Medical Device Daily Washington Editor

The cavalry that rides over the hill just in time is not always in a military uniform, but beneficiaries of two federal health programs are probably not concerned about sartorial finery.

Sens. Max Baucus (D-Montana) and Chuck Grassley (R-Iowa) have come through for beneficiaries of Medicare and the Children's Health Insurance Program (CHIP) and their doctors in a big way with a bill that will suspend the impending 10% cut to spending on doctor fees under Medicare Part B for 2008 and would continue funding CHIP at current levels. The six-month extension gives Congress more time to come to some agreement on these issues ... and to turn them into campaign issues.

But for the cavalry to really arrive in time, the House of Representatives must also saddle up.

Baucus said in a statement that the bill "takes needed, immediate steps to shore up Medicare by restoring physician payments and ensuring seniors' continued access to health care in rural areas," but he added that "Congress must move boldly to improve Medicare for America's seniors" next year. He also said that while "the CHIP extension in this bill will maintain health coverage for more than six million children who currently have it," he intends to "keep working to reach more low-income, uninsured American children through that vital program."

Baucus also said he wants to "change Medicare in a smart and fiscally responsible way, serving both the seniors who use Medicare and the taxpayers who fund this vital program." However, he offered no specifics in the statement.

At press time yesterday, there was no word on where the House stood on the proposal.

Bill tweaks attorney-client privilege regs

Thanks to Perry Mason and his heirs, fans of legal dramas are likely to believe that attorney-client privilege is sacrosanct, but every rule has its exception. In the years since the corporate scandals at the beginning of the decade, the exception has arisen for attorney-client privilege for corporate prosecutions and has been the source of controversy and billable hours.

Thanks to the debacles at Enron and WorldCom, Deputy Attorney General Larry Thompson issued a memorandum, the dreaded Thompson memo, that outlined tactics federal prosecutors could employ in obtaining evidence. Among those was to overtly ask for copies of any privileged communication with legal counsel as well as leeway in deciding whether to prosecute based on the target company's cooperation with the investigation. The pair working, in conjunction, was felt by many to amount to coercion.

In the case of accounting giant KPMG (Amsterdam, the Netherlands), these elements were combined with a threat to indict the firm if it did not suspend payments to counsel for corporate management, a move that set off a firestorm of protests and prompted several former U.S. attorney generals to urge that the Thompson memo be junked.

Thompson retired in 2003 and his successor, Paul McNulty, blunted some of the effects of the Thompson memo, but the McNulty memo has, in the eyes of some, not gone far enough to repeal the most serious aspects of its predecessor.

The issue was on the Senate Judiciary Committee's agenda in 2005, but a bill proposed by then-chairman Sen. Arlen Specter (R-Pennsylvania) made little headway. Reintroduced in January as S. 186, the Attorney-Client Privilege Protection Act of 2007, the bill passed in identical form in the House of Representatives, but did not get past committee in the Senate.

Now a different bill, S. 2450, is in the committee, but is co-sponsored by Specter and the committee chairman, Sen. Patrick Leahy (D-Vermont), as well as Sen. Lindsey Graham (R-South Carolina), but the holidays are in sight, giving Congress little time to do something with this legislation.

The primary difference between the two bills is that while S. 186 called for a change to law (chapter 201 of title 18 of the United States code), S. 2450 would amend Rule 502 of the Federal Rule of Evidence. S. 2450 would prohibit federal prosecutors from attempting to leverage additional privileged information out of a corporation, based on the similarity of undisclosed information to information that is voluntarily disclosed. The amended regulatory language would also limit the ability of state prosecutors from jumping jurisdictional lines to obtain information disclosed in actions taken by other state prosecutors.

The bill has at least some support in the legal community. In a Dec. 7 letter to Leahy and Specter, Dennis Cardman, the acting director of the American Bar Association (ABA; Chicago), said that the bar lent its "strong support" to S. 2450, adding that ABA's members are of the opinion that "your proposed draft legislation will greatly improve the practice of law for those facing conflicting rules and therefore urges its speedy introduction and adoption by Congress before adjournment."

Jeffrey Greenbaum, a partner in the practice of Sills Cummis & Gross (Newark, New Jersey), told Medical Device Daily on behalf of ABA that "we strongly support the bill" and that it is "consistent with the resolution we passed in 2006" on the question.

Greenbaum said that S. 2450 would provide a remedy for "the nightmare that lawyers face when trying to do privileges" in different jurisdictions due to the different rules. He pointed out that thanks to electronic discovery, "its now possible to get huge amounts" of data with little effort, but for attorneys to go through it all is very labor intensive.

Greenbaum said that in an effort to expedite discovery without compromising privilege, the new language would allow prosecutors to examine documents on a "quick-peek" basis, but defendants would retain the right to overrule the use of any of that content. However, defendants and their counsel must review that information and decide quickly which elements it wants to pull back.

"If you act quickly once you've made a mistake, you're going to be protected," he said.