Jennifer Lubell

WASHINGTON — Physicians will see a 4.4% cut in their Medicare fees under rules announcing next year's fee schedule, unless legislation pending in Congress supersedes those rules. Mark D. McClellan, M.D., administrator of the Centers for Medicare and Medicaid Services, announced the fee cut at a press teleconference.

At press time, it was unclear how Congress ultimately would address the issue. The Senate had passed a budget-reconciliation package containing several provisions on pay for performance, sponsored by Sen. Charles E. “Chuck” Grassley (R-Iowa), as well as a yearlong, 1% Medicare pay increase for physicians. In the meantime, legislation by the House of Representatives did not address the pay cut.

In announcing the final rule on the 2006 fee schedule, Dr. McClellan clarified that the 1% increase contained in the Senate legislation “would link to creating a pay-for-performance fund for physician services. While we have not endorsed that approach and think that in the short term, it may be better to get more quality reporting in place effectively, we definitely want to work with interested members [of Congress] on payment reform for physicians in 2006,” he told reporters.

The American College of Cardiology supports the 1% update in the fee schedule, John W. Schaeffer, M.D., who serves on the college's advocacy committee, said in an interview.

Moving ahead with pay for performance at this time however, “is unfair and inappropriate,” he said. The Senate language barely provides an incremental increase in fees to support such a process and cover current practice expense increases.

Another problem is that pay for performance has never been tested, he said. “There are no clinical trials to show that it's safe, fair, responsible, accurate, and appropriate.” The 1% update is just a temporary fix to the serious long-term problem of correcting the sustainable growth rate (SGR), he said.

Mary Frank, M.D., board chair of the American Academy of Family Physicians, said the hope is that the budget-reconciliation package will incorporate the 1% increase with provisions from Rep. Nancy Johnson's (R-Conn.) pay-for-performance bill, which also would repeal the SGR and base future payments on the Medicare Economic Index.

As has been the case for years, the SGR is driving the cut in Medicare physician pay.

The SGR is a component in the Medicare payment formula that determines the conversion factor update each year. Errors made to the formula in 1998 and 1999 led to a 5.4% decrease in physician payments in 2002—decreases that will continue unless the payment formula is corrected. Indeed, only congressional intervention has stopped payment cuts in the years since 2002; instead, short-term laws have provided small increases in pay.

The SGR is determined by several factors, including the projected increase in the gross domestic product; in essence, it ties medical spending to the ups and downs of the national economy.

Several organizations, such as the AAFP and Medical Group Management Association, oppose the “value-based purchasing” pay-for-performance bill sponsored by Sen. Grassley, which would link 2% of physician Medicare payments to reporting of quality data and demonstrated progress toward quality and efficiency measures but would not fix the SGR. Although the program would be voluntary, those choosing not to participate would lose the 2%.

Value-based measures require physicians to deliver more services, Michael Maves, M.D., executive vice president of the American Medical Association, recently wrote in a letter to Sen. Grassley. “Under the SGR, more physician services will result in a series of severe cuts, compounding current problems. This would make future SGR reforms more expensive.”

On the surface, pay for performance sounds good, because it would force physicians to meet certain standards, Daniel Siegel, M.D., said in an interview. Dr. Siegel of Smithtown, N.Y., represents the American Academy of Dermatology on the AMA Resource-Based Relative Value Update Committee (RUC).

The problem, he said, is that “we're not sure those measures are all that valuable.” Taking into account that 2% drop in reimbursement for not participating in Sen. Grassley's program, “the most distressing part is, it's really not pay for performance but a penalty for not meeting the new minimum standard.”

The physician fee schedule was the subject of much debate at the interim meeting of the AMA's House of Delegates.

The AMA's support for any type of pay for performance or other type of quality reporting program “is dependent on stopping the Medicare pay cuts,” AMA president J. Edward Hill, M.D., said at the meeting. In a resolution, the House of Delegates asked the organization to advocate for a repeal of the SGR without compromising the organization's principles on pay for performance.

Joyce Frieden, Associate Editor for Practice Trends, contributed to this report.

WASHINGTON — Physicians will see a 4.4% cut in their Medicare fees under rules announcing next year's fee schedule, unless legislation pending in Congress supersedes those rules. Mark D. McClellan, M.D., administrator of the Centers for Medicare and Medicaid Services, announced the fee cut at a press teleconference.

At press time, it was unclear how Congress ultimately would address the issue. The Senate had passed a budget-reconciliation package containing several provisions on pay for performance, sponsored by Sen. Charles E. “Chuck” Grassley (R-Iowa), as well as a yearlong, 1% Medicare pay increase for physicians. In the meantime, legislation by the House of Representatives did not address the pay cut.

In announcing the final rule on the 2006 fee schedule, Dr. McClellan clarified that the 1% increase contained in the Senate legislation “would link to creating a pay-for-performance fund for physician services. While we have not endorsed that approach and think that in the short term, it may be better to get more quality reporting in place effectively, we definitely want to work with interested members [of Congress] on payment reform for physicians in 2006,” he told reporters.

The American College of Cardiology supports the 1% update in the fee schedule, John W. Schaeffer, M.D., who serves on the college's advocacy committee, said in an interview.

Moving ahead with pay for performance at this time however, “is unfair and inappropriate,” he said. The Senate language barely provides an incremental increase in fees to support such a process and cover current practice expense increases.

Another problem is that pay for performance has never been tested, he said. “There are no clinical trials to show that it's safe, fair, responsible, accurate, and appropriate.” The 1% update is just a temporary fix to the serious long-term problem of correcting the sustainable growth rate (SGR), he said.

Mary Frank, M.D., board chair of the American Academy of Family Physicians, said the hope is that the budget-reconciliation package will incorporate the 1% increase with provisions from Rep. Nancy Johnson's (R-Conn.) pay-for-performance bill, which also would repeal the SGR and base future payments on the Medicare Economic Index.

As has been the case for years, the SGR is driving the cut in Medicare physician pay.

The SGR is a component in the Medicare payment formula that determines the conversion factor update each year. Errors made to the formula in 1998 and 1999 led to a 5.4% decrease in physician payments in 2002—decreases that will continue unless the payment formula is corrected. Indeed, only congressional intervention has stopped payment cuts in the years since 2002; instead, short-term laws have provided small increases in pay.

The SGR is determined by several factors, including the projected increase in the gross domestic product; in essence, it ties medical spending to the ups and downs of the national economy.

Several organizations, such as the AAFP and Medical Group Management Association, oppose the “value-based purchasing” pay-for-performance bill sponsored by Sen. Grassley, which would link 2% of physician Medicare payments to reporting of quality data and demonstrated progress toward quality and efficiency measures but would not fix the SGR. Although the program would be voluntary, those choosing not to participate would lose the 2%.

Value-based measures require physicians to deliver more services, Michael Maves, M.D., executive vice president of the American Medical Association, recently wrote in a letter to Sen. Grassley. “Under the SGR, more physician services will result in a series of severe cuts, compounding current problems. This would make future SGR reforms more expensive.”

On the surface, pay for performance sounds good, because it would force physicians to meet certain standards, Daniel Siegel, M.D., said in an interview. Dr. Siegel of Smithtown, N.Y., represents the American Academy of Dermatology on the AMA Resource-Based Relative Value Update Committee (RUC).

The problem, he said, is that “we're not sure those measures are all that valuable.” Taking into account that 2% drop in reimbursement for not participating in Sen. Grassley's program, “the most distressing part is, it's really not pay for performance but a penalty for not meeting the new minimum standard.”

The physician fee schedule was the subject of much debate at the interim meeting of the AMA's House of Delegates.

The AMA's support for any type of pay for performance or other type of quality reporting program “is dependent on stopping the Medicare pay cuts,” AMA president J. Edward Hill, M.D., said at the meeting. In a resolution, the House of Delegates asked the organization to advocate for a repeal of the SGR without compromising the organization's principles on pay for performance.

Joyce Frieden, Associate Editor for Practice Trends, contributed to this report.

WASHINGTON — Physicians will see a 4.4% cut in their Medicare fees under rules announcing next year's fee schedule, unless legislation pending in Congress supersedes those rules. Mark D. McClellan, M.D., administrator of the Centers for Medicare and Medicaid Services, announced the fee cut at a press teleconference.

At press time, it was unclear how Congress ultimately would address the issue. The Senate had passed a budget-reconciliation package containing several provisions on pay for performance, sponsored by Sen. Charles E. “Chuck” Grassley (R-Iowa), as well as a yearlong, 1% Medicare pay increase for physicians. In the meantime, legislation by the House of Representatives did not address the pay cut.

In announcing the final rule on the 2006 fee schedule, Dr. McClellan clarified that the 1% increase contained in the Senate legislation “would link to creating a pay-for-performance fund for physician services. While we have not endorsed that approach and think that in the short term, it may be better to get more quality reporting in place effectively, we definitely want to work with interested members [of Congress] on payment reform for physicians in 2006,” he told reporters.

The American College of Cardiology supports the 1% update in the fee schedule, John W. Schaeffer, M.D., who serves on the college's advocacy committee, said in an interview.

Moving ahead with pay for performance at this time however, “is unfair and inappropriate,” he said. The Senate language barely provides an incremental increase in fees to support such a process and cover current practice expense increases.

Another problem is that pay for performance has never been tested, he said. “There are no clinical trials to show that it's safe, fair, responsible, accurate, and appropriate.” The 1% update is just a temporary fix to the serious long-term problem of correcting the sustainable growth rate (SGR), he said.

Mary Frank, M.D., board chair of the American Academy of Family Physicians, said the hope is that the budget-reconciliation package will incorporate the 1% increase with provisions from Rep. Nancy Johnson's (R-Conn.) pay-for-performance bill, which also would repeal the SGR and base future payments on the Medicare Economic Index.

As has been the case for years, the SGR is driving the cut in Medicare physician pay.

The SGR is a component in the Medicare payment formula that determines the conversion factor update each year. Errors made to the formula in 1998 and 1999 led to a 5.4% decrease in physician payments in 2002—decreases that will continue unless the payment formula is corrected. Indeed, only congressional intervention has stopped payment cuts in the years since 2002; instead, short-term laws have provided small increases in pay.

The SGR is determined by several factors, including the projected increase in the gross domestic product; in essence, it ties medical spending to the ups and downs of the national economy.

Several organizations, such as the AAFP and Medical Group Management Association, oppose the “value-based purchasing” pay-for-performance bill sponsored by Sen. Grassley, which would link 2% of physician Medicare payments to reporting of quality data and demonstrated progress toward quality and efficiency measures but would not fix the SGR. Although the program would be voluntary, those choosing not to participate would lose the 2%.

Value-based measures require physicians to deliver more services, Michael Maves, M.D., executive vice president of the American Medical Association, recently wrote in a letter to Sen. Grassley. “Under the SGR, more physician services will result in a series of severe cuts, compounding current problems. This would make future SGR reforms more expensive.”

On the surface, pay for performance sounds good, because it would force physicians to meet certain standards, Daniel Siegel, M.D., said in an interview. Dr. Siegel of Smithtown, N.Y., represents the American Academy of Dermatology on the AMA Resource-Based Relative Value Update Committee (RUC).

The problem, he said, is that “we're not sure those measures are all that valuable.” Taking into account that 2% drop in reimbursement for not participating in Sen. Grassley's program, “the most distressing part is, it's really not pay for performance but a penalty for not meeting the new minimum standard.”

The physician fee schedule was the subject of much debate at the interim meeting of the AMA's House of Delegates.

The AMA's support for any type of pay for performance or other type of quality reporting program “is dependent on stopping the Medicare pay cuts,” AMA president J. Edward Hill, M.D., said at the meeting. In a resolution, the House of Delegates asked the organization to advocate for a repeal of the SGR without compromising the organization's principles on pay for performance.

Joyce Frieden, Associate Editor for Practice Trends, contributed to this report.

Universal Health Care in Illinois

Universal health care coverage will be available to children in the state of Illinois next year. Gov. Rod R. Blagojevich (D) recently signed the “All Kids” plan into law, which makes comprehensive health insurance available to all children—regardless of family income—with parents paying monthly premiums and co-payments for physician's visits and prescription drugs at affordable rates. The coverage also includes inpatient care, vision care, dental care, and medical devices such as inhalers. The plan specifically targets uninsured children that come from working and middle-class families—those whose parents earn too much to qualify for public programs like KidCare, but still can't afford private insurance. “This plan makes Illinois the first state in the country to provide comprehensive health care coverage to uninsured children,” said Ron Pollack, executive director of Families USA, in a statement. “This enormous breakthrough may set an example for other states and the federal government to extend help to the parents of uninsured children all across the country,” he said. The plan goes into effect on July 1.

Autism and Genetics

Five institutes at the National Institutes of Health and three private organizations have formed a consortium to identify genes that may contribute to the development of autism and autism spectrum disorders. The consortium has funded five grants totaling $10.8 million, to be given out over a 5-year period. “This initiative seeks to expand our knowledge of the genetic factors involved in this disorder that affects so many families,” said Thomas R. Insel, director of the National Institute of Mental Health, one of the consortium members. The other members from NIH are the National Institute on Deafness and Other Communication Disorders, the National Institute of Environmental Health Sciences, the National Institute of Neurological Disorders and Stroke, and the National Institute of Child Health and Human Development. The private organizations are the National Alliance for Autism Research, Cure Autism Now, and the Southwest Autism Research and Resource Center.

AMA Addresses Medicaid Reform

Delegates to the American Medical Association's interim meeting tackled the issues of Medicaid reform and the uninsured, opposing Medicaid reform legislation—now pending in the U.S. House of Representatives—that would mandate premiums and copayments for acute care services and pharmaceuticals for children who live at or below 133% of the federal poverty level. In addition, they adopted a report that would place a high priority on expanding health insurance coverage for “all Americans,” including the uninsured, and also called on the AMA to pursue bipartisan support for federally funded tax credits as a preferred long-term solution for covering all patients. A resolution calling for the AMA to endorse health savings accounts for Medicaid patients ended up getting referred back to the AMA's Board of Trustees.

Smoking Ban in Public Places

Applying a hard-line approach to kicking the habit, AMA delegates voted to actively support national, state, and local legislation and pursue regulations banning smoking in all workplaces. In addition, the AMA should work to ensure that federal legislation banning smoking in all workplaces does not prohibit or weaken existing and stricter state or local regulations. The AMA should also actively pursue national legislation banning smoking in all cafeterias, restaurants, cafes, supermarkets, and other venues where food or drink is consumed on the premises. The language initially just called for a ban in restaurants, “but we recognized that there was no reason to limit it to eating establishments,” said AMA Trustee Robert Wah, M.D. “The public workplace needed to be protected as well.”

Improving Uncompensated Care

Hospitals have established more generous uncompensated-care guidelines for uninsured patients after a torrent of publicity about aggressive hospital billing and collection practices and a series of lawsuits alleging that hospitals overcharge these patients, the Center for Studying Health System Change (HSC) reported. The study is based on HSC's 2005 site visits to 12 nationally representative communities. “In every HSC community, most hospitals have either recently changed their pricing, billing, and collection policies or tried to improve the clarity of the information provided to patients,” said HSC research analyst Andrea B. Staiti, coauthor of the study. For example, it is now common for hospitals in the 12 surveyed communities to provide uncompensated care to uninsured patients with incomes less than 200% of the federal poverty level, and to offer sliding-scale discounts for patients with incomes up to 400% or 500% of the poverty level.

Universal Health Care in Illinois

Universal health care coverage will be available to children in the state of Illinois next year. Gov. Rod R. Blagojevich (D) recently signed the “All Kids” plan into law, which makes comprehensive health insurance available to all children—regardless of family income—with parents paying monthly premiums and co-payments for physician's visits and prescription drugs at affordable rates. The coverage also includes inpatient care, vision care, dental care, and medical devices such as inhalers. The plan specifically targets uninsured children that come from working and middle-class families—those whose parents earn too much to qualify for public programs like KidCare, but still can't afford private insurance. “This plan makes Illinois the first state in the country to provide comprehensive health care coverage to uninsured children,” said Ron Pollack, executive director of Families USA, in a statement. “This enormous breakthrough may set an example for other states and the federal government to extend help to the parents of uninsured children all across the country,” he said. The plan goes into effect on July 1.

Autism and Genetics

Five institutes at the National Institutes of Health and three private organizations have formed a consortium to identify genes that may contribute to the development of autism and autism spectrum disorders. The consortium has funded five grants totaling $10.8 million, to be given out over a 5-year period. “This initiative seeks to expand our knowledge of the genetic factors involved in this disorder that affects so many families,” said Thomas R. Insel, director of the National Institute of Mental Health, one of the consortium members. The other members from NIH are the National Institute on Deafness and Other Communication Disorders, the National Institute of Environmental Health Sciences, the National Institute of Neurological Disorders and Stroke, and the National Institute of Child Health and Human Development. The private organizations are the National Alliance for Autism Research, Cure Autism Now, and the Southwest Autism Research and Resource Center.

AMA Addresses Medicaid Reform

Delegates to the American Medical Association's interim meeting tackled the issues of Medicaid reform and the uninsured, opposing Medicaid reform legislation—now pending in the U.S. House of Representatives—that would mandate premiums and copayments for acute care services and pharmaceuticals for children who live at or below 133% of the federal poverty level. In addition, they adopted a report that would place a high priority on expanding health insurance coverage for “all Americans,” including the uninsured, and also called on the AMA to pursue bipartisan support for federally funded tax credits as a preferred long-term solution for covering all patients. A resolution calling for the AMA to endorse health savings accounts for Medicaid patients ended up getting referred back to the AMA's Board of Trustees.

Smoking Ban in Public Places

Applying a hard-line approach to kicking the habit, AMA delegates voted to actively support national, state, and local legislation and pursue regulations banning smoking in all workplaces. In addition, the AMA should work to ensure that federal legislation banning smoking in all workplaces does not prohibit or weaken existing and stricter state or local regulations. The AMA should also actively pursue national legislation banning smoking in all cafeterias, restaurants, cafes, supermarkets, and other venues where food or drink is consumed on the premises. The language initially just called for a ban in restaurants, “but we recognized that there was no reason to limit it to eating establishments,” said AMA Trustee Robert Wah, M.D. “The public workplace needed to be protected as well.”

Improving Uncompensated Care

Hospitals have established more generous uncompensated-care guidelines for uninsured patients after a torrent of publicity about aggressive hospital billing and collection practices and a series of lawsuits alleging that hospitals overcharge these patients, the Center for Studying Health System Change (HSC) reported. The study is based on HSC's 2005 site visits to 12 nationally representative communities. “In every HSC community, most hospitals have either recently changed their pricing, billing, and collection policies or tried to improve the clarity of the information provided to patients,” said HSC research analyst Andrea B. Staiti, coauthor of the study. For example, it is now common for hospitals in the 12 surveyed communities to provide uncompensated care to uninsured patients with incomes less than 200% of the federal poverty level, and to offer sliding-scale discounts for patients with incomes up to 400% or 500% of the poverty level.

Universal Health Care in Illinois

Universal health care coverage will be available to children in the state of Illinois next year. Gov. Rod R. Blagojevich (D) recently signed the “All Kids” plan into law, which makes comprehensive health insurance available to all children—regardless of family income—with parents paying monthly premiums and co-payments for physician's visits and prescription drugs at affordable rates. The coverage also includes inpatient care, vision care, dental care, and medical devices such as inhalers. The plan specifically targets uninsured children that come from working and middle-class families—those whose parents earn too much to qualify for public programs like KidCare, but still can't afford private insurance. “This plan makes Illinois the first state in the country to provide comprehensive health care coverage to uninsured children,” said Ron Pollack, executive director of Families USA, in a statement. “This enormous breakthrough may set an example for other states and the federal government to extend help to the parents of uninsured children all across the country,” he said. The plan goes into effect on July 1.

Autism and Genetics

Five institutes at the National Institutes of Health and three private organizations have formed a consortium to identify genes that may contribute to the development of autism and autism spectrum disorders. The consortium has funded five grants totaling $10.8 million, to be given out over a 5-year period. “This initiative seeks to expand our knowledge of the genetic factors involved in this disorder that affects so many families,” said Thomas R. Insel, director of the National Institute of Mental Health, one of the consortium members. The other members from NIH are the National Institute on Deafness and Other Communication Disorders, the National Institute of Environmental Health Sciences, the National Institute of Neurological Disorders and Stroke, and the National Institute of Child Health and Human Development. The private organizations are the National Alliance for Autism Research, Cure Autism Now, and the Southwest Autism Research and Resource Center.

AMA Addresses Medicaid Reform

Delegates to the American Medical Association's interim meeting tackled the issues of Medicaid reform and the uninsured, opposing Medicaid reform legislation—now pending in the U.S. House of Representatives—that would mandate premiums and copayments for acute care services and pharmaceuticals for children who live at or below 133% of the federal poverty level. In addition, they adopted a report that would place a high priority on expanding health insurance coverage for “all Americans,” including the uninsured, and also called on the AMA to pursue bipartisan support for federally funded tax credits as a preferred long-term solution for covering all patients. A resolution calling for the AMA to endorse health savings accounts for Medicaid patients ended up getting referred back to the AMA's Board of Trustees.

Smoking Ban in Public Places

Applying a hard-line approach to kicking the habit, AMA delegates voted to actively support national, state, and local legislation and pursue regulations banning smoking in all workplaces. In addition, the AMA should work to ensure that federal legislation banning smoking in all workplaces does not prohibit or weaken existing and stricter state or local regulations. The AMA should also actively pursue national legislation banning smoking in all cafeterias, restaurants, cafes, supermarkets, and other venues where food or drink is consumed on the premises. The language initially just called for a ban in restaurants, “but we recognized that there was no reason to limit it to eating establishments,” said AMA Trustee Robert Wah, M.D. “The public workplace needed to be protected as well.”

Improving Uncompensated Care

Hospitals have established more generous uncompensated-care guidelines for uninsured patients after a torrent of publicity about aggressive hospital billing and collection practices and a series of lawsuits alleging that hospitals overcharge these patients, the Center for Studying Health System Change (HSC) reported. The study is based on HSC's 2005 site visits to 12 nationally representative communities. “In every HSC community, most hospitals have either recently changed their pricing, billing, and collection policies or tried to improve the clarity of the information provided to patients,” said HSC research analyst Andrea B. Staiti, coauthor of the study. For example, it is now common for hospitals in the 12 surveyed communities to provide uncompensated care to uninsured patients with incomes less than 200% of the federal poverty level, and to offer sliding-scale discounts for patients with incomes up to 400% or 500% of the poverty level.

Cream Skimming Continues

Specialty hospitals are under scrutiny once again. A study found that Arizona heart physicians who partly owned cardiac specialty hospitals were more likely than were physicians with no ownership stake to treat low-acuity, high-profit cases in their own facilities and refer the more complex, lower-profit cases to community hospitals. Jean Mitchell, Ph.D., a professor of public policy at Georgetown University, Washington, analyzed 6 years of inpatient discharge data to compare the practice patterns of physicians who were owners of cardiac specialty hospitals in Phoenix and Tucson with those of physicians who only treated patients in full-service community hospitals with an accredited cardiac care program. She found that physician-owners treated higher percentages of patients with Medicare fee-for-service or commercial PPOs, and lower percentages of patients enrolled in Medicaid and HMOs. The American Medical Association endorses the existence of such hospitals, although the Center for Medicare and Medicaid Services has reinstituted a freeze on the approval of new specialty hospitals until it completes a review next year. The study appeared as a Health Affairs Web-exclusive article.

HHS Mulls Investigation

The Department of Health and Human Services' Office of Inspector General is looking into the circumstances surrounding the resignation of former Food and Drug Administration Commissioner Lester M. Crawford, D.V.M., Ph.D., to determine if an investigation should be opened, an OIG spokeswoman said. In a response to a query from Rep. Maurice Hinchey (D-N.Y.), HHS Inspector General Daniel R. Levinson said that the OIG is doing an initial review of the facts, not an investigation in any regulatory sense, according to the spokeswoman. “After reviewing the facts, the OIG will determine if an investigation is formally launched,” she said. “Dr. Crawford's departure, a mere 2 months after confirmation to his position, raises significant questions,” Rep. Hinchey and several fellow members of Congress wrote in their request. Dr. Crawford had resigned his position after a 30-year career with the agency, serving as its deputy commissioner and director of the Center for Veterinary Medicine, among other posts.

Alternative Medicine Centers

The National Center for Complementary and Alternative Medicine (NCCAM) is funding five new research centers to study complementary and alternative approaches to HIV/AIDS, arthritis, asthma, and pain. Three of the new centers will focus on therapies used in traditional Chinese medicine, such as acupuncture and Chinese herbal mixtures. The other centers will study millimeter wave therapy—a type of energy medicine—and botanical therapies used by traditional healers in Africa. For example, NCCAM has awarded $1.2 million in first-year funding to the Center for Arthritis and Traditional Chinese Medicine at the University of Maryland in Baltimore. Researchers there will conduct a clinical trial of an 11-herb Chinese formula known as HLXL for osteoarthritis of the knee; assess acupuncture's effect on inflammatory pain in an animal model; and study the efficacy of HLXL in an animal model of autoimmune arthritis. NCCAM is a component of the National Institutes of Health.

Perceptions on Seeking Care

It's the lack of insurance, not a lack of concern, that keeps uninsured people from getting care, the Center for Studying Health System Change concluded in a study. When confronted with a serious new medical symptom, insured and uninsured people shared similar perceptions about the need to see a medical provider. In fact, the study found that uninsured people aged 18 years and older were more likely than were insured people (23% vs. 19%) to report the recent onset of at least one of 15 serious symptoms, such as shortness of breath, chest pain, persistent headache, or loss of consciousness. About 58% of insured and uninsured people with a new symptom believed they needed to see or talk to a medical provider. But even with similar conditions and similar severity levels, uninsured people were much less likely than were the insured to obtain medical care in response to the new symptom. The analysis, drawn from the center's Community Tracking Study Household Survey, was limited to 1,937 adults without Medicare coverage—1,024 uninsured and 913 insured patients.

Groups Call for Alcohol Labeling

Two consumer groups, the National Consumers League and Shape Up America!, are calling on the federal government to require standardized labeling on alcoholic beverages similar to that appearing on packaged food and over-the-counter medications. “Even the most basic information about alcohol beverages is not required to be provided on the labels of most alcohol beverage products,” said NCL President Linda Golodner. “Just as conventional foods, dietary supplements, and nonprescription drugs are required to provide a basic minimum of information needed by consumers to make informed purchasing decisions, alcohol beverage labels should also be required to provide this information.” Information the groups would like to see on the label includes serving size, alcohol content, calories, the definition of a “standard drink,” and advice from federal dietary guidelines about moderate alcohol consumption. The two groups were responding to a request for comment from the U.S. Treasury's Alcohol and Tobacco Tax and Trade Bureau on a proposal to revise the current labeling rules.

Cream Skimming Continues

Specialty hospitals are under scrutiny once again. A study found that Arizona heart physicians who partly owned cardiac specialty hospitals were more likely than were physicians with no ownership stake to treat low-acuity, high-profit cases in their own facilities and refer the more complex, lower-profit cases to community hospitals. Jean Mitchell, Ph.D., a professor of public policy at Georgetown University, Washington, analyzed 6 years of inpatient discharge data to compare the practice patterns of physicians who were owners of cardiac specialty hospitals in Phoenix and Tucson with those of physicians who only treated patients in full-service community hospitals with an accredited cardiac care program. She found that physician-owners treated higher percentages of patients with Medicare fee-for-service or commercial PPOs, and lower percentages of patients enrolled in Medicaid and HMOs. The American Medical Association endorses the existence of such hospitals, although the Center for Medicare and Medicaid Services has reinstituted a freeze on the approval of new specialty hospitals until it completes a review next year. The study appeared as a Health Affairs Web-exclusive article.

HHS Mulls Investigation

The Department of Health and Human Services' Office of Inspector General is looking into the circumstances surrounding the resignation of former Food and Drug Administration Commissioner Lester M. Crawford, D.V.M., Ph.D., to determine if an investigation should be opened, an OIG spokeswoman said. In a response to a query from Rep. Maurice Hinchey (D-N.Y.), HHS Inspector General Daniel R. Levinson said that the OIG is doing an initial review of the facts, not an investigation in any regulatory sense, according to the spokeswoman. “After reviewing the facts, the OIG will determine if an investigation is formally launched,” she said. “Dr. Crawford's departure, a mere 2 months after confirmation to his position, raises significant questions,” Rep. Hinchey and several fellow members of Congress wrote in their request. Dr. Crawford had resigned his position after a 30-year career with the agency, serving as its deputy commissioner and director of the Center for Veterinary Medicine, among other posts.

Alternative Medicine Centers

The National Center for Complementary and Alternative Medicine (NCCAM) is funding five new research centers to study complementary and alternative approaches to HIV/AIDS, arthritis, asthma, and pain. Three of the new centers will focus on therapies used in traditional Chinese medicine, such as acupuncture and Chinese herbal mixtures. The other centers will study millimeter wave therapy—a type of energy medicine—and botanical therapies used by traditional healers in Africa. For example, NCCAM has awarded $1.2 million in first-year funding to the Center for Arthritis and Traditional Chinese Medicine at the University of Maryland in Baltimore. Researchers there will conduct a clinical trial of an 11-herb Chinese formula known as HLXL for osteoarthritis of the knee; assess acupuncture's effect on inflammatory pain in an animal model; and study the efficacy of HLXL in an animal model of autoimmune arthritis. NCCAM is a component of the National Institutes of Health.

Perceptions on Seeking Care

It's the lack of insurance, not a lack of concern, that keeps uninsured people from getting care, the Center for Studying Health System Change concluded in a study. When confronted with a serious new medical symptom, insured and uninsured people shared similar perceptions about the need to see a medical provider. In fact, the study found that uninsured people aged 18 years and older were more likely than were insured people (23% vs. 19%) to report the recent onset of at least one of 15 serious symptoms, such as shortness of breath, chest pain, persistent headache, or loss of consciousness. About 58% of insured and uninsured people with a new symptom believed they needed to see or talk to a medical provider. But even with similar conditions and similar severity levels, uninsured people were much less likely than were the insured to obtain medical care in response to the new symptom. The analysis, drawn from the center's Community Tracking Study Household Survey, was limited to 1,937 adults without Medicare coverage—1,024 uninsured and 913 insured patients.

Groups Call for Alcohol Labeling

Two consumer groups, the National Consumers League and Shape Up America!, are calling on the federal government to require standardized labeling on alcoholic beverages similar to that appearing on packaged food and over-the-counter medications. “Even the most basic information about alcohol beverages is not required to be provided on the labels of most alcohol beverage products,” said NCL President Linda Golodner. “Just as conventional foods, dietary supplements, and nonprescription drugs are required to provide a basic minimum of information needed by consumers to make informed purchasing decisions, alcohol beverage labels should also be required to provide this information.” Information the groups would like to see on the label includes serving size, alcohol content, calories, the definition of a “standard drink,” and advice from federal dietary guidelines about moderate alcohol consumption. The two groups were responding to a request for comment from the U.S. Treasury's Alcohol and Tobacco Tax and Trade Bureau on a proposal to revise the current labeling rules.

Cream Skimming Continues

Specialty hospitals are under scrutiny once again. A study found that Arizona heart physicians who partly owned cardiac specialty hospitals were more likely than were physicians with no ownership stake to treat low-acuity, high-profit cases in their own facilities and refer the more complex, lower-profit cases to community hospitals. Jean Mitchell, Ph.D., a professor of public policy at Georgetown University, Washington, analyzed 6 years of inpatient discharge data to compare the practice patterns of physicians who were owners of cardiac specialty hospitals in Phoenix and Tucson with those of physicians who only treated patients in full-service community hospitals with an accredited cardiac care program. She found that physician-owners treated higher percentages of patients with Medicare fee-for-service or commercial PPOs, and lower percentages of patients enrolled in Medicaid and HMOs. The American Medical Association endorses the existence of such hospitals, although the Center for Medicare and Medicaid Services has reinstituted a freeze on the approval of new specialty hospitals until it completes a review next year. The study appeared as a Health Affairs Web-exclusive article.

HHS Mulls Investigation

The Department of Health and Human Services' Office of Inspector General is looking into the circumstances surrounding the resignation of former Food and Drug Administration Commissioner Lester M. Crawford, D.V.M., Ph.D., to determine if an investigation should be opened, an OIG spokeswoman said. In a response to a query from Rep. Maurice Hinchey (D-N.Y.), HHS Inspector General Daniel R. Levinson said that the OIG is doing an initial review of the facts, not an investigation in any regulatory sense, according to the spokeswoman. “After reviewing the facts, the OIG will determine if an investigation is formally launched,” she said. “Dr. Crawford's departure, a mere 2 months after confirmation to his position, raises significant questions,” Rep. Hinchey and several fellow members of Congress wrote in their request. Dr. Crawford had resigned his position after a 30-year career with the agency, serving as its deputy commissioner and director of the Center for Veterinary Medicine, among other posts.

Alternative Medicine Centers

The National Center for Complementary and Alternative Medicine (NCCAM) is funding five new research centers to study complementary and alternative approaches to HIV/AIDS, arthritis, asthma, and pain. Three of the new centers will focus on therapies used in traditional Chinese medicine, such as acupuncture and Chinese herbal mixtures. The other centers will study millimeter wave therapy—a type of energy medicine—and botanical therapies used by traditional healers in Africa. For example, NCCAM has awarded $1.2 million in first-year funding to the Center for Arthritis and Traditional Chinese Medicine at the University of Maryland in Baltimore. Researchers there will conduct a clinical trial of an 11-herb Chinese formula known as HLXL for osteoarthritis of the knee; assess acupuncture's effect on inflammatory pain in an animal model; and study the efficacy of HLXL in an animal model of autoimmune arthritis. NCCAM is a component of the National Institutes of Health.

Perceptions on Seeking Care

It's the lack of insurance, not a lack of concern, that keeps uninsured people from getting care, the Center for Studying Health System Change concluded in a study. When confronted with a serious new medical symptom, insured and uninsured people shared similar perceptions about the need to see a medical provider. In fact, the study found that uninsured people aged 18 years and older were more likely than were insured people (23% vs. 19%) to report the recent onset of at least one of 15 serious symptoms, such as shortness of breath, chest pain, persistent headache, or loss of consciousness. About 58% of insured and uninsured people with a new symptom believed they needed to see or talk to a medical provider. But even with similar conditions and similar severity levels, uninsured people were much less likely than were the insured to obtain medical care in response to the new symptom. The analysis, drawn from the center's Community Tracking Study Household Survey, was limited to 1,937 adults without Medicare coverage—1,024 uninsured and 913 insured patients.

Groups Call for Alcohol Labeling

Two consumer groups, the National Consumers League and Shape Up America!, are calling on the federal government to require standardized labeling on alcoholic beverages similar to that appearing on packaged food and over-the-counter medications. “Even the most basic information about alcohol beverages is not required to be provided on the labels of most alcohol beverage products,” said NCL President Linda Golodner. “Just as conventional foods, dietary supplements, and nonprescription drugs are required to provide a basic minimum of information needed by consumers to make informed purchasing decisions, alcohol beverage labels should also be required to provide this information.” Information the groups would like to see on the label includes serving size, alcohol content, calories, the definition of a “standard drink,” and advice from federal dietary guidelines about moderate alcohol consumption. The two groups were responding to a request for comment from the U.S. Treasury's Alcohol and Tobacco Tax and Trade Bureau on a proposal to revise the current labeling rules.

WASHINGTON — Vendors should not be allowed to cut off distribution of drugs to patients regardless of their ability to pay under Medicare's new drug acquisition program, the Practicing Physicians Advisory Council recommended.

Scheduled to begin mid-2006, the Medicare competitive acquisition program (CAP) for Part B drugs and biologicals will select vendors through a bidding process to bill Medicare for these types of drugs and collect coinsurance or deductibles from patients.

Currently, physicians must purchase these drugs and biologicals from a distributor or manufacturer and then bill Medicare for reimbursement, which is set at a statutorily mandated payment rate of 106% of the manufacturer's average sales price (or ASP + 6%). Medicare pays 80% of this rate, and the physician collects a 20% copayment from the beneficiary.

Under the CAP, the only thing the physician has to do is purchase the drugs from the preselected vendors. The program was designed to reduce the administrative burden for physicians by taking them out of the financial loop. However, it also means that physicians won't have as much control over these drugs—and that vendors can elect not to ship a drug if the patient has not met some of the copay obligations.

This system will inevitably work against patients who need therapy but have no money and the physicians who treat them, said Barbara McAneny, M.D., a member of the PPAC and an oncologist, who proposed the recommendation.

Physicians are required by law to attempt to collect those copayments, “but we know that we're going to end up eating [the cost of the drug] because the patient doesn't have it.” However, the physician is going to continue treating those patients.

The provision that an executive of a vendor corporation can make the decision to cut somebody off 15 days after they've failed to make a payment is unfair, Dr. McAneny said. The vendors “never have to face that person and say, 'I'm sorry, you get to die now.' But when I'm in my practice looking at that person, that's what it will come down to. The person they'll see will be me.”

From a moral and ethical standpoint, the interim final rule leaves physicians with only one option: to opt out of the CAP to avoid abandoning patients, continue to purchase drugs on the ASP + 6% market, receive 86% of the cost of the drug, “and chew up the rest,” she said.

Medicare's reimbursement under ASP can fall short of what the drugs actually cost, given fluctuations in what distributors and manufacturers charge for the drugs.

“I assume the vendors, who tend to be large pharmaceutical manufacturing corporations, would be in a much better position to eat those costs than I would as an individual physician,” Dr. McAneny said.

Amy Bassano, director of the division of ambulatory services at the Centers for Medicare and Medicaid Services (CMS) Center for Medicare Management, noted that Medicare supplier provider agreements do not require services to be provided except in cases of emergency and civil rights. “That's what we're coming up against,” she said. However, there are cases where coinsurance could be waived if there is a demonstrated financial hardship and the vendor made an attempt to collect, she added.

The panel decided that CMS should reevaluate its contention that working with CAP vendors would not increase the administrative burden of physicians.

In other PPAC recommendations:

▸ CMS should work with Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, to clarify how Congress intended the ASP and CAP to function independently of each other.

▸ CAP vendor prices should not be included in the calculation of the ASP. The inclusion is duplicative and unfair to physicians not participating in the CAP, the PPAC determined.

Given that the CMS has recognized the increased cost of dispensing drugs by pharmacies and has added 2% of the average sales price to cover pharmacy overhead costs under the ASP, the PPAC recommended that the CMS “treat physicians equally” and add 2% for physicians using the ASP + 6% and a dispensing fee for physicians using the CAP.

Physicians under the interim final rule would have only 14 days to submit to Medicare carriers procedural claims, including all necessary codes, for the administration of the drugs. Taking into account the challenges associated with meeting that deadline, the PPAC recommended that the time frame be extended to 30 days.

Also, CAP participation should be determined on an individual basis, and not as a group requirement, the panel recommended. Under the interim final rule, if one physician in a group practice decides to participate in the CAP, all of the physicians in that practice are forced to do so, Ronald Castellanos, M.D., chairman of the PPAC, said in an interview.

The program's launch was originally scheduled for January 2006, but it was delayed for 6 months after the CMS announced the suspension of the vendor bidding process to allow more time for review of public comments. The agency expects to publish a final rule on the CAP in late 2005, which would reopen bidding.

WASHINGTON — Vendors should not be allowed to cut off distribution of drugs to patients regardless of their ability to pay under Medicare's new drug acquisition program, the Practicing Physicians Advisory Council recommended.

Scheduled to begin mid-2006, the Medicare competitive acquisition program (CAP) for Part B drugs and biologicals will select vendors through a bidding process to bill Medicare for these types of drugs and collect coinsurance or deductibles from patients.

Currently, physicians must purchase these drugs and biologicals from a distributor or manufacturer and then bill Medicare for reimbursement, which is set at a statutorily mandated payment rate of 106% of the manufacturer's average sales price (or ASP + 6%). Medicare pays 80% of this rate, and the physician collects a 20% copayment from the beneficiary.

Under the CAP, the only thing the physician has to do is purchase the drugs from the preselected vendors. The program was designed to reduce the administrative burden for physicians by taking them out of the financial loop. However, it also means that physicians won't have as much control over these drugs—and that vendors can elect not to ship a drug if the patient has not met some of the copay obligations.

This system will inevitably work against patients who need therapy but have no money and the physicians who treat them, said Barbara McAneny, M.D., a member of the PPAC and an oncologist, who proposed the recommendation.

Physicians are required by law to attempt to collect those copayments, “but we know that we're going to end up eating [the cost of the drug] because the patient doesn't have it.” However, the physician is going to continue treating those patients.

The provision that an executive of a vendor corporation can make the decision to cut somebody off 15 days after they've failed to make a payment is unfair, Dr. McAneny said. The vendors “never have to face that person and say, 'I'm sorry, you get to die now.' But when I'm in my practice looking at that person, that's what it will come down to. The person they'll see will be me.”

From a moral and ethical standpoint, the interim final rule leaves physicians with only one option: to opt out of the CAP to avoid abandoning patients, continue to purchase drugs on the ASP + 6% market, receive 86% of the cost of the drug, “and chew up the rest,” she said.

Medicare's reimbursement under ASP can fall short of what the drugs actually cost, given fluctuations in what distributors and manufacturers charge for the drugs.

“I assume the vendors, who tend to be large pharmaceutical manufacturing corporations, would be in a much better position to eat those costs than I would as an individual physician,” Dr. McAneny said.

Amy Bassano, director of the division of ambulatory services at the Centers for Medicare and Medicaid Services (CMS) Center for Medicare Management, noted that Medicare supplier provider agreements do not require services to be provided except in cases of emergency and civil rights. “That's what we're coming up against,” she said. However, there are cases where coinsurance could be waived if there is a demonstrated financial hardship and the vendor made an attempt to collect, she added.

The panel decided that CMS should reevaluate its contention that working with CAP vendors would not increase the administrative burden of physicians.

In other PPAC recommendations:

▸ CMS should work with Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, to clarify how Congress intended the ASP and CAP to function independently of each other.

▸ CAP vendor prices should not be included in the calculation of the ASP. The inclusion is duplicative and unfair to physicians not participating in the CAP, the PPAC determined.

Given that the CMS has recognized the increased cost of dispensing drugs by pharmacies and has added 2% of the average sales price to cover pharmacy overhead costs under the ASP, the PPAC recommended that the CMS “treat physicians equally” and add 2% for physicians using the ASP + 6% and a dispensing fee for physicians using the CAP.

Physicians under the interim final rule would have only 14 days to submit to Medicare carriers procedural claims, including all necessary codes, for the administration of the drugs. Taking into account the challenges associated with meeting that deadline, the PPAC recommended that the time frame be extended to 30 days.

Also, CAP participation should be determined on an individual basis, and not as a group requirement, the panel recommended. Under the interim final rule, if one physician in a group practice decides to participate in the CAP, all of the physicians in that practice are forced to do so, Ronald Castellanos, M.D., chairman of the PPAC, said in an interview.

The program's launch was originally scheduled for January 2006, but it was delayed for 6 months after the CMS announced the suspension of the vendor bidding process to allow more time for review of public comments. The agency expects to publish a final rule on the CAP in late 2005, which would reopen bidding.

WASHINGTON — Vendors should not be allowed to cut off distribution of drugs to patients regardless of their ability to pay under Medicare's new drug acquisition program, the Practicing Physicians Advisory Council recommended.

Scheduled to begin mid-2006, the Medicare competitive acquisition program (CAP) for Part B drugs and biologicals will select vendors through a bidding process to bill Medicare for these types of drugs and collect coinsurance or deductibles from patients.

Currently, physicians must purchase these drugs and biologicals from a distributor or manufacturer and then bill Medicare for reimbursement, which is set at a statutorily mandated payment rate of 106% of the manufacturer's average sales price (or ASP + 6%). Medicare pays 80% of this rate, and the physician collects a 20% copayment from the beneficiary.

Under the CAP, the only thing the physician has to do is purchase the drugs from the preselected vendors. The program was designed to reduce the administrative burden for physicians by taking them out of the financial loop. However, it also means that physicians won't have as much control over these drugs—and that vendors can elect not to ship a drug if the patient has not met some of the copay obligations.

This system will inevitably work against patients who need therapy but have no money and the physicians who treat them, said Barbara McAneny, M.D., a member of the PPAC and an oncologist, who proposed the recommendation.

Physicians are required by law to attempt to collect those copayments, “but we know that we're going to end up eating [the cost of the drug] because the patient doesn't have it.” However, the physician is going to continue treating those patients.

The provision that an executive of a vendor corporation can make the decision to cut somebody off 15 days after they've failed to make a payment is unfair, Dr. McAneny said. The vendors “never have to face that person and say, 'I'm sorry, you get to die now.' But when I'm in my practice looking at that person, that's what it will come down to. The person they'll see will be me.”

From a moral and ethical standpoint, the interim final rule leaves physicians with only one option: to opt out of the CAP to avoid abandoning patients, continue to purchase drugs on the ASP + 6% market, receive 86% of the cost of the drug, “and chew up the rest,” she said.

Medicare's reimbursement under ASP can fall short of what the drugs actually cost, given fluctuations in what distributors and manufacturers charge for the drugs.

“I assume the vendors, who tend to be large pharmaceutical manufacturing corporations, would be in a much better position to eat those costs than I would as an individual physician,” Dr. McAneny said.

Amy Bassano, director of the division of ambulatory services at the Centers for Medicare and Medicaid Services (CMS) Center for Medicare Management, noted that Medicare supplier provider agreements do not require services to be provided except in cases of emergency and civil rights. “That's what we're coming up against,” she said. However, there are cases where coinsurance could be waived if there is a demonstrated financial hardship and the vendor made an attempt to collect, she added.

The panel decided that CMS should reevaluate its contention that working with CAP vendors would not increase the administrative burden of physicians.

In other PPAC recommendations:

▸ CMS should work with Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, to clarify how Congress intended the ASP and CAP to function independently of each other.

▸ CAP vendor prices should not be included in the calculation of the ASP. The inclusion is duplicative and unfair to physicians not participating in the CAP, the PPAC determined.

Given that the CMS has recognized the increased cost of dispensing drugs by pharmacies and has added 2% of the average sales price to cover pharmacy overhead costs under the ASP, the PPAC recommended that the CMS “treat physicians equally” and add 2% for physicians using the ASP + 6% and a dispensing fee for physicians using the CAP.

Physicians under the interim final rule would have only 14 days to submit to Medicare carriers procedural claims, including all necessary codes, for the administration of the drugs. Taking into account the challenges associated with meeting that deadline, the PPAC recommended that the time frame be extended to 30 days.

Also, CAP participation should be determined on an individual basis, and not as a group requirement, the panel recommended. Under the interim final rule, if one physician in a group practice decides to participate in the CAP, all of the physicians in that practice are forced to do so, Ronald Castellanos, M.D., chairman of the PPAC, said in an interview.

The program's launch was originally scheduled for January 2006, but it was delayed for 6 months after the CMS announced the suspension of the vendor bidding process to allow more time for review of public comments. The agency expects to publish a final rule on the CAP in late 2005, which would reopen bidding.

HHS Buys More Avian Flu Vaccine

The Department of Health and Human Services is spending another $62.5 million to buy vaccine to be used in the event of an avian influenza pandemic. HHS awarded the contract to Chiron Corp. to produce vaccine against the H5N1 influenza strain. “An influenza vaccine effective against the H5N1 virus is our best hope of protecting the American people from a virus for which they have no immunity,” Secretary Mike Leavitt said in a statement. Last month, the government awarded a $100 million contract to Sanofi Pasteur to produce a similar vaccine. HHS officials plan to buy enough H5N1 vaccine for 20 million people and enough influenza antiviral medication for an additional 20 million people. Both will become part of the Strategic National Stockpile.

Finance a Challenge

Most physicians say that managing their finances will become more challenging over the next few years, according to a survey conducted by American Express. The survey was based on online interviews with 360 mostly primary care physicians and ob.gyns. in private practice. Additionally, 100 oncologists, 102 dermatologists, 100 urologists, 101 ophthalmologists, and 116 dentists in private practice were surveyed. For 83% of the survey respondents, managing the dual role of practicing medicine and running their business is a challenge. Nearly 75% said they need more financial training

Humana Settles Class Action Suit

Humana and representatives of more than 700,000 physicians settled a nationwide class action suit that had been pending in U.S. District Court for the Southern District of Florida for more than 6 years. The original lawsuit alleged a conspiracy between Humana and other HMOs against physicians, “to manipulate software to cheat the doctor out of getting paid money due for services rendered,” Archie Lamb, lead co-counsel for the physicians, said in an interview. Pursuant to the settlement, Humana has agreed to pay $40 million to physicians, as well as modify its software system to make it more fair and efficient for physicians—changes worth more than $75 million. “Humana should be commended for joining the growing list of health insurance companies that have settled with the nation's physicians,” Mr. Lamb said. Those companies include Aetna, Cigna, Prudential, and HealthNet.

Public Favors EHRs

Nearly three-fourths of Americans favor establishing a nationwide electronic information exchange to allow patient health records to be shared quickly among health professionals via the Internet, according to a survey of 800 adults sponsored by the Markle Foundation. However, 79% of respondents said it was important to make sure sharing could take place only after patients gave their permission. “Americans use digital information technology to pay bills, book flights, and customize the music they listen to, and our research shows they now want to use health information technology to get the best care possible for themselves,” said Zoe Baird, the foundation's president. “People realize that if they or those they love are in an accident or disaster, having their medical records available at a moment's notice through secure, electronic information exchange could mean the difference between life and death.”

Pinpointing Side Effects

In an attempt to more quickly pinpoint the potential side effects of drugs on the market, the Food and Drug Administration has contracted with several organizations to access their prescription drug data. Ingenix Inc., a unit of UnitedHealth Group Inc.; the Kaiser Foundation Research Institute; Vanderbilt University, Nashville, Tenn.; and the privately held Harvard Pilgrim Health Care Inc. each won contracts worth about $1.35 million to provide the data. Under the agreements, FDA scientists will be able to search each organization's database of medical claims and prescription drug use. The databases include information from patients enrolled in private insurance plans and state Medicaid programs. “These proactive efforts should enhance the FDA's ability to identify and assess issues and potential risks related to pharmaceutical agents in a more timely fashion than ever before,” said Terri Madison, Ph.D., president of i3 Drug Safety, which will lead the Ingenix program. In a statement, Alan Goldhammer, Ph.D., associate vice president for regulatory affairs at Pharmaceutical Research and Manufacturers of America, said PhRMA supported “new approaches to improving pharmacovigilance.” The group called on the CERTs (Centers for Education and Research on Therapeutics) to hold a workshop on this topic.

Voters Doubt Congress on Access

Roughly two-thirds of voters think Congress has not made much progress on helping those without health insurance, and is not likely to make much more in the next 5–10 years, according to a survey of 800 likely voters sponsored by Ceasefire on Health Care, a group whose aim is to stimulate dialogue on health care between Republican and Democratic policy makers. Overall, poll respondents listed their top four health care priorities as making sure all U.S. children have access to basic health care, guaranteeing health care to every American citizen, providing better preventive health care to all Americans, and helping control the amount of out-of-pocket health care costs. About “88% of those surveyed want Congress to compromise on the issue of the uninsured,” said former Sen. John Breaux (D-La.), who is leading the group.

HHS Buys More Avian Flu Vaccine

The Department of Health and Human Services is spending another $62.5 million to buy vaccine to be used in the event of an avian influenza pandemic. HHS awarded the contract to Chiron Corp. to produce vaccine against the H5N1 influenza strain. “An influenza vaccine effective against the H5N1 virus is our best hope of protecting the American people from a virus for which they have no immunity,” Secretary Mike Leavitt said in a statement. Last month, the government awarded a $100 million contract to Sanofi Pasteur to produce a similar vaccine. HHS officials plan to buy enough H5N1 vaccine for 20 million people and enough influenza antiviral medication for an additional 20 million people. Both will become part of the Strategic National Stockpile.

Finance a Challenge

Most physicians say that managing their finances will become more challenging over the next few years, according to a survey conducted by American Express. The survey was based on online interviews with 360 mostly primary care physicians and ob.gyns. in private practice. Additionally, 100 oncologists, 102 dermatologists, 100 urologists, 101 ophthalmologists, and 116 dentists in private practice were surveyed. For 83% of the survey respondents, managing the dual role of practicing medicine and running their business is a challenge. Nearly 75% said they need more financial training

Humana Settles Class Action Suit

Humana and representatives of more than 700,000 physicians settled a nationwide class action suit that had been pending in U.S. District Court for the Southern District of Florida for more than 6 years. The original lawsuit alleged a conspiracy between Humana and other HMOs against physicians, “to manipulate software to cheat the doctor out of getting paid money due for services rendered,” Archie Lamb, lead co-counsel for the physicians, said in an interview. Pursuant to the settlement, Humana has agreed to pay $40 million to physicians, as well as modify its software system to make it more fair and efficient for physicians—changes worth more than $75 million. “Humana should be commended for joining the growing list of health insurance companies that have settled with the nation's physicians,” Mr. Lamb said. Those companies include Aetna, Cigna, Prudential, and HealthNet.

Public Favors EHRs

Nearly three-fourths of Americans favor establishing a nationwide electronic information exchange to allow patient health records to be shared quickly among health professionals via the Internet, according to a survey of 800 adults sponsored by the Markle Foundation. However, 79% of respondents said it was important to make sure sharing could take place only after patients gave their permission. “Americans use digital information technology to pay bills, book flights, and customize the music they listen to, and our research shows they now want to use health information technology to get the best care possible for themselves,” said Zoe Baird, the foundation's president. “People realize that if they or those they love are in an accident or disaster, having their medical records available at a moment's notice through secure, electronic information exchange could mean the difference between life and death.”

Pinpointing Side Effects

In an attempt to more quickly pinpoint the potential side effects of drugs on the market, the Food and Drug Administration has contracted with several organizations to access their prescription drug data. Ingenix Inc., a unit of UnitedHealth Group Inc.; the Kaiser Foundation Research Institute; Vanderbilt University, Nashville, Tenn.; and the privately held Harvard Pilgrim Health Care Inc. each won contracts worth about $1.35 million to provide the data. Under the agreements, FDA scientists will be able to search each organization's database of medical claims and prescription drug use. The databases include information from patients enrolled in private insurance plans and state Medicaid programs. “These proactive efforts should enhance the FDA's ability to identify and assess issues and potential risks related to pharmaceutical agents in a more timely fashion than ever before,” said Terri Madison, Ph.D., president of i3 Drug Safety, which will lead the Ingenix program. In a statement, Alan Goldhammer, Ph.D., associate vice president for regulatory affairs at Pharmaceutical Research and Manufacturers of America, said PhRMA supported “new approaches to improving pharmacovigilance.” The group called on the CERTs (Centers for Education and Research on Therapeutics) to hold a workshop on this topic.

Voters Doubt Congress on Access

Roughly two-thirds of voters think Congress has not made much progress on helping those without health insurance, and is not likely to make much more in the next 5–10 years, according to a survey of 800 likely voters sponsored by Ceasefire on Health Care, a group whose aim is to stimulate dialogue on health care between Republican and Democratic policy makers. Overall, poll respondents listed their top four health care priorities as making sure all U.S. children have access to basic health care, guaranteeing health care to every American citizen, providing better preventive health care to all Americans, and helping control the amount of out-of-pocket health care costs. About “88% of those surveyed want Congress to compromise on the issue of the uninsured,” said former Sen. John Breaux (D-La.), who is leading the group.

HHS Buys More Avian Flu Vaccine

The Department of Health and Human Services is spending another $62.5 million to buy vaccine to be used in the event of an avian influenza pandemic. HHS awarded the contract to Chiron Corp. to produce vaccine against the H5N1 influenza strain. “An influenza vaccine effective against the H5N1 virus is our best hope of protecting the American people from a virus for which they have no immunity,” Secretary Mike Leavitt said in a statement. Last month, the government awarded a $100 million contract to Sanofi Pasteur to produce a similar vaccine. HHS officials plan to buy enough H5N1 vaccine for 20 million people and enough influenza antiviral medication for an additional 20 million people. Both will become part of the Strategic National Stockpile.

Finance a Challenge

Most physicians say that managing their finances will become more challenging over the next few years, according to a survey conducted by American Express. The survey was based on online interviews with 360 mostly primary care physicians and ob.gyns. in private practice. Additionally, 100 oncologists, 102 dermatologists, 100 urologists, 101 ophthalmologists, and 116 dentists in private practice were surveyed. For 83% of the survey respondents, managing the dual role of practicing medicine and running their business is a challenge. Nearly 75% said they need more financial training

Humana Settles Class Action Suit

Humana and representatives of more than 700,000 physicians settled a nationwide class action suit that had been pending in U.S. District Court for the Southern District of Florida for more than 6 years. The original lawsuit alleged a conspiracy between Humana and other HMOs against physicians, “to manipulate software to cheat the doctor out of getting paid money due for services rendered,” Archie Lamb, lead co-counsel for the physicians, said in an interview. Pursuant to the settlement, Humana has agreed to pay $40 million to physicians, as well as modify its software system to make it more fair and efficient for physicians—changes worth more than $75 million. “Humana should be commended for joining the growing list of health insurance companies that have settled with the nation's physicians,” Mr. Lamb said. Those companies include Aetna, Cigna, Prudential, and HealthNet.

Public Favors EHRs

Nearly three-fourths of Americans favor establishing a nationwide electronic information exchange to allow patient health records to be shared quickly among health professionals via the Internet, according to a survey of 800 adults sponsored by the Markle Foundation. However, 79% of respondents said it was important to make sure sharing could take place only after patients gave their permission. “Americans use digital information technology to pay bills, book flights, and customize the music they listen to, and our research shows they now want to use health information technology to get the best care possible for themselves,” said Zoe Baird, the foundation's president. “People realize that if they or those they love are in an accident or disaster, having their medical records available at a moment's notice through secure, electronic information exchange could mean the difference between life and death.”

Pinpointing Side Effects

In an attempt to more quickly pinpoint the potential side effects of drugs on the market, the Food and Drug Administration has contracted with several organizations to access their prescription drug data. Ingenix Inc., a unit of UnitedHealth Group Inc.; the Kaiser Foundation Research Institute; Vanderbilt University, Nashville, Tenn.; and the privately held Harvard Pilgrim Health Care Inc. each won contracts worth about $1.35 million to provide the data. Under the agreements, FDA scientists will be able to search each organization's database of medical claims and prescription drug use. The databases include information from patients enrolled in private insurance plans and state Medicaid programs. “These proactive efforts should enhance the FDA's ability to identify and assess issues and potential risks related to pharmaceutical agents in a more timely fashion than ever before,” said Terri Madison, Ph.D., president of i3 Drug Safety, which will lead the Ingenix program. In a statement, Alan Goldhammer, Ph.D., associate vice president for regulatory affairs at Pharmaceutical Research and Manufacturers of America, said PhRMA supported “new approaches to improving pharmacovigilance.” The group called on the CERTs (Centers for Education and Research on Therapeutics) to hold a workshop on this topic.

Voters Doubt Congress on Access

Roughly two-thirds of voters think Congress has not made much progress on helping those without health insurance, and is not likely to make much more in the next 5–10 years, according to a survey of 800 likely voters sponsored by Ceasefire on Health Care, a group whose aim is to stimulate dialogue on health care between Republican and Democratic policy makers. Overall, poll respondents listed their top four health care priorities as making sure all U.S. children have access to basic health care, guaranteeing health care to every American citizen, providing better preventive health care to all Americans, and helping control the amount of out-of-pocket health care costs. About “88% of those surveyed want Congress to compromise on the issue of the uninsured,” said former Sen. John Breaux (D-La.), who is leading the group.

WASHINGTON — A focus on specific diseases and patient needs can improve care and reduce costs to Medicaid by keeping patients healthier and out of hospitals, John Sory said at a meeting sponsored by the Center for Health Transformation.

Pfizer Health Solutions, a care management subsidiary of Pfizer Inc., has applied such an approach to Florida's Medicaid program, the fourth largest program in the country, said Mr. Sory, the company's vice president.

The company partners with health care and community organizations to implement patient-centered programs that focus on prevention, disease management, and care coordination. Through an agreement with Florida Medicaid, “we took responsibility for improving the health of a significant part of the Medicaid population, through creation of a program that connects 10 hospital systems around the state, trains nurse care managers employed by those hospitals, provides clinical technologies to support the nurses, distributes medical equipment to patients' homes, and guarantees that the better patient health will reduce overall cost of care for this population,” Mr. Sory said.

The state's Medicaid program has more than 2 million beneficiaries and takes up 24% of the state's budget. Nearly 50% of expenditures are spent on institutional services such as hospitals and nursing homes.

Access to care is a significant issue for Medicaid beneficiaries in Florida. Although the number of health care providers in Florida has increased in recent years, there has also been a notable decrease in the number of providers willing to see Medicaid patients, he said.

Prevalence of chronic disease and unhealthy behaviors has been rising in the Medicaid population in Florida. There is low treatment compliance because patients “don't necessarily know what steps they can take to be healthier,” Mr. Sory said. In addition, there are few tests and services for those who need monitoring, coordination, and continual follow-up.

Pfizer Health Solutions began in 2001 with a goal of looking at specific populations—patients with asthma, heart failure, hypertension, and diabetes—with an eye to decreasing Medicaid costs for them, he said.

Working with the state's government, Pfizer Health Solutions identified diagnoses and comorbidities then “built a network around those patients, to find new care managers who could work with them, and match the intensity of the intervention with the patients' diseases.”

For example, high-risk patients that tend to visit the emergency department would receive more intensive intervention from care managers.

“Patient-centered care” means instructing patients on when and how to call their physician, he explained. Some patients don't interact with the health care system except in the emergency department, so they're not ready to handle hour-long phone conversations with a nurse.

Coordination of care with local providers is important to make sure that patients get appropriate referrals and that data tracking takes place for each patient, he said. Ten health systems and 50 care managers have been integrated into the program.

No program will work unless you measure the outcomes and promote results, Mr. Sory said. This involves measuring clinical changes such as asthma severity or blood pressure scores, as well as tracking the satisfaction of physicians and patients. “Are patients using the emergency room less, and is this lowering the overall health system costs?” These are the outcomes a successful program has to track, he said.

Among the improvements in patient behavior, 39% of patients have increased their compliance with medication regimens prescribed, 19% of patients have reported following a special diet, and 52% improved physical health scores, he said.

There has been a 99% increase in patients who monitor their peak airflow at home and a 72% reduction in diabetes patients who fail to check their feet. Mr. Sory said more than 240,000 lancets have been distributed to monitor blood glucose at home. In addition, thousands of blood pressure monitors have been distributed to patients with hypertension, as well as 3,700 peak flow meters to asthma patients.

Mr. Sory gave the example of one patient, a recent immigrant, who was legally blind, had asthma, and was taking multiple medications. Under the program, a caregiver drives out to visit him and instructs him on using his medications and ways to ensure he takes each at the right time.

In addition, the caregiver told him what environmental triggers for his asthma might send him to the emergency department, and found a physician for him. Such changes have an impact on the number of hospital visits and also reduce costs, Mr. Sory said.

Pfizer sponsored the interactive Webcast for the meeting.

WASHINGTON — A focus on specific diseases and patient needs can improve care and reduce costs to Medicaid by keeping patients healthier and out of hospitals, John Sory said at a meeting sponsored by the Center for Health Transformation.

Pfizer Health Solutions, a care management subsidiary of Pfizer Inc., has applied such an approach to Florida's Medicaid program, the fourth largest program in the country, said Mr. Sory, the company's vice president.

The company partners with health care and community organizations to implement patient-centered programs that focus on prevention, disease management, and care coordination. Through an agreement with Florida Medicaid, “we took responsibility for improving the health of a significant part of the Medicaid population, through creation of a program that connects 10 hospital systems around the state, trains nurse care managers employed by those hospitals, provides clinical technologies to support the nurses, distributes medical equipment to patients' homes, and guarantees that the better patient health will reduce overall cost of care for this population,” Mr. Sory said.

The state's Medicaid program has more than 2 million beneficiaries and takes up 24% of the state's budget. Nearly 50% of expenditures are spent on institutional services such as hospitals and nursing homes.

Access to care is a significant issue for Medicaid beneficiaries in Florida. Although the number of health care providers in Florida has increased in recent years, there has also been a notable decrease in the number of providers willing to see Medicaid patients, he said.

Prevalence of chronic disease and unhealthy behaviors has been rising in the Medicaid population in Florida. There is low treatment compliance because patients “don't necessarily know what steps they can take to be healthier,” Mr. Sory said. In addition, there are few tests and services for those who need monitoring, coordination, and continual follow-up.

Pfizer Health Solutions began in 2001 with a goal of looking at specific populations—patients with asthma, heart failure, hypertension, and diabetes—with an eye to decreasing Medicaid costs for them, he said.

Working with the state's government, Pfizer Health Solutions identified diagnoses and comorbidities then “built a network around those patients, to find new care managers who could work with them, and match the intensity of the intervention with the patients' diseases.”

For example, high-risk patients that tend to visit the emergency department would receive more intensive intervention from care managers.

“Patient-centered care” means instructing patients on when and how to call their physician, he explained. Some patients don't interact with the health care system except in the emergency department, so they're not ready to handle hour-long phone conversations with a nurse.

Coordination of care with local providers is important to make sure that patients get appropriate referrals and that data tracking takes place for each patient, he said. Ten health systems and 50 care managers have been integrated into the program.

No program will work unless you measure the outcomes and promote results, Mr. Sory said. This involves measuring clinical changes such as asthma severity or blood pressure scores, as well as tracking the satisfaction of physicians and patients. “Are patients using the emergency room less, and is this lowering the overall health system costs?” These are the outcomes a successful program has to track, he said.

Among the improvements in patient behavior, 39% of patients have increased their compliance with medication regimens prescribed, 19% of patients have reported following a special diet, and 52% improved physical health scores, he said.

There has been a 99% increase in patients who monitor their peak airflow at home and a 72% reduction in diabetes patients who fail to check their feet. Mr. Sory said more than 240,000 lancets have been distributed to monitor blood glucose at home. In addition, thousands of blood pressure monitors have been distributed to patients with hypertension, as well as 3,700 peak flow meters to asthma patients.

Mr. Sory gave the example of one patient, a recent immigrant, who was legally blind, had asthma, and was taking multiple medications. Under the program, a caregiver drives out to visit him and instructs him on using his medications and ways to ensure he takes each at the right time.

In addition, the caregiver told him what environmental triggers for his asthma might send him to the emergency department, and found a physician for him. Such changes have an impact on the number of hospital visits and also reduce costs, Mr. Sory said.

Pfizer sponsored the interactive Webcast for the meeting.

WASHINGTON — A focus on specific diseases and patient needs can improve care and reduce costs to Medicaid by keeping patients healthier and out of hospitals, John Sory said at a meeting sponsored by the Center for Health Transformation.

Pfizer Health Solutions, a care management subsidiary of Pfizer Inc., has applied such an approach to Florida's Medicaid program, the fourth largest program in the country, said Mr. Sory, the company's vice president.

The company partners with health care and community organizations to implement patient-centered programs that focus on prevention, disease management, and care coordination. Through an agreement with Florida Medicaid, “we took responsibility for improving the health of a significant part of the Medicaid population, through creation of a program that connects 10 hospital systems around the state, trains nurse care managers employed by those hospitals, provides clinical technologies to support the nurses, distributes medical equipment to patients' homes, and guarantees that the better patient health will reduce overall cost of care for this population,” Mr. Sory said.

The state's Medicaid program has more than 2 million beneficiaries and takes up 24% of the state's budget. Nearly 50% of expenditures are spent on institutional services such as hospitals and nursing homes.

Access to care is a significant issue for Medicaid beneficiaries in Florida. Although the number of health care providers in Florida has increased in recent years, there has also been a notable decrease in the number of providers willing to see Medicaid patients, he said.

Prevalence of chronic disease and unhealthy behaviors has been rising in the Medicaid population in Florida. There is low treatment compliance because patients “don't necessarily know what steps they can take to be healthier,” Mr. Sory said. In addition, there are few tests and services for those who need monitoring, coordination, and continual follow-up.

Pfizer Health Solutions began in 2001 with a goal of looking at specific populations—patients with asthma, heart failure, hypertension, and diabetes—with an eye to decreasing Medicaid costs for them, he said.

Working with the state's government, Pfizer Health Solutions identified diagnoses and comorbidities then “built a network around those patients, to find new care managers who could work with them, and match the intensity of the intervention with the patients' diseases.”

For example, high-risk patients that tend to visit the emergency department would receive more intensive intervention from care managers.

“Patient-centered care” means instructing patients on when and how to call their physician, he explained. Some patients don't interact with the health care system except in the emergency department, so they're not ready to handle hour-long phone conversations with a nurse.

Coordination of care with local providers is important to make sure that patients get appropriate referrals and that data tracking takes place for each patient, he said. Ten health systems and 50 care managers have been integrated into the program.

No program will work unless you measure the outcomes and promote results, Mr. Sory said. This involves measuring clinical changes such as asthma severity or blood pressure scores, as well as tracking the satisfaction of physicians and patients. “Are patients using the emergency room less, and is this lowering the overall health system costs?” These are the outcomes a successful program has to track, he said.

Among the improvements in patient behavior, 39% of patients have increased their compliance with medication regimens prescribed, 19% of patients have reported following a special diet, and 52% improved physical health scores, he said.

There has been a 99% increase in patients who monitor their peak airflow at home and a 72% reduction in diabetes patients who fail to check their feet. Mr. Sory said more than 240,000 lancets have been distributed to monitor blood glucose at home. In addition, thousands of blood pressure monitors have been distributed to patients with hypertension, as well as 3,700 peak flow meters to asthma patients.

Mr. Sory gave the example of one patient, a recent immigrant, who was legally blind, had asthma, and was taking multiple medications. Under the program, a caregiver drives out to visit him and instructs him on using his medications and ways to ensure he takes each at the right time.

In addition, the caregiver told him what environmental triggers for his asthma might send him to the emergency department, and found a physician for him. Such changes have an impact on the number of hospital visits and also reduce costs, Mr. Sory said.

Pfizer sponsored the interactive Webcast for the meeting.

WASHINGTON — Vendors should not be allowed to cut off distribution of drugs to patients regardless of their ability to pay under Medicare's new drug acquisition program, the Practicing Physicians Advisory Council recommended.

Scheduled to begin mid-2006, the Medicare competitive acquisition program (CAP) for Part B drugs and biologicals will select vendors through a bidding process to bill Medicare for these types of drugs and collect coinsurance or deductibles from patients.

Currently, physicians must purchase these drugs and biologicals from a distributor or manufacturer and then bill Medicare for reimbursement, which is set at a statutorily mandated payment rate of 106% of the manufacturer's average sales price (or ASP + 6%). Medicare pays 80% of this rate, and the physician collects a 20% copayment from the beneficiary.

Under the CAP, the only thing the physician has to do is purchase the drugs from the preselected vendors.

The program was designed to reduce the administrative burden for physicians by taking them out of the financial loop. However, it also means that physicians won't have as much control over these drugs—and that vendors can elect not to ship a drug if the patient has not met some of the copay obligations.

This system will inevitably work against the patients who need therapy but have no money and the physicians who treat them, said Barbara McAneny, M.D., a member of the PPAC and an oncologist, who proposed the recommendation. If the patient is unemployed, “there is no way to make that copay,” she said.

Physicians are required by law to attempt to collect those copayments, “but we know that we're going to end up eating [the cost of the drug] because the patient doesn't have it.” However, the physician is going to continue treating those patients.

The provision that an executive of a vendor corporation can make the decision to cut somebody off 15 days after they've failed to make a payment is unfair, Dr. McAneny said. The vendors “never have to face that person and say, 'I'm sorry, you get to die now.' But when I'm in my practice looking at that person, that's what it will come down to. The person they'll see will be me.”

From a moral and ethical standpoint, the interim final rule leaves physicians with only one option: to opt out of the CAP to avoid abandoning patients, continue to purchase drugs on the ASP + 6% market, receive 86% of the cost of the drug, “and chew up the rest,” she said.

Medicare's reimbursement under ASP can fall short of what the drugs actually cost, given fluctuations in what distributors and manufacturers charge for the drugs.

“I assume the vendors, who tend to be large pharmaceutical manufacturing corporations, would be in a much better position to eat those costs than I would as an individual physician,” Dr. McAneny said.

Amy Bassano, director of the division of ambulatory services at the Centers for Medicare and Medicaid Services (CMS) Center for Medicare Management, noted that Medicare supplier provider agreements do not require services to be provided except in cases of emergency and civil rights. “That's what we're coming up against,” she said. However, there are cases where coinsurance could be waived if there is a demonstrated financial hardship and the vendor made an attempt to collect, she added.

The panel decided that CMS should reevaluate its contention that working with CAP vendors would not increase the administrative burden of physicians.

In other PPAC recommendations:

▸ CMS should work with Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, to clarify how Congress intended the ASP and CAP to function independently of each other.

▸ CAP vendor prices should not be included in the calculation of the ASP. The inclusion is duplicative and unfair to physicians not participating in the CAP, the PPAC determined. Given that the CMS has recognized the increased cost of dispensing drugs by pharmacies and has added 2% of the average sales price to cover pharmacy overhead costs under the ASP, the PPAC recommended that the CMS “treat physicians equally” and add 2% for physicians using the ASP + 6% and a dispensing fee for physicians using the CAP.

Physicians under the interim final rule would have only 14 days to submit to Medicare carriers procedural claims, including all necessary codes, for the administration of the drugs. Taking into account the challenges associated with meeting that deadline, the PPAC recommended that the time frame be extended to 30 days.

Also, CAP participation should be determined on an individual basis, and not as a group requirement, the panel recommended. Under the interim final rule, if one physician in a group practice decides to participate in the CAP, all of the physicians in that practice are forced to do so, Ronald Castellanos, M.D., chairman of the PPAC, said in an interview. This is the only requirement under Medicare where an individual determines whether a group participates, he said.

The program's launch was originally scheduled for January 2006, but it was delayed for 6 months after the CMS announced the suspension of the vendor bidding process to allow more time for review of public comments. The agency expects to publish a final rule on the CAP in late 2005, which would reopen the bidding process. Drugs could be first delivered under the program by July 2006.

WASHINGTON — Vendors should not be allowed to cut off distribution of drugs to patients regardless of their ability to pay under Medicare's new drug acquisition program, the Practicing Physicians Advisory Council recommended.

Scheduled to begin mid-2006, the Medicare competitive acquisition program (CAP) for Part B drugs and biologicals will select vendors through a bidding process to bill Medicare for these types of drugs and collect coinsurance or deductibles from patients.

Currently, physicians must purchase these drugs and biologicals from a distributor or manufacturer and then bill Medicare for reimbursement, which is set at a statutorily mandated payment rate of 106% of the manufacturer's average sales price (or ASP + 6%). Medicare pays 80% of this rate, and the physician collects a 20% copayment from the beneficiary.

Under the CAP, the only thing the physician has to do is purchase the drugs from the preselected vendors.

The program was designed to reduce the administrative burden for physicians by taking them out of the financial loop. However, it also means that physicians won't have as much control over these drugs—and that vendors can elect not to ship a drug if the patient has not met some of the copay obligations.

This system will inevitably work against the patients who need therapy but have no money and the physicians who treat them, said Barbara McAneny, M.D., a member of the PPAC and an oncologist, who proposed the recommendation. If the patient is unemployed, “there is no way to make that copay,” she said.

Physicians are required by law to attempt to collect those copayments, “but we know that we're going to end up eating [the cost of the drug] because the patient doesn't have it.” However, the physician is going to continue treating those patients.

The provision that an executive of a vendor corporation can make the decision to cut somebody off 15 days after they've failed to make a payment is unfair, Dr. McAneny said. The vendors “never have to face that person and say, 'I'm sorry, you get to die now.' But when I'm in my practice looking at that person, that's what it will come down to. The person they'll see will be me.”

From a moral and ethical standpoint, the interim final rule leaves physicians with only one option: to opt out of the CAP to avoid abandoning patients, continue to purchase drugs on the ASP + 6% market, receive 86% of the cost of the drug, “and chew up the rest,” she said.

Medicare's reimbursement under ASP can fall short of what the drugs actually cost, given fluctuations in what distributors and manufacturers charge for the drugs.

“I assume the vendors, who tend to be large pharmaceutical manufacturing corporations, would be in a much better position to eat those costs than I would as an individual physician,” Dr. McAneny said.

Amy Bassano, director of the division of ambulatory services at the Centers for Medicare and Medicaid Services (CMS) Center for Medicare Management, noted that Medicare supplier provider agreements do not require services to be provided except in cases of emergency and civil rights. “That's what we're coming up against,” she said. However, there are cases where coinsurance could be waived if there is a demonstrated financial hardship and the vendor made an attempt to collect, she added.

The panel decided that CMS should reevaluate its contention that working with CAP vendors would not increase the administrative burden of physicians.

In other PPAC recommendations:

▸ CMS should work with Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, to clarify how Congress intended the ASP and CAP to function independently of each other.

▸ CAP vendor prices should not be included in the calculation of the ASP. The inclusion is duplicative and unfair to physicians not participating in the CAP, the PPAC determined. Given that the CMS has recognized the increased cost of dispensing drugs by pharmacies and has added 2% of the average sales price to cover pharmacy overhead costs under the ASP, the PPAC recommended that the CMS “treat physicians equally” and add 2% for physicians using the ASP + 6% and a dispensing fee for physicians using the CAP.

Physicians under the interim final rule would have only 14 days to submit to Medicare carriers procedural claims, including all necessary codes, for the administration of the drugs. Taking into account the challenges associated with meeting that deadline, the PPAC recommended that the time frame be extended to 30 days.

Also, CAP participation should be determined on an individual basis, and not as a group requirement, the panel recommended. Under the interim final rule, if one physician in a group practice decides to participate in the CAP, all of the physicians in that practice are forced to do so, Ronald Castellanos, M.D., chairman of the PPAC, said in an interview. This is the only requirement under Medicare where an individual determines whether a group participates, he said.

The program's launch was originally scheduled for January 2006, but it was delayed for 6 months after the CMS announced the suspension of the vendor bidding process to allow more time for review of public comments. The agency expects to publish a final rule on the CAP in late 2005, which would reopen the bidding process. Drugs could be first delivered under the program by July 2006.

WASHINGTON — Vendors should not be allowed to cut off distribution of drugs to patients regardless of their ability to pay under Medicare's new drug acquisition program, the Practicing Physicians Advisory Council recommended.

Scheduled to begin mid-2006, the Medicare competitive acquisition program (CAP) for Part B drugs and biologicals will select vendors through a bidding process to bill Medicare for these types of drugs and collect coinsurance or deductibles from patients.

Currently, physicians must purchase these drugs and biologicals from a distributor or manufacturer and then bill Medicare for reimbursement, which is set at a statutorily mandated payment rate of 106% of the manufacturer's average sales price (or ASP + 6%). Medicare pays 80% of this rate, and the physician collects a 20% copayment from the beneficiary.

Under the CAP, the only thing the physician has to do is purchase the drugs from the preselected vendors.

The program was designed to reduce the administrative burden for physicians by taking them out of the financial loop. However, it also means that physicians won't have as much control over these drugs—and that vendors can elect not to ship a drug if the patient has not met some of the copay obligations.

This system will inevitably work against the patients who need therapy but have no money and the physicians who treat them, said Barbara McAneny, M.D., a member of the PPAC and an oncologist, who proposed the recommendation. If the patient is unemployed, “there is no way to make that copay,” she said.

Physicians are required by law to attempt to collect those copayments, “but we know that we're going to end up eating [the cost of the drug] because the patient doesn't have it.” However, the physician is going to continue treating those patients.

The provision that an executive of a vendor corporation can make the decision to cut somebody off 15 days after they've failed to make a payment is unfair, Dr. McAneny said. The vendors “never have to face that person and say, 'I'm sorry, you get to die now.' But when I'm in my practice looking at that person, that's what it will come down to. The person they'll see will be me.”

From a moral and ethical standpoint, the interim final rule leaves physicians with only one option: to opt out of the CAP to avoid abandoning patients, continue to purchase drugs on the ASP + 6% market, receive 86% of the cost of the drug, “and chew up the rest,” she said.

Medicare's reimbursement under ASP can fall short of what the drugs actually cost, given fluctuations in what distributors and manufacturers charge for the drugs.

“I assume the vendors, who tend to be large pharmaceutical manufacturing corporations, would be in a much better position to eat those costs than I would as an individual physician,” Dr. McAneny said.

Amy Bassano, director of the division of ambulatory services at the Centers for Medicare and Medicaid Services (CMS) Center for Medicare Management, noted that Medicare supplier provider agreements do not require services to be provided except in cases of emergency and civil rights. “That's what we're coming up against,” she said. However, there are cases where coinsurance could be waived if there is a demonstrated financial hardship and the vendor made an attempt to collect, she added.

The panel decided that CMS should reevaluate its contention that working with CAP vendors would not increase the administrative burden of physicians.

In other PPAC recommendations:

▸ CMS should work with Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, to clarify how Congress intended the ASP and CAP to function independently of each other.

▸ CAP vendor prices should not be included in the calculation of the ASP. The inclusion is duplicative and unfair to physicians not participating in the CAP, the PPAC determined. Given that the CMS has recognized the increased cost of dispensing drugs by pharmacies and has added 2% of the average sales price to cover pharmacy overhead costs under the ASP, the PPAC recommended that the CMS “treat physicians equally” and add 2% for physicians using the ASP + 6% and a dispensing fee for physicians using the CAP.

Physicians under the interim final rule would have only 14 days to submit to Medicare carriers procedural claims, including all necessary codes, for the administration of the drugs. Taking into account the challenges associated with meeting that deadline, the PPAC recommended that the time frame be extended to 30 days.

Also, CAP participation should be determined on an individual basis, and not as a group requirement, the panel recommended. Under the interim final rule, if one physician in a group practice decides to participate in the CAP, all of the physicians in that practice are forced to do so, Ronald Castellanos, M.D., chairman of the PPAC, said in an interview. This is the only requirement under Medicare where an individual determines whether a group participates, he said.

The program's launch was originally scheduled for January 2006, but it was delayed for 6 months after the CMS announced the suspension of the vendor bidding process to allow more time for review of public comments. The agency expects to publish a final rule on the CAP in late 2005, which would reopen the bidding process. Drugs could be first delivered under the program by July 2006.

HHS Buys More Avian Flu Vaccine

The Department of Health and Human Services is spending another $62.5 million to buy vaccine to be used in the event of an avian influenza pandemic. HHS awarded the contract to Chiron Corp. to produce vaccine against the H5N1 influenza strain. “An influenza vaccine effective against the H5N1 virus is our best hope of protecting the American people from a virus for which they have no immunity,” Secretary Mike Leavitt said in a statement. Last month, the government awarded a $100 million contract to Sanofi Pasteur to produce a similar vaccine. HHS officials plan to buy enough H5N1 vaccine for 20 million people and enough influenza antiviral medication for an additional 20 million people. Both will become part of the Strategic National Stockpile.

Managing Finances a Challenge

Most physicians say that managing their finances will become more challenging over the next few years, according to a survey conducted by American Express. The survey was based on online interviews with 360 mostly primary care physicians and ob.gyns. in private practice. Additionally, 100 oncologists, 102 dermatologists, 100 urologists, 101 ophthalmologists, and 116 dentists in private practice were surveyed. For 83% of the survey respondents, managing the dual role of practicing medicine and running their business is a challenge. Nearly 75% said they need more financial training.

Humana Settles Class Action Suit

Humana and representatives of more than 700,000 physicians settled a nationwide class action suit that had been pending in U.S. District Court for the Southern District of Florida for more than 6 years. The original lawsuit alleged a conspiracy between Humana and other HMOs against physicians, “to manipulate software to cheat the doctor out of getting paid money due for services rendered,” Archie Lamb, lead co-counsel for the physicians, said in an interview. Pursuant to the settlement, Humana has agreed to pay $40 million to physicians, as well as modify its software system to make it more fair and efficient for physicians—changes worth more than $75 million. “Humana should be commended for joining the growing list of health insurance companies that have settled with the nation's physicians,” Mr. Lamb said. Those companies include Aetna, Cigna, Prudential, and HealthNet.

Public Favors EHRs

Nearly three-fourths of Americans favor establishing a nationwide electronic information exchange to allow patient health records to be shared quickly among health professionals via the Internet, according to a survey of 800 adults sponsored by the Markle Foundation. However, 79% of respondents said it was important to make sure sharing could take place only after patients gave their permission. “Americans use digital information technology to pay bills, book flights, and customize the music they listen to, and our research shows they now want to use health information technology to get the best care possible for themselves,” said Zoe Baird, the foundation's president. “People realize that if they or those they love are in an accident or disaster, having their medical records available at a moment's notice through secure, electronic information exchange could mean the difference between life and death.”

Pinpointing Side Effects

In an attempt to more quickly pinpoint the potential side effects of drugs on the market, the Food and Drug Administration has contracted with several organizations to access their prescription drug data. Ingenix Inc., a unit of UnitedHealth Group Inc.; the Kaiser Foundation Research Institute; Vanderbilt University, Nashville, Tenn.; and the privately held Harvard Pilgrim Health Care Inc. each won contracts worth about $1.35 million to provide the data. Under the agreements, FDA scientists will be able to search each organization's database of medical claims and prescription drug use. The databases include information from patients enrolled in private insurance plans and state Medicaid programs. “These proactive efforts should enhance the FDA's ability to identify and assess issues and potential risks related to pharmaceutical agents in a more timely fashion than ever before,” said Terri Madison, Ph.D., president of i3 Drug Safety, which will lead the Ingenix program. In a statement, Alan Goldhammer, Ph.D., associate vice president for regulatory affairs at Pharmaceutical Research and Manufacturers of America, said PhRMA supported “new approaches to improving pharmacovigilance.” The group called on the CERTs (Centers for Education and Research on Therapeutics) to hold a workshop on this topic.

Voters Doubt Congress on Access

Roughly two-thirds of voters think Congress has not made much progress on helping those without health insurance, and is not likely to make much more in the next 5–10 years, according to a survey of 800 likely voters sponsored by Ceasefire on Health Care, a group whose aim is to stimulate dialogue on health care between Republican and Democratic policy makers. Overall, poll respondents listed their top four health care priorities as making sure all U.S. children have access to basic health care, guaranteeing health care to every American citizen, providing better preventive health care to all Americans, and helping control the amount of out-of-pocket health care costs. About “88% of those surveyed want Congress to compromise on the issue of the uninsured,” said former Sen. John Breaux (D-La.), who is leading the group.

HHS Buys More Avian Flu Vaccine

The Department of Health and Human Services is spending another $62.5 million to buy vaccine to be used in the event of an avian influenza pandemic. HHS awarded the contract to Chiron Corp. to produce vaccine against the H5N1 influenza strain. “An influenza vaccine effective against the H5N1 virus is our best hope of protecting the American people from a virus for which they have no immunity,” Secretary Mike Leavitt said in a statement. Last month, the government awarded a $100 million contract to Sanofi Pasteur to produce a similar vaccine. HHS officials plan to buy enough H5N1 vaccine for 20 million people and enough influenza antiviral medication for an additional 20 million people. Both will become part of the Strategic National Stockpile.

Managing Finances a Challenge

Most physicians say that managing their finances will become more challenging over the next few years, according to a survey conducted by American Express. The survey was based on online interviews with 360 mostly primary care physicians and ob.gyns. in private practice. Additionally, 100 oncologists, 102 dermatologists, 100 urologists, 101 ophthalmologists, and 116 dentists in private practice were surveyed. For 83% of the survey respondents, managing the dual role of practicing medicine and running their business is a challenge. Nearly 75% said they need more financial training.

Humana Settles Class Action Suit

Humana and representatives of more than 700,000 physicians settled a nationwide class action suit that had been pending in U.S. District Court for the Southern District of Florida for more than 6 years. The original lawsuit alleged a conspiracy between Humana and other HMOs against physicians, “to manipulate software to cheat the doctor out of getting paid money due for services rendered,” Archie Lamb, lead co-counsel for the physicians, said in an interview. Pursuant to the settlement, Humana has agreed to pay $40 million to physicians, as well as modify its software system to make it more fair and efficient for physicians—changes worth more than $75 million. “Humana should be commended for joining the growing list of health insurance companies that have settled with the nation's physicians,” Mr. Lamb said. Those companies include Aetna, Cigna, Prudential, and HealthNet.

Public Favors EHRs

Nearly three-fourths of Americans favor establishing a nationwide electronic information exchange to allow patient health records to be shared quickly among health professionals via the Internet, according to a survey of 800 adults sponsored by the Markle Foundation. However, 79% of respondents said it was important to make sure sharing could take place only after patients gave their permission. “Americans use digital information technology to pay bills, book flights, and customize the music they listen to, and our research shows they now want to use health information technology to get the best care possible for themselves,” said Zoe Baird, the foundation's president. “People realize that if they or those they love are in an accident or disaster, having their medical records available at a moment's notice through secure, electronic information exchange could mean the difference between life and death.”

Pinpointing Side Effects

In an attempt to more quickly pinpoint the potential side effects of drugs on the market, the Food and Drug Administration has contracted with several organizations to access their prescription drug data. Ingenix Inc., a unit of UnitedHealth Group Inc.; the Kaiser Foundation Research Institute; Vanderbilt University, Nashville, Tenn.; and the privately held Harvard Pilgrim Health Care Inc. each won contracts worth about $1.35 million to provide the data. Under the agreements, FDA scientists will be able to search each organization's database of medical claims and prescription drug use. The databases include information from patients enrolled in private insurance plans and state Medicaid programs. “These proactive efforts should enhance the FDA's ability to identify and assess issues and potential risks related to pharmaceutical agents in a more timely fashion than ever before,” said Terri Madison, Ph.D., president of i3 Drug Safety, which will lead the Ingenix program. In a statement, Alan Goldhammer, Ph.D., associate vice president for regulatory affairs at Pharmaceutical Research and Manufacturers of America, said PhRMA supported “new approaches to improving pharmacovigilance.” The group called on the CERTs (Centers for Education and Research on Therapeutics) to hold a workshop on this topic.

Voters Doubt Congress on Access

Roughly two-thirds of voters think Congress has not made much progress on helping those without health insurance, and is not likely to make much more in the next 5–10 years, according to a survey of 800 likely voters sponsored by Ceasefire on Health Care, a group whose aim is to stimulate dialogue on health care between Republican and Democratic policy makers. Overall, poll respondents listed their top four health care priorities as making sure all U.S. children have access to basic health care, guaranteeing health care to every American citizen, providing better preventive health care to all Americans, and helping control the amount of out-of-pocket health care costs. About “88% of those surveyed want Congress to compromise on the issue of the uninsured,” said former Sen. John Breaux (D-La.), who is leading the group.

HHS Buys More Avian Flu Vaccine

The Department of Health and Human Services is spending another $62.5 million to buy vaccine to be used in the event of an avian influenza pandemic. HHS awarded the contract to Chiron Corp. to produce vaccine against the H5N1 influenza strain. “An influenza vaccine effective against the H5N1 virus is our best hope of protecting the American people from a virus for which they have no immunity,” Secretary Mike Leavitt said in a statement. Last month, the government awarded a $100 million contract to Sanofi Pasteur to produce a similar vaccine. HHS officials plan to buy enough H5N1 vaccine for 20 million people and enough influenza antiviral medication for an additional 20 million people. Both will become part of the Strategic National Stockpile.

Managing Finances a Challenge

Most physicians say that managing their finances will become more challenging over the next few years, according to a survey conducted by American Express. The survey was based on online interviews with 360 mostly primary care physicians and ob.gyns. in private practice. Additionally, 100 oncologists, 102 dermatologists, 100 urologists, 101 ophthalmologists, and 116 dentists in private practice were surveyed. For 83% of the survey respondents, managing the dual role of practicing medicine and running their business is a challenge. Nearly 75% said they need more financial training.

Humana Settles Class Action Suit

Humana and representatives of more than 700,000 physicians settled a nationwide class action suit that had been pending in U.S. District Court for the Southern District of Florida for more than 6 years. The original lawsuit alleged a conspiracy between Humana and other HMOs against physicians, “to manipulate software to cheat the doctor out of getting paid money due for services rendered,” Archie Lamb, lead co-counsel for the physicians, said in an interview. Pursuant to the settlement, Humana has agreed to pay $40 million to physicians, as well as modify its software system to make it more fair and efficient for physicians—changes worth more than $75 million. “Humana should be commended for joining the growing list of health insurance companies that have settled with the nation's physicians,” Mr. Lamb said. Those companies include Aetna, Cigna, Prudential, and HealthNet.

Public Favors EHRs

Nearly three-fourths of Americans favor establishing a nationwide electronic information exchange to allow patient health records to be shared quickly among health professionals via the Internet, according to a survey of 800 adults sponsored by the Markle Foundation. However, 79% of respondents said it was important to make sure sharing could take place only after patients gave their permission. “Americans use digital information technology to pay bills, book flights, and customize the music they listen to, and our research shows they now want to use health information technology to get the best care possible for themselves,” said Zoe Baird, the foundation's president. “People realize that if they or those they love are in an accident or disaster, having their medical records available at a moment's notice through secure, electronic information exchange could mean the difference between life and death.”

Pinpointing Side Effects

In an attempt to more quickly pinpoint the potential side effects of drugs on the market, the Food and Drug Administration has contracted with several organizations to access their prescription drug data. Ingenix Inc., a unit of UnitedHealth Group Inc.; the Kaiser Foundation Research Institute; Vanderbilt University, Nashville, Tenn.; and the privately held Harvard Pilgrim Health Care Inc. each won contracts worth about $1.35 million to provide the data. Under the agreements, FDA scientists will be able to search each organization's database of medical claims and prescription drug use. The databases include information from patients enrolled in private insurance plans and state Medicaid programs. “These proactive efforts should enhance the FDA's ability to identify and assess issues and potential risks related to pharmaceutical agents in a more timely fashion than ever before,” said Terri Madison, Ph.D., president of i3 Drug Safety, which will lead the Ingenix program. In a statement, Alan Goldhammer, Ph.D., associate vice president for regulatory affairs at Pharmaceutical Research and Manufacturers of America, said PhRMA supported “new approaches to improving pharmacovigilance.” The group called on the CERTs (Centers for Education and Research on Therapeutics) to hold a workshop on this topic.

Voters Doubt Congress on Access

Roughly two-thirds of voters think Congress has not made much progress on helping those without health insurance, and is not likely to make much more in the next 5–10 years, according to a survey of 800 likely voters sponsored by Ceasefire on Health Care, a group whose aim is to stimulate dialogue on health care between Republican and Democratic policy makers. Overall, poll respondents listed their top four health care priorities as making sure all U.S. children have access to basic health care, guaranteeing health care to every American citizen, providing better preventive health care to all Americans, and helping control the amount of out-of-pocket health care costs. About “88% of those surveyed want Congress to compromise on the issue of the uninsured,” said former Sen. John Breaux (D-La.), who is leading the group.

WASHINGTON — States should have the flexibility to experiment with innovative measures to improve the Medicaid program, Rep. Nathan Deal (R-Ga.) said during a meeting sponsored by the Center for Health Transformation.

“One size fits all” was the concept at Medicaid's inception, but the truth is “no one size fits everybody, every state,” said Rep. Deal, chairman of the House Committee on Energy and Commerce subcommittee on health. States over the years have gotten out of this one-size-fits-all approach by applying for waivers, which has resulted in a patchwork of Medicaid programs, he said.

States are the testing ground for what works, he said. For that reason, the congressional role in Medicaid reform should be to make broad program outlines, to allow “states the ability to tailor their programs as best as they think meets their needs, without having to come to Washington to ask for waivers all the time,” he said.

Medicaid is the single largest component of every state's budget, Rep. Deal noted. Even though it's technically a federal/state partnership, many states can't pay their portion. “It's breaking their budget.”

The nation's governors have proposed a framework that Congress has been working to implement, he said. One of the things the governors asked of Congress “is to be more selective in the way we allow them to present and manage their programs.”

Instilling a sense of personal responsibility in the beneficiaries and giving them more choice in their care will help the states achieve that goal, he said.

The irony about Medicaid is that “we have created a tax-supported health delivery system that's much more generous than what any of us can buy in the private insurance market. And certainly much better than what you could buy as an individual insurance policy.”

The problem is that once you cross the Medicaid eligibility threshold, “all of a sudden you're in a vast land of health care delivery, where you have all of these benefits whether you need them or not.” This entitlement structure does not allow the health delivery system to do things like disease management, to focus resources on particular medical needs, to do overall management on the health care system, he said.

Medicaid also has limited deductibles and copays built into its federal formulation. “The governors have asked us to change that,” he said. Making copays mandatory or enforceable “goes a long way for putting the idea of personal responsibility back into the system.”

Obviously, the mandate would have to exclude certain categories, such as children below the poverty level and certain disabled beneficiaries. However, for those with eligibility levels in the upper categories, “that's certainly an appropriate place to go,” he said.

Instead of walking behind that “magic curtain” and being eligible for everything, the governors are saying “let us make the benefits flexible, tailored to the needs of the beneficiary, and thereby allow us to save money, and in the process do a better job of delivering better health care,” Rep. Deal said.

A difficult area in need of reform is reimbursement for drugs, he added. The current system “is very complicated and, I think, subject to manipulation.”

The hope is to abandon the old formulas and convert to the “average manufacturer's price,” he said. “The AMP is an effort to come at a price formulation that is as close to reflecting the true cost [of the drug] as possible,” he said. Differentiations between chain drug stores, community pharmacists, and mail-order drug companies are distorting the actual cost of the drug. The goal of the AMP is to arrive at a realistic reimbursement number, “so we don't make pharmacists bear the brunt of reforms. Expecting the dispensing agent to absorb the cost differentials, I don't think that's fair or realistic.”

In long-term health care, “we also need to begin the cycle of taking care of ourselves when we can, by buying long-term health care insurance,” he said. The federal government could set an example with its own employees, and provide some tax incentives to spur that effort, he said. Getting federal and state employees into a long-term heath care insurance plan would dramatically reduce the cost of Medicaid in the long term, he said.

Reforming Medicaid won't be easy to do, he said. “States have been operating under judicial constraints.

“We have some states that have been sued, many of them operating under consent orders that have tied their hands every time they apply to the federal government for a waiver.”

The approach has to be a basic structural reform, he concluded. “You cannot achieve these goals without going back into this program and restating the concepts of the program itself. And that's always a difficult task to do.”

Because these reforms would require actual changes to the Medicaid law, he expects that “demagogues would come out of every corner accusing us of all sorts of things.” The same thing happened with welfare reform, where Congress was accused of starving people on the street, according to Rep. Deal.

WASHINGTON — States should have the flexibility to experiment with innovative measures to improve the Medicaid program, Rep. Nathan Deal (R-Ga.) said during a meeting sponsored by the Center for Health Transformation.

“One size fits all” was the concept at Medicaid's inception, but the truth is “no one size fits everybody, every state,” said Rep. Deal, chairman of the House Committee on Energy and Commerce subcommittee on health. States over the years have gotten out of this one-size-fits-all approach by applying for waivers, which has resulted in a patchwork of Medicaid programs, he said.

States are the testing ground for what works, he said. For that reason, the congressional role in Medicaid reform should be to make broad program outlines, to allow “states the ability to tailor their programs as best as they think meets their needs, without having to come to Washington to ask for waivers all the time,” he said.

Medicaid is the single largest component of every state's budget, Rep. Deal noted. Even though it's technically a federal/state partnership, many states can't pay their portion. “It's breaking their budget.”

The nation's governors have proposed a framework that Congress has been working to implement, he said. One of the things the governors asked of Congress “is to be more selective in the way we allow them to present and manage their programs.”

Instilling a sense of personal responsibility in the beneficiaries and giving them more choice in their care will help the states achieve that goal, he said.

The irony about Medicaid is that “we have created a tax-supported health delivery system that's much more generous than what any of us can buy in the private insurance market. And certainly much better than what you could buy as an individual insurance policy.”

The problem is that once you cross the Medicaid eligibility threshold, “all of a sudden you're in a vast land of health care delivery, where you have all of these benefits whether you need them or not.” This entitlement structure does not allow the health delivery system to do things like disease management, to focus resources on particular medical needs, to do overall management on the health care system, he said.

Medicaid also has limited deductibles and copays built into its federal formulation. “The governors have asked us to change that,” he said. Making copays mandatory or enforceable “goes a long way for putting the idea of personal responsibility back into the system.”

Obviously, the mandate would have to exclude certain categories, such as children below the poverty level and certain disabled beneficiaries. However, for those with eligibility levels in the upper categories, “that's certainly an appropriate place to go,” he said.

Instead of walking behind that “magic curtain” and being eligible for everything, the governors are saying “let us make the benefits flexible, tailored to the needs of the beneficiary, and thereby allow us to save money, and in the process do a better job of delivering better health care,” Rep. Deal said.

A difficult area in need of reform is reimbursement for drugs, he added. The current system “is very complicated and, I think, subject to manipulation.”

The hope is to abandon the old formulas and convert to the “average manufacturer's price,” he said. “The AMP is an effort to come at a price formulation that is as close to reflecting the true cost [of the drug] as possible,” he said. Differentiations between chain drug stores, community pharmacists, and mail-order drug companies are distorting the actual cost of the drug. The goal of the AMP is to arrive at a realistic reimbursement number, “so we don't make pharmacists bear the brunt of reforms. Expecting the dispensing agent to absorb the cost differentials, I don't think that's fair or realistic.”

In long-term health care, “we also need to begin the cycle of taking care of ourselves when we can, by buying long-term health care insurance,” he said. The federal government could set an example with its own employees, and provide some tax incentives to spur that effort, he said. Getting federal and state employees into a long-term heath care insurance plan would dramatically reduce the cost of Medicaid in the long term, he said.

Reforming Medicaid won't be easy to do, he said. “States have been operating under judicial constraints.

“We have some states that have been sued, many of them operating under consent orders that have tied their hands every time they apply to the federal government for a waiver.”

The approach has to be a basic structural reform, he concluded. “You cannot achieve these goals without going back into this program and restating the concepts of the program itself. And that's always a difficult task to do.”

Because these reforms would require actual changes to the Medicaid law, he expects that “demagogues would come out of every corner accusing us of all sorts of things.” The same thing happened with welfare reform, where Congress was accused of starving people on the street, according to Rep. Deal.

WASHINGTON — States should have the flexibility to experiment with innovative measures to improve the Medicaid program, Rep. Nathan Deal (R-Ga.) said during a meeting sponsored by the Center for Health Transformation.

“One size fits all” was the concept at Medicaid's inception, but the truth is “no one size fits everybody, every state,” said Rep. Deal, chairman of the House Committee on Energy and Commerce subcommittee on health. States over the years have gotten out of this one-size-fits-all approach by applying for waivers, which has resulted in a patchwork of Medicaid programs, he said.

States are the testing ground for what works, he said. For that reason, the congressional role in Medicaid reform should be to make broad program outlines, to allow “states the ability to tailor their programs as best as they think meets their needs, without having to come to Washington to ask for waivers all the time,” he said.

Medicaid is the single largest component of every state's budget, Rep. Deal noted. Even though it's technically a federal/state partnership, many states can't pay their portion. “It's breaking their budget.”

The nation's governors have proposed a framework that Congress has been working to implement, he said. One of the things the governors asked of Congress “is to be more selective in the way we allow them to present and manage their programs.”

Instilling a sense of personal responsibility in the beneficiaries and giving them more choice in their care will help the states achieve that goal, he said.

The irony about Medicaid is that “we have created a tax-supported health delivery system that's much more generous than what any of us can buy in the private insurance market. And certainly much better than what you could buy as an individual insurance policy.”

The problem is that once you cross the Medicaid eligibility threshold, “all of a sudden you're in a vast land of health care delivery, where you have all of these benefits whether you need them or not.” This entitlement structure does not allow the health delivery system to do things like disease management, to focus resources on particular medical needs, to do overall management on the health care system, he said.

Medicaid also has limited deductibles and copays built into its federal formulation. “The governors have asked us to change that,” he said. Making copays mandatory or enforceable “goes a long way for putting the idea of personal responsibility back into the system.”

Obviously, the mandate would have to exclude certain categories, such as children below the poverty level and certain disabled beneficiaries. However, for those with eligibility levels in the upper categories, “that's certainly an appropriate place to go,” he said.

Instead of walking behind that “magic curtain” and being eligible for everything, the governors are saying “let us make the benefits flexible, tailored to the needs of the beneficiary, and thereby allow us to save money, and in the process do a better job of delivering better health care,” Rep. Deal said.

A difficult area in need of reform is reimbursement for drugs, he added. The current system “is very complicated and, I think, subject to manipulation.”

The hope is to abandon the old formulas and convert to the “average manufacturer's price,” he said. “The AMP is an effort to come at a price formulation that is as close to reflecting the true cost [of the drug] as possible,” he said. Differentiations between chain drug stores, community pharmacists, and mail-order drug companies are distorting the actual cost of the drug. The goal of the AMP is to arrive at a realistic reimbursement number, “so we don't make pharmacists bear the brunt of reforms. Expecting the dispensing agent to absorb the cost differentials, I don't think that's fair or realistic.”

In long-term health care, “we also need to begin the cycle of taking care of ourselves when we can, by buying long-term health care insurance,” he said. The federal government could set an example with its own employees, and provide some tax incentives to spur that effort, he said. Getting federal and state employees into a long-term heath care insurance plan would dramatically reduce the cost of Medicaid in the long term, he said.

Reforming Medicaid won't be easy to do, he said. “States have been operating under judicial constraints.

“We have some states that have been sued, many of them operating under consent orders that have tied their hands every time they apply to the federal government for a waiver.”

The approach has to be a basic structural reform, he concluded. “You cannot achieve these goals without going back into this program and restating the concepts of the program itself. And that's always a difficult task to do.”

Because these reforms would require actual changes to the Medicaid law, he expects that “demagogues would come out of every corner accusing us of all sorts of things.” The same thing happened with welfare reform, where Congress was accused of starving people on the street, according to Rep. Deal.

In the wake of the severe hurricane season on the Gulf Coast, thousands of displaced physicians are looking for ways to keep practicing medicine.

For some, this means relocating to another part of the country or holding down a temporary job in the hopes they'll someday reclaim their practice from flood-ravaged areas and regroup with their patients.

Pediatric neurologist Carmela Tardo, M.D., director of the epilepsy center at New Orleans' Children's Hospital, didn't return to the city for nearly 6 weeks after Hurricane Katrina made landfall in late August.

“[In early October] we were given the go-ahead to return to Children's Hospital … which fortunately was located in an area uptown and did not flood,” Dr. Tardo, a clinical professor of neurology at Louisiana State University, said in an interview.

During those weeks in limbo, Children's Hospital stayed busy, opening up a temporary corporate office and an outpatient clinic in Baton Rouge 2 weeks after the hurricane. Another clinic was established in Lafayette. “We've had to adapt by becoming more mobile,” said Dr. Tardo.

Both of these facilities will remain in operation.

For now, the hospital in New Orleans is nowhere near full capacity, she said. “We had maybe 35 patients yesterday, where we normally would have 150. We're very pleased we're getting things [back to normal]. But many of our patients may not be here anymore.”

Faculty at LSU had dispersed “everywhere” after Hurricane Katrina—to Alabama, California, Georgia, or South Carolina—said Dr. Tardo. Evacuating the city before the hurricane hit, Dr. Tardo had stayed in Houston before temporarily relocating to Baton Rouge for a few weeks, then finally moving back home. “During this period, the seven pediatric neurologists, all LSU faculty, were in touch with each other through e-mail and phone calls,” she said. All have since returned to Louisiana to practice medicine.

Michael Happel, M.D., a neurologist who lost his practice in New Orleans, is trying to reestablish his practice and build up his referral base in a new area.

His home in Metairie, La., survived, but the private practice in Chalmette, in Orleans Parish, flooded, he said in an interview. The rented office “looks like the inside of a toilet bowl,” he said. Fortunately, his paper records escaped the flooding—they were being stored at a nearby office on the 10th floor. “I know some physicians who lost 20 years of records,” said Dr. Happel.

Whenever he needs his records, however, he has to hike up those 10 floors to carry down sometimes as much as 100 pounds of documents at a time. “I've been relocating records for patients, who are asking them to be forwarded to another doctor.”

Dr. Happel's private practice is part of a group of eight neurologists that share overhead and jointly negotiate managed care contracts. At press time, Dr. Happel is living in his home and commuting to one of the group's offices in Covington, La., on the north shore of Lake Pontchartrain. “My average monthly [patient] volume is 5%–10% of what it once was,” he said, referring to his current patient base. For now, he sees about 3–5 patients a day.

“I'm pretty much living day to day,” said Dr. Happel, who's looking to open a new practice in Metairie, to replace the one in Chalmette, and has applied for hospital privileges in that area. “I'm committed to trying to stay [in Louisiana] and make it work, but it's difficult,” he said.

Nancy Michaelis, M.D., an internist from Chalmette, La., obtained a temporary license to practice in Virginia. Overall, she's had three job offers, but in an interview said she's “desperately trying to get back to New Orleans.” For now, it looks like she'll be practicing in Virginia for quite some time.

“My house survived quite well … [but] St. Bernard Parish was completely destroyed. The two hospitals that I went to—Chalmette Medical Center in St. Bernard and Pendleton Memorial Methodist Hospital in New Orleans East—are not operational anymore. Furthermore, the population I used to see is not there anymore.”

If group practices felt the impact of the hurricanes, “the worst toll has been with physicians in individual practices, who have lost their house and practice,” Dr. Tardo commented.

Some physicians are considering a more permanent relocation. Otolaryngologist Michael Ellis, M.D., whose practice in Chalmette was flooded during Hurricane Katrina, is considering a move to North Carolina. Through his contacts in organized medicine, Dr. Ellis said he's been offered positions, both in private practice and in academic medicine, throughout the country.

“I've gotten job offers from North Carolina, Virginia, Tennessee, Chicago,” he said in an interview.

Many physicians like Dr. Michaelis thought they'd practice at a temporary location then come back to New Orleans, “but that's less likely to happen as time goes on,” said internist and infectious disease specialist Michael Hill, M.D.

Telephone service has been spotty in some areas, and it's been difficult for patients to navigate around the New Orleans area and get care, Dr. Hill said. His practice is trying to communicate with patients through newspaper ads and its Internet site, “which has updated where we are.” At press time he was working at his group practice's offices in Covington, located north of Lake Pontchartrain, and in Slidell, La. Two other physicians in the practice are working in the North Shore.

He and Dr. Ellis have been trying to organize a summit with members of Congress to establish a medical health care system within New Orleans. “We want to make sure that organized medicine has a voice” in this effort, he said.

6,000 Physicians Displaced in Gulf Coast Region

A recent study from the University of North Carolina at Chapel Hill estimates that Hurricane Katrina and flooding in New Orleans may have dislocated up to 5,944 active, patient-care physicians, the largest single displacement of doctors in U.S. history.

It's expected that Hurricane Rita may boost the total to an unknown degree, according to the as-yet-unpublished study.

Approximately 6,000 “physicians doing primarily patient care in the 10 counties and parishes in Louisiana and Mississippi have been directly affected by Katrina flooding,” said the study's author Thomas C. Ricketts III, M.D., deputy director for policy analysis at the university's Cecil G. Sheps Center for Health Services Research.

Data for the analysis were drawn from the American Medical Association's master file of physicians for the month of March and FEMA-posted information, as well as data from the American Association of Medical Colleges, Tulane University and Louisiana State University medical schools, the Texas Board of Medicine, and the state of Louisiana.

In an interview, Dr. Ricketts said most of the calls he's gotten to date have either been from physician recruiters or from practices in various parts of the country, asking for names of physicians who need a job.

Locum tenens or temporary positions have been an option for many of these physicians, according to Phil Miller, a spokesman for Merritt, Hawkins & Associates, a physician search firm based in Irving, Tex.

Staff Care Inc., the locum tenens agency of the Merritt, Hawkins group, has been placing physicians all over the country—in Texas, Oklahoma, the Carolinas, and Florida—Trey Davis, executive vice president for the agency, said in an interview. Hospitals and state licensing boards have facilitated this effort by making some exceptions to normal guidelines to process state licensing and hospital privileges, he said.

“We had a physician who contacted us a couple of days after Katrina hit. He flew his small, private plane to a location in Oklahoma and did a face-to-face interview with a government facility. Within 4 days, we pushed his privileges through, and he was seeing patients in less than a week.”

Not every physician is looking to reestablish a practice or begin a new one, Dr. Ricketts pointed out. Some will decide to retire instead. “We don't know what this is going to mean to health care. We've never had to deal with something like this before.”

Mr. Davis said his agency has been receiving a large number of calls for physicians to extend their contracts in their locum tenens jobs for as long as 6 months.

In the wake of the severe hurricane season on the Gulf Coast, thousands of displaced physicians are looking for ways to keep practicing medicine.

For some, this means relocating to another part of the country or holding down a temporary job in the hopes they'll someday reclaim their practice from flood-ravaged areas and regroup with their patients.

Pediatric neurologist Carmela Tardo, M.D., director of the epilepsy center at New Orleans' Children's Hospital, didn't return to the city for nearly 6 weeks after Hurricane Katrina made landfall in late August.

“[In early October] we were given the go-ahead to return to Children's Hospital … which fortunately was located in an area uptown and did not flood,” Dr. Tardo, a clinical professor of neurology at Louisiana State University, said in an interview.

During those weeks in limbo, Children's Hospital stayed busy, opening up a temporary corporate office and an outpatient clinic in Baton Rouge 2 weeks after the hurricane. Another clinic was established in Lafayette. “We've had to adapt by becoming more mobile,” said Dr. Tardo.

Both of these facilities will remain in operation.

For now, the hospital in New Orleans is nowhere near full capacity, she said. “We had maybe 35 patients yesterday, where we normally would have 150. We're very pleased we're getting things [back to normal]. But many of our patients may not be here anymore.”

Faculty at LSU had dispersed “everywhere” after Hurricane Katrina—to Alabama, California, Georgia, or South Carolina—said Dr. Tardo. Evacuating the city before the hurricane hit, Dr. Tardo had stayed in Houston before temporarily relocating to Baton Rouge for a few weeks, then finally moving back home. “During this period, the seven pediatric neurologists, all LSU faculty, were in touch with each other through e-mail and phone calls,” she said. All have since returned to Louisiana to practice medicine.

Michael Happel, M.D., a neurologist who lost his practice in New Orleans, is trying to reestablish his practice and build up his referral base in a new area.

His home in Metairie, La., survived, but the private practice in Chalmette, in Orleans Parish, flooded, he said in an interview. The rented office “looks like the inside of a toilet bowl,” he said. Fortunately, his paper records escaped the flooding—they were being stored at a nearby office on the 10th floor. “I know some physicians who lost 20 years of records,” said Dr. Happel.

Whenever he needs his records, however, he has to hike up those 10 floors to carry down sometimes as much as 100 pounds of documents at a time. “I've been relocating records for patients, who are asking them to be forwarded to another doctor.”

Dr. Happel's private practice is part of a group of eight neurologists that share overhead and jointly negotiate managed care contracts. At press time, Dr. Happel is living in his home and commuting to one of the group's offices in Covington, La., on the north shore of Lake Pontchartrain. “My average monthly [patient] volume is 5%–10% of what it once was,” he said, referring to his current patient base. For now, he sees about 3–5 patients a day.

“I'm pretty much living day to day,” said Dr. Happel, who's looking to open a new practice in Metairie, to replace the one in Chalmette, and has applied for hospital privileges in that area. “I'm committed to trying to stay [in Louisiana] and make it work, but it's difficult,” he said.

Nancy Michaelis, M.D., an internist from Chalmette, La., obtained a temporary license to practice in Virginia. Overall, she's had three job offers, but in an interview said she's “desperately trying to get back to New Orleans.” For now, it looks like she'll be practicing in Virginia for quite some time.

“My house survived quite well … [but] St. Bernard Parish was completely destroyed. The two hospitals that I went to—Chalmette Medical Center in St. Bernard and Pendleton Memorial Methodist Hospital in New Orleans East—are not operational anymore. Furthermore, the population I used to see is not there anymore.”

If group practices felt the impact of the hurricanes, “the worst toll has been with physicians in individual practices, who have lost their house and practice,” Dr. Tardo commented.

Some physicians are considering a more permanent relocation. Otolaryngologist Michael Ellis, M.D., whose practice in Chalmette was flooded during Hurricane Katrina, is considering a move to North Carolina. Through his contacts in organized medicine, Dr. Ellis said he's been offered positions, both in private practice and in academic medicine, throughout the country.

“I've gotten job offers from North Carolina, Virginia, Tennessee, Chicago,” he said in an interview.

Many physicians like Dr. Michaelis thought they'd practice at a temporary location then come back to New Orleans, “but that's less likely to happen as time goes on,” said internist and infectious disease specialist Michael Hill, M.D.

Telephone service has been spotty in some areas, and it's been difficult for patients to navigate around the New Orleans area and get care, Dr. Hill said. His practice is trying to communicate with patients through newspaper ads and its Internet site, “which has updated where we are.” At press time he was working at his group practice's offices in Covington, located north of Lake Pontchartrain, and in Slidell, La. Two other physicians in the practice are working in the North Shore.

He and Dr. Ellis have been trying to organize a summit with members of Congress to establish a medical health care system within New Orleans. “We want to make sure that organized medicine has a voice” in this effort, he said.

6,000 Physicians Displaced in Gulf Coast Region

A recent study from the University of North Carolina at Chapel Hill estimates that Hurricane Katrina and flooding in New Orleans may have dislocated up to 5,944 active, patient-care physicians, the largest single displacement of doctors in U.S. history.

It's expected that Hurricane Rita may boost the total to an unknown degree, according to the as-yet-unpublished study.

Approximately 6,000 “physicians doing primarily patient care in the 10 counties and parishes in Louisiana and Mississippi have been directly affected by Katrina flooding,” said the study's author Thomas C. Ricketts III, M.D., deputy director for policy analysis at the university's Cecil G. Sheps Center for Health Services Research.

Data for the analysis were drawn from the American Medical Association's master file of physicians for the month of March and FEMA-posted information, as well as data from the American Association of Medical Colleges, Tulane University and Louisiana State University medical schools, the Texas Board of Medicine, and the state of Louisiana.

In an interview, Dr. Ricketts said most of the calls he's gotten to date have either been from physician recruiters or from practices in various parts of the country, asking for names of physicians who need a job.

Locum tenens or temporary positions have been an option for many of these physicians, according to Phil Miller, a spokesman for Merritt, Hawkins & Associates, a physician search firm based in Irving, Tex.

Staff Care Inc., the locum tenens agency of the Merritt, Hawkins group, has been placing physicians all over the country—in Texas, Oklahoma, the Carolinas, and Florida—Trey Davis, executive vice president for the agency, said in an interview. Hospitals and state licensing boards have facilitated this effort by making some exceptions to normal guidelines to process state licensing and hospital privileges, he said.

“We had a physician who contacted us a couple of days after Katrina hit. He flew his small, private plane to a location in Oklahoma and did a face-to-face interview with a government facility. Within 4 days, we pushed his privileges through, and he was seeing patients in less than a week.”

Not every physician is looking to reestablish a practice or begin a new one, Dr. Ricketts pointed out. Some will decide to retire instead. “We don't know what this is going to mean to health care. We've never had to deal with something like this before.”

Mr. Davis said his agency has been receiving a large number of calls for physicians to extend their contracts in their locum tenens jobs for as long as 6 months.

In the wake of the severe hurricane season on the Gulf Coast, thousands of displaced physicians are looking for ways to keep practicing medicine.

For some, this means relocating to another part of the country or holding down a temporary job in the hopes they'll someday reclaim their practice from flood-ravaged areas and regroup with their patients.

Pediatric neurologist Carmela Tardo, M.D., director of the epilepsy center at New Orleans' Children's Hospital, didn't return to the city for nearly 6 weeks after Hurricane Katrina made landfall in late August.

“[In early October] we were given the go-ahead to return to Children's Hospital … which fortunately was located in an area uptown and did not flood,” Dr. Tardo, a clinical professor of neurology at Louisiana State University, said in an interview.

During those weeks in limbo, Children's Hospital stayed busy, opening up a temporary corporate office and an outpatient clinic in Baton Rouge 2 weeks after the hurricane. Another clinic was established in Lafayette. “We've had to adapt by becoming more mobile,” said Dr. Tardo.

Both of these facilities will remain in operation.

For now, the hospital in New Orleans is nowhere near full capacity, she said. “We had maybe 35 patients yesterday, where we normally would have 150. We're very pleased we're getting things [back to normal]. But many of our patients may not be here anymore.”

Faculty at LSU had dispersed “everywhere” after Hurricane Katrina—to Alabama, California, Georgia, or South Carolina—said Dr. Tardo. Evacuating the city before the hurricane hit, Dr. Tardo had stayed in Houston before temporarily relocating to Baton Rouge for a few weeks, then finally moving back home. “During this period, the seven pediatric neurologists, all LSU faculty, were in touch with each other through e-mail and phone calls,” she said. All have since returned to Louisiana to practice medicine.

Michael Happel, M.D., a neurologist who lost his practice in New Orleans, is trying to reestablish his practice and build up his referral base in a new area.

His home in Metairie, La., survived, but the private practice in Chalmette, in Orleans Parish, flooded, he said in an interview. The rented office “looks like the inside of a toilet bowl,” he said. Fortunately, his paper records escaped the flooding—they were being stored at a nearby office on the 10th floor. “I know some physicians who lost 20 years of records,” said Dr. Happel.

Whenever he needs his records, however, he has to hike up those 10 floors to carry down sometimes as much as 100 pounds of documents at a time. “I've been relocating records for patients, who are asking them to be forwarded to another doctor.”

Dr. Happel's private practice is part of a group of eight neurologists that share overhead and jointly negotiate managed care contracts. At press time, Dr. Happel is living in his home and commuting to one of the group's offices in Covington, La., on the north shore of Lake Pontchartrain. “My average monthly [patient] volume is 5%–10% of what it once was,” he said, referring to his current patient base. For now, he sees about 3–5 patients a day.

“I'm pretty much living day to day,” said Dr. Happel, who's looking to open a new practice in Metairie, to replace the one in Chalmette, and has applied for hospital privileges in that area. “I'm committed to trying to stay [in Louisiana] and make it work, but it's difficult,” he said.

Nancy Michaelis, M.D., an internist from Chalmette, La., obtained a temporary license to practice in Virginia. Overall, she's had three job offers, but in an interview said she's “desperately trying to get back to New Orleans.” For now, it looks like she'll be practicing in Virginia for quite some time.

“My house survived quite well … [but] St. Bernard Parish was completely destroyed. The two hospitals that I went to—Chalmette Medical Center in St. Bernard and Pendleton Memorial Methodist Hospital in New Orleans East—are not operational anymore. Furthermore, the population I used to see is not there anymore.”

If group practices felt the impact of the hurricanes, “the worst toll has been with physicians in individual practices, who have lost their house and practice,” Dr. Tardo commented.

Some physicians are considering a more permanent relocation. Otolaryngologist Michael Ellis, M.D., whose practice in Chalmette was flooded during Hurricane Katrina, is considering a move to North Carolina. Through his contacts in organized medicine, Dr. Ellis said he's been offered positions, both in private practice and in academic medicine, throughout the country.

“I've gotten job offers from North Carolina, Virginia, Tennessee, Chicago,” he said in an interview.

Many physicians like Dr. Michaelis thought they'd practice at a temporary location then come back to New Orleans, “but that's less likely to happen as time goes on,” said internist and infectious disease specialist Michael Hill, M.D.

Telephone service has been spotty in some areas, and it's been difficult for patients to navigate around the New Orleans area and get care, Dr. Hill said. His practice is trying to communicate with patients through newspaper ads and its Internet site, “which has updated where we are.” At press time he was working at his group practice's offices in Covington, located north of Lake Pontchartrain, and in Slidell, La. Two other physicians in the practice are working in the North Shore.

He and Dr. Ellis have been trying to organize a summit with members of Congress to establish a medical health care system within New Orleans. “We want to make sure that organized medicine has a voice” in this effort, he said.

6,000 Physicians Displaced in Gulf Coast Region

A recent study from the University of North Carolina at Chapel Hill estimates that Hurricane Katrina and flooding in New Orleans may have dislocated up to 5,944 active, patient-care physicians, the largest single displacement of doctors in U.S. history.

It's expected that Hurricane Rita may boost the total to an unknown degree, according to the as-yet-unpublished study.

Approximately 6,000 “physicians doing primarily patient care in the 10 counties and parishes in Louisiana and Mississippi have been directly affected by Katrina flooding,” said the study's author Thomas C. Ricketts III, M.D., deputy director for policy analysis at the university's Cecil G. Sheps Center for Health Services Research.

Data for the analysis were drawn from the American Medical Association's master file of physicians for the month of March and FEMA-posted information, as well as data from the American Association of Medical Colleges, Tulane University and Louisiana State University medical schools, the Texas Board of Medicine, and the state of Louisiana.

In an interview, Dr. Ricketts said most of the calls he's gotten to date have either been from physician recruiters or from practices in various parts of the country, asking for names of physicians who need a job.

Locum tenens or temporary positions have been an option for many of these physicians, according to Phil Miller, a spokesman for Merritt, Hawkins & Associates, a physician search firm based in Irving, Tex.

Staff Care Inc., the locum tenens agency of the Merritt, Hawkins group, has been placing physicians all over the country—in Texas, Oklahoma, the Carolinas, and Florida—Trey Davis, executive vice president for the agency, said in an interview. Hospitals and state licensing boards have facilitated this effort by making some exceptions to normal guidelines to process state licensing and hospital privileges, he said.

“We had a physician who contacted us a couple of days after Katrina hit. He flew his small, private plane to a location in Oklahoma and did a face-to-face interview with a government facility. Within 4 days, we pushed his privileges through, and he was seeing patients in less than a week.”

Not every physician is looking to reestablish a practice or begin a new one, Dr. Ricketts pointed out. Some will decide to retire instead. “We don't know what this is going to mean to health care. We've never had to deal with something like this before.”

Mr. Davis said his agency has been receiving a large number of calls for physicians to extend their contracts in their locum tenens jobs for as long as 6 months.