Joyce Frieden

New voluntary guidelines for direct-to-consumer prescription drug advertising released by the Pharmaceutical Research and Manufacturers of America have drawn criticism from politicians and consumer groups who say they don't go far enough.

“While I wish the PhRMA guidelines would have gone farther and proposed a moratorium on DTC [direct to consumer] advertising of newly approved drugs, I hope individual pharmaceutical manufacturers will seriously consider such a measure,” Senate Majority Leader Bill Frist, M.D. (R-Tenn.) said in a statement. Sidney Wolfe, M.D., director of the Public Citizen Health Research Group, called the PhRMA announcement “a meaningless attempt to fool people into believing the guidelines are stronger than they really are.”

The PhRMA guidelines were released in Dallas in early August at a meeting of the American Legislative Exchange Council.

Among other things, the guidelines call for pharmaceutical manufacturers to educate physicians and other health care providers about new drugs before advertising them to consumers.

“The centerpiece is the notion that the companies are committing an appropriate amount of time to educate health care professionals about new medications and new indications … to make sure physicians and other providers know about the medicines and benefits before,” direct-to-consumer advertising campaigns are undertaken, Billy Tauzin, CEO of PhRMA and a former congressman from Louisiana, said at a press conference sponsored by PhRMA.

The length of time the companies will take to educate physicians will depend on several factors, including whether the drug is a life-saving one and how complex the risk-benefit profile is, Mr. Tauzin said. “We are also committed to continuing to educate health care professionals as additional info about a medication is obtained from all sources, even after medication has begun being marketed.”

Other provisions of the voluntary guidelines, which 23 companies have signed onto, include:

▸ DTC ads should be balanced, and discuss both the benefits and risks of the medication. The information should be presented in “clear, understandable language, without distraction from the content.”

▸ Ads should be targeted to avoid audiences that are not age-appropriate. For example, Karen Katen, president of Pfizer Human Health, said that her company would not run a television advertisement for Viagra (sildenafil) during the Super Bowl, when young children may be watching.

▸ Companies should submit new DTC print and television advertisements to the FDA before releasing them. PhRMA board chair Bill Weldon said this does not mean that companies would submit an ad to the FDA on Tuesday and then run it on Wednesday. “The intent is to make sure that FDA has been able to comment on any programs prior to advertising,” said Mr. Weldon, who is also chairman and CEO of Johnson & Johnson.

▸ Ads that identify a product by name should include the product's indications as well as its risks and benefits. This means no more ads that just give the name of the medication and tell what it's for, Mr. Tauzin said.

PhRMA also will convene an independent board in about a year to get outside opinion on whether the companies are following the guidelines. The panel will include experts in health care, broadcasting, and other relevant disciplines. The panel's report “will be made public, and also made available to the FDA,” Mr. Tauzin said.

The voluntary guidelines are available at www.phrma.org/publications/policy//admin/2005-08-02.1194.pdf

New voluntary guidelines for direct-to-consumer prescription drug advertising released by the Pharmaceutical Research and Manufacturers of America have drawn criticism from politicians and consumer groups who say they don't go far enough.

“While I wish the PhRMA guidelines would have gone farther and proposed a moratorium on DTC [direct to consumer] advertising of newly approved drugs, I hope individual pharmaceutical manufacturers will seriously consider such a measure,” Senate Majority Leader Bill Frist, M.D. (R-Tenn.) said in a statement. Sidney Wolfe, M.D., director of the Public Citizen Health Research Group, called the PhRMA announcement “a meaningless attempt to fool people into believing the guidelines are stronger than they really are.”

The PhRMA guidelines were released in Dallas in early August at a meeting of the American Legislative Exchange Council.

Among other things, the guidelines call for pharmaceutical manufacturers to educate physicians and other health care providers about new drugs before advertising them to consumers.

“The centerpiece is the notion that the companies are committing an appropriate amount of time to educate health care professionals about new medications and new indications … to make sure physicians and other providers know about the medicines and benefits before,” direct-to-consumer advertising campaigns are undertaken, Billy Tauzin, CEO of PhRMA and a former congressman from Louisiana, said at a press conference sponsored by PhRMA.

The length of time the companies will take to educate physicians will depend on several factors, including whether the drug is a life-saving one and how complex the risk-benefit profile is, Mr. Tauzin said. “We are also committed to continuing to educate health care professionals as additional info about a medication is obtained from all sources, even after medication has begun being marketed.”

Other provisions of the voluntary guidelines, which 23 companies have signed onto, include:

▸ DTC ads should be balanced, and discuss both the benefits and risks of the medication. The information should be presented in “clear, understandable language, without distraction from the content.”

▸ Ads should be targeted to avoid audiences that are not age-appropriate. For example, Karen Katen, president of Pfizer Human Health, said that her company would not run a television advertisement for Viagra (sildenafil) during the Super Bowl, when young children may be watching.

▸ Companies should submit new DTC print and television advertisements to the FDA before releasing them. PhRMA board chair Bill Weldon said this does not mean that companies would submit an ad to the FDA on Tuesday and then run it on Wednesday. “The intent is to make sure that FDA has been able to comment on any programs prior to advertising,” said Mr. Weldon, who is also chairman and CEO of Johnson & Johnson.

▸ Ads that identify a product by name should include the product's indications as well as its risks and benefits. This means no more ads that just give the name of the medication and tell what it's for, Mr. Tauzin said.

PhRMA also will convene an independent board in about a year to get outside opinion on whether the companies are following the guidelines. The panel will include experts in health care, broadcasting, and other relevant disciplines. The panel's report “will be made public, and also made available to the FDA,” Mr. Tauzin said.

The voluntary guidelines are available at www.phrma.org/publications/policy//admin/2005-08-02.1194.pdf

New voluntary guidelines for direct-to-consumer prescription drug advertising released by the Pharmaceutical Research and Manufacturers of America have drawn criticism from politicians and consumer groups who say they don't go far enough.

“While I wish the PhRMA guidelines would have gone farther and proposed a moratorium on DTC [direct to consumer] advertising of newly approved drugs, I hope individual pharmaceutical manufacturers will seriously consider such a measure,” Senate Majority Leader Bill Frist, M.D. (R-Tenn.) said in a statement. Sidney Wolfe, M.D., director of the Public Citizen Health Research Group, called the PhRMA announcement “a meaningless attempt to fool people into believing the guidelines are stronger than they really are.”

The PhRMA guidelines were released in Dallas in early August at a meeting of the American Legislative Exchange Council.

Among other things, the guidelines call for pharmaceutical manufacturers to educate physicians and other health care providers about new drugs before advertising them to consumers.

“The centerpiece is the notion that the companies are committing an appropriate amount of time to educate health care professionals about new medications and new indications … to make sure physicians and other providers know about the medicines and benefits before,” direct-to-consumer advertising campaigns are undertaken, Billy Tauzin, CEO of PhRMA and a former congressman from Louisiana, said at a press conference sponsored by PhRMA.

The length of time the companies will take to educate physicians will depend on several factors, including whether the drug is a life-saving one and how complex the risk-benefit profile is, Mr. Tauzin said. “We are also committed to continuing to educate health care professionals as additional info about a medication is obtained from all sources, even after medication has begun being marketed.”

Other provisions of the voluntary guidelines, which 23 companies have signed onto, include:

▸ DTC ads should be balanced, and discuss both the benefits and risks of the medication. The information should be presented in “clear, understandable language, without distraction from the content.”

▸ Ads should be targeted to avoid audiences that are not age-appropriate. For example, Karen Katen, president of Pfizer Human Health, said that her company would not run a television advertisement for Viagra (sildenafil) during the Super Bowl, when young children may be watching.

▸ Companies should submit new DTC print and television advertisements to the FDA before releasing them. PhRMA board chair Bill Weldon said this does not mean that companies would submit an ad to the FDA on Tuesday and then run it on Wednesday. “The intent is to make sure that FDA has been able to comment on any programs prior to advertising,” said Mr. Weldon, who is also chairman and CEO of Johnson & Johnson.

▸ Ads that identify a product by name should include the product's indications as well as its risks and benefits. This means no more ads that just give the name of the medication and tell what it's for, Mr. Tauzin said.

PhRMA also will convene an independent board in about a year to get outside opinion on whether the companies are following the guidelines. The panel will include experts in health care, broadcasting, and other relevant disciplines. The panel's report “will be made public, and also made available to the FDA,” Mr. Tauzin said.

The voluntary guidelines are available at www.phrma.org/publications/policy//admin/2005-08-02.1194.pdf

WASHINGTON — The trend toward consumer-driven health care will ultimately improve overall health care quality, Regina Herzlinger, Ph.D., said at a consensus conference sponsored by the American Association of Clinical Endocrinologists.

Dr. Herzlinger, professor and chair of business administration at Harvard Business School, in Boston, contrasted health care with the automotive industry. The automotive industry, which is already consumer-driven, is deflationary and features increasing product quality, lots of available product information, and widespread ownership. Health care, on the other hand, is not consumer-driven and is characterized by inflation, unknown quality of care, and 46 million people without insurance.

She noted that what helped the automotive industry was the presence of entrepreneurs, who ended up being richly rewarded for their efforts. Henry Ford, founder of Ford Motor Co., created a less- expensive form of steel from which to make cars. “Within a decade, car ownership went from 10,000 to 1 million,” she noted.

Although Mr. Ford and other automotive industry pioneers were rewarded, innovation in health care is not well rewarded, Dr. Herzlinger said. As an example, she cited the case of Ralph Snyderman, M.D., who came up with the idea of integrating the care of patients with heart failure by organizing care teams. “In 1 year, he lowered the costs by 40%,” she said.

And what was his reward for doing so? “He lost the entire savings, because the health care system does not pay for making sick people better. It pays for days in the hospital, for doctor visits, for components of care. So the healthier he made people, the fewer people went to the hospital, the fewer doctor visits there were, and the more money he lost,” she said.

With consumer-driven health care, products will be developed to respond to consumers' different needs. And, she said, insurers will realize they can be rewarded for considering consumers' longer-term needs.

“I want a 5-year insurance policy. I want my insurer to really care about my long-term health,” Dr. Herzlinger said. Switzerland has 5-year insurance policies, she noted, “and if, at the end of the 5 years, you're healthier than would have been predicted at the beginning, you get 45% of your money back. How's that for a good deal for the insurer, the provider, and the customer?”

Dr. Herzlinger predicted it will become common for insurers to offer integrated team care for chronic diseases. The teams “will be wired, they'll be focused, and they're going to be paid for the fact that they're dealing with sicker people.”

Offering such teams will be a matter of “simple economics,” she said. “You're the insurer; 80% [of your money] goes for sick people. If you want to make it cheaper and better, how better to make it cheaper and better than to go to these organizations?”

In a consumer-driven system, physicians will be paid based on outcomes, she said. “Investments in self-care early on will be rewarded.”

One big driver behind consumer-driven health care will be aging baby boomers, a group that Dr. Herzlinger called “the most narcissistic, self-centered, empowered, and effective cohort we've ever had in the United States. The idea that this group isn't going to get what it wants, that's fantasy. They want [doctors] to integrate themselves, seize control of the system, and help patients care for their chronic diseases.”

She took issue with the notion that consumer-driven plans will be disadvantageous to sick people. “Quite the contrary. It will finally focus attention on sick people. Right now, it's in the incentive of the insurers to get rid of sick people and not to pay people who treat sick people well. But if you go to a consumer-driven system with risk-adjusted prices, the sick will be very attractive kinds of entities.”

And she rejected the idea that those who can afford high-cost plans will get the best care. “In the car market, what is the best car in the U.S.? Toyota,” she said. “Is that the highest-cost car? Not by a long shot.”

WASHINGTON — The trend toward consumer-driven health care will ultimately improve overall health care quality, Regina Herzlinger, Ph.D., said at a consensus conference sponsored by the American Association of Clinical Endocrinologists.

Dr. Herzlinger, professor and chair of business administration at Harvard Business School, in Boston, contrasted health care with the automotive industry. The automotive industry, which is already consumer-driven, is deflationary and features increasing product quality, lots of available product information, and widespread ownership. Health care, on the other hand, is not consumer-driven and is characterized by inflation, unknown quality of care, and 46 million people without insurance.

She noted that what helped the automotive industry was the presence of entrepreneurs, who ended up being richly rewarded for their efforts. Henry Ford, founder of Ford Motor Co., created a less- expensive form of steel from which to make cars. “Within a decade, car ownership went from 10,000 to 1 million,” she noted.

Although Mr. Ford and other automotive industry pioneers were rewarded, innovation in health care is not well rewarded, Dr. Herzlinger said. As an example, she cited the case of Ralph Snyderman, M.D., who came up with the idea of integrating the care of patients with heart failure by organizing care teams. “In 1 year, he lowered the costs by 40%,” she said.

And what was his reward for doing so? “He lost the entire savings, because the health care system does not pay for making sick people better. It pays for days in the hospital, for doctor visits, for components of care. So the healthier he made people, the fewer people went to the hospital, the fewer doctor visits there were, and the more money he lost,” she said.

With consumer-driven health care, products will be developed to respond to consumers' different needs. And, she said, insurers will realize they can be rewarded for considering consumers' longer-term needs.

“I want a 5-year insurance policy. I want my insurer to really care about my long-term health,” Dr. Herzlinger said. Switzerland has 5-year insurance policies, she noted, “and if, at the end of the 5 years, you're healthier than would have been predicted at the beginning, you get 45% of your money back. How's that for a good deal for the insurer, the provider, and the customer?”

Dr. Herzlinger predicted it will become common for insurers to offer integrated team care for chronic diseases. The teams “will be wired, they'll be focused, and they're going to be paid for the fact that they're dealing with sicker people.”

Offering such teams will be a matter of “simple economics,” she said. “You're the insurer; 80% [of your money] goes for sick people. If you want to make it cheaper and better, how better to make it cheaper and better than to go to these organizations?”

In a consumer-driven system, physicians will be paid based on outcomes, she said. “Investments in self-care early on will be rewarded.”

One big driver behind consumer-driven health care will be aging baby boomers, a group that Dr. Herzlinger called “the most narcissistic, self-centered, empowered, and effective cohort we've ever had in the United States. The idea that this group isn't going to get what it wants, that's fantasy. They want [doctors] to integrate themselves, seize control of the system, and help patients care for their chronic diseases.”

She took issue with the notion that consumer-driven plans will be disadvantageous to sick people. “Quite the contrary. It will finally focus attention on sick people. Right now, it's in the incentive of the insurers to get rid of sick people and not to pay people who treat sick people well. But if you go to a consumer-driven system with risk-adjusted prices, the sick will be very attractive kinds of entities.”

And she rejected the idea that those who can afford high-cost plans will get the best care. “In the car market, what is the best car in the U.S.? Toyota,” she said. “Is that the highest-cost car? Not by a long shot.”

WASHINGTON — The trend toward consumer-driven health care will ultimately improve overall health care quality, Regina Herzlinger, Ph.D., said at a consensus conference sponsored by the American Association of Clinical Endocrinologists.

Dr. Herzlinger, professor and chair of business administration at Harvard Business School, in Boston, contrasted health care with the automotive industry. The automotive industry, which is already consumer-driven, is deflationary and features increasing product quality, lots of available product information, and widespread ownership. Health care, on the other hand, is not consumer-driven and is characterized by inflation, unknown quality of care, and 46 million people without insurance.

She noted that what helped the automotive industry was the presence of entrepreneurs, who ended up being richly rewarded for their efforts. Henry Ford, founder of Ford Motor Co., created a less- expensive form of steel from which to make cars. “Within a decade, car ownership went from 10,000 to 1 million,” she noted.

Although Mr. Ford and other automotive industry pioneers were rewarded, innovation in health care is not well rewarded, Dr. Herzlinger said. As an example, she cited the case of Ralph Snyderman, M.D., who came up with the idea of integrating the care of patients with heart failure by organizing care teams. “In 1 year, he lowered the costs by 40%,” she said.

And what was his reward for doing so? “He lost the entire savings, because the health care system does not pay for making sick people better. It pays for days in the hospital, for doctor visits, for components of care. So the healthier he made people, the fewer people went to the hospital, the fewer doctor visits there were, and the more money he lost,” she said.

With consumer-driven health care, products will be developed to respond to consumers' different needs. And, she said, insurers will realize they can be rewarded for considering consumers' longer-term needs.

“I want a 5-year insurance policy. I want my insurer to really care about my long-term health,” Dr. Herzlinger said. Switzerland has 5-year insurance policies, she noted, “and if, at the end of the 5 years, you're healthier than would have been predicted at the beginning, you get 45% of your money back. How's that for a good deal for the insurer, the provider, and the customer?”

Dr. Herzlinger predicted it will become common for insurers to offer integrated team care for chronic diseases. The teams “will be wired, they'll be focused, and they're going to be paid for the fact that they're dealing with sicker people.”

Offering such teams will be a matter of “simple economics,” she said. “You're the insurer; 80% [of your money] goes for sick people. If you want to make it cheaper and better, how better to make it cheaper and better than to go to these organizations?”

In a consumer-driven system, physicians will be paid based on outcomes, she said. “Investments in self-care early on will be rewarded.”

One big driver behind consumer-driven health care will be aging baby boomers, a group that Dr. Herzlinger called “the most narcissistic, self-centered, empowered, and effective cohort we've ever had in the United States. The idea that this group isn't going to get what it wants, that's fantasy. They want [doctors] to integrate themselves, seize control of the system, and help patients care for their chronic diseases.”

She took issue with the notion that consumer-driven plans will be disadvantageous to sick people. “Quite the contrary. It will finally focus attention on sick people. Right now, it's in the incentive of the insurers to get rid of sick people and not to pay people who treat sick people well. But if you go to a consumer-driven system with risk-adjusted prices, the sick will be very attractive kinds of entities.”

And she rejected the idea that those who can afford high-cost plans will get the best care. “In the car market, what is the best car in the U.S.? Toyota,” she said. “Is that the highest-cost car? Not by a long shot.”

WASHINGTON — Expect more health plans to offer limited insurance policies for people who are currently uninsured, Robert Laszewski said at a press briefing sponsored by the Center for Studying Health System Change.

“Insurers are recognizing that the 45 million people who are uninsured are a market,” said Mr. Laszewski, founder and president of Health Policy and Strategy Associates, a consulting firm. “Now, they're not a market for comprehensive major medical insurance, but … for very limited benefits programs, programs that cost perhaps $50-$100 per month.”

He added that such plans—which typically include a wellness checkup every other year, a few visits to a primary care physician, and a drug benefit based on generic drugs—have come under criticism for not doing enough to help the uninsured. “I think that's a false set of arguments,” he said. “Of course they're not going to solve the problems of the uninsured, but [they] do respond to the needs of people who cannot afford health insurance.”

Most speakers at the conference also were upbeat about the future of consumer-driven health plans, such as health savings accounts (HSAs), although Christine Arnold, an executive director specializing in managed care at New York brokerage firm Morgan Stanley, noted that such plans are still a very small part of employers' health insurance offerings.

“Less than 5% of any HMO's total book of business is right now in any form of consumer-directed health care,” she said. “We may be on the cusp of a product revolution, which I've been hoping for, but I don't think it's here yet.”

Mr. Laszewski added that although consumer-driven health care “is a wonderful thing,” it focuses on first-dollar benefits rather than on the real problem in health care spending: that 75% of the costs are incurred by the 15% of people who are very ill. “It's the sick people who blow through the deductibles and get to the out-of-pocket maximums,” he said. “Sick people are the ones who control costs. Consumer-driven health care is a wonderful thing, but when the day is done, the incentives haven't fundamentally changed. In about another year or two, we're going to get this out of our system.”

Efforts to measure physician quality also came in for much discussion. “While I think 'sabotage' is a strong word, I would say there has been resistance by the health plans because each of them is trying to use this initiative as a competitive advantage,” said Ms. Arnold. “The tug of war is that employers want this on a macro basis—they want a Consumer Reports for providers.”

Two new initiatives could help consumers and employers compare health care quality, Ms. Arnold said. One is the Ambulatory Care Quality Alliance, a project of the American Academy of Family Physicians, the American College of Physicians, America's Health Insurance Plans, and the Agency for Healthcare Research and Quality (FAMILY PRACTICE NEWS, June 1, 2005, p. 1). “They are trying to put together an objective list of measures. How do we measure who is a good provider? As we think about ways to assess quality, I think we need a standard.”

The second initiative involves a group of employers and consultants who are exploring “care-focused purchasing—that is, getting health plans to aggregate their provider data so that employers and consumers can see which are the highest quality providers. “Any one health plan can't give you a full picture of [a physician],” she said.

Frederic Martucci, a managing director specializing in not-for-profit companies at Fitch Ratings, a New York credit-rating firm, said that Medicare's efforts to measure provider quality are likely to have a big impact on the health care market.

“The biggest insurance company in the world is Medicare, and Medicare is into quality,” he said.

WASHINGTON — Expect more health plans to offer limited insurance policies for people who are currently uninsured, Robert Laszewski said at a press briefing sponsored by the Center for Studying Health System Change.

“Insurers are recognizing that the 45 million people who are uninsured are a market,” said Mr. Laszewski, founder and president of Health Policy and Strategy Associates, a consulting firm. “Now, they're not a market for comprehensive major medical insurance, but … for very limited benefits programs, programs that cost perhaps $50-$100 per month.”

He added that such plans—which typically include a wellness checkup every other year, a few visits to a primary care physician, and a drug benefit based on generic drugs—have come under criticism for not doing enough to help the uninsured. “I think that's a false set of arguments,” he said. “Of course they're not going to solve the problems of the uninsured, but [they] do respond to the needs of people who cannot afford health insurance.”

Most speakers at the conference also were upbeat about the future of consumer-driven health plans, such as health savings accounts (HSAs), although Christine Arnold, an executive director specializing in managed care at New York brokerage firm Morgan Stanley, noted that such plans are still a very small part of employers' health insurance offerings.

“Less than 5% of any HMO's total book of business is right now in any form of consumer-directed health care,” she said. “We may be on the cusp of a product revolution, which I've been hoping for, but I don't think it's here yet.”

Mr. Laszewski added that although consumer-driven health care “is a wonderful thing,” it focuses on first-dollar benefits rather than on the real problem in health care spending: that 75% of the costs are incurred by the 15% of people who are very ill. “It's the sick people who blow through the deductibles and get to the out-of-pocket maximums,” he said. “Sick people are the ones who control costs. Consumer-driven health care is a wonderful thing, but when the day is done, the incentives haven't fundamentally changed. In about another year or two, we're going to get this out of our system.”

Efforts to measure physician quality also came in for much discussion. “While I think 'sabotage' is a strong word, I would say there has been resistance by the health plans because each of them is trying to use this initiative as a competitive advantage,” said Ms. Arnold. “The tug of war is that employers want this on a macro basis—they want a Consumer Reports for providers.”

Two new initiatives could help consumers and employers compare health care quality, Ms. Arnold said. One is the Ambulatory Care Quality Alliance, a project of the American Academy of Family Physicians, the American College of Physicians, America's Health Insurance Plans, and the Agency for Healthcare Research and Quality (FAMILY PRACTICE NEWS, June 1, 2005, p. 1). “They are trying to put together an objective list of measures. How do we measure who is a good provider? As we think about ways to assess quality, I think we need a standard.”

The second initiative involves a group of employers and consultants who are exploring “care-focused purchasing—that is, getting health plans to aggregate their provider data so that employers and consumers can see which are the highest quality providers. “Any one health plan can't give you a full picture of [a physician],” she said.

Frederic Martucci, a managing director specializing in not-for-profit companies at Fitch Ratings, a New York credit-rating firm, said that Medicare's efforts to measure provider quality are likely to have a big impact on the health care market.

“The biggest insurance company in the world is Medicare, and Medicare is into quality,” he said.

WASHINGTON — Expect more health plans to offer limited insurance policies for people who are currently uninsured, Robert Laszewski said at a press briefing sponsored by the Center for Studying Health System Change.

“Insurers are recognizing that the 45 million people who are uninsured are a market,” said Mr. Laszewski, founder and president of Health Policy and Strategy Associates, a consulting firm. “Now, they're not a market for comprehensive major medical insurance, but … for very limited benefits programs, programs that cost perhaps $50-$100 per month.”

He added that such plans—which typically include a wellness checkup every other year, a few visits to a primary care physician, and a drug benefit based on generic drugs—have come under criticism for not doing enough to help the uninsured. “I think that's a false set of arguments,” he said. “Of course they're not going to solve the problems of the uninsured, but [they] do respond to the needs of people who cannot afford health insurance.”

Most speakers at the conference also were upbeat about the future of consumer-driven health plans, such as health savings accounts (HSAs), although Christine Arnold, an executive director specializing in managed care at New York brokerage firm Morgan Stanley, noted that such plans are still a very small part of employers' health insurance offerings.

“Less than 5% of any HMO's total book of business is right now in any form of consumer-directed health care,” she said. “We may be on the cusp of a product revolution, which I've been hoping for, but I don't think it's here yet.”

Mr. Laszewski added that although consumer-driven health care “is a wonderful thing,” it focuses on first-dollar benefits rather than on the real problem in health care spending: that 75% of the costs are incurred by the 15% of people who are very ill. “It's the sick people who blow through the deductibles and get to the out-of-pocket maximums,” he said. “Sick people are the ones who control costs. Consumer-driven health care is a wonderful thing, but when the day is done, the incentives haven't fundamentally changed. In about another year or two, we're going to get this out of our system.”

Efforts to measure physician quality also came in for much discussion. “While I think 'sabotage' is a strong word, I would say there has been resistance by the health plans because each of them is trying to use this initiative as a competitive advantage,” said Ms. Arnold. “The tug of war is that employers want this on a macro basis—they want a Consumer Reports for providers.”

Two new initiatives could help consumers and employers compare health care quality, Ms. Arnold said. One is the Ambulatory Care Quality Alliance, a project of the American Academy of Family Physicians, the American College of Physicians, America's Health Insurance Plans, and the Agency for Healthcare Research and Quality (FAMILY PRACTICE NEWS, June 1, 2005, p. 1). “They are trying to put together an objective list of measures. How do we measure who is a good provider? As we think about ways to assess quality, I think we need a standard.”

The second initiative involves a group of employers and consultants who are exploring “care-focused purchasing—that is, getting health plans to aggregate their provider data so that employers and consumers can see which are the highest quality providers. “Any one health plan can't give you a full picture of [a physician],” she said.

Frederic Martucci, a managing director specializing in not-for-profit companies at Fitch Ratings, a New York credit-rating firm, said that Medicare's efforts to measure provider quality are likely to have a big impact on the health care market.

“The biggest insurance company in the world is Medicare, and Medicare is into quality,” he said.

WASHINGTON — The new database on hospital quality from the Centers for Medicare and Medicaid Services may herald a new era in patient assertiveness in terms of health care preferences, several experts said at a briefing sponsored by the Alliance for Health Reform.

“We're beginning a change in how doctor-patient relations are established and [considering] how paternalistic they have been, I think we'll see major changes in the future where they become less that way,” said Elliot Sussman, M.D., president and CEO of Lehigh Valley Hospital and Health Network in Allentown, Pa. “When people come into a community, they'll look at measures like this and say, 'Which are the kinds of places I want to be cared for at, and who are doctors on staff at those places?'”

In fact, such changes as these have already begun to occur, Dr. Sussman pointed out.

“We've seen experiences where people change their doctor relationship because 'I really like Dr. Jones, but he's not on the staff of what seems to be the best hospital. Either he does that or I'm going to find myself a new physician,'” Dr. Sussman said.

CMS launched its “Hospital Compare” database earlier this year at www.hospital compare.hhs.gov

Users are able to search the hospital comparison database by hospital name or geographic location.

Gerald M. Shea, assistant to the president for government affairs at the AFL-CIO, said that the feeling of partnership that comes from empowering consumers should spill over onto the physician side of the equation.

“I could make the argument that there are very serious limits to how much consumers can drive change in the health decision making process,” he said.

“An equally fruitful strategy would be trying to change the preparation and education of physicians, so they come to this suggesting that a partnership would be a good idea,” Mr. Shea added.

In fact, physicians also have much to gain from being able to access hospital quality data, said Margaret E. O'Kane, president of the National Committee for Quality Assurance.

“Physicians have been working in an information vacuum as well—both doctors involved in performing particular procedures in the hospital, and the primary care physicians who are making referrals to specialists,” Ms. O'Kane said.

“We can't underestimate the impact that transparency has on changing everything. I feel very optimistic this will lead to a lot of positive changes,” she said.

One panelist warned that empowerment does have its limits. Charles N. “Chip” Kahn, president of the Federation of American Hospitals, said that as databases such as Hospital Compare begin adding more measures, “it will be more and more difficult for the average consumer … to figure things out other than, 'This is either an okay place or a dreadful place' and you obviously want to stay away from dreadful places.”

In the end, Mr. Kahn said that, databases such as this one “are more about using accountability to improve care than they are about consumers making more decisions.”

Ms. O'Kane said she was confident that “intermediaries” would rise up to help consumers interpret the database information. And she also had a prediction.

“What we've seen so far is not hospitals that are excellent at everything or terrible at everything, but hospitals that are excellent at one thing and maybe not so great at others,” she said.

“As process engineering becomes more core to the hospitals, you'll see hospitals that will break out and be excellent across the board,” she added.

WASHINGTON — The new database on hospital quality from the Centers for Medicare and Medicaid Services may herald a new era in patient assertiveness in terms of health care preferences, several experts said at a briefing sponsored by the Alliance for Health Reform.

“We're beginning a change in how doctor-patient relations are established and [considering] how paternalistic they have been, I think we'll see major changes in the future where they become less that way,” said Elliot Sussman, M.D., president and CEO of Lehigh Valley Hospital and Health Network in Allentown, Pa. “When people come into a community, they'll look at measures like this and say, 'Which are the kinds of places I want to be cared for at, and who are doctors on staff at those places?'”

In fact, such changes as these have already begun to occur, Dr. Sussman pointed out.

“We've seen experiences where people change their doctor relationship because 'I really like Dr. Jones, but he's not on the staff of what seems to be the best hospital. Either he does that or I'm going to find myself a new physician,'” Dr. Sussman said.

CMS launched its “Hospital Compare” database earlier this year at www.hospital compare.hhs.gov

Users are able to search the hospital comparison database by hospital name or geographic location.

Gerald M. Shea, assistant to the president for government affairs at the AFL-CIO, said that the feeling of partnership that comes from empowering consumers should spill over onto the physician side of the equation.

“I could make the argument that there are very serious limits to how much consumers can drive change in the health decision making process,” he said.

“An equally fruitful strategy would be trying to change the preparation and education of physicians, so they come to this suggesting that a partnership would be a good idea,” Mr. Shea added.

In fact, physicians also have much to gain from being able to access hospital quality data, said Margaret E. O'Kane, president of the National Committee for Quality Assurance.

“Physicians have been working in an information vacuum as well—both doctors involved in performing particular procedures in the hospital, and the primary care physicians who are making referrals to specialists,” Ms. O'Kane said.

“We can't underestimate the impact that transparency has on changing everything. I feel very optimistic this will lead to a lot of positive changes,” she said.

One panelist warned that empowerment does have its limits. Charles N. “Chip” Kahn, president of the Federation of American Hospitals, said that as databases such as Hospital Compare begin adding more measures, “it will be more and more difficult for the average consumer … to figure things out other than, 'This is either an okay place or a dreadful place' and you obviously want to stay away from dreadful places.”

In the end, Mr. Kahn said that, databases such as this one “are more about using accountability to improve care than they are about consumers making more decisions.”

Ms. O'Kane said she was confident that “intermediaries” would rise up to help consumers interpret the database information. And she also had a prediction.

“What we've seen so far is not hospitals that are excellent at everything or terrible at everything, but hospitals that are excellent at one thing and maybe not so great at others,” she said.

“As process engineering becomes more core to the hospitals, you'll see hospitals that will break out and be excellent across the board,” she added.

WASHINGTON — The new database on hospital quality from the Centers for Medicare and Medicaid Services may herald a new era in patient assertiveness in terms of health care preferences, several experts said at a briefing sponsored by the Alliance for Health Reform.

“We're beginning a change in how doctor-patient relations are established and [considering] how paternalistic they have been, I think we'll see major changes in the future where they become less that way,” said Elliot Sussman, M.D., president and CEO of Lehigh Valley Hospital and Health Network in Allentown, Pa. “When people come into a community, they'll look at measures like this and say, 'Which are the kinds of places I want to be cared for at, and who are doctors on staff at those places?'”

In fact, such changes as these have already begun to occur, Dr. Sussman pointed out.

“We've seen experiences where people change their doctor relationship because 'I really like Dr. Jones, but he's not on the staff of what seems to be the best hospital. Either he does that or I'm going to find myself a new physician,'” Dr. Sussman said.

CMS launched its “Hospital Compare” database earlier this year at www.hospital compare.hhs.gov

Users are able to search the hospital comparison database by hospital name or geographic location.

Gerald M. Shea, assistant to the president for government affairs at the AFL-CIO, said that the feeling of partnership that comes from empowering consumers should spill over onto the physician side of the equation.

“I could make the argument that there are very serious limits to how much consumers can drive change in the health decision making process,” he said.

“An equally fruitful strategy would be trying to change the preparation and education of physicians, so they come to this suggesting that a partnership would be a good idea,” Mr. Shea added.

In fact, physicians also have much to gain from being able to access hospital quality data, said Margaret E. O'Kane, president of the National Committee for Quality Assurance.

“Physicians have been working in an information vacuum as well—both doctors involved in performing particular procedures in the hospital, and the primary care physicians who are making referrals to specialists,” Ms. O'Kane said.

“We can't underestimate the impact that transparency has on changing everything. I feel very optimistic this will lead to a lot of positive changes,” she said.

One panelist warned that empowerment does have its limits. Charles N. “Chip” Kahn, president of the Federation of American Hospitals, said that as databases such as Hospital Compare begin adding more measures, “it will be more and more difficult for the average consumer … to figure things out other than, 'This is either an okay place or a dreadful place' and you obviously want to stay away from dreadful places.”

In the end, Mr. Kahn said that, databases such as this one “are more about using accountability to improve care than they are about consumers making more decisions.”

Ms. O'Kane said she was confident that “intermediaries” would rise up to help consumers interpret the database information. And she also had a prediction.

“What we've seen so far is not hospitals that are excellent at everything or terrible at everything, but hospitals that are excellent at one thing and maybe not so great at others,” she said.

“As process engineering becomes more core to the hospitals, you'll see hospitals that will break out and be excellent across the board,” she added.

California doctors are wondering whether prescribing will be next, now that state regulations allow psychologists in the state to have admitting privileges for mental health patients.

“This would be a prelude to that, if you want to think about it from the psychologists' perspective,” said Randall Hagar, director of government affairs at the California Psychiatric Association in Sacramento. “Getting this kind of privilege would be 'physiciandom,' [so that they will now say,] 'In order to better treat our patients, we need to be able to handle the medication aspect of it. We're prevented from taking good care of our patients until we get this privilege.'”

Psychology groups, however, reject the notion that getting these regulations into place is a stepping stone to prescribing. “The big difference between prescribing and the hospital practices at issue with these laws is that the activities being envisioned by these regulations are already within the scope of the psychologist's license,” said Russ Newman, Ph.D., executive director for professional practice at the American Psychological Association in Washington. “Prescribing is not; it would require a psychology licensure change.”

The regulations, which apply to patients at psychiatric hospitals as well as those in psychiatric wards of acute care facilities, permit psychologists to admit patients, order therapy, ask for consultations, and approve ground and weekend privileges, said Charles Faltz, Ph.D., director of professional affairs at the California Psychological Association.

Dr. Faltz added that although such privileges may be very new to some psychologists, others have already been doing much of the admitting work themselves anyway. He said that before he began working for the association, he was on the full medical staff of a hospital and was admitting and managing patients. “The way it's done is in collaboration with a physician—usually with both the primary care physician and the psychiatrist who prescribes medications,” he said.

Tom Riley, director of government relations at the California Academy of Family Physicians, in Sacramento, noted that even if psychologists have admitting privileges, a physician will still have to be there to do a physical exam during the intake.

“We're following [those regulations] only tangentially,” Mr. Riley said. “The main issue is patient safety; we want things that ensure patient safety and allow access to care … we will be monitoring this to ensure that patient safety issues are met.”

Family physicians “are monomaniacally focused on trying to expand access to care in California, and some folks take that to be saying, 'We should have expanded scope' of service,” said Mr. Riley, noting that is not necessarily the case. “There are all sorts of issues regarding psychologists' knowing how the mental state of patients affects their physical attributes, and they don't have that training.”

One of the issues in dispute with the California regulations—which were first promulgated in 1978 and finally issued in April—is the way they were approved. Instead of going through the usual regulatory process, which requires public hearings, these regulations ended up going through the courts—with little public input. “These particular regulations were made using rule 100, which [means that] if the courts interpret a particular law and say 'This is what the law means,' the regulatory agencies have no particular ability to change it,” Dr. Faltz said. “So they can simply put those regulations through, and they don't have public hearings, because it isn't possible for the public to change the court's interpretation.”

But Mr. Hagar said the regulations were the result of three attempts by the psychologists to get the regulations put out without public notice or input. “This attempt succeeded, and we're having a hard time figuring that there's anything else but politics involved,” he said.

Earlier attempts involved getting the psychologists privileges to order and release seclusion and restraint treatments, Mr. Hagar continued. “This time, they got the seclusion and restraint orders and also got the ability to put someone in a hospital and release them, and also to transfer them.”

Mr. Hagar said psychologists should be forewarned that their liability rates might increase now that they have these additional privileges. But Dr. Faltz said psychologists were not concerned about such a possibility, because their experience to date with collaborative practice has proved otherwise.

“There have never been any instances where it was shown that … psychologists practicing in hospitals in this way have had increased liability for psychologists or hospitals,” he said. “In fact, when something goes wrong, all the practitioners involved with the patient are sued. So if a psychiatrist is managing the patient and has a psychologist consulting or doing testing, all involved are sued. It's equal opportunity.”

So far, 17 other states and the District of Columbia have these hospital privileging laws, in addition to California, but psychologists are not expecting many more such laws to be passed, Dr. Newman said. That's because hospital licensing laws vary from jurisdiction to jurisdiction, and in many states psychologists have been able to obtain additional privileges by changing existing licensing laws without going through a full regulatory process.

California doctors are wondering whether prescribing will be next, now that state regulations allow psychologists in the state to have admitting privileges for mental health patients.

“This would be a prelude to that, if you want to think about it from the psychologists' perspective,” said Randall Hagar, director of government affairs at the California Psychiatric Association in Sacramento. “Getting this kind of privilege would be 'physiciandom,' [so that they will now say,] 'In order to better treat our patients, we need to be able to handle the medication aspect of it. We're prevented from taking good care of our patients until we get this privilege.'”

Psychology groups, however, reject the notion that getting these regulations into place is a stepping stone to prescribing. “The big difference between prescribing and the hospital practices at issue with these laws is that the activities being envisioned by these regulations are already within the scope of the psychologist's license,” said Russ Newman, Ph.D., executive director for professional practice at the American Psychological Association in Washington. “Prescribing is not; it would require a psychology licensure change.”

The regulations, which apply to patients at psychiatric hospitals as well as those in psychiatric wards of acute care facilities, permit psychologists to admit patients, order therapy, ask for consultations, and approve ground and weekend privileges, said Charles Faltz, Ph.D., director of professional affairs at the California Psychological Association.

Dr. Faltz added that although such privileges may be very new to some psychologists, others have already been doing much of the admitting work themselves anyway. He said that before he began working for the association, he was on the full medical staff of a hospital and was admitting and managing patients. “The way it's done is in collaboration with a physician—usually with both the primary care physician and the psychiatrist who prescribes medications,” he said.

Tom Riley, director of government relations at the California Academy of Family Physicians, in Sacramento, noted that even if psychologists have admitting privileges, a physician will still have to be there to do a physical exam during the intake.

“We're following [those regulations] only tangentially,” Mr. Riley said. “The main issue is patient safety; we want things that ensure patient safety and allow access to care … we will be monitoring this to ensure that patient safety issues are met.”

Family physicians “are monomaniacally focused on trying to expand access to care in California, and some folks take that to be saying, 'We should have expanded scope' of service,” said Mr. Riley, noting that is not necessarily the case. “There are all sorts of issues regarding psychologists' knowing how the mental state of patients affects their physical attributes, and they don't have that training.”

One of the issues in dispute with the California regulations—which were first promulgated in 1978 and finally issued in April—is the way they were approved. Instead of going through the usual regulatory process, which requires public hearings, these regulations ended up going through the courts—with little public input. “These particular regulations were made using rule 100, which [means that] if the courts interpret a particular law and say 'This is what the law means,' the regulatory agencies have no particular ability to change it,” Dr. Faltz said. “So they can simply put those regulations through, and they don't have public hearings, because it isn't possible for the public to change the court's interpretation.”

But Mr. Hagar said the regulations were the result of three attempts by the psychologists to get the regulations put out without public notice or input. “This attempt succeeded, and we're having a hard time figuring that there's anything else but politics involved,” he said.

Earlier attempts involved getting the psychologists privileges to order and release seclusion and restraint treatments, Mr. Hagar continued. “This time, they got the seclusion and restraint orders and also got the ability to put someone in a hospital and release them, and also to transfer them.”

Mr. Hagar said psychologists should be forewarned that their liability rates might increase now that they have these additional privileges. But Dr. Faltz said psychologists were not concerned about such a possibility, because their experience to date with collaborative practice has proved otherwise.

“There have never been any instances where it was shown that … psychologists practicing in hospitals in this way have had increased liability for psychologists or hospitals,” he said. “In fact, when something goes wrong, all the practitioners involved with the patient are sued. So if a psychiatrist is managing the patient and has a psychologist consulting or doing testing, all involved are sued. It's equal opportunity.”

So far, 17 other states and the District of Columbia have these hospital privileging laws, in addition to California, but psychologists are not expecting many more such laws to be passed, Dr. Newman said. That's because hospital licensing laws vary from jurisdiction to jurisdiction, and in many states psychologists have been able to obtain additional privileges by changing existing licensing laws without going through a full regulatory process.

California doctors are wondering whether prescribing will be next, now that state regulations allow psychologists in the state to have admitting privileges for mental health patients.

“This would be a prelude to that, if you want to think about it from the psychologists' perspective,” said Randall Hagar, director of government affairs at the California Psychiatric Association in Sacramento. “Getting this kind of privilege would be 'physiciandom,' [so that they will now say,] 'In order to better treat our patients, we need to be able to handle the medication aspect of it. We're prevented from taking good care of our patients until we get this privilege.'”

Psychology groups, however, reject the notion that getting these regulations into place is a stepping stone to prescribing. “The big difference between prescribing and the hospital practices at issue with these laws is that the activities being envisioned by these regulations are already within the scope of the psychologist's license,” said Russ Newman, Ph.D., executive director for professional practice at the American Psychological Association in Washington. “Prescribing is not; it would require a psychology licensure change.”

The regulations, which apply to patients at psychiatric hospitals as well as those in psychiatric wards of acute care facilities, permit psychologists to admit patients, order therapy, ask for consultations, and approve ground and weekend privileges, said Charles Faltz, Ph.D., director of professional affairs at the California Psychological Association.

Dr. Faltz added that although such privileges may be very new to some psychologists, others have already been doing much of the admitting work themselves anyway. He said that before he began working for the association, he was on the full medical staff of a hospital and was admitting and managing patients. “The way it's done is in collaboration with a physician—usually with both the primary care physician and the psychiatrist who prescribes medications,” he said.

Tom Riley, director of government relations at the California Academy of Family Physicians, in Sacramento, noted that even if psychologists have admitting privileges, a physician will still have to be there to do a physical exam during the intake.

“We're following [those regulations] only tangentially,” Mr. Riley said. “The main issue is patient safety; we want things that ensure patient safety and allow access to care … we will be monitoring this to ensure that patient safety issues are met.”

Family physicians “are monomaniacally focused on trying to expand access to care in California, and some folks take that to be saying, 'We should have expanded scope' of service,” said Mr. Riley, noting that is not necessarily the case. “There are all sorts of issues regarding psychologists' knowing how the mental state of patients affects their physical attributes, and they don't have that training.”

One of the issues in dispute with the California regulations—which were first promulgated in 1978 and finally issued in April—is the way they were approved. Instead of going through the usual regulatory process, which requires public hearings, these regulations ended up going through the courts—with little public input. “These particular regulations were made using rule 100, which [means that] if the courts interpret a particular law and say 'This is what the law means,' the regulatory agencies have no particular ability to change it,” Dr. Faltz said. “So they can simply put those regulations through, and they don't have public hearings, because it isn't possible for the public to change the court's interpretation.”

But Mr. Hagar said the regulations were the result of three attempts by the psychologists to get the regulations put out without public notice or input. “This attempt succeeded, and we're having a hard time figuring that there's anything else but politics involved,” he said.

Earlier attempts involved getting the psychologists privileges to order and release seclusion and restraint treatments, Mr. Hagar continued. “This time, they got the seclusion and restraint orders and also got the ability to put someone in a hospital and release them, and also to transfer them.”

Mr. Hagar said psychologists should be forewarned that their liability rates might increase now that they have these additional privileges. But Dr. Faltz said psychologists were not concerned about such a possibility, because their experience to date with collaborative practice has proved otherwise.

“There have never been any instances where it was shown that … psychologists practicing in hospitals in this way have had increased liability for psychologists or hospitals,” he said. “In fact, when something goes wrong, all the practitioners involved with the patient are sued. So if a psychiatrist is managing the patient and has a psychologist consulting or doing testing, all involved are sued. It's equal opportunity.”

So far, 17 other states and the District of Columbia have these hospital privileging laws, in addition to California, but psychologists are not expecting many more such laws to be passed, Dr. Newman said. That's because hospital licensing laws vary from jurisdiction to jurisdiction, and in many states psychologists have been able to obtain additional privileges by changing existing licensing laws without going through a full regulatory process.

A new process for appealing Medicare coverage denials is raising concern among some advocates for senior citizens.

“We're concerned about the ability of beneficiaries to get a fair and favorable hearing,” said Vicki Gottlich, senior policy attorney at the Center for Medicare Advocacy, a Mansfield, Conn.-based group that helps beneficiaries with the appeals process. “Our organization and other organizations that do this kind of work have a very high success rate [for Medicare appeals] and we're concerned that the rate is going to go down.”

That could mean collection snags for physicians, she added. For example, if the physician accepts assignment for Medicare, Medicare denies coverage for a claim, and the denial is unsuccessfully appealed by the patient, “the doctor will then have to go collect from the patient. They don't want to do that.”

Under the new process, which began on July 1, beneficiaries and providers whose claims are denied will be asked to appeal their claims to an administrative law judge (ALJ) via teleconference. Previously, these appeals were made in person.

“Older people and people with disabilities will have problems” with teleconferences, especially if their vision or hearing is impaired, Ms. Gottlich said. And if they ask for an in-person hearing instead, beneficiaries will waive their right to a timely decision if that request is granted. The new process also specifies that there will be three “regions” for hearing cases in person, rather than beneficiaries being allowed to have hearings in their home states.

Department of Health and Human Services spokesman Bill Hall said there are logistical reasons for waiving the right to speedy resolution in the case of an in-person hearing.

“We have to schedule everyone, allow time for them to travel, and set up a facility for the hearing,” he said. “So logistics must come in play. That doesn't mean we'll take a year to do it.”

Ms. Gottlich noted that the changes were made in the first place in part because members of Congress were dissatisfied with how long it was taking for beneficiaries to make their way through the appeals process.

“The changes are supposed to protect beneficiaries,” but the system needs better funding to make sure everyone gets their chance to be heard in a timely way, she said. “There are some cases where teleconferencing could work, but for an individual beneficiary who's gone through the whole inhuman system and wants to see a real person, the system doesn't really work.”

Another change in the process places administrative law judges under the jurisdiction of HHS, rather than the Social Security Administration. Further, judges are instructed to place more weight on Medicare regulations than they were before. “The [law] says the administrative law judge is supposed to be independent of [the Centers for Medicare and Medicaid Services], but now they are supposed to give deference to their rules,” Ms. Gottlich said.

Mr. Hall said that his agency “has gone to great lengths to be sure this is a fair process.” Questions about how well the new system will work “are virtually impossible to answer because we haven't even heard the first case yet. I think it's a lot more fair to ask these questions a year from now.”

The Medical Group Management Association, which represents medical practice managers, is one group that is very interested in how the appeals process plays out. “We have concerns about how effective arbitration or review will be through a distance,” said Jennifer Miller, external relations liaison at MGMA's Washington office. “How effective can someone be to advocate their position over teleconference? When the rubber hits the road and we start seeing more [cases], we'll have a better feel for it.”

Ms. Miller added that MGMA supports having the judges hired by HHS rather than the Social Security Administration. “Before now, someone dealing with disability issues would be trying to adjudicate what may be their third case of this type out of 300 cases, so they may not be as familiar with it,” she said. “Now there will be a specialized group of magistrates–it's going to be a new breed of ALJ.”

MGMA is not concerned that being hired by HHS will bias the judges too much, she added. “That is a concern many still share; however, ALJs historically have enjoyed a great deal of flexibility, and that's the genius behind the review process,” Ms. Miller said.

Several senators expressed concern about changes to the appeals process. A bill, the Justice for Medicare Beneficiaries Act, sponsored by Sen. Christopher Dodd (D-Conn.), Sen. Edward M. Kennedy (D-Mass.), Sen. John Kerry (D-Mass.), and Sen. Jeff Bingaman (D-N.M.) was introduced earlier this summer and would reverse many of the changes.

For instance, the bill says that judges “shall not be required to give substantial deference to local coverage determination, local medical review policies, or Centers for Medicare and Medicaid Services program guidance.” The measure also calls for appeal hearings to be in-person “unless such individual requests that the hearing be conducted using tele- or video conference technologies.” The bill was referred to the Senate Finance Committee.

A new process for appealing Medicare coverage denials is raising concern among some advocates for senior citizens.

“We're concerned about the ability of beneficiaries to get a fair and favorable hearing,” said Vicki Gottlich, senior policy attorney at the Center for Medicare Advocacy, a Mansfield, Conn.-based group that helps beneficiaries with the appeals process. “Our organization and other organizations that do this kind of work have a very high success rate [for Medicare appeals] and we're concerned that the rate is going to go down.”

That could mean collection snags for physicians, she added. For example, if the physician accepts assignment for Medicare, Medicare denies coverage for a claim, and the denial is unsuccessfully appealed by the patient, “the doctor will then have to go collect from the patient. They don't want to do that.”

Under the new process, which began on July 1, beneficiaries and providers whose claims are denied will be asked to appeal their claims to an administrative law judge (ALJ) via teleconference. Previously, these appeals were made in person.

“Older people and people with disabilities will have problems” with teleconferences, especially if their vision or hearing is impaired, Ms. Gottlich said. And if they ask for an in-person hearing instead, beneficiaries will waive their right to a timely decision if that request is granted. The new process also specifies that there will be three “regions” for hearing cases in person, rather than beneficiaries being allowed to have hearings in their home states.

Department of Health and Human Services spokesman Bill Hall said there are logistical reasons for waiving the right to speedy resolution in the case of an in-person hearing.

“We have to schedule everyone, allow time for them to travel, and set up a facility for the hearing,” he said. “So logistics must come in play. That doesn't mean we'll take a year to do it.”

Ms. Gottlich noted that the changes were made in the first place in part because members of Congress were dissatisfied with how long it was taking for beneficiaries to make their way through the appeals process.

“The changes are supposed to protect beneficiaries,” but the system needs better funding to make sure everyone gets their chance to be heard in a timely way, she said. “There are some cases where teleconferencing could work, but for an individual beneficiary who's gone through the whole inhuman system and wants to see a real person, the system doesn't really work.”

Another change in the process places administrative law judges under the jurisdiction of HHS, rather than the Social Security Administration. Further, judges are instructed to place more weight on Medicare regulations than they were before. “The [law] says the administrative law judge is supposed to be independent of [the Centers for Medicare and Medicaid Services], but now they are supposed to give deference to their rules,” Ms. Gottlich said.

Mr. Hall said that his agency “has gone to great lengths to be sure this is a fair process.” Questions about how well the new system will work “are virtually impossible to answer because we haven't even heard the first case yet. I think it's a lot more fair to ask these questions a year from now.”

The Medical Group Management Association, which represents medical practice managers, is one group that is very interested in how the appeals process plays out. “We have concerns about how effective arbitration or review will be through a distance,” said Jennifer Miller, external relations liaison at MGMA's Washington office. “How effective can someone be to advocate their position over teleconference? When the rubber hits the road and we start seeing more [cases], we'll have a better feel for it.”

Ms. Miller added that MGMA supports having the judges hired by HHS rather than the Social Security Administration. “Before now, someone dealing with disability issues would be trying to adjudicate what may be their third case of this type out of 300 cases, so they may not be as familiar with it,” she said. “Now there will be a specialized group of magistrates–it's going to be a new breed of ALJ.”

MGMA is not concerned that being hired by HHS will bias the judges too much, she added. “That is a concern many still share; however, ALJs historically have enjoyed a great deal of flexibility, and that's the genius behind the review process,” Ms. Miller said.

Several senators expressed concern about changes to the appeals process. A bill, the Justice for Medicare Beneficiaries Act, sponsored by Sen. Christopher Dodd (D-Conn.), Sen. Edward M. Kennedy (D-Mass.), Sen. John Kerry (D-Mass.), and Sen. Jeff Bingaman (D-N.M.) was introduced earlier this summer and would reverse many of the changes.

For instance, the bill says that judges “shall not be required to give substantial deference to local coverage determination, local medical review policies, or Centers for Medicare and Medicaid Services program guidance.” The measure also calls for appeal hearings to be in-person “unless such individual requests that the hearing be conducted using tele- or video conference technologies.” The bill was referred to the Senate Finance Committee.

A new process for appealing Medicare coverage denials is raising concern among some advocates for senior citizens.

“We're concerned about the ability of beneficiaries to get a fair and favorable hearing,” said Vicki Gottlich, senior policy attorney at the Center for Medicare Advocacy, a Mansfield, Conn.-based group that helps beneficiaries with the appeals process. “Our organization and other organizations that do this kind of work have a very high success rate [for Medicare appeals] and we're concerned that the rate is going to go down.”

That could mean collection snags for physicians, she added. For example, if the physician accepts assignment for Medicare, Medicare denies coverage for a claim, and the denial is unsuccessfully appealed by the patient, “the doctor will then have to go collect from the patient. They don't want to do that.”

Under the new process, which began on July 1, beneficiaries and providers whose claims are denied will be asked to appeal their claims to an administrative law judge (ALJ) via teleconference. Previously, these appeals were made in person.

“Older people and people with disabilities will have problems” with teleconferences, especially if their vision or hearing is impaired, Ms. Gottlich said. And if they ask for an in-person hearing instead, beneficiaries will waive their right to a timely decision if that request is granted. The new process also specifies that there will be three “regions” for hearing cases in person, rather than beneficiaries being allowed to have hearings in their home states.

Department of Health and Human Services spokesman Bill Hall said there are logistical reasons for waiving the right to speedy resolution in the case of an in-person hearing.

“We have to schedule everyone, allow time for them to travel, and set up a facility for the hearing,” he said. “So logistics must come in play. That doesn't mean we'll take a year to do it.”

Ms. Gottlich noted that the changes were made in the first place in part because members of Congress were dissatisfied with how long it was taking for beneficiaries to make their way through the appeals process.

“The changes are supposed to protect beneficiaries,” but the system needs better funding to make sure everyone gets their chance to be heard in a timely way, she said. “There are some cases where teleconferencing could work, but for an individual beneficiary who's gone through the whole inhuman system and wants to see a real person, the system doesn't really work.”

Another change in the process places administrative law judges under the jurisdiction of HHS, rather than the Social Security Administration. Further, judges are instructed to place more weight on Medicare regulations than they were before. “The [law] says the administrative law judge is supposed to be independent of [the Centers for Medicare and Medicaid Services], but now they are supposed to give deference to their rules,” Ms. Gottlich said.

Mr. Hall said that his agency “has gone to great lengths to be sure this is a fair process.” Questions about how well the new system will work “are virtually impossible to answer because we haven't even heard the first case yet. I think it's a lot more fair to ask these questions a year from now.”

The Medical Group Management Association, which represents medical practice managers, is one group that is very interested in how the appeals process plays out. “We have concerns about how effective arbitration or review will be through a distance,” said Jennifer Miller, external relations liaison at MGMA's Washington office. “How effective can someone be to advocate their position over teleconference? When the rubber hits the road and we start seeing more [cases], we'll have a better feel for it.”

Ms. Miller added that MGMA supports having the judges hired by HHS rather than the Social Security Administration. “Before now, someone dealing with disability issues would be trying to adjudicate what may be their third case of this type out of 300 cases, so they may not be as familiar with it,” she said. “Now there will be a specialized group of magistrates–it's going to be a new breed of ALJ.”

MGMA is not concerned that being hired by HHS will bias the judges too much, she added. “That is a concern many still share; however, ALJs historically have enjoyed a great deal of flexibility, and that's the genius behind the review process,” Ms. Miller said.

Several senators expressed concern about changes to the appeals process. A bill, the Justice for Medicare Beneficiaries Act, sponsored by Sen. Christopher Dodd (D-Conn.), Sen. Edward M. Kennedy (D-Mass.), Sen. John Kerry (D-Mass.), and Sen. Jeff Bingaman (D-N.M.) was introduced earlier this summer and would reverse many of the changes.

For instance, the bill says that judges “shall not be required to give substantial deference to local coverage determination, local medical review policies, or Centers for Medicare and Medicaid Services program guidance.” The measure also calls for appeal hearings to be in-person “unless such individual requests that the hearing be conducted using tele- or video conference technologies.” The bill was referred to the Senate Finance Committee.

Sometimes, being equal is just not enough–at least, that's what the Progressive Policy Institute says.

A new paper from the institute, a liberal Washington think tank, suggests that rather than aiming for simple dollar-for-dollar parity with physical health benefits, advocates for mental health parity should insist that mental health providers be held accountable for delivering high-quality, cost-effective services.

Some people in the business community are intrigued by this idea, noted David Kendall, senior fellow for health policy at the institute. “Employers see themselves as leaders in the outcomes disclosure field, and their argument has been all along that parity shouldn't mean unlimited entitlement to [mental health] services,” he said. “So if we can find ways to discipline the demand side with outcomes [data], I think that may help break the deadlock on parity.” One reason the Progressive Policy Institute (PPI) published the paper is that President Bush has “dropped the ball” on reforming the mental health system, even though he himself called for such reforms about 4 years ago, Mr. Kendall said.

In the report, PPI notes that enhanced parity “would bring together a wave of cutting-edge reforms–some proposed, some already proven–that aim to promote effective treatments and tangible results, often reinforced by pay-for-performance or other incentives.”

One example would be Assertive Community Treatment (ACT), in which mobile interdisciplinary teams give 24-hour assistance to hard-to-reach mentally ill patients. “When states fail to adopt such practices, the cost of preventable hospitalization soars,” the report noted.

Parity legislation should also “require the disclosure of performance results, not just reimbursement for any service provided,” the report said.

“Without some form of accountability, mental health parity risks turning into a blank check for mediocre treatment-as-usual. Parity legislation should include a requirement to use at least some of the measurements that have been developed by the Substance Abuse and Mental Health Services Administration,” such as its Mental Health Consumer-Oriented Report Card.

Rep. Patrick Kennedy (D-R.I.), chief sponsor of a parity bill in the House of Representatives, said that although accountable mental health care is a laudable goal, Parity Plus is not the way to go about achieving it. “If we are to ever rid the prejudice associated with this country's mental health policy, we cannot at the same time require some kind of higher standard of accountability for mental health care,” he said at a PPI forum on Parity Plus. “Holding mental health to a higher standard in order to get the same coverage just perpetuates the stigma.”

Nicholas Meyers, director of government relations at the American Psychiatric Association, in Arlington, Va., agreed. “We appreciate the interest of PPI in the parity issue, but framing and conditioning approval of parity on a range of performance initiatives is both a very dubious political strategy and perpetuates the stigma,” he said. “It's an assumption at the get-go that the only way mental health parity should be approved is if strict performance measures are imposed.”

Furthermore, performance measures are still in the early stages of development, especially in the area of “pay-for-performance” programs, Mr. Meyers continued. For example, “There are a whole host of technical issues: Who owns the information that's being reported? Who has access to it?” he said.

Still, PPI's Mr. Kendall thinks the Parity Plus proposal helps to advance the mental health care debate in one other way: It puts some of the onus for improvement squarely on the managed care plans. “If you have accountability measures, that's another way to hold managed care plans accountable for delivering quality care,” he said. “It's a tool slowly but surely consumer and provider groups are coming around to.”

Sometimes, being equal is just not enough–at least, that's what the Progressive Policy Institute says.

A new paper from the institute, a liberal Washington think tank, suggests that rather than aiming for simple dollar-for-dollar parity with physical health benefits, advocates for mental health parity should insist that mental health providers be held accountable for delivering high-quality, cost-effective services.

Some people in the business community are intrigued by this idea, noted David Kendall, senior fellow for health policy at the institute. “Employers see themselves as leaders in the outcomes disclosure field, and their argument has been all along that parity shouldn't mean unlimited entitlement to [mental health] services,” he said. “So if we can find ways to discipline the demand side with outcomes [data], I think that may help break the deadlock on parity.” One reason the Progressive Policy Institute (PPI) published the paper is that President Bush has “dropped the ball” on reforming the mental health system, even though he himself called for such reforms about 4 years ago, Mr. Kendall said.

In the report, PPI notes that enhanced parity “would bring together a wave of cutting-edge reforms–some proposed, some already proven–that aim to promote effective treatments and tangible results, often reinforced by pay-for-performance or other incentives.”

One example would be Assertive Community Treatment (ACT), in which mobile interdisciplinary teams give 24-hour assistance to hard-to-reach mentally ill patients. “When states fail to adopt such practices, the cost of preventable hospitalization soars,” the report noted.

Parity legislation should also “require the disclosure of performance results, not just reimbursement for any service provided,” the report said.

“Without some form of accountability, mental health parity risks turning into a blank check for mediocre treatment-as-usual. Parity legislation should include a requirement to use at least some of the measurements that have been developed by the Substance Abuse and Mental Health Services Administration,” such as its Mental Health Consumer-Oriented Report Card.

Rep. Patrick Kennedy (D-R.I.), chief sponsor of a parity bill in the House of Representatives, said that although accountable mental health care is a laudable goal, Parity Plus is not the way to go about achieving it. “If we are to ever rid the prejudice associated with this country's mental health policy, we cannot at the same time require some kind of higher standard of accountability for mental health care,” he said at a PPI forum on Parity Plus. “Holding mental health to a higher standard in order to get the same coverage just perpetuates the stigma.”

Nicholas Meyers, director of government relations at the American Psychiatric Association, in Arlington, Va., agreed. “We appreciate the interest of PPI in the parity issue, but framing and conditioning approval of parity on a range of performance initiatives is both a very dubious political strategy and perpetuates the stigma,” he said. “It's an assumption at the get-go that the only way mental health parity should be approved is if strict performance measures are imposed.”

Furthermore, performance measures are still in the early stages of development, especially in the area of “pay-for-performance” programs, Mr. Meyers continued. For example, “There are a whole host of technical issues: Who owns the information that's being reported? Who has access to it?” he said.

Still, PPI's Mr. Kendall thinks the Parity Plus proposal helps to advance the mental health care debate in one other way: It puts some of the onus for improvement squarely on the managed care plans. “If you have accountability measures, that's another way to hold managed care plans accountable for delivering quality care,” he said. “It's a tool slowly but surely consumer and provider groups are coming around to.”

Sometimes, being equal is just not enough–at least, that's what the Progressive Policy Institute says.

A new paper from the institute, a liberal Washington think tank, suggests that rather than aiming for simple dollar-for-dollar parity with physical health benefits, advocates for mental health parity should insist that mental health providers be held accountable for delivering high-quality, cost-effective services.

Some people in the business community are intrigued by this idea, noted David Kendall, senior fellow for health policy at the institute. “Employers see themselves as leaders in the outcomes disclosure field, and their argument has been all along that parity shouldn't mean unlimited entitlement to [mental health] services,” he said. “So if we can find ways to discipline the demand side with outcomes [data], I think that may help break the deadlock on parity.” One reason the Progressive Policy Institute (PPI) published the paper is that President Bush has “dropped the ball” on reforming the mental health system, even though he himself called for such reforms about 4 years ago, Mr. Kendall said.

In the report, PPI notes that enhanced parity “would bring together a wave of cutting-edge reforms–some proposed, some already proven–that aim to promote effective treatments and tangible results, often reinforced by pay-for-performance or other incentives.”

One example would be Assertive Community Treatment (ACT), in which mobile interdisciplinary teams give 24-hour assistance to hard-to-reach mentally ill patients. “When states fail to adopt such practices, the cost of preventable hospitalization soars,” the report noted.

Parity legislation should also “require the disclosure of performance results, not just reimbursement for any service provided,” the report said.

“Without some form of accountability, mental health parity risks turning into a blank check for mediocre treatment-as-usual. Parity legislation should include a requirement to use at least some of the measurements that have been developed by the Substance Abuse and Mental Health Services Administration,” such as its Mental Health Consumer-Oriented Report Card.

Rep. Patrick Kennedy (D-R.I.), chief sponsor of a parity bill in the House of Representatives, said that although accountable mental health care is a laudable goal, Parity Plus is not the way to go about achieving it. “If we are to ever rid the prejudice associated with this country's mental health policy, we cannot at the same time require some kind of higher standard of accountability for mental health care,” he said at a PPI forum on Parity Plus. “Holding mental health to a higher standard in order to get the same coverage just perpetuates the stigma.”

Nicholas Meyers, director of government relations at the American Psychiatric Association, in Arlington, Va., agreed. “We appreciate the interest of PPI in the parity issue, but framing and conditioning approval of parity on a range of performance initiatives is both a very dubious political strategy and perpetuates the stigma,” he said. “It's an assumption at the get-go that the only way mental health parity should be approved is if strict performance measures are imposed.”

Furthermore, performance measures are still in the early stages of development, especially in the area of “pay-for-performance” programs, Mr. Meyers continued. For example, “There are a whole host of technical issues: Who owns the information that's being reported? Who has access to it?” he said.

Still, PPI's Mr. Kendall thinks the Parity Plus proposal helps to advance the mental health care debate in one other way: It puts some of the onus for improvement squarely on the managed care plans. “If you have accountability measures, that's another way to hold managed care plans accountable for delivering quality care,” he said. “It's a tool slowly but surely consumer and provider groups are coming around to.”

Hello, October–goodbye, paper Medicare claims.

Oct. 1 marks the date that physicians and other providers may no longer submit any paper Medicare claims; electronically filed claims not in compliance with federal regulations are also prohibited.

The rules are part of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). After Oct. 1, paper claims will not be allowed, and all electronic claims “that do not meet standards required by [HIPAA] will be returned to the filer for re-submission as compliant claims,” the Centers for Medicare and Medicaid Services (CMS) announced in a statement. “Noncompliant claims will not be processed.”

The only groups that will be permitted to continue submitting paper claims are physician practices with fewer than 10 full-time employees and institutions with fewer than 25 full-time employees, according to a CMS spokesman.

As of June, only about 0.5% of Medicare fee-for-service providers were submitting noncompliant claims, CMS said.

However, that figure is a little misleading, according to Rob Tennant, senior policy advisor at the Medical Group Management Association.

“That doesn't mean [all] practices are submitting electronically; they're just getting claims to CMS electronically,” he said. “Lots of times providers will utilize a clearinghouse” that takes the providers' paper claims and transfers them into an electronic format for submission.

In addition, the CMS statement mentioned only compliance rates for claim forms, Mr. Tennant noted. Compliance in other electronic transactions, such as remittances, eligibility status inquiries, and claims inquiries, is much lower, he said. “These are all very important transactions from providers, and we're hearing from health plans and others that providers aren't there yet.”

As far as claims are concerned, most family physicians will be prepared to meet the Oct. 1 deadline–even the rural ones, according to David C. Kibbe, M.D., director of the American Academy of Family Physicians' Center for Health Information Technology.

The AAFP's membership surveys on information technology (IT) have found that more than 90% of its members have computers in offices for billing purposes, and 25% have electronic health records, Dr. Kibbe said. Those figures haven't been broken down with respect to rural versus urban, yet “people make the assumption that because a practice is small or rural, it's unlikely to use IT. That's just not true.”

Dr. Kibbe said recent visits to practices in North Carolina and Tennessee indicate that rural practices aren't behind the curve. “My staff and I made over 25 appearances at state chapter events, everywhere from Alaska to Hawaii, including some very rural areas, and we got a good feeling about what's happening in rural practices.”

Although many practices have found ways to comply with the HIPAA electronic claims submission regulation, the requirements do create a hardship for physicians in rural areas that aren't affiliated with large health care groups or hospitals that have the financial resources for a health IT system, Bernard Proy, M.D., a family physician in Corry, Pa., said. “If you're just a small rural practice, you don't have access to that kind of capital or technology.”

Establishing an electronic health record on your own can get costly–up to $50,000 to $100,000, he continued. “No one's paying to have that available, and that creates a difficulty.”

Dr. Proy's office does have an electronic billing system in place, but he's deferring from getting a full blown electronic health record system until he sees what kind of support the federal government will be offering.

Several bills in the Senate propose technology initiatives: Sen. Edward Kennedy (D-Mass.), Sen. Hillary Clinton (D-N.Y.) and Senate Majority Leader Bill Frist (R-Tenn.) have introduced legislation that would offer grants to financially needy providers to enhance their use of health IT, as well as financial assistance to establish regional health IT networks.

Another bipartisan bill from Sen. Debbie Stabenow (D-Mich.) and Sen. Olympia Snowe (R-Maine) would spur the use of new information technologies to reduce paperwork costs and improve patient care.

Until that legislation is approved, however, another solution might be to tap into existing resources, Dr. Proy said. For example, federal government agencies such as the Department of Veterans Affairs already have an electronic health record in place.

“Individual physicians could tap into that system–which has already been paid for with tax dollars,” he said. At press time, CMS was expected to shortly announce just such a program–a way for physicians to install a simplified version of the VA's electronic health records system at a very low cost.

Jennifer Silverman, associate editor for Practice Trends, contributed to this story.

Hello, October–goodbye, paper Medicare claims.

Oct. 1 marks the date that physicians and other providers may no longer submit any paper Medicare claims; electronically filed claims not in compliance with federal regulations are also prohibited.

The rules are part of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). After Oct. 1, paper claims will not be allowed, and all electronic claims “that do not meet standards required by [HIPAA] will be returned to the filer for re-submission as compliant claims,” the Centers for Medicare and Medicaid Services (CMS) announced in a statement. “Noncompliant claims will not be processed.”

The only groups that will be permitted to continue submitting paper claims are physician practices with fewer than 10 full-time employees and institutions with fewer than 25 full-time employees, according to a CMS spokesman.

As of June, only about 0.5% of Medicare fee-for-service providers were submitting noncompliant claims, CMS said.

However, that figure is a little misleading, according to Rob Tennant, senior policy advisor at the Medical Group Management Association.

“That doesn't mean [all] practices are submitting electronically; they're just getting claims to CMS electronically,” he said. “Lots of times providers will utilize a clearinghouse” that takes the providers' paper claims and transfers them into an electronic format for submission.

In addition, the CMS statement mentioned only compliance rates for claim forms, Mr. Tennant noted. Compliance in other electronic transactions, such as remittances, eligibility status inquiries, and claims inquiries, is much lower, he said. “These are all very important transactions from providers, and we're hearing from health plans and others that providers aren't there yet.”

As far as claims are concerned, most family physicians will be prepared to meet the Oct. 1 deadline–even the rural ones, according to David C. Kibbe, M.D., director of the American Academy of Family Physicians' Center for Health Information Technology.

The AAFP's membership surveys on information technology (IT) have found that more than 90% of its members have computers in offices for billing purposes, and 25% have electronic health records, Dr. Kibbe said. Those figures haven't been broken down with respect to rural versus urban, yet “people make the assumption that because a practice is small or rural, it's unlikely to use IT. That's just not true.”

Dr. Kibbe said recent visits to practices in North Carolina and Tennessee indicate that rural practices aren't behind the curve. “My staff and I made over 25 appearances at state chapter events, everywhere from Alaska to Hawaii, including some very rural areas, and we got a good feeling about what's happening in rural practices.”

Although many practices have found ways to comply with the HIPAA electronic claims submission regulation, the requirements do create a hardship for physicians in rural areas that aren't affiliated with large health care groups or hospitals that have the financial resources for a health IT system, Bernard Proy, M.D., a family physician in Corry, Pa., said. “If you're just a small rural practice, you don't have access to that kind of capital or technology.”

Establishing an electronic health record on your own can get costly–up to $50,000 to $100,000, he continued. “No one's paying to have that available, and that creates a difficulty.”

Dr. Proy's office does have an electronic billing system in place, but he's deferring from getting a full blown electronic health record system until he sees what kind of support the federal government will be offering.

Several bills in the Senate propose technology initiatives: Sen. Edward Kennedy (D-Mass.), Sen. Hillary Clinton (D-N.Y.) and Senate Majority Leader Bill Frist (R-Tenn.) have introduced legislation that would offer grants to financially needy providers to enhance their use of health IT, as well as financial assistance to establish regional health IT networks.

Another bipartisan bill from Sen. Debbie Stabenow (D-Mich.) and Sen. Olympia Snowe (R-Maine) would spur the use of new information technologies to reduce paperwork costs and improve patient care.

Until that legislation is approved, however, another solution might be to tap into existing resources, Dr. Proy said. For example, federal government agencies such as the Department of Veterans Affairs already have an electronic health record in place.

“Individual physicians could tap into that system–which has already been paid for with tax dollars,” he said. At press time, CMS was expected to shortly announce just such a program–a way for physicians to install a simplified version of the VA's electronic health records system at a very low cost.

Jennifer Silverman, associate editor for Practice Trends, contributed to this story.

Hello, October–goodbye, paper Medicare claims.

Oct. 1 marks the date that physicians and other providers may no longer submit any paper Medicare claims; electronically filed claims not in compliance with federal regulations are also prohibited.

The rules are part of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). After Oct. 1, paper claims will not be allowed, and all electronic claims “that do not meet standards required by [HIPAA] will be returned to the filer for re-submission as compliant claims,” the Centers for Medicare and Medicaid Services (CMS) announced in a statement. “Noncompliant claims will not be processed.”

The only groups that will be permitted to continue submitting paper claims are physician practices with fewer than 10 full-time employees and institutions with fewer than 25 full-time employees, according to a CMS spokesman.

As of June, only about 0.5% of Medicare fee-for-service providers were submitting noncompliant claims, CMS said.

However, that figure is a little misleading, according to Rob Tennant, senior policy advisor at the Medical Group Management Association.

“That doesn't mean [all] practices are submitting electronically; they're just getting claims to CMS electronically,” he said. “Lots of times providers will utilize a clearinghouse” that takes the providers' paper claims and transfers them into an electronic format for submission.

In addition, the CMS statement mentioned only compliance rates for claim forms, Mr. Tennant noted. Compliance in other electronic transactions, such as remittances, eligibility status inquiries, and claims inquiries, is much lower, he said. “These are all very important transactions from providers, and we're hearing from health plans and others that providers aren't there yet.”

As far as claims are concerned, most family physicians will be prepared to meet the Oct. 1 deadline–even the rural ones, according to David C. Kibbe, M.D., director of the American Academy of Family Physicians' Center for Health Information Technology.

The AAFP's membership surveys on information technology (IT) have found that more than 90% of its members have computers in offices for billing purposes, and 25% have electronic health records, Dr. Kibbe said. Those figures haven't been broken down with respect to rural versus urban, yet “people make the assumption that because a practice is small or rural, it's unlikely to use IT. That's just not true.”

Dr. Kibbe said recent visits to practices in North Carolina and Tennessee indicate that rural practices aren't behind the curve. “My staff and I made over 25 appearances at state chapter events, everywhere from Alaska to Hawaii, including some very rural areas, and we got a good feeling about what's happening in rural practices.”

Although many practices have found ways to comply with the HIPAA electronic claims submission regulation, the requirements do create a hardship for physicians in rural areas that aren't affiliated with large health care groups or hospitals that have the financial resources for a health IT system, Bernard Proy, M.D., a family physician in Corry, Pa., said. “If you're just a small rural practice, you don't have access to that kind of capital or technology.”

Establishing an electronic health record on your own can get costly–up to $50,000 to $100,000, he continued. “No one's paying to have that available, and that creates a difficulty.”

Dr. Proy's office does have an electronic billing system in place, but he's deferring from getting a full blown electronic health record system until he sees what kind of support the federal government will be offering.

Several bills in the Senate propose technology initiatives: Sen. Edward Kennedy (D-Mass.), Sen. Hillary Clinton (D-N.Y.) and Senate Majority Leader Bill Frist (R-Tenn.) have introduced legislation that would offer grants to financially needy providers to enhance their use of health IT, as well as financial assistance to establish regional health IT networks.

Another bipartisan bill from Sen. Debbie Stabenow (D-Mich.) and Sen. Olympia Snowe (R-Maine) would spur the use of new information technologies to reduce paperwork costs and improve patient care.

Until that legislation is approved, however, another solution might be to tap into existing resources, Dr. Proy said. For example, federal government agencies such as the Department of Veterans Affairs already have an electronic health record in place.

“Individual physicians could tap into that system–which has already been paid for with tax dollars,” he said. At press time, CMS was expected to shortly announce just such a program–a way for physicians to install a simplified version of the VA's electronic health records system at a very low cost.

Jennifer Silverman, associate editor for Practice Trends, contributed to this story.

On April 1, CMS began covering an expanded array of chiropractic services provided to Medicare beneficiaries in Maine, New Mexico, and parts of Illinois, Iowa, and Virginia.

Under the 2-year demonstration project, newly covered services include extraspinal manipulation, x-rays, EMG and nerve conduction studies, clinical lab tests, electrotherapy, ultrasound therapy, and evaluation and management services. Chiropractors also will be allowed to order MRIs, CT scans, and clinical lab services and to make referrals for physical therapy. Currently, Medicare chiropractic coverage is limited to manual spinal manipulation and therapy to treat neuromusculoskeletal conditions.

“By expanding chiropractic coverage in this demonstration, we are reducing out-of-pocket costs for seniors who visit chiropractors, and we will learn whether paying chiropractors for delivering these additional services can help improve health outcomes and keep Medicare costs down,” said CMS Administrator Mark B. McClellan, M.D.

On April 1, CMS began covering an expanded array of chiropractic services provided to Medicare beneficiaries in Maine, New Mexico, and parts of Illinois, Iowa, and Virginia.

Under the 2-year demonstration project, newly covered services include extraspinal manipulation, x-rays, EMG and nerve conduction studies, clinical lab tests, electrotherapy, ultrasound therapy, and evaluation and management services. Chiropractors also will be allowed to order MRIs, CT scans, and clinical lab services and to make referrals for physical therapy. Currently, Medicare chiropractic coverage is limited to manual spinal manipulation and therapy to treat neuromusculoskeletal conditions.

“By expanding chiropractic coverage in this demonstration, we are reducing out-of-pocket costs for seniors who visit chiropractors, and we will learn whether paying chiropractors for delivering these additional services can help improve health outcomes and keep Medicare costs down,” said CMS Administrator Mark B. McClellan, M.D.

On April 1, CMS began covering an expanded array of chiropractic services provided to Medicare beneficiaries in Maine, New Mexico, and parts of Illinois, Iowa, and Virginia.

Under the 2-year demonstration project, newly covered services include extraspinal manipulation, x-rays, EMG and nerve conduction studies, clinical lab tests, electrotherapy, ultrasound therapy, and evaluation and management services. Chiropractors also will be allowed to order MRIs, CT scans, and clinical lab services and to make referrals for physical therapy. Currently, Medicare chiropractic coverage is limited to manual spinal manipulation and therapy to treat neuromusculoskeletal conditions.

“By expanding chiropractic coverage in this demonstration, we are reducing out-of-pocket costs for seniors who visit chiropractors, and we will learn whether paying chiropractors for delivering these additional services can help improve health outcomes and keep Medicare costs down,” said CMS Administrator Mark B. McClellan, M.D.

WASHINGTON — It doesn't surprise most physicians to hear that populations in certain cities—especially cities with a high percentage of minorities—have higher rates of chronic disease.

But new work in small-area analysis can help pinpoint exactly which areas of a city suffer from a higher disease burden, Robert Bonow, M.D., said at a meeting sponsored by the Alliance of Minority Medical Associations, the National Association for Equal Opportunity in Higher Education, and the Department of Health and Human Services.

For example, Dallas turns out to be a complicated area when it comes to cardiovascular mortality, said Dr. Bonow, chief of the division of cardiology at Northwestern Memorial Hospital, in Evanston, Ill. He and Sean Cleary, Ph.D., associate professor of epidemiology and statistics at George Washington University, performed small-area analysis on the city using data from state Vital Statistics offices and the 2000 U.S. Census.

Data were based on the U.S. Postal Service's definition of a “minority Zip code” consisting of 50% or greater African American, Native American, Hispanic, Asian, or Pacific Islander residents.

The data showed that there are often disparities in mortality from cardiovascular disease not only between minority and nonminority populations, but also within minority Zip code neighborhoods themselves.

The question is, Why would that be true? “Is one [minority] area more Hispanic, and one area more African American?” Dr. Bonow asked. Of course, there could be other factors driving differences in mortality, such as differing opportunities for exercise, lesser or greater availability of fresh fruits and vegetables, or more fast-food restaurants in one community than in another, he added.

Dr. Bonow noted that the maps produced by small-area analysis could be a useful lobbying tool for health care advocates. “Imagine walking into [a congressman's office] with a map showing that minority areas in his district have very high rates of cardiovascular disease,” he said. And if the analysis also found that there were very few neighborhood health centers in the area, advocates could argue that services are not being offered where they are needed.

Dr. Bonow and his colleagues hope to eventually get data for all U.S. Zip codes. “The results hopefully will inform community-based intervention and treatment programs targeting higher-risk uninsured areas,” Dr. Bonow said.

WASHINGTON — It doesn't surprise most physicians to hear that populations in certain cities—especially cities with a high percentage of minorities—have higher rates of chronic disease.

But new work in small-area analysis can help pinpoint exactly which areas of a city suffer from a higher disease burden, Robert Bonow, M.D., said at a meeting sponsored by the Alliance of Minority Medical Associations, the National Association for Equal Opportunity in Higher Education, and the Department of Health and Human Services.

For example, Dallas turns out to be a complicated area when it comes to cardiovascular mortality, said Dr. Bonow, chief of the division of cardiology at Northwestern Memorial Hospital, in Evanston, Ill. He and Sean Cleary, Ph.D., associate professor of epidemiology and statistics at George Washington University, performed small-area analysis on the city using data from state Vital Statistics offices and the 2000 U.S. Census.

Data were based on the U.S. Postal Service's definition of a “minority Zip code” consisting of 50% or greater African American, Native American, Hispanic, Asian, or Pacific Islander residents.

The data showed that there are often disparities in mortality from cardiovascular disease not only between minority and nonminority populations, but also within minority Zip code neighborhoods themselves.

The question is, Why would that be true? “Is one [minority] area more Hispanic, and one area more African American?” Dr. Bonow asked. Of course, there could be other factors driving differences in mortality, such as differing opportunities for exercise, lesser or greater availability of fresh fruits and vegetables, or more fast-food restaurants in one community than in another, he added.

Dr. Bonow noted that the maps produced by small-area analysis could be a useful lobbying tool for health care advocates. “Imagine walking into [a congressman's office] with a map showing that minority areas in his district have very high rates of cardiovascular disease,” he said. And if the analysis also found that there were very few neighborhood health centers in the area, advocates could argue that services are not being offered where they are needed.

Dr. Bonow and his colleagues hope to eventually get data for all U.S. Zip codes. “The results hopefully will inform community-based intervention and treatment programs targeting higher-risk uninsured areas,” Dr. Bonow said.

WASHINGTON — It doesn't surprise most physicians to hear that populations in certain cities—especially cities with a high percentage of minorities—have higher rates of chronic disease.

But new work in small-area analysis can help pinpoint exactly which areas of a city suffer from a higher disease burden, Robert Bonow, M.D., said at a meeting sponsored by the Alliance of Minority Medical Associations, the National Association for Equal Opportunity in Higher Education, and the Department of Health and Human Services.

For example, Dallas turns out to be a complicated area when it comes to cardiovascular mortality, said Dr. Bonow, chief of the division of cardiology at Northwestern Memorial Hospital, in Evanston, Ill. He and Sean Cleary, Ph.D., associate professor of epidemiology and statistics at George Washington University, performed small-area analysis on the city using data from state Vital Statistics offices and the 2000 U.S. Census.

Data were based on the U.S. Postal Service's definition of a “minority Zip code” consisting of 50% or greater African American, Native American, Hispanic, Asian, or Pacific Islander residents.

The data showed that there are often disparities in mortality from cardiovascular disease not only between minority and nonminority populations, but also within minority Zip code neighborhoods themselves.

The question is, Why would that be true? “Is one [minority] area more Hispanic, and one area more African American?” Dr. Bonow asked. Of course, there could be other factors driving differences in mortality, such as differing opportunities for exercise, lesser or greater availability of fresh fruits and vegetables, or more fast-food restaurants in one community than in another, he added.

Dr. Bonow noted that the maps produced by small-area analysis could be a useful lobbying tool for health care advocates. “Imagine walking into [a congressman's office] with a map showing that minority areas in his district have very high rates of cardiovascular disease,” he said. And if the analysis also found that there were very few neighborhood health centers in the area, advocates could argue that services are not being offered where they are needed.

Dr. Bonow and his colleagues hope to eventually get data for all U.S. Zip codes. “The results hopefully will inform community-based intervention and treatment programs targeting higher-risk uninsured areas,” Dr. Bonow said.