Congress talking health IT cash — Teladoc offers a trend to watch — Medicare struggles to incorporate gene tests for drug metabolism

With help from Arthur Allen (@ArthurAllen202), David Pittman (@David_Pittman), and Aubree Eliza Weaver (@AubreeEWeaver).

STILL ALL ABOUT THE BENJAMINS: The Senate Appropriations Committee cut $646 million off HHS’s budget relative to fiscal year 2015 in a markup yesterday, which probably bodes ill for the health IT community’s desires to see more funding for ONC and to sustain AHRQ. On the other hand, NIH got a big funding boost — to over $2 billion — cheerful newsto the precision medicine community.

TELADOC TRENDS TO KEEP AN EYE OUT ON: Teladoc officially kicked off its IPO campaign Monday with an S-1 filing to the SEC. Armed with their abacuses, the business folks have already picked over many of the relevant dollars-and-cents aspects of the filing. (Your correspondent recommends Rock Health’s Malay Gandhi on the subject).

But there’s a key policy trend to monitor: “1099 economy” issues. Veteran tech watchers are likely familiar, but for those who aren’t, here’s the quick rundown. It’s popular for Silicon Valley companies to use independent contractors (who use 1099 tax forms) to serve the company’s physical product. Think ofyour Uber driver as an example. This allows the company to avoid the cost of benefits, among other things. But the approach has gotten Uber, in particular, in trouble: some of the company’sdrivers have sued claiming they are, in fact, employees rather than truly independent contractors.

Teladoc risks the same fate: in the “risk factors” section of its SEC filing, the firm says it considers its providers to be independent contractors, rather than employees. “[A]ny determination that our Providers are our employees could have a material adverse effect on our business, financial condition and results of operations,” it cautions. And since the rationale for telehealth is its lower cost relative to the overhead-heavy emergency departments out there, that determination is potentially important for the sector’s future.

It remains to be seen to what extent Teladoc’s competitors rely on the same distinction. American Well’s spokeswoman, Catherine Anderson, told us in an email that that companydoesn’t believe it’s exposed to any reclassification. Doctor on Demand didn’t reply to requests for comment.

eHealth tweet of the day: @ TLaskyPhD Went to a new physician today — no #EHR — what’s a patient to do? (and doc didn’t see that there was a problem!)( http://bit.ly/1RvylyO)

It’s Wednesday morning: Your correspondent has been the recipient of an awful lot of stock promotional medical pictures lately, leaving him wondering: why do these ruddy-faced patients, allegedly needing care, look so much healthier than he does? Commiserate over the wonders of advertising (and/or leave news tips) at [email protected] or @ dariustahir. You can reach the rest of the gang at [email protected] and @ David_Pittman, or @ ArthurAllen202 and @ Morning_eHealth.

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PRECISION MEDICINE WON’T BE A CAKEWALK: Renaissance RX, a company owned by an in-law of Louisiana Gov. Bobby Jindal, grew from five employees in 2012 to 800 last year, while raking in $150 million conducting the kind of genetic tests that are central to President Obama’s Precision Medicine Initiative. Then the bottom fell out. Medicare stopped paying. The company laid off all but 60 employees. Its main business — testing seniors for genetic variations that affect how their body responds to medications — entered a mysterious limbo while federal contractors reviewed the practice. The odyssey of Renaissance Rx is one exhibit in the herky-jerky advance of the genetics revolution. It reflects the uncertainty and challenges faced by scientists, doctors, policymakers and entrepreneurs seeking to give birth to a new age of high-tech personalized medicine. Fifteen years after scientists sequenced the human genome, the transformation of genetic information into medical treatment is still progressing slowly — a situation NIH chief Francis Collins calls “pretty depressing.” Read all about it in Arthur Allen’s story here: http://politico.pro/1HdBGmM

DON’T MESS WITH US, TEXAS: If you’ve ever wondered why Teladoc’s been putting up such a fuss about their tussle with Texas’s regulatory boards, the aforementioned SEC filing should quickly apprise you: business in Texas accounted for $10 million in revenues in 2014. That’s roughly a quarter of the company’s $43.5 million haul that year.

STILL ALL ABOUT THE BENJAMINS, PT. II: The Congressional Budget Office has emerged from its enclaves to deliver the verdict on 21 st Century Cures: the bill will cost $106.4 billion between 2016 and 2020.

FDA would have to spend about $68 million to deal with new requirements; ONC about $15 million, to sort out its large new interoperability responsibilities; and CMS and MedPAC, $2 million, to study telemedicine.

SENATE NEW HOPE FOR TELEMEDINCE: For telemedicine, reimbursement by Medicare is still a distant oasis.It’s located right at the horizon, if you gaze over there — and that somewhere is now in the Senate, David Pittman reports for Pros.

After getting rebuffed by the drafters at 21 st Century Cures, the telemedicine industry is now focusing on the Senate Finance Committee as its new hope for funding. One idea is to allow providers of chronic care to use telemedicine, though we’ll see what gains traction. Read the rest here: http://politico.pro/1BJMQNN

INCHING AHEAD ON INTEROPERABILITY: Progress marches on, inch by inch, toward interoperability. A survey, released this week by HIMSS, demonstrates this perfectly — providers seem to like the Direct protocol (similar to email addresses for health information), but aren’t necessarily thrilled about the information they can get on it.

“It is all about the content, or lack of,” said Cletis Earle, CIO of St. Luke’s Cornwall Hospital. Read the rest here: http://politico.pro/1J30HP3

MORE COMMENTS TO SENATE FINANCE: Technology giant Philips says the Senate Finance Committee should look to the Better Care, Lower Cost Act, sponsored by Sens. Ron Wyden and Johnny Isakson, as it looks to crafting chronic care policies. Philips’s comments were focused heavily on remote monitoring and telehealth. The Behavioral Health Information Technology Coalition urged the inclusion of mental health providers and settings for the meaningful use EHR incentive program. The National Coalition on Health Care wants Medicare Advantage plans to be able to offer telemedicine outside of a supplemental benefit. The Electronic Health Record Association, while not offering specific policy solutions in a brief three-page letter, pressed on the importance EHRs and clinical decision support can have on chronic disease management.

HHS AGENCY TO ADD INTEROPERABILTY LEAD: HHS’s Administration for Children and Families will soon hire a “high-level bureaucrat” to serve as its interoperability lead, Maria Cancian, the administration’s deputy assistant secretary for policy, said Tuesday. The new hire will start next month and will help coordinate work to integrate various health and human service data within the federal government. The idea is to integrate health data with social factors such as housing, food supply, and schooling that impact public and community health. The new job-holder in the administration would help make this happen.

VERACODE REPORT SAYS HEALTHCARE LAGS IN SECURITY: Only government agencies do worse than healthcare at securing themselves from hackers, according to a new study by security firm Veracode While many firms in all sectors are making progress at patching holes, says the report, some are better than others. Only 43 percent of known vulnerabilities are remediated by healthcare organizations. And most troubling, 80 percent of healthcare applications exhibit cryptographic issues such as weak algorithms, according to the report.

COMMONWELL EXPANDS, STILL NO YOU-KNOW-WHO: CommonWell announced another expansion today, adding two IT firms (Caremerge and T-System) and HIEs (from Texas and Michigan). Still no Epic, however. The Wisconsin EHR giant has said it prefers to facilitate exchange between networks — a “network of networks” whose members can access information inside different exchanges. To do this Epic helped set up the eHealth Exchange, to which the Michigan HIE is connected.

WHAT WE’RE CLICKING:

A medical gold mine, buried underneath layers of red tape ( http://for.tn/1NgTXhS)

Seven questions for personalized medicine ( http://bit.ly/1BJFCJP)

Google reveals health-tracking wristband ( http://bloom.bg/1RsZr9W)

Data overprotection in Europe ( http://bit.ly/1LlP0VR)