As I blogged last week, Mark McClellan, current Centers for Medicare and Medicare Services (CMS) administrator, is set to leave his post.

The Hill reports that Andrew von Eschenbach, President Bush’s nominee to lead the Food and Drug Administration (FDA), is facing obstacles to his confirmation. Will the same happen when Bush nominates someone to take over McClellen’s post?

According to The Hill, former “senior officials” for CMS and the FDA say that agency replacements face a difficult time when they haven’t been confirmed by the Senate.

An incoming chief who’s received Senate confirmation has a vote of confidence, so to speak. He or she went through the preferred process (approval by accountable elected officials). If the president appoints a new chief without Senate approval, his or her leadership position may be precarious and less secure.

With all the controversy surrounding Medicare Part D, the timing couldn’t be worse or more politically charged.

As more beneficiaries sign up for Medicare fee-for-service plans, “experts” are concerned that Medicare may be going private, which apparently is a bad thing.

Citing a New York Times story, the Kaiser Network reports that fee-for-service enrollments increased tenfold to 820,000 during the last two years. The federal government raised plan subsidies by an average of 11 percent, which some say accounts for the increased enrollment numbers.

Chief Executive of the California Medical Association Jack Lewin sounds a little paranoid. He told the Times that fee-for-service plans are a “back-door way of trying to privatize Medicare” and “We are very concerned that Congress is going to pull back on funding, and we will be left with a private system that offers fewer benefits and is going to be influenced by Wall Street.”

In other Medicare prescription drug news, outgoing CMS administrator Mark McClellan wants to encourage beneficiaries to use generic drugs to save money. According to a Dow Jones report, about 52 percent of the time, U.S. residents buy prescription drugs. For seniors, the number is higher – 60 percent.

At least one big-name store is capitalizing on the trend. Wal-Mart plans to offer generic prescription drugs for $4. For more information, listen to an NPR program on the topic.

Texas Health and Human Services Commission (HHSC) has adopted new rules that affect various provisions of Chapter 358, Medicaid Eligibility. The following are new sections: (from the September 22 Texas Register):

§358.431 Transfer of Assets
§358.432, Home Equity Treatment
§358.433, Treatment of Entrance Fees for Individuals Residing in Continuing Care Retirement Communities

HHSC adopted the changes to incorporate mandatory provisions of the Social Security Act.

In related news, the HHSC will conduct a public hearing on October 9, 2006, for public comments on proposed Medicaid payment rate changes for several anesthesia procedure codes. Time and location:

The public hearing will be held on October 9, 2006, at 9:30 a.m. in the Lone Star Conference Room of the Braker Center, Building H, at 11209 Metric Boulevard, Austin, Texas 78758-4021. Entry is through Security at the entrance of 11209 Metric Boulevard.

Follow this link for more information about the proposed changes.

Go the federal Department of Justice website (www.usdoj.gov), and you can read how the largest health care system and second largest employer in New Jersey agreed to pay $265 million to resolve a qui tam lawsuit’s allegations in of defrauding Medicare. Click here for the web page. The agreement could also mean huge rewards for the three whistleblowers who started the whole thing. As part of the settlement, St. Barnabas Care System entered into a corporate compliance agreement with the government to ensure compliance with Medicare regulations and policies. And the lawsuits suggest that other undisclosed hospitals may also have been named as defendants.
The qui tam (whistleblower) cases involved a supplemental Medicare payment system known as “outliers.” Medicare provides outlier payments to hospitals to give them an incentive to treat Medicare inpatients whose care requires unusually high costs. The whistleblowers alleged St. Barnabas inflated those costs from 1995 to 2003 to increase its outlier payments. In June, St. Barnabas agreed to pay the federal government $265 million to settle the allegations but did not admit any wrongdoing. According to the Department of Justice, St. Barnabas overcharged Medicare by at least $630 million between 1995 and 2003.

This case illustrates the power of qui tam lawsuits. The St. Barnabas settlement resolved allegations that were filed in two separate federal lawsuits brought by three “whistleblowers” under the federal False Claims Act. The False Claims Act permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant.

Qui Tam cases are typically filed “under seal” and promptly referred to the local United States Attorney so the Justice Department can weigh whether to intervene in the action. Although not always assured of an award, whistleblowers can stand to profit by millions of dollars for initiating the action.

Unless the Centers for Medicare and Medicaid Services (CMS) delays a policy change, schedule to take effect on October 1, certain Medicare beneficiaries will be forced to use medical equipment, such as scooters and wheelchairs, that doesn’t suit their particular needs, say lawmakers and stakeholders. From Medical News Today:

Sen. Santorum noted that while the National Coverage Determination revamped the coverage criteria for mobility equipment more than a year ago, “since that time, others and myself have weighed in strongly to express our concerns with certain proposed policy changes and timeframes. Specifically, changes to the power mobility benefit, which are seen as counter to the expert guidance provided to CMS by product engineers, physicians, clinicians, and other industry stakeholders.'’

In his letter, Rep. Sherwood said that the recent changes “will create major disruptions to the power mobility industry and result in denial of coverage in appropriate devices. These concerns prompt me to respectfully request that you postpone the October 1, 2006 implementation date for new codes, pricing and coverage policies.”

In other CMS news, the agency began a campaign called “My Health. My Medicare” to help beneficiaries sign up for Medicare Part D. The new enrollment period begins November 15.

Last month I mentioned that the American Medical Association (AMA) and other doctors groups planned to lobby Congress during the August recess to block a scheduled reduction in Medicare reimbursement rates.

In the ongoing saga, one lawmaker recently made an offer that was easy to refuse: send us quality-of-care reports, and we’ll block the reduction. (Kaiser Network)

No thanks, said the AMA.

Physicians are not only trying to block the cut; they’re seeking a 2 percent increase in reimbursement rates without a reporting requirement. The offer by House Ways and Means Committee Chair Bill Thomas (pictured) would have required doctors to send quality-of-care data to the government. Some practices wouldn’t be able to afford the cost of reporting, according to doctors’ groups.

A formula called the Sustainable Growth Rate determines whether Medicare reimbursement rates are raised or lowered each year. The formula calls for a 5.1 percent reduction for 2007, scheduled to take effect in January 2007.

In a letter dated September 12, 2006, the Department of Aging and Disability Services informed providers that it will no longer send program notifications through the mail. Notifications will be posted online, effective October 1.

Providers can access notifications in two ways: 1) By following this link and clicking on “Communications,” where you’ll find links to alerts, bulletins, and other providers letters; 2) By signing up to receive notifications through e-mail. On the home page in the left column, click on the “Sign Up For E-mail Updates” icon and enter your e-mail address.

For more information, including how you can be exempted from online only notifications, download the letter here.

Some Democrats already believe Medicare Part D is a “Republican-engineered windfall” for pharmaceutical companies, but the good fortune may not last, say the experts. (Philadephia Inquirer)

According to Verispan, a health information company, Medicare Part D accounted for as much as 13.6 percent (Bristol-Myers Squibb) of drugs sales from January to July. Medicare Part D prescription drugs accounted for 8.8 percent of Pfizer’s retail sales, 10.9 percent of Merck’s, and 9.5 percent of Eli Lilly’s. The national average is 8.5 percent.

The Inquirer also cites a report titled The Long and Winding Road Ahead: Medicare Part D, Post 2006 (PDF), which indicates the good times may not roll for long. From the report:

IMS foresees that just a few years into the program, the unrelenting financial pressures of maintaining and managing the benefit will begin to take its toll. HHS estimates that the net cost to the federal government will nearly double between 2006 and 2009, rising from $37 billion to $67 billion, and the cost over the first ten years will be $725 billion.

In other words, as the cost of maintaining Medicare Part D rises, the federal government may cover only those drugs that are most cost-effective (generic?), which may hurt drug companies’ financial bottom line.

Senator Bob Dole has gone high-tech.

Every Monday, he hosts a podcast called Success: The Benefits of the New Medicare Drug Plan, with interviews from Medicare beneficiaries signed up for the new prescription drug program. (Medical News Today)

According to the site, there are 70+ days remaining until the enrollment period starts for Medicare Part D. Dole’s podcast is apparently designed to encourage beneficiaries to enroll. He said, “Now is the time for seniors to learn about their options and decide if they want to enroll. There will be a lot of people around willing to help; people that have the answers or know how to get the answers and they can help you make a decision. But it has to be your decision.”

To listen to the podcasts, either subscribe from the podcast page or click on the “Click to Play” buttons.

Don’t know what a “podcast” is? See What is a Podcast and How Can I Use One?

The Texas Health and Human Services Commission (HHSC) will submit Amendment Number 747 to the Texas State Plan for Medical Assistance. From the September 8 Texas Register:

Amendment 747 revises the methodology used by the State to estimate the Medicaid Upper Payment Limit (UPL) for hospital inpatient services. The UPL is the federal limit on Medicaid payments to a group of hospitals and is determined under Federal regulations as a reasonable estimate of the amount that would be paid for the Medicaid services or similar services using Medicare payment principles.

On behalf of the Texas Department of Aging and Disability Services, HHSC proposes a new subchapter to the Texas Administrative Code, Rights Of Individuals With Mental Retardation.

The new subchapter will “clarify the requirements” for a state mental retardation facility (MR) and a mental retardation authority (MRA) concerning their responsibilities for telling individuals with mental retardation about their rights and educating staff about those rights. MRs and MRAs must also hire a rights protection officer, whose job will be to protect individuals’ rights.

For more information, see the relevant section of the September 8 Texas Register.