Health and Human Services Secretary Tommy Thompson announced at a Senate hearing on Thursday that Medicare is dropping language stating that obesity is "not an illness," although it is not formally recognizing obesity as a disease.

Following up on a prior initiative in the early 2000's, the Texas Medical Foundation, under a contract with CMS, is currently evaluating every acute care hospital's data for certain specific indicators, such as DRGs 127, 143, 079, and 416.

The Centers for Medicare and Medicaid Services released a notice informing interested parties of an opportunity to apply to implement and operate a chronic care improvement program as part of Phase I of the Voluntary Chronic Care Improvement Under Traditional Fee-for-Service Medicare initiative.

In OIG Advisory Opinion 04-03, the OIG examined whether a marketing company working on behalf of pharmaceutical firms could pay physicians a dollar for their efforts at completing surveys relating to drug labeling and product information. The OIG questioned whether the surveys were actually marketing or promotional activities, which would imply that the one dollar payment was actually intended to induce referrals.

The Office of Inspector General has issued supplemental compliance program guidance for hospitals containing expanded discussions of risk areas and offering compliance recommendations for reduction of risk. The guidance is issued as a draft with a 60 day comment period.

The Attorney General of Pennsylvania filed a lawsuit earlier this month against 13 major drug companies. The lawsuit alleges that the defendants engaged in unlawful practices that forced consumers and state agencies to pay significantly higher prices for prescription drugs.

The deadline for participating in the Joint Commission on Accreditation of Healthcare Organizations ("JCAHO") field review of potential 2005 patient safety goals is April 30, 2004.

Texas Attorney General Abbott has issued an opinion concluding that section 285.201 of the Texas Health and Safety Code permits, but does not require, a hospital district to provide nonemergency public health services to undocumented aliens.

Last week, the U.S. Sentencing Commission, which sets national sentencing policy, voted to recommend that Congress enhance the rules and standards for effective ethics and compliance programs.

The Centers for Medicare and Medicaid Services ("CMS") has reissued its one-time transmittal setting the date by which providers must choose the cost reporting period to be used in determining whether they are below their cap.

CMS announced in a February 27, 2004, Change Transmittal that Medicare reimbursement claims in non-standard HIPAA format would be subject to a 13-day delay from the 14-day window for compliant claims. This 27-day delay was implemented starting July 6, 2004.

In 2003, the Texas Legislature passed House Bill 1614 (H.B. 1614), which requires hospitals, ambulatory surgical centers (ASCs), and mental hospitals to document certain types of medical errors and report the number of occurrences of these types of errors annually.

A Mississippi trial lawyer who participated in the legal assault on the tobacco industry has set his sights on tax-exempt hospitals.

The Centers for Medicare and Medicaid Services ("CMS") announced recently that it is going to launch a pilot program that will result in metrics to measure compliance effectiveness. The program seeks to develop incentives to help Medicare providers follow through on compliance objectives.

The OIG is sending letters to a large number of teaching hospitals requesting information on whether the hospital had written agreements in place for rotations to nonprovider settings for academic year 2004, purportedly pursuant to a requirement in the Medicare Prescription Drug, Improvement and Modernization Act ("MMA").

On June 22, 2004, Richard Scruggs expanded his class action litigation against nonprofit hospitals. After targeting thirteen nonprofit hospitals in eight different states two weeks ago, Scruggs has now extended his assault against tax-exempt hospitals in Arizona, Colorado, Illinois, Missouri, and Texas.

Provena Covenant Medical Center, located in Urbana, Illinois, had its exemption from property taxes revoked by the Illinois Department of Revenue. Provena's billing and collections efforts, particularly those allegedly used to collect amounts owed by underinsured or uninsured patients, have received considerable media attention.

On May 13, 2004, the Justice Department filed an appeal notice to maintain its ability to appeal the March 4, 2004, jury decision that St. David's Health Care System, Inc., continues to be tax-exempt notwithstanding its decision to contribute substantially all of its operating assets into a joint venture with HCA, Inc. While the notice is not a formal appeal of the jury's decision, it does preserve the government's ability to pursue an appeal.