Medical Device Daily Washington Editor

Pay for performance, a.k.a., P4P, is all the rage in hospitals, and the Centers for Medicare and Medicaid Services (CMS) intends to roll out precisely such a demonstration program for home healthcare providers as well. However, as is the case with some hospitals, some home healthcare agencies (HHAs) may find that it costs more to participate than they earn in performance bonuses.

In an Oct. 11 statement, the agency reported that it will commence with solicitations of home healthcare agencies this autumn and will have operators signed up and projects rolling out on Jan. 1, 2008. The statement described the P4P program as “an important new step in its drive to become a more effective purchaser of quality healthcare.”

The agency will set up demonstration sites for two years in seven states and will measure the incidence of acute care hospitalization, the incidence of emergent care, and improvement in the status of surgical wounds. Other measures will include improvements in oral medication management and in the patient’s ability to walk under his or her own power.

The demonstration project will operate essentially as a randomized, controlled clinical trial, with home health agencies randomly assigned either to a study group, with patients monitored over the two years, or a control group, comprised of HHAs that will continue their care practices for the duration of the demonstration.

The demonstration will attempt to recruit a group of HHAs that are collectively representative of HHAs across the nation by selecting specific geographic targets. For the Northeastern U.S., CMS will select HHAs operating in Connecticut and Massachusetts and for the South, operations in Alabama, Georgia and Tennessee. Illinois HHAs will represent the Midwest, and California is the site of demonstration projects representing the West Coast.

HHAs will be eligible for payments under the demonstration only if their quality improvements “result in the highest performance levels or significant improvement in outcomes.” However, CMS did not release any details as to the level of bonuses, saying only that while no participating HHAs will experience a loss of revenue, the payments “will depend on whether or not the demonstration results in improvements in the quality of care and the actual savings to the Medicare program overall — not just for home health services provided to the patients served under the demonstration.”

Mary St. Pierre, VP of regulatory affairs for the National Association for Home Care & Hospice (NAHC; Washington), told Medical Device Daily that the association’s members are “very excited” about the program and that CMS “adopted a lot of our recommendations” in setting up the program. She said “we’re looking forward to seeing how this progresses.”

Some hospitals that have participated in a P4P project found that their costs increased sufficiently to negate the bonuses received, and St. Pierre said the same scenario could play out in the home healthcare setting. “It could end up that some spend money to improve quality of care, but there’s a lot of good information out there” to make it easier to keep the effort from running into the red.

St. Pierre said that some providers have seen acute care hospitalization rates fall from 32% to 24% under quality initiatives. “It could cost [more], but could benefit patients in the long run” if all home healthcare providers adopted higher quality standards, she said.

PTO warns new rules effective Nov. 1

The U.S. Patent and Trademark Office (PTO) has been as active an agency as CMS in recent months, and PTO warns med-tech and other firms that its proposed rules regarding patent application continuations will take force Nov. 1. The agency issued the final rule in September after floating the proposed rule the previous month (Medical Device Daily, Aug. 29, 2007).

According to PTO’s statement, the final rule will allow a transitional “one-more” continuing application provision for any applications that were the subjects of two continuations or continuations-in-part applications prior to Aug. 21. Applicants can file a “one-more” continuation after Nov. 1 with no petition if they can show that no other patents have been filed that “claims the benefit of the prior-filed applications.”

In the case of pending continuation-in-part applications, PTO is also waiving the requirement that “an applicant must identify the claim or claims in the continuation-in-part application for which the subject matter is disclosed” per 35 USC 112. In that passage, the United States Code says that the specifications of a patent must “contain a written description of the invention, and of the manner and process of making and using it,” but also stipulates that “a claim in dependent form shall contain a reference to a claim previously set forth and then specify a further limitation of the subject matter claimed.”

The new rule will allow an in-part continuation to go forward despite having initially not referenced the prior claims so long as the applicant can show “where a prior application provides support ... for the invention as defined in the claims of an application.” However, this refers only to those continuation-in-part claims that are the subject of an action-on-the-merits letter from PTO dated before Nov. 1. Any in-part continuation claims referenced later than that date will have to make reference to the prior claim.

Among the other provisions of the final is a provision dealing with the agency’s waiver of a two-month provision codified in the Code of Federal Regulations for applications having a common owner and at least one common inventor. In keeping with the tortured use of language inherent in regulations, PTO also clarifies the use of the term “examined” in reference to the scope of an application. Any application for U.S. patent that does not clear an international search may nonetheless be filed and “examined” for a divisional application for U.S. purposes.