Insurance Fraud & Big PhRMA

The problem of insurance fraud hits many segments of health care.  Before I moved to the west I was a witness in a large Medicare fraud case.  After moving west I was again a witness in several insurance fraud cases involving private insurance and Medicaid.

What struck me as curious was how Washington state dealt with one case involving Medicaid fraud and risk of grave harm to patients as well as a massive effort to fabricate medical records.  The nurse that led all these questionable activities was never investigated.  This was political as she was an inside member of WSNA and therefore could do no wrong. 


The accessory crime was failure on the part of the state's Medicaid fraud unit to not investigate this person who is still in practice in Whatcom County.  The Nursing QA office also failed to investigate and prosecute her while attacking the complainant as part of the cover up.


The clear violation of basic due process rights was staggering.


Lately I have another Medicare issue related to something similar.  I'm getting ready to contact the authorities in what seem to be like the case in this article.  Pay-offs for prescribing.


Our members of Congress, gladly raking in money from the pharmaceutical industry, seem to keep attacking the wrong folks too. 


Nero fiddles while Rome burns.

Massive health insurance fraud alleged in Bristol-Myers Squibb case

Thousands of California doctors were bribed as the company dangled illegal kickbacks and L.A. Laker 'happy hours,' California officials allege. The state has joined a previously sealed whistleblower lawsuit against the company.

By Duke Helfand and Marc Lifsher, Los Angeles Times
March 18, 2011

Pharmaceutical giant Bristol-Myers Squibb bribed thousands of California doctors and pharmacists to promote its drugs, using illegal kickbacks, lavish gifts and "happy hours" with the Los Angeles Lakers to expand its market share in the state, state officials said.

California Insurance Commissioner Dave Jones announced Friday that his office had joined a previously sealed whistleblower lawsuit against the company, calling it the largest health insurance fraud case ever pursued by a California state agency.

Two of the three whistleblowers in the case are former Lakers player Lucius Allen and his wife, Eve, who worked for the drug company as employees and provided access to the basketball team, whose players participated in "Lakers Dream Camps" set up by the drug company for doctors and their family members, the lawsuit said. The lawsuit was filed in 2007 but was sealed until the state joined the case recently.

New York-based Bristol-Myers Squibb issued a statement: "Bristol-Myers Squibb believes this lawsuit has no merit and the company will defend itself vigorously."

The case is the latest major legal action against Bristol-Myers Squibb over allegations of fraud. The pharmaceutical giant paid $515 million in 2007 to settle allegations by the federal government and other states that it used a kickback scheme to defraud the Medicare and Medicaid insurance programs, officials said.

The California lawsuit alleges that Bristol-Myers Squibb targeted the private insurance industry, making thousands of payments to "high prescribing doctors" who wrote prescriptions for its well-known drugs, including Plavix, Abilify and Pravachol.

Jones said that insurance companies in California had spent more than $3.5 billion to cover the costs of the drugs Bristol-Myers Squibb sought to promote through its kickback scheme.

"We need to be sure that doctors are prescribing drugs because those drugs are best for their patients and not because a pharmaceutical company provided doctors with trips and kickbacks," Jones said. "These illegal practices drive up the cost of health insurance for millions of Californians."

duke.helfand@latimes.com     marc.lifsher@latimes.com

Copyright © 2011, Los Angeles Times

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Posted in: Bristol-Myers Squibb,first natural health news,first natural news,insurance fraud,Medicaid,Washington DOH,WSNA

Big Insurance Moves in on Medicaid

• An excerpt, DECEMBER 29, 2010

Insurers Bid for State Medicaid Plans

BY AVERY JOHNSON

Health insurers are preparing to capitalize on $40 billion of new opportunities to run privately managed Medicaid plans for the states, which would position insurers to benefit from the health overhaul's expansion of Medicaid in 2014.

Medicaid, the state and federal program for the poor, has become a growth area for big insurers such as UnitedHealth Group Inc. and more specialized plans such as Molina Healthcare Inc. Texas and Georgia will solicit new contracts for their private Medicaid plans early next year, while California, Florida and others are likely to meaningfully expand their programs, companies and states have said.

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Posted in: Big Insurance,health insurance reform,Medicaid

Saving Lives and Saving Money

The following is a quote excerpted from a Public Citizen report that looked at the US health crisis.  As we move to the unfolding of health insurance reform in 2011 it is well worth everyone's attention to the issues addressed in this post.

"...the country is in a patient safety crisis, and that medical professionals, lawmakers and regulators must do significantly more to avert it.
The 1999 landmark report, “To Err is Human,” dropped the first bombshell, reporting that between 44,000 and 98,000 Americans die in hospitals each year from medical mistakes, costing an estimated $17 billion to $29 billion annually. HHS’ new finding that medical mistakes kill 15,000 Medicare patients a month equates to 180,000 Medicare deaths per year - more than the IOM’s estimate, which attempted to cover all patients in the United States. That means that the annual death toll in this country caused by mistakes in hospitals is well over 250,000 deaths a year! But perhaps the most startling finding by HHS is that a significant number of patients suffered injuries or died needlessly, as 44 percent of the medical errors were preventable."

One of my clients recently saw the writing on the wall when he went for his regular lab work, as he is an organ transplant recipient. transplant.  The lab removed many of the tests on his doctor's order, and he will not be able to get them routinely because of program changes.

As this moves further along we see that the "advance care planning" portion is in a rule from US Department of
Health & Human Services, Centers for Medicare & Medicaid (CMS) here:
http://www.ofr.gov/OFRUpload/OFRData/2010-27969_PI.pdf
[NOTE: link went inactive following 11/29. As of 12/1 the document is available at http://tinyurl.com/3akk88e

SOURCE: Just when you thought the American people had dodged the death panel bullet (Section 1233 of the House bill), think again. Last Monday, November 29, 2010, /The Federal Register/ (page 73406) published a new funding rule for "voluntary" advance care planning consultations that changes US Department of Health and Human Services regulation pertaining to Medicare and Medicaid patients.

The new regulation states that advanced care planning consultations will now be offered (and funded) as part of the initial wellness visit for medicare patients and during all subsequent annual visits.

The Federal Register provides a uniform system for making available to the public regulations and legal notices issued by Federal agencies. Agency proclamations having general and legal effect are required to be published by act of Congress.

Has there been any media attention to this important change in health care coverage for all those receiving medicare and medicaid services" You will recall the uproar about death panels, but this week funding for these consultation sessions became part of general government regulations without fanfare.

Ione Whitlock is Chief of Research at LifeTree. On our current homepage she discusses these new Federal Regulations. Also posted there is her new essay titled "Heads up: Section 1233 again."

Ione discusses Congressman Earl Blumenauer's bill -- HR 5795 -- which was introduced this summer after passage of the health care bill, and two matching bills which were introduced in 2009 by Senator Rockefeller and Congressman Blumenauer. All these bills seek grants for programs to expand or enhance existing state programs for orders regarding life sustaining treatment (POLST).

One of the main goals of this legislation is to fully implement the POLST form into our health care system. POLST stands for Physician's Orders for Life Sustaining Treatement. It comes in many flavors including MOST, MOLST, POST and TPOPP, depending on the location.

Government funds will be used to educate "providers" who will work with the patients, their families and surrogates in filling out the POLST forms. They will learn the so-called "best practices" for discussing end-of-life care with dying patients and their loved ones. These funds will ensure that the POLST forms are recorded electronically.

Note: For more information on the history and implications of POLST, see "POLST: 'Self-Determination' or Imposed Death" http://www.lifetree.org/resources/polstInfo.html in LifeTree's Resources section.

New CMS Rule Establishes "Voluntary" End-of-Life Consultations

Americans weary of "voluntary" TSA pat-downs and full-body scans will be delighted to learn that "voluntary" end-of-life consultations are in their future as well.

The US Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS) has made it official: The "advance care planning" funding that would incentivize "voluntary" end-of-life counseling will be included in Obamacare. This funding was part of what was in the controversial "Section 1233" earlier this year. See more
extensive discussion in our alert below, posted last week.

The new CMS rule as printed in the Federal Register (Vol. 75, No. 228, Book 1) online at http://tinyurl.com/2wn5vz4
Discussion on "voluntary advance care planning" begins on page 73406.

posted 12/1/10 by IW
------------------------------------------------------------------------
Heads up: Section 1233 again.

Last March Nancy Pelosi told the American people that she and her colleagues "have to pass the bill so you can find out what's in it." Americans had already seen one part of the proposed healthcare legislation, and didn't like what they saw: The infamous Section 1233 of HR 3200 would have federalized "voluntary" end-of-life "consultations."
The section was eventually dropped.

It appears that Section 1233 is still alive and kicking.

The "advance care planning" portion is in a rule from US Department of Health & Human Services, Centers for Medicare & Medicaid (CMS) here: http://www.ofr.gov/OFRUpload/OFRData/2010-27969_PI.pdf
[NOTE: link went inactive following 11/29. As of 12/1 the document is available at http://tinyurl.com/3akk88e

The POLST part is included in pending legislation, HR 5795 "Personalize Your Care Act of 2010." See
http://tinyurl.com/24u5q37
which is a link to all the information about this bill and the actual text as a pdf at http://tinyurl.com/2a9rudq.

CMS posted the preliminary rules on Election Day; formal rules are to be published in the Federal Register on November 29. The rules include a discussion of the definition of "voluntary," although some of the more nuanced meanings of "voluntary" may have been missed (just ask any recipient of a "voluntary" TSA pat-down). The rule also includes a discussion of signature requirements for "orders" versus "requisitions" in context of diagnostic tests. The American Bar Association's Charles Sabatino, who supported Section 1233, calls the new rules "a big step forward."

Congressman Earl Blumenauer (D-OR) introduced HR 5795 this past July. It is a revised version of the legislation that he and Senator Rockefeller (D-WV) introduced last year. Blumenauer introduced HR 2911, and Rockefeller introduced S. 1150 in 2009, both titled "Advance Planning and Compassionate Care Act of 2009". Both bills included:
    * Section 211 (Advance Care Planning) was almost identical to Section 1233 of HR. 3200 " the section that was dropped from the  final bill signed in March.
    * Section 112, which would have provided funding to expand POLST.

It is Section 112 of the Rockefeller and Blumenauer bills (S 1150 and HR 2911) that is now Section 3 of HR 5795. Portability of advance directives and standards for electronic health records are also addressed in HR 5795.

Blumenauer is the congressman most often associated with POLST He is, incidentally, an advocate of legalized assisted suicide, and Rockefeller has spent decades trying to push through legislation on behalf of the organizations that evolved from the Euthanasia Society of America.

Shortly before the election, Blumenauer told a radical pro-assisted suicide group that he had reintroduced what had been known as the "death panel" legislation. He complained that Section 1233 had been dropped due to "organized opposition" from "all of the Sarah-Palin-Fox-News-tin-foil-hat" people, but "it's not stopping us from moving forward." Over the summer he had reintroduced the bill with a new name: the "Personalize Your Care Act of 2010" (HR 5795).

"Personalize" leaves the impression that this bill might put medical treatment decisions back in the hands of the individual, keeping the discussion between patient and physician. It implies that the patient might as easily "choose life" as to forgo treatment. This is pretty slick marketing, considering it is coming from the same Oregon liberals
who pushed not only assisted suicide, but rationing for "equitable distribution of resources" for "the common good." The bioethicists at Oregon Health & Science University (OHSU) who devised the "citizen parliaments" that gave Oregon its rationing scheme are some of the same bioethicists who put the fine tuning on POLST.

Blumenauer, in his remarks to the Oregon activists, went on to say that Oregon leads the way in health reform. Well, yes. Oregon health care is infamous for two things: assisted suicide, and rationing. Blumenauer's bill would impose both on the whole country.

Note: For more information on the history and implications of POLST, see "POLST: 'Self-Determination' or Imposed Death"  www.lifetree.org/resources/polstInfo.html in LifeTree's Resources section.
posted 11/24/10 by IW, revised 12/2/10 by IW

The Six Parts of the Deficit Commission's Plan for Medicare Reform Through 2020
Part #1— Reform the Medicare Sustainable Growth Rate ($26 Billion Savings)
Freezing physician pay reductions through 2013 and a one percent cut in 2014. Additionally it recommends developing a new pay formula based on care coordination and quality instead of quantity of services.
Part #2— Reform or Repeal the CLASS Act ($76 Billion Cost)
The attempt as part of the health care overhaul to address the need for residential long-term care through a voluntary insurance program is criticized as financially unsustainable under its current format.
The recommendation is for complete overhaul or repeal (the preferred option) even with a price to be paid. This is because the collection of premiums over the first five years would have provided positive cash flow.
Part #3— Medicare and Other Health Care Revisions for 2012-2020 ($316 Billion Savings)
The commission proposes the following:

• $9 billion in waste, fraud and abuse will be saved by increasing the authority and resources of the Centers for Medicare & Medicaid Services (CMS).
  
• $110 billion by introducing a simple annual deductible of $550 for Part A and Part B and 20 percent Medicare co-pays, with a cap of $7,500.
  
• $38 billion through Medigap supplemental insurance reform. Eliminating coverage for the first $500 and restricting coverage to 50 percent of the next $5,000 in cost sharing. As a stretch into dangerous political territory the commission recommends the same treatment for Tricare (military version of Medicare) and federal retirees.
  
• $49 billion from treating Medicaid drug rebates in the same way as Medicare for those eligible for both programs.
  
• $60 billion by reducing excess payments to teaching hospitals to 120 percent of the national average salary for residents.
  
• $23 billion from ceasing payment for unpaid Medicare deductibles and co-pays.
  
• $9 billion by bringing forward, by two years, plans to change reimbursements for home health providers.
  
• $18 billion by introducing a change in the Federal Employee Health Benefit program and providing a fixed subsidy. The commission also recommends evaluation of the program to determine, based on the experience with FEHB reform, whether a voucher system could work for Medicare.

Part #4— Aggressive Implementation and Expansion of Payment Reform Pilots
The commission sees opportunities to expand programs aggressively where there is evidence of cost control, without need for additional Congressional approval. Note that this expansion will not be at the cost of providing quality care.
Part #5— Eliminate Provider Carve-Outs from IPAB
This recommendation allows the Independent Payment Advisory Board (IPAB) to include provider groups, such as hospitals, within its authority to recommend changes in revised payment policies.
Part #6— Establish a Long-Term Global Budget for Total Health Care Spending
This requires establishing a total federal health care budget and limiting growth to GDP plus 1 percent with a process to review spending. It additionally requires structural reforms if the spending exceeds the targets. The commission also said that if spending continues to grow, tax benefits for employer provided health insurance should be eliminated.

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Posted in: death rate,end of life planning,health insurance reform,Medicaid,medical errors,Medicare

Health Insurance: Update on Current Issues

If you believe this is just a fluke with or without health insurance reform, be prepared for more.
Blue Shield of California is accused of overcharging for safety-net insurance
A Los Angeles woman says in a lawsuit that the health plan exceeded the state's maximum rates for policies sold to people who have lost their jobs or who have preexisting medical conditions.

By Duke Helfand, Los Angeles Times
July 8, 2010

A Los Angeles woman sued Blue Shield of California on Wednesday, accusing the nonprofit health plan of overcharging thousands of policyholders who bought safety-net insurance for people who were sick or jobless.

Amalia Lample said in her lawsuit that Blue Shield, the state's second-largest not-for-profit insurer, knowingly exceeded maximum insurance rates set by the state and falsely reported to regulators that the charges stayed within official guidelines.

Lample, 64, argued that she is owed $4,475 in excess charges she paid from 2007 to 2009. She said that more than 6,000 Blue Shield policyholders with similar coverage also were overcharged since 2001.

"This is for justice. It's not only for the money," said Lample, who decided to file her lawsuit in Los Angeles County Superior Court after reading a story in The Times about Blue Shield's rates. "It's not right what they do."

Blue Shield spokesman Tom Epstein said the San Francisco company had no immediate comment on the lawsuit, which seeks class-action status.

Blue Shield denied two refund requests by Lample, who filed a complaint with the California Department of Managed Health Care. Regulators said they could not conclude that Blue Shield had violated state law.

But Wednesday a department spokeswoman said the law's definition for calculating maximum rates was ambiguous, making it difficult to determine whether health plans were charging too much.

The department is sponsoring a bill in the Legislature to "eliminate any question" on rates insurers can charge, said the spokeswoman, Lynne Randolph.

At issue is health coverage available under the federal Health Insurance Portability and Accountability Act, or HIPAA. Insurers are required by the federal law to sell insurance to people who have lost their jobs or who would otherwise be ineligible because of preexisting medical conditions.

HIPAA policyholders maintain that Blue Shield and one of its chief competitors, Anthem Blue Cross, have substantially overcharged subscribers for several years.

Blue Shield has long maintained that its HIPAA rates comply with state guidelines.

Anthem determined that it had overcharged customers between 2006 and 2009, and agreed to issue refunds.

But one policyholder, Culver City attorney Les Greenberg, accused Anthem of returning only a fraction of what was due. Anthem had given Greenberg a $12 refund. He took the company to Small Claims Court. A judge agreed in September, awarding Greenberg more than $7,300.

Greenberg filed a lawsuit in December on behalf of another Anthem subscriber, saying the insurer owed additional refunds to more than 10,000 HIPAA policyholders. Anthem issued a statement Wednesday saying its refunds were "appropriate."

Greenberg also is representing Lample in the lawsuit filed against Blue Shield on Wednesday.

"They have gone off on a lark of their own to overcharge their subscribers," he said of the two insurers. "I would call it egregious behavior."

duke.helfand@latimes.com
latimes.com/news/la-fi-blue-shield-20100708,0,1302403.story Copyright©2010, The Los Angeles Times

And at the same time Big Insurance is taking you to the cleaners, the new "health czar" at Medicare/Medicaid wants redistribution of wealth -

You looking to boil your own blood this morning, watch this video. Donald Berwick, Obama’s recess appointment to be the administrator of the Centers for Medicare and Medicaid Services says (with a straight face) “Any health care funding plan that is just equitable civilized and humane must, must redistribute wealth from the richer among us to the poorer and the less fortunate. Excellent health care is by definition redistributional.”
http://www.thetradingreport.com/2010/07/08/your-new-healthcare-czar-we-must-redistribute-wealth/

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Posted in: Big Insurance,Blue Shield,Donald Berwick,Medicaid,Medicare,over chargeed for health insurance,pre-existing conditions,unemployed

The Importance of Being Earnest

In the Oscar Wilde play of the same name Wilde uses Lady Bracknell to embody the mind-boggling stupidity of the British aristocracy, while at the same time, he allows her to voice some of the most trenchant observations in the play.

Lady Bracknell state's “I do not approve of anything that tampers with natural ignorance. Ignorance is like a delicate exotic fruit; touch it and the bloom is gone. The whole theory of modern education is radically unsound. Fortunately in England, at any rate, education produces no effect whatsoever. If it did, it would prove a serious danger to the upper classes, and probably lead to acts of violence in Grosvenor Square.”

Perhaps we are dealing with mind boggling ignorance of the pundits in the new administration - and Members of Congress - when it comes to the health care debate.

If one is familiar with current health care concerns, they know all too well that people who are the "Medicare eligibles" and "Medicaid recipients" are in between the proverbial 'rock and a hard place' because they already are being turned away from care because of low reimbursement rates.

Now on top of the excessive costs and privacy risks of electronic health care records, Obama wants to further reduce reimbursement.

"...make big changes to health care, including lower reimbursements for Medicare and Medicaid treatments and prescription drugs."

We do not see any effort to reduce reimbursements, treatments and Rx from the health care plan used by members of Congress.

We also haven't seen any move to reverse the horrendous gift to the drub industry by Bushites AKA Medicare Plan D. Changes here would save millions, just starting with bidiing for supplying the drugs and elimination of the estra level of bureaucracy called "case management".

I remind you that it is a violation of the equal protection clause to continue these dualistic and more costly in the long term type of patches to the long broken health care system.

Your effort in learning what you can do to build your health is the key. You'll find some of our many health education programs at TOC, and of course we also offer consultation to you and to health care providers.

A move to reign in lobbyists is just as massive an undertaking - and of course we have the culture of bureacracy, something not unfamiliar with the new crew in the White House and the pack of hardline cronies with no vested interest in real change.

Obama challenges lobbyists to legislative duel
By CHARLES BABINGTON, Associated Press Writer Charles Babington, Associated Press Writer
Sat Feb 28, 3:39 pm ET

WASHINGTON – President Barack Obama challenged the nation's vested interests to a legislative duel Saturday, saying he will fight to change health care, energy and education in dramatic ways that will upset the status quo.

"The system we have now might work for the powerful and well-connected interests that have run Washington for far too long," Obama said in his weekly radio and video address. "But I don't. I work for the American people."

He said the ambitious budget plan he presented Thursday will help millions of people, but only if Congress overcomes resistance from deep-pocket lobbies.

"I know these steps won't sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they're gearing up for a fight," Obama said, using tough-guy language reminiscent of his predecessor, George W. Bush. "My message to them is this: So am I."

The bring-it-on tone underscored Obama's combative side as he prepares for a drawn-out battle over his tax and spending proposals. Sometimes he uses more conciliatory language and stresses the need for bipartisanship. Often he favors lofty, inspirational phrases.

On Saturday, he was a full-throated populist, casting himself as the people's champion confronting special interest groups that care more about themselves and the wealthy than about the average American.

Some analysts say Obama's proposals are almost radical. But he said all of them were included in his campaign promises. "It is the change the American people voted for in November," he said.

Nonetheless, he said, well-financed interest groups will fight back furiously.

Insurance companies will dislike having "to bid competitively to continue offering Medicare coverage, but that's how we'll help preserve and protect Medicare and lower health care costs," the president said. "I know that banks and big student lenders won't like the idea that we're ending their huge taxpayer subsidies, but that's how we'll save taxpayers nearly $50 billion and make college more affordable. I know that oil and gas companies won't like us ending nearly $30 billion in tax breaks, but that's how we'll help fund a renewable energy economy."

Passing the budget, even with a Democratic-controlled Congress, "won't be easy," Obama said. "Because it represents real and dramatic change, it also represents a threat to the status quo in Washington."

Obama also promoted his economic proposals in a video message to a group meeting in Los Angeles on "the state of the black union."

"We have done more in these past 30 days to bring about progressive change than we have in the past many years," the president in remarks the White House released in advance. "We are closing the gap between the nation we are and the nation we can be by implementing policies that will speed our recovery and build a foundation for lasting prosperity and opportunity."

Congressional Republicans continued to bash Obama's spending proposals and his projection of a $1.75 trillion deficit this year.

Almost every day brings another "multibillion-dollar government spending plan being proposed or even worse, passed," said Sen. Richard Burr, R-N.C., who gave the GOP's weekly address.

He said Obama is pushing "the single largest increase in federal spending in the history of the United States, while driving the deficit to levels that were once thought impossible."
___

On the Net:Obama address: http://www.whitehouse.gov
Copyright © 2009 The Associated Press.

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Posted in: 2009,consumer health,health care reform,independent health news,Medicaid,Medicare,natural health news,natural news,no plan for CHANGE,Obama,Plan D

Medicaid Reduction in Service as Bush Prepares to Leave Office.

The new regulation jeopardizes community-based health services, including screening, diagnostic and dental services for children, as well as lab and ambulance services.

In line with the current administration's plans to issue, or relax, many economic, environmental, health and safety rules before they leave office on Jan. 20, this impact on the poor is a political favor now for a surge in costs later as illness rates rise and insurance payments fail to meet cost.

Keep in mind that members of Congress did little to address this sweeping change, so hope they will re-visit the issue in January.

November 8, 2008
New U.S. Rule Pares Outpatient Medicaid Services
By ROBERT PEAR
WASHINGTON — In the first of an expected avalanche of post-election regulations, the Bush administration on Friday narrowed the scope of services that can be provided to poor people under Medicaid’s outpatient hospital benefit.

Public hospitals and state officials immediately protested the action, saying it would reduce Medicaid payments to many hospitals at a time of growing need.

The new rule conflicts with efforts by Congressional leaders and governors to increase federal aid to the states for Medicaid as part of a new economic action plan.

President-elect Barack Obama has endorsed those efforts. At a news conference on Friday, he said that legislation to stimulate the economy should include “assistance to state and local governments” so they would not have to lay off workers or increase taxes.

In a notice published Friday in the Federal Register, the Bush administration said it had to clarify the definition of outpatient hospital services because the current ambiguity had allowed states to claim excessive payments.

“This rule represents a new initiative to preserve the fiscal integrity of the Medicaid program,” the notice said.

But John W. Bluford III, the president of Truman Medical Centers in Kansas City, Mo., said: “This is a disaster for safety-net institutions like ours. The change in the outpatient rule will mean a $5 million hit to us. Medicaid accounts for about 55 percent of our business.”

Alan D. Aviles, the president of the New York City Health and Hospitals Corporation, the largest municipal health care system in the country, said: “The new rule forces us to consider reducing some outpatient services like dental and vision care. State and local government cannot pick up these costs. If anything, we expect to see additional cuts at the state level.”

Carol H. Steckel, the commissioner of the Alabama Medicaid Agency, said the rule would reduce federal payments for outpatient services at two large children’s hospitals, in Birmingham and Mobile.

Richard J. Pollack, the executive vice president of the American Hospital Association, said these concerns were valid.

“The new regulation,” Mr. Pollack said, “will jeopardize important community-based services, including screening, diagnostic and dental services for children, as well as lab and ambulance services.”

Herb B. Kuhn, the deputy administrator of the Centers for Medicare and Medicaid Services, defended the rule.

“We are not trying to deny services,” Mr. Kuhn said. “We want to pay for them more accurately and appropriately. Payments for some services were way higher than they should be.”

The rule narrows the definition of outpatient hospital services to exclude those that could be provided and covered outside a hospital.

In May, the White House said it wanted to avoid the rush of “midnight regulations” that had occurred at the end of other administrations. But Bush administration officials said this week that they still intended to issue, or relax, many economic, environmental, health and safety rules before they leave office on Jan. 20.

Medicaid, financed jointly by the federal government and the states, provides health insurance to more than 50 million low-income people. Services can often be billed at a higher rate if they are performed in the outpatient department of a hospital rather than in a doctor’s office or a free-standing clinic. Hospitals generally have higher overhead costs.

Matt D. Salo, a health policy specialist at the National Governors Association, said, “The new rule is consistent with the administration’s effort to squeeze, shrink and flatten Medicaid spending.”

In a recent letter, the governors urged Congress to increase the federal share of Medicaid for at least two years. With state tax revenues plunging, many governors are considering cuts in Medicaid and other programs. Such cuts, they say, would further depress economic activity.

Ann Clemency Kohler, the executive director of the National Association of State Medicaid Directors, said: “The new rule is a pretty sweeping change from longtime Medicaid policy. Since the beginning of the program, states have been allowed to define hospital outpatient services. We have to question why the rule is being issued now, three days after the election, with a new administration coming in.”

The rule was proposed in September 2007. It takes effect on Dec. 8, six weeks before Mr. Bush leaves office.

Ms. Kohler said the rule would cut “money going to the states, to safety net providers, at a time when states are really being stressed.”

“More and more people are coming onto Medicaid,” she said. “People are losing their jobs and running out of unemployment benefits. Some employers can no longer afford to provide health insurance to their workers.”

In the last 18 months, Congress has imposed moratoriums on six other rules that would have cut Medicaid payments. But the administration says Congress did not block the rule issued on Friday.

Larry S. Gage, the president of the National Association of Public Hospitals, said, “We will urge Congress to extend the moratorium to this rule, and we will ask the Obama administration to withdraw it.”

Copyright 2008 The New York Times Company

And in other news we find Big Pharma (one great group of very substantial contributions to 'W') being cited for prolific Medicaid billing fraud.

Kansas is suing to recover millions in over payment -

According to the lawsuit, the Medicaid program spent more $160 million on meds last year. And the suit alleges the price for a drug paid by the state, based on a fraudulently-reported Average Wholesale Price and other price indicators, often bears no relationship to the true price and can exceed 100 percent to 200 percent above the actual price.

One example cited - Dey reported an AWP of $44.10 for Ipratropium Bromide, yet the AG claims the drugmaker sold the same drug to retail pharmacists for $8.35 - a 355 percent difference. And Glaxo reported an AWP of $128.24 for Zofran, but charged $22.61- a 450 difference.

Perhaps is the current administration would move to prosecute Big Pharma for the egregious activity the recovery would save Medicaid from current cuts. The FDA might be cleaned up a little at the same time, and don't they need an overhaul!

WARNING: I once blew the whistle on perpetrators of Medicare fraud involving Washington state. Instead of doing an accurate investigation, Mike Gregoire, husband of the the current governor and formerly with the Medicaid Fraud unit in the AGs office (at a time when his wife was AG), he feel into lock step with the typical bureaucratic cover-up: Protect the System First.

Fortunately my contacts at the Region X HHS OIG office was glad to take my data. DOJ was prosecuting the company I tried to report to Gregoire for insurance fraud in ten states.

The FEDS won this case and got a $372 million settlement.

Former state legislator Dave Schmidt did do a proper investigation, finding egregious errors by the state. He assisted me in regaining my status. DOH still is covering up. Mike and some DOH cronies continued the fraud by "loosing" legal documents and ignoring fact. Funny though that the AAG assigned to represent the state came out in favor of my facts and me. Former gov Gary Locke ignored the facts too and went so far as to cover up for DOH lies, at a time when he agreed to a request by a US Congressman to investigate. Locke refused to look at my eveidence. Locke and Mike's wife are law school grads and should know very well about due process and equal protection. I can't say for sure, but they went very far to attack the messenger here. And lost some recovery money as well. For shame.

Fraud has many faces.

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