June 1998 Bulletin


Private contracting bill is stalled, says Sen. Kyle

Sen. Jon Kyle (R-Ariz.) told the Heritage Foundation that his bill to alter private contracting legislation is probably not going to be passed in the current session of Congress. Sen. Kyle is trying to eliminate a provision of the Balanced Budget Act of 1997 which requires physicians who enter into private contracts with Medicare beneficiaries for services that would be covered by Medicare to disenroll from Medicare for two years. A nonbinding "Sense of the Senate" resolution in favor of Sen. Kyl's bill passed by a 51-47 vote in March, but the bill is bogged down in the Finance committee. The private contracting bill is opposed by the American Association of Retired Persons and would probably be vetoed by President Clinton; the White House insisted the measure be put into the 1997 budget bill. The Department of Health and Human Services said preliminary statistics indicated 300 physicians opted out of Medicare to privately contract with beneficiaries.

HHS proposes streamlining of claims' processing

The Department of Health and Human Services has proposed rules to streamline the processing of health care claims and reduce the amount of paperwork. Health care providers would apply for an eight-digit identifier that they would use whenever processing claims electronically. Every health care provider would be able to use a single standard electronic format to bill for services rendered. All health plans would be required to accept these standard electronic claims.

Judge suspends withholds, bonuses of contracts

A district court judge in Fort Worth, Texas granted a request by physicians seeking to suspend provisions in the contracts of the Harris Methodist Health Plan that can increase or reduce primary care physicians' payments, depending on whether they meet financial budgets. The judge said the provisions, in effect since October 1995, probably violate Texas law, including a new statute prohibiting financial incentives that induce physicians to limit medically necessary care. The managed care plan will appeal the ruling. The two provisions being challenged are withholds of up to 25 percent of a physician's capitation payment, depending on the physician's overall financial performance; and bonuses for staying under budget for medical specialists care, prescription drugs and hospitalization.

Academy urges FDA clinical trials for biologics before OK

James D. Heckman, MD, Academy president, urged the Food and Drug Administration's Center for Biologics Evaluation and Research to balance the need for a rapid review method for new biological products with "the historical and rightful concern that uses of new products be safe and efficacious." In a letter to the Jay Siegel, MD, director, Office of Therapeutic Research and Review, Dr. Heckman said, clinical trials of new products and procedures should be performed prior to general clearance, and FDA clearance should be based on the results of clinical trials. Clinical trials should be performed on a national basis and surgeons should be enrolled who can provide appropriate data.

Board approves vancomycin, banked tissue statements

The Board of Directors approved on May 22, 1998 an Advisory Statement on the Use of Prophylactic Antibiotics in Orthopaedic Medicine and the Emergence of Vancomycin Resistant Bacteria. The Academy recommends that vancomycin should be reserved for the treatment of serious infection with beta-lactam resistant organisms or for treatment of infection in patients with life threatening allergy to beta-lactam antimicrobials. The Academy also recommends hand washing with antibacterial soaps to prevent nonsocomial spread, and isolation of patients infected with vancomycin resistant enterococcus, vancomycin resistant strains of S. epidermidis or S. aureus demonstrating intermediate resistance to vancomycin. The Board also approved an Advisory Statement on Safety and Efficacy of Banked Human Tissues which endorses stringent screening for the detection of disease in donors of banked human tissues. The Academy supports the use of banked human tissues when autograft tissue is not available in sufficient quantity. An Opinion on Ethics on the Care and Treatment of the Medically Underserved also was approved. The documents are in the "Library" section of the home page www.aaos.org.

Hyatt hotel project near Academy starts with work on garage

Construction is underway on a four-story garage adjacent to the Academy's building in Rosemont. It is the first step in the development of an eight-story, 206-room Hyatt hotel on adjoining property. The garage is scheduled to be completed in October. Construction of the hotel will begin immediately thereafter and is scheduled to be completed in late 1999.

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