Medical Device Daily Washington Editor

Privacy has long served as a roadblock on the information superhighway, and the failure of policymakers to resolve this dilemma is again back in the news with the announcement of a lawsuit filed against the federal government over a key provision in the American Reinvestment and Recovery Act of 2009 (ARRA).

The lawsuit, filed on June 25 in the Southern District Court of the State of New York by Beatrice Heghmann of Durham, New Hampshire, names Secretary of Health and Human Services Kathleen Sebelius and two others as defendants and alleges that regulations promulgated under ARRA would supersede provisions in the Health Insurance Portability and Accountability Act of 1996 in that the Secretary of Health and Human Services would determine what constitutes a "minimum necessary" disclosure of information in an electronic health record (EHR). The minimum disclosure requirement in HIPAA is left to the doctor to decide on behalf of patients.

According to HealthDataManagement.com, the lawsuit alleges that provisions in ARRA that require HHS to draft rules for de-identification of EHRs gives the Secretary of HHS the ability "to totally vitiate the privacy provisions under HIPAA," and that the disclosure of patient information by providers to HHS means that such information "will be made available ... to an unknown and potentially unlimited number of persons." The suit also names acting CMS administrator Charlene Frizzera and Nancy Ann DeParle, the director of the White House Office of Health Reform.

The privacy issue has dogged legislators for several years as Congress has thrown one HIT bill after another against the proverbial wall, only to see privacy considerations, among others, shoot down such legislation. Such was the case with pending legislation last year during a hearing in the health subcommittee of the House Energy and Commerce Committee (Medical Device Daily, June 6, 2008).

However, clinical researchers are also growing weary of roadblocks to the formation of exhaustive epidemiological data sets. The Association of Academic Health Centers (Washington) went on record last year arguing that privacy considerations are forcing clinical researchers to spend inordinate amounts of time dealing with patient questions about privacy (MDD, June 20, 2008), thus imposing drag on the already-expensive and time-consuming clinical trial process.

The idea of crafting EHRs for all Americans is an ambition that dates back to the administration of President George W. Bush, which set the date of achievement for 2014, a timeline the Obama administration apparently hews to. The lawsuit puts the majority of the effort at risk, given that the litigant seeks to prevent the government from forming EHRs for all those who are not covered by Medicare and Medicaid. The financial risk amounts to $20 billion, the amount set aside in ARRA for HIT.

CMS continues to tweak OPPS

The Centers for Medicare & Medicaid Services is still forging ahead with its revamp of the prospective payment system for outpatient services, announcing last week that hospitals will be allowed to bill Medicare for pulmonary and intensive cardiac rehabilitation services provided on an outpatient basis starting Jan. 1 next year.

CMS notes in the July 1 announcement that the proposed fee schedule, set up in response to provisions of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), helps to maintain a trend to providing care in the most appropriate setting. Acting CMS administrator Charlene Frizzera said in the statement that the agency "is continuing to strengthen the connection between Medicare payment and efficient, high-quality care." However, neither the statement nor the accompanying fact sheet lists the procedures proposed for outpatient care. The agency will take comments until Aug. 13 and expects to issue a final payment schedule by Nov. 1.

CMS is also contemplating allowing other healthcare professionals to take up some of the work that is currently only billable when performed by physicians. According to the July 1 fact sheet, the agency "is proposing that non-physician practitioners, specifically physician assistants, nurse practitioners, certified nurse specialists, and certified nurse-midwives, may directly supervise all hospital outpatient therapeutic services that they are able to personally perform within their state scope of practice and hospital-granted privileges," a departure from previous policy and one that may help take some of the pressure off what is described as a primary physician shortage. The agency is not proposing to add any quality measures to the existing set of measures under the outpatient quality reporting data set, but is floating the idea of phasing in validation requirements for "chart-abstracted data," although CMS indicates that such a requirement "will not have any impact on outpatient department payments in [calendar year] 2011."

The Federation of American Hospitals was unable to offer comment for the record.

OIG defers to gainsharing arrangement

The Office of Inspector General (OIG) at the Department of Health and Human Services rendered an opinion last week that it would not oppose a gainsharing arrangement between a hospital and three provider groups even though the arrangement was already in force at the time of OIG's review.

According to the June 23 decision memo, posted at the OIG web site a week later, the arrangement between the hospital and the three provider groups, a cardiology practice, a vascular surgical group, and an interventional radiology practice, provided the physician groups with half the savings generated by the use of standardized supplies and equipment, which includes catheters, guidewires, pacemakers and defibrillators. A third-party administrator is tasked with tracking outcomes against a database provided by the American College of Cardiology (Washington) in order to ensure that the arrangement does not affect outcomes.

Although none of the agreed-upon savings had yet been disbursed to the physician practices, OIG expressed concern about the possibility of improper payments and impact on care. The decision memo nonetheless states that because the cost-saving actions were clearly identified and because the hospital was able to offer data showing that care was not compromised by the decision, OIG opted not to stand in the way of the arrangement. The arrangement also placed no restrictions on the range of devices and supplies available to physicians during procedures and, according to OIG, "the financial incentives under the arrangement were reasonably limited in duration and amount."