Contents of "Obamacare" - Part I

CONTENTS OF THE AFFORDABLE CARE ACT From now until the election, I will be briefly summarizing the content of the Affordable Care Act (aka “Obamacare”) so that you may be informed about the act when you vote in November. The law is lengthy and complex so I shall be simplifying. Title I, Subpart A, of the act starts with improvements that were to take effect immediately upon the signing of the act. These include the removal of annual or lifetime limits for benefits; a prohibition disallowing insurers to rescind (“take back” or “cancel”) an existing health insurance policy unless the applicant has committed fraud in the application process; coverage of appropriate immunizations; preventive care for infants, children and adolescents; preventive care and screening for women such as mammograms and breast cancer screening; extension of coverage for dependents up to 26 years of age. Changes in wording and definitions: The act provides for standardization of wording and format for coverage documents and benefits plans to make them easier to understand and easier to cross-compare; the development of standard definitions for insurance related terms such as “deductibles’ “copayments”, “preferred provider”, “out-of-pocket” , etc.; the development of standard definitions for medical terms that are utilized in insurance plans, such as “durable medical equipment”, “hospitalization”, “hospice” so that individuals may more easily cross-compare and understand various plans; Equality of benefits. The act includes prohibitions preventing employers from discriminating against lower-paid full-time employers or providing better insurance for higher-paid full-time employees. Changes in health care delivery: the act provides incentives to encourage hospitals to avoid re-admissions for the same condition rather than putting a Band-Aid on the problem, stabilizing the patient, and discharging them; steps to reduce medical errors through “best clinical practices”; and incentives to include wellness and preventive care. <Wellness and preventive care: These are “smoking cessation”, “weight management”, “stress management”, “physical fitness”, “nutrition”, “heart disease prevention”, “health lifestyle support”, and “diabetes prevention.” Reporting by insurance plans: Insurers will be provided to report on a website the percentage of their premiums that they actually spend on health care and provide a refund to the insured if this is less than 80%. Standardization and reporting of charges for medical procedures: The act requires hospitals to publish in advance their standardize costs for procedures so that individuals may cross-compare. Minimal requirements for an appeals process: These include and internal appeals process, an understandable notice to individuals receiving denials about their rights and appeals, and the patient’s right to review their record and provide testimony. Health insurance consumer information: The law provides grants to the states, if they provide certain information in return, to establish contacts for consumer assistance in regards to health care insurance. Funding: The act funded all of the above activities for the first year with 30 million dollars. <b>Justification and Disclosure for Premium Increases: The state is required to monitor and review premium increases, and the law offers federal grants to states to achieve this. Immediate Actions to Preserve and Expand Coverage (Title 1, Subpart B): The law creates temporary high-risk pools to provide insurance for those with pre-existing conditions (this has already been done) and adds sanctions for the dumping of sick patients. Five billion dollars was appropriated each year for these claims. In 2014, the patients will be transferred to other plans. The act also provides funds to cover re-insurance for early retirees (those over 55 years of age), their spouses, their surviving spouses and dependents. Establishment of websites to allow patients to find coverage. HOLD YOUR BREATH. I AM ONLY THROUGH PAGE 60 OF A 2,409 PAGE ACT! MORE TO COME.

Recent Federal Court Decisions Re: FDA

Two Federal Courts have released decisions that affect the extent of authority of the FDA. The first case deals with FDA's capability to debar corporate executives of companies that engage in illegal conduct. The second case deals with the agency's authority to regulate stem cell treatments. In the first case, called Friedman v. Sebelius, No. 11 5028, July 27, 2012, the United States Court of Appeals for the DC Circuit upheld a lower court's ruling allowing the FDA to personally bar executives of the Purdue Frederick Company ("Purdue") from participating in Federal programs such as Medicare and Medicaid. The CORPORATION had pleaded guilty to felony charges for misbranding and the fradulent promotion of the painkiller OxyContin. The INDIVIDUAL EXECUTIVES of Purdue had pleaded guilty to misdeamor violations in which the Purdue exectutives did not admit, and the government did not allege, any fraudulent conduct on the part of the executives. Soon after the plea, the United States Department of Health and Human Services Office of Inspector General ("OIG") determined that the executives should be individually debarred from participating in the federal health programs for 20 years. After several administrative rulings, the case came up before the Court of Appeals. The federal statute at play says that individuals can be excludied from participating in federal health care plans if they have been convicted "of a criminal offense consisting of a misdemeanor relating to fraud." 42 U.S.C.Sec.1320a-7(b)(1)(A). The executives had pleaded guilty to a misdeamenor which did not include fraud. The Court held that the government can exclude an individual under this provision based on a conviction which was for conduct factually related to fraud, even thought the offense to which the person pleaded guilty did not require a showing of fraud. The significance of the above case is that pleading guilty to a non-fraudulent misdemeanor may not longer save the defendent from disbarment. In the second case, a US District Court, which is the lowest court level in the federal system, held that the harvesting of a patient's own mesencymal stem cells from his/her own bone marrow and then re-injecting the stem cells into the same patient for treatment of bone and joint pain constitutes the manufacture of a drug or biological product rather than the practice of medicine. If the procedure was the practice of medicine, it would be regulated by state, i.e., in this case, Colorado. If the procedure was manufacturing, it would regulated by the FDA. If the stem cells are only “minimally manipulated”, they should only be regulated under FDA regulations for HCT/Ps, which would not require FDA approval. However, the court found that this particular procedure exceeded mere “processing” of cells in that the procedure changed their relevant biological and physiological characteristics. This is in part because the procedure added the antibiotic doxycycline into the removed stem cells to avoid infection. The Court went on to find the stem cells "adulterated" because they were not manufactured according to FDA regulations and "misbranded" because the syringe label did not have the required federal wording. United States v. Regenerative Sciences, LLC (Civil Action No. 10-1327 (RMC) (U.S.D.C. July 23, 2012).

Do We Need the Insurance Mandate of the Affordable Care Act?

The Affordable Care Act requires individuals to purchase health insurance or face penalties from the IRS beginning 2014. The US Supreme Court recently heard arguments as to whether this requirement was constitutional. Regardless of it is constitutionality, the purchase mandate is necessary to the success of the bill in order make health insurance more affordable. Rates will not go down unless more younger, healthier individuals are included in the insurance pool. For example, Blue Cross Blue Shield just raised my personal premium rates by 20%, yet at my last annual physical, I had no new diagnoses, no hospitalizations and no outpatient surgery. Why did they raise my rates? Because I turn 55 years old before the next premium payment is due. Yet the policiticians on both sides say that it is the small business owners such as myself that will hire people and get the ecomony going again. This is not going to happen if we are burderned by increasing health care costs just to maintain the status quo. This country will go bankrupt if health care costs are not put under control. For that reason, the insurance purchase mandate is necessary.

Illinois governer Quinn's proposals to cut Medicaid

From Crain's Chicago business. AS the federal government tries to expland health care for the poor, the state proposes to cut it. http://www.chicagobusiness.com/article/20120420/NEWS03/120429999/despite-questions-quinns-medicaid-proposal-winning-some-praise

Alarming planned closure of Chicago's Mental Health Clinics

At a time when the economy is bad, Chicago plans to close some of the city's neighborhood mental health clinics. Below is a link to a WGN interview of Bechar Choucair of the Chicago Department of Public Health trying to rationalize the closings. Cook County Sheriff Dart has said this will result in making Cook County Jail the largest mental health care "provider" in the state, because if the mentally ill cannot receive treatment, they will ultimately be arrested and incarcerated at a greater expense to the city. Dart is right.


http://www.wgntv.com/videogallery/68433606/News/chicago-dept.-of-public-health-talks-the-closing-of-mental-health-clinics#pl-62864487

Sherrif Dart's prediction:

http://www.chicagonewscoop.org/county-jail-a-large-mental-ward-dart/

New Illinois Insurance Plan for Those with Pre-existing Medical Conditions is Now Accepting Applications Effective August 20, 2010

The federal health reform law, known as the "Patient Protection and Affordable Care Act", establishes a federally-funded temporary high risk pool to provide affordable health insurance coverage to people who have been denied insurance because of pre-existing conditions. In Illinois, this plan is call the Illinois Pre-Existing Condition Insurance Plan (IPXP). Urbana-based Health Alliance Medical Plans Inc. was awarded the contract for this plan. The plan began accepting applications at 10:00 am August 20, 2010.

To qualify for the plan you must be a U.S. Citizen, national, or legal resident, be uninsured for at least 6 months, and have a pre-existing condition.

You can establish that you have a pre-existing condition by: 1.) providing documentation from a health insurance company stating that you are ineligible for comprehensive coverage due to a medical condition; 2.) providing documentation from a health insurance company offering you health coverage with a rider that excludes coverage for your medical condition; or 3.) provide a written statement from a physician stating that you have an existing medical condition that may result in denial of comprehensive coverage by a health insurance company. The plan has provided me with a "Qualifying Pre-existing Medical Condition Certification Form" that you may provide to your doctor to certify your current health status.

You can find out more information at htt://www.insurance.illinois.gov/HealthInsurance/highriskpools.asp.

I would recommend that any interested persons apply asap because the project has limited funding.

Steve

Urgent: New Government Funding For Biomedical Research

On May 21, 1010, the U.S. Treasury Department announced the procedures for requesting a tax credit of up to $5 million per firm to be utilized for the development of new biomedical therapies (Therapeutic Discovery Credit). The purpose of the credit is to provide an immediate boost to U.S. biomedical research and the small businesses that conduct it. The credit is effective for investments made in 2009 and 2010. Only smaller firms with 250 employees or less can participate.

The application period for the credit opens on June 21, 2010 and closes on July 21, 2010. The Department of Health and Human Services (HHS) will evaluate each project for its potential to produce new therapies, address unmet medical needs, reduce health care costs or advance the goal of curing cancer. Meeting any one of the pre-stated criteria could result in qualification. Applicants will receive a determination no later than October 29, 2010.

The credit can apply to up to 50% of a company's "qualified investment" which is defined as the "aggregate amount of the costs paid or incurred in the taxable year for expenses necessary for and directly related to the conduct of a qualify therapeutic discovery project". The credit can be applied to the taxable years of 2009 and 2010. The qualfied investment does not include costs for remuneration for executives, interest expenses or facility maintenance expenses during those taxable years. Qualified investments may include expenses for wages, supplies and lab costs, depreciable property, contractor costs, etc.

There are three types of projects that can qualify for the credit: 1.) those to treat or prevent diseases or conditions by conducting pre-clinical activities, clinical trials, and clinical studies, or carrying out research protocols, for the purpose of securing FDA approval; 2.) those to diagnose diseases or conditions or to determine molecular factors related to diseases or conditions by developing molecular diagnostics to guide therapeutic decisions; and 3.) those to develop a product, process, or technology to further the delivery or administration of therapeutics.

A separate application for certification must be submitted to each project for which an eligible taxpaying entity is seeking certification of a qualified investment. An application consists of the following:

1. New Tax Form 8942 (this new tax form will be released no later than June 21, 2010)

2. Penalty of Perjuries Statement

3. Project Information Memorandum

4. Consent to Public Disclosure of Certain Qualifying Therapeutic Discovery Project Program Application Information (optional).

Brochures and other presentations are not permitted as part of the application and will not be considered.

The application must disclose the number of full-time and part-time employees whose work is directly billed to the project and their average salaries. It must also disclose the number of contractors in the US that were paid for work on the project.

The application must also disclose whether the project is active, terminated, or suspended. If the project has been terminated or suspended because the project failed a clinical trial, failed a pre-clinical research milestone, or failed to secure FDA licensure, it would be ineligible for the credit. Termination or suspension of the project due to lack of funds does not disqualify the project for consideration.

The application must assert whether the project will produce new or significantly improved technology as compared to commercial technologies currently in service and whether the project is expected to lead to the construction or use of a contract production facility in the US within the next five years.

The Project Information Memorandum, to be included in the application, must meet a specified format and meet certain stated number of word limitations in response to the required questions. The applicant can take certain steps to protect confidential trade secrets and information. The memorandum will describe the scientific rationale, research and developent plan, and the scientific evidence relied upon by the applicant, including citations. The memorandum will address the FDA regulatory status of the project. The memorandum will also explain the resources, management experience and organizational capacity of the applicant. The memorandum will finally address in 250 words or less per item the likelihood that the project will: 1.) produce new therapies; 2.) address unmet medical needs; 3.) reduce health care costs; or 4.) advance the goal of curing cancer.

I recommend that interested applicants start preparing their Project Information Memorandum immediately so they can stand at the beginning of the line when their application is filed on June 21, 2010.

Steve

Steve Schurr