News in brief - June 6, 2011

GOP senators call for CMS to abandon Medicare ACO plans

Seven Republican senators have called on the Centers for Medicare & Medicaid Services to scrap its current plans to develop an accountable care organization payment model that uses shared savings to encourage better care coordination.

"Unfortunately, based on the feedback we have from providers around the country, we conclude that the proposed ACO regulation will fail to accomplish its purpose," the senators wrote in the May 24 letter. "Therefore, we respectfully ask that you withdraw this proposed rule and re-engage experienced stakeholders to craft a new rule that fulfills the promise of ACOs."

The letter was signed by Republican Sens. Tom Coburn, MD (Okla.), Richard Burr (N.C.), John Cornyn (Texas), Mike Crapo (Idaho), Mike Enzi (Wyo.), Jon Kyl (Ariz.) and Pat Roberts (Kan.). They cited concerns from participants in the CMS physician group practice demonstration, which tested an ACO-type model, as a reason to start over. The physician groups have expressed "serious reservations" about the CMS proposal, the senators said.

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House repeals automatic funds for resident training at health centers

The House on May 25 voted 234-185 along party lines to approve a bill that would rescind $190 million set aside over the next decade to train physicians and other medical residents at community health centers.

The provision marked for repeal, known as the Teaching Health Centers program, is part of the health system reform law. House GOP lawmakers object to this and other mandatory funding provisions in the law because they are not subject to congressional approval through the annual appropriations process, while other physician training programs are.

"Everyone agrees that there is a strong need for more primary care physicians in our health care system, but picking and choosing one program over another to receive automatic funding is irresponsible," said Rep. Brett Guthrie (R, Ky.), the bill's sponsor.

The Democratic-controlled Senate is not expected to take up the measure. President Obama did not issue an official veto threat, but the White House issued a May 23 statement saying that it opposes "legislation that attempts to erode the important provisions of the Affordable Care Act that are making health care more affordable and accessible for all Americans."

The National Assn. of Community Health Centers also opposes the House bill, according to a May 23 letter to House leaders. NACHC noted in the letter that the U.S. will need thousands more primary care health professionals to care for the newly covered under the national health reform law.

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Vermont governor signs universal health insurance bill

Vermont Gov. Peter Shumlin on May 26 signed a bill that paves the way for the state to create a single payer-style health system.

The law creates a powerful five-member Green Mountain Care Board, the members of which will determine the benefits and craft a funding plan for Green Mountain Care, a state universal health plan. The board will have wide authority over state health spending and health system reform. The bill requires the governor to nominate board members by Oct. 1 and the Vermont Senate to confirm them. Some private plans will continue to have a presence in the state even if Green Mountain Care is implemented.

"We'll be getting input from all Vermonters moving forward, which is essential to the success of this effort," Shumlin said. "But input from providers, businesses and health care consumers will be especially important to assuring that our reforms are good for our health care system and good for our economy."

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Medicare drug plans received $3.6 million to cover dead enrollees

Government auditors uncovered $3.6 million paid to Medicare Part D plans on behalf of deceased patients, according to a May report from the Dept. of Health and Human Services Office of Inspector General.

As a result, the inspector general recommended the Centers for Medicare & Medicaid Services recoup the money and take steps to prevent similar improper payments in the future. The OIG used data from the Social Security Administration to identify enrollees who died between July 2005 and July 2007. It found 1,500 cases where the Medicare agency continued to make payments to drug plans for the enrollees for at least one month after they had died.

CMS Administrator Donald M. Berwick, MD, insisted that the agency had recovered the $3.6 million, according to a memo in response to the report. Also, CMS data showed that more than 1,000 of the 1,500 patients cited in the report were alive throughout the review period, he said.

Despite the discrepancies cited by CMS, the inspector general declined to change its findings before releasing the report.

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Lab to pay $241 million for alleged overcharges

Quest Diagnostics, California's largest laboratory provider of medical testing, has agreed to pay the state a $241 million settlement for alleged Medicaid overcharges, according to a May 20 announcement by California Attorney General Kamala D. Harris.

The state sued the lab company in 2005, claiming that the firm significantly overcharged the state's Medicaid program -- Medi-Cal -- and gave illegal kickbacks to physicians, hospitals and medical centers. The lawsuit said Quest charged up to six times more to test Medi-Cal patients than other patients. In a statement, Quest denied any wrongdoing and said its testing services for Medi-Cal were priced appropriately.

The settlement is the highest amount recovered under the state's False Claims Act, according to the attorney general's office.

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