panel

Two major tobacco companies have sued the federal government, challenging the objectivity of an advisory panel that will make safety recommendations on tobacco products.

R.J. Reynolds and Lorillard filed the complaint Feb. 25 in the U.S. District Court for the District of Columbia against several government agencies, including the Food and Drug Administration and the Dept. of Health and Human Services. The tobacco companies are questioning the neutrality of an advisory panel created to help direct the enforcement of the 2009 Family Smoking Prevention and Tobacco Control Act.

The panel, known as the Tobacco Products Scientific Advisory Committee, will provide advice to HHS on cigarettes and tobacco-related issues. It is scheduled to file a key report on menthol cigarette flavoring in March.

The lawsuit alleges that some members of the committee have been paid as expert witnesses for legal claims against tobacco companies and therefore have conflicting interests.

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