U.S. Supreme Court Stops Vermont Prescription Confidentiality Law

As of June 23, 2011, data miners and pharmaceutical manufacturers are rejoicing over a U.S. Supreme Court decision on Sorrel v. IMS Health, Inc. that declared a Vermont statute unconstitutionally restricted 1^st Amendment rights.  The Vermont statute targeted the practice of “detailing,” where a pharmaceutical representative explains and promotes a certain drug to a doctor in hopes that the doctor will be inclined to prescribe that drug in the future.

The statute lists rules regarding relevant issues such as the prohibition of sales, license or exchange of regulated records, including their use in marketing or promoting a prescription drug without the prescriber’s knowledge.

The Supreme Court specified that the statute at face value was a content-based burden on protected expression, which means the statute was subject to heightened judicial scrutiny.  The State needed to show that the law will advance substantial government interest and that the law is created to further that interest.  The statute does not favor “speech with a particular content” and, more specifically, does not favor specific speakers, mainly pharmaceutical manufacturers.  Based on these rules, detailers are not allowed to obtain prescriber-identifying information, even if the information can be purchased by others with various purposes and opinions.  Detailers also cannot use the information for marketing purposes, even though other speakers could use the information.

The State’s reasons for why the statute was necessary:

1. In order to protect medical privacy, such as honoring the doctor-patient relationship, keeping physician confidentiality, and avoiding harassment; and
2. In order to accomplish the goals set out by the policy objectives, including improving public health and decreasing healthcare costs.

The fact that the Vermont law explicitly targets the speech’s content and the speaker’s identity weighed heavily on the Court’s decision.  Although physicians have a vested interest in privatizing their prescription decisions, the Court ruled the statute did not advance that interest because it only offered “limited degree of privacy…on terms favorable to the speech the State prefers.”  The Court also acknowledged that the State might not appreciate the detailers’ success in furthering their brand name drugs.  However, the Court declared that the State “may not burden the speech of others in order to tilt public debate in a preferred direction.”  Because of this, the Court held that the statute was unconstitutional.

Although pharmaceutical manufacturers and detailers may seem like the primary victors in this battle, physicians still have the opportunity to withhold their prescribing data from marketers through a special program.  Physicians must register for the Physician Data Restriction Program through the American Medical Association.

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Louisiana charged with mismanaging $50 million post-Katrina health care grant

A federal audit charged the Louisiana state health agency again for mismanaging a $50 million post-Hurricane Katrina grant meant to restore health care access to the New Orleans area.

In a new draft of the audit, the Office of the Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) suggests that the state pay back $13.6 million of the money paid out to doctors.  The money acts as an incentive for doctors and other medical professionals to practice within the city.

According to the updated draft, 33 out of 100 practitioners in a sample were in compliance with the Federal grant requirements while majority of the sample, 67, were not in compliance. Based on our sample results for the period March 1, 2007, through January 31, 2009, we estimated that the Bureau paid at least $13,629,287 of Federal grant funds to an estimated 3509 practitioners who were not in compliance with the Federal grant requirements.

The Deficit Reduction Act of 2005 authorized the Centers for Medicare and Medicaid Services (CMS) to award the Louisiana Department of Health and Hospitals a federal grant called Professional Workforce Supply Grant to restore access to health care in communities impacted by Hurricane Katrina. The $50 million Federal grant covers the period March 1, 2007, through September 30, 2012.  The Federal grant funds payments to licensed health care professionals to help keep doctors in the city and bring talented health care professionals into the city. As of September 30, 2009, all of the Federal grant funds had been distributed.

The Federal grant required the funds to be distributed in one-time payments to individual practitioners based on the incentive options they chose. The incentives included payments for:

• Student loans
• Malpractice insurance premium expenses
• Contract execution (sign-on bonuses)
• Income guarantees
• Health information technology continuing education expenses
• Relocation expenses

Practitioners had the option to choose more than one incentive option and receive payments within the limits set forth in the Federal grant requirements for each practitioner type.  As long as the recipient remained in their qualifying job for three years, they had the opportunity to use the grants for any of the above purposes.

The Bureau of Primary Care and Rural Health administers the Federal grant and remains responsible for grant guideline compliance. From managing the day-to-day operation of grant-supported activities and monitoring grant-supported activities, the Bureau must ensure compliance with applicable Federal requirements and achievement of performance goals.

The problems auditors cited among the 100 practitioners:

• Practitioner Contracts Specified Service Periods of Less Than 3 Years
• Practitioners Did Not File Quarterly Reports
• Practitioners Not Working Full Time
• Practitioners Did Not Spend Federal Grant Funds Appropriately
• Practitioners Not Working at Eligible Sites
• Practitioners Absent More Than 7 Weeks Without Contract Extension
• Practitioner Did Not Provide Clinical Services
• Practitioner Not Eligible To Receive Federal Grant Funds

If you have any questions or concerns, please contact the Law Firm of Beahm & Green at 504-288-2000.