West Virginia Native John Chambers, CEO of Cisco Systems, Talks about the Costs of Paper on the Health Care System

A recent USA Today article talks about the impact a paper based health care record system has on the costs to the health care system. Below are excerpts from the article.

John Chambers, CEO of Internet titan Cisco Systems (CSCO) and a native of West Virginia, says that based on tech's impact on other industries, technology could cut health care costs by at least 25% - and improve care. In May, President Bush set the goal for every American to have an electronic medical record, instead of the traditional stuffed manila folder, within 10 years. At the same time, he named David Brailer to the new position of national coordinator of health information technology.

On Wednesday, Brailer is expected to announce government plans to nudge the industry forward. In the past 18 months, lawmakers introduced at least five bills pushing health care tech ideas.

It won't be an easy fix, though. Billions in investments have been lost on health care tech. The reasons are many. Health care is a huge, fragmented industry: 700,000 doctors; 5,700 hospitals. Each piece collects data its own way. Existing systems don't talk to each other. More common standards are needed. Privacy has been a concern.

The biggest reason, though, is economic. Doctors and hospitals bear the cost of new hardware and software. Their productivity suffers when they change decades-old work processes. But those who pay for care, insurers and employers, get the first financial benefit because of increased efficiency and fewer costly errors.

More than 90% of the 30 billion health care transactions done annually occur via phone, fax or paper, says the eHealth Initiative, a non-profit formed to spur tech adoption. While 90% of physicians in Sweden and the Netherlands use electronic patient medical records, fewer than 20% of U.S. primary-care physicians do, the same percentage as Greece, says market researcher Harris Interactive.

Health and Human Services Secretary Tommy Thompson estimates the USA could save $140 billion a year using more tech. That's a lower estimate than Chambers', but about equal to Mexico's '04 federal budget.

CMS Says All Physician Recruiting Contracts Must Comply With Stark Phase II Regulations

In a new Frequently Asked Question, CMS said that all physician recruiting agreements, even those that pre-date the Stark II Phase II regulations, must comply with the regulations effective July 26, 2004. According to the FAQ, the Phase II regulations, including the new exception at § 411.357(e)(4) for certain joint recruitment arrangements, go into effect July 26. Therefore, "a hospital-funded recruitment arrangement in which the recruited physician is subject to a restriction against competing with the group will not comply with the new joint recruiting exception in the Phase II regulations." To read the FAQ, go here. 
 
 

Hospitals and Physicians should analyze the impact of Stark II

The Stark II Phase II regulations were published as an interim final rule on March 26, 2004 and will become effective on July 26, 2004. 
 
The Stark law (aka federal physician self-referral law) prohibits physicians from referring Medicare patients for certain designated health services (DHS) to an entity with which the physician or a member of the physician's immediate family has a financial relationship--unless an exception applies. Stark was originally enacted under Section 1877 of the Social Security Act  in 1989 and only applied to physician referrals for clinical laboratory services. In 1993 and 1994, Congress expanded the prohibition to ten additional DHS and applied certain aspects of the law to the Medicaid program. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA 2003) (Public Law 108-173) further altered section 1877 by establishing an 18-month moratorium on physician ownership of or investment in certain specialty hospitals. The moratorium is in effect from December 8, 2003 through June 7, 2005. The Stark law is typically used in conjunction with the anti-kickback laws to investigate health care providers for reimbursement related actions under Medicare and Medicaid. In addition, Stark is being used more and more as a basis for qui tam related whistleblower actions brought by individuals. 
 
The new regulations clarify a number of areas of Stark law that have been confusing and uncertain for years. Health lawyers have tried to provide the best advice possible to their clients when looking at Stark related issued -- but because final regulations have been long in coming it has been very difficult to fully understand the complexity of some of the Stark related exceptions. Now that Stark II Phase I and Phase II have been issued many of the gray areas are now much clearer. What will this lead to? More enforcement? More qui tam whistleblower claims which contain Stark related allegations? Only time will tell. Hospital, physicians and other designated health service care providers should take a close look at the impact of the new regulations.

Interesting law firm websites

Here is a blog that reports on and tracks intriguing websites for law professionals.

Kessel v. Monongalia General Hospital (May 19, 2004)

Following is a description and link to a recent decision by the West Virginia Supreme Court of Appeals which impacts the ability of hospitals in West Virginia to enter into exclusive agreements with physicians.

EMPLOYMENT, CONTRACTS :: Staff privileges in public hospitals
KESSEL, et al. v. MONONGALIA GENERAL HOSPITAL, et al., Nos. 31547 & 31548 (Maynard, J.)(May 19, 2004). Answering the following certified question from the Circuit Court of Monongalia County (as reformulated by the Court): "May a public or quasi-public hospital enter into an exclusive contract with a medical service provider that has the effect of completely excluding physicians who have staff privileges at the hospital from the use of the hospital's medical facilities." Answer by the Court - No. Setting forth guidance regarding interpretation of medical staff bylaws; a physician's right to practice in public hospitals; duties of quasi-public hospitals; and effect of exclusive contracts with medical service providers.

Here is a link to the full text of the decision.

Letter to DHHS Secretary Addresses Privacy Rule & Child/Adult Protective Services

HIPAA Government Information Value Exchange for States (HIPAA GIVES) a collaborative state government focus group created to share information through a clearinghouse highway and provide a forum for state government and county government agencies to discuss and resolve implementation issues concerning the HIPAA Administrative Simplification rules.
 
On May 5, 2004, HIPAA GIVES sent DHHS Secretary Tommy Thompson a letter regarding the adverse effect the HIPAA Privacy Rule on state and local governments’ Child Protective Services and Adult Protective Services.

HHS OIG Posts Second Hospital Board Member Educational Resource

On July 1, 2004 the HHS Office of Inspector General posted to its website a second
educational resource which was developed jointly with the American Health Lawyers Association to assist health care organizations' boards of directors in carrying out their compliance oversight responsibility. The new resource is titled "An Integrated Approach to Corporate Compliance: A Resource for Health Care Boards of Directors".
 
Here is an accompanying press release providing details about the guidance resource. This second educational guidance documents supplements a previously released resource called  "Corporate Responsibility and Corporate Compliance: A Resource for Health Care Boards of
Directors," issued in April 2003.