Ohio Attorney General Dave Yost has filed suit against Centene and several of its subsidiaries, alleging that they schemed to misrepresent pharmacy costs and gain overpayments from the state’s Medicaid program.
According to the lawsuit, Centene subsidiary Buckeye Health Plan used sister companies Envolve Health Solutions and Health Net Pharmacy Solutions to administer its pharmacy benefit. Yost’s office said it began to investigate their business practices as the arrangement “raised questions.”
In a statement, Yost’s office said the investigation, which was conducted by outside counsel, found that the companies filed reimbursement requests for amounts that had already been paid by third parties, and failed to accurately represent costs to the Ohio Department of Medicaid.
In addition, the scheme led to artificially inflated dispensing fees, the AG’s office said.
“Corporate greed has led Centene and its wholly-owned subsidiaries to fleece taxpayers out of millions. This conspiracy to obtain Medicaid payments through deceptive means stops now,” Yost said in a statement. “My office has worked tirelessly to untangle this complex scheme, and we are confident that Centene and its affiliates have materially breached their obligations both to the Department of Medicaid and the state of Ohio.”
Yost has openly declared war on PBMs and has made investigating their business practices a critical initiative within his office. In March 2019, the AG filed suit against Optum, seeking to reclaim $16 million in what he says are drug overcharges.
In a statement, Centene called the claims in the lawsuit “unfounded” and said it will “aggressively defend” against the allegations.
“Envolve’s pharmacy contracts with the State are reviewed and pre-approved by state agencies before they ever go into effect. Furthermore, these services saved millions of tax-payer dollars for Ohioans from market-based pharmaceutical pricing,” Centene said.
“We look forward to answering any of the Attorney General’s questions. Our company is committed to the highest levels of quality and transparency,” the insurer said.
On March 4th, the U.S. District Court for the District of Maryland struck down four provisions of the Trump Administration’s Notice of Benefit and Payment Parameters for 2019, 83 Fed. Reg. 16930 (April 17, 2018) (the “Rule”), which governs many aspects of Affordable Care Act (“ACA”) insurance markets beginning in the 2019 plan year. The decision in City of Columbus, et al. v. Norris Cochran comes two and a half years after the cities of Columbus, Baltimore, Cincinnati, Chicago, and Philadelphia, as well as two individuals who rely on health insurance offered on ACA exchanges, filed suit alleging that the actions of the U.S. Department of Health and Human Services (“HHS”) drove up premiums, made enrollment more difficult, and caused more people to go without affordable, high-quality health insurance.
The plaintiffs originally filed suit against Donald J. Trump (in his official capacity as President of the United States) in August 2018, alleging that the Rule would eliminate protections guaranteed by the ACA, deter Americans from enrolling in quality health insurance plans, and drive up insurance costs. They further alleged that the Executive branch directed agencies to “sabotage” the ACA, committed various actions in an attempt to destabilize the exchanges, strategically worked to decrease enrollment, arbitrarily drove up premiums, and refused to defend the ACA. They claimed that these actions have caused premiums to rise and the number of uninsured to increase, harming the government plaintiffs by forcing them to spend more on uncompensated care. The complaint stated two causes of action, first under the Administrative Procedure Act (alleging that the Rule is arbitrary and capricious) and second under the Take Care Clause of the Constitution (U.S. Const. Art. II, § 3). The Court dismissed the Take Care claim in 2020.
In vacating four provisions of the Rule, the court held that HHS’s actions were either arbitrary and capricious or contrary to the ACA. The provisions of the Rule that were vacated by the court are:
Federal Review of Network Adequacy
The Rule’s removal of the federal government’s responsibility to ensure that insurance plans offer adequate provider networks was arbitrary and capricious.
Income Verification
The Rule’s requirement that low-income consumers submit additional documentation to verify their income when it conflicts with government data was arbitrary and capricious.
Standardized Options
The Rule’s elimination of “standardized options” — qualified health plans offering different levels of coverage and price, but with a standard cost-sharing structure specified by HHS that makes it easier for consumers to compare plans — was arbitrary and capricious.
Medical Loss Ratio
The Rule’s reduced medical loss ratio rebates was contrary to law. Plaintiffs argued that this provision made it easier for insurers to avoid paying legally required rebates to their customers.
The court also held that HHS acted appropriately and in compliance with the law with respect to provisions in the Rule that eliminate direct notices to taxpayers that they are in danger of losing tax credits that allow them to afford health insurance; do away with federal oversight of insurance brokers participating in direct enrollment; revise standards for “navigators” who help people find insurance on exchanges; change aspects of the small business exchange program; and limit review of insurance rate increases.The provisions relating to federal review of network adequacy, income verification and standardized options will now go back to HHS for further action. The MLR provision will not.
The Supreme Court announced Thursday it will no longer hear oral arguments later this month on an appeal over the controversial Medicaid work requirements program in New Hampshire and Arkansas.
Legal experts say the move likely means the case won’t be heard this term and possibly may not be heard at all, especially with the Biden administration signaling a different approach to work requirements.
“By taking the cases off the docket, the court is signaling that it won’t hear them this term and probably that it’ll never hear them at all,” University of Michigan Law Professor Nicholas Bagley told Fierce Healthcare.
A major question mark,though, is whether the court will vacate the decisions by several appellate courts that upheld lower court rulings that the programs should be struck down.
“If the Supreme Court is not going to vacate the D.C. Circuit ruling, that means the decision on the books is one that clearly explains why work requirements are not permitted under the Medicaid statute,” said Rachel Sachs, associate professor of law at Washington University, in an interview with Fierce Healthcare.
She added that it is unlikely for the case to come back and “extremely unlikely that this issue will return in the near future.”
The Biden administration asked the court back in February to cancel the oral arguments originally scheduled for March 29. The administration said in a filing that allowing the requirements to take effect won’t promote the objectives of Medicaid to extend health insurance to low-income people.
President Joe Biden’s Department of Justice called for the court to vacate judgments of appeals courts and remand the case back to the Department of Health and Human Services so it can finish a review of all the waivers.
Arkansas Attorney General Leslie Rutledge said in a statement back in February that the legal filing seeking the delay was a “politically motivated stunt designed to avoid a Supreme Court decision upholding a program that encourages personal responsibility while still providing healthcare coverage for those seeking gainful employment.”
Arkansas’ work requirements program was installed in 2018 and led to approximately 18,000 people losing Medicaid coverage before the program was struck down by a federal judge.
Appellate courts upheld judgments from lower courts that New Hampshire and Arkansas’ programs did not meet the objectives of the Medicaid program. The states appealed to the Supreme Court, which agreed to hear the cases late last year.
Court rulings have also struck down programs in other states including Kentucky and Michigan. Kentucky pulled its program in 2019 after a Democrat was elected governor.
Arkansas and New Hampshire’s attorneys general did not return requests for comment on the Supreme Court’s decision Thursday.
Ann Arbor-based Michigan Medicine will start construction on its $920 million hospital in the coming months, after delaying the project last year amid the COVID-19 pandemic, according to a March 8 health system update.
Michigan Medicine said its planning team has resumed design work on the facility.
The 12-story, 690,000-square-foot hospital is expected to house 264 private rooms, 20 operating rooms and three interventional radiology suites.
Citing a financial loss exacerbated by the COVID-19 pandemic, the academic health system delayed the project in May 2020.
With the delay, the new hospital is slated to open in the fall of 2025.
The following four health system credit rating downgrades occurred in the past three months. They are listed in alphabetical order.
1. Mercy Hospital(Iowa City, Iowa) — from “Ba3” to “B1” (Moody’s Investors Service) “The downgrade to B1 reflects the near term challenges that Mercy will face following the large operating loss in fiscal 2020, narrow headroom to the debt service covenant in fiscal 2020 and the pronounced December COVID surge, creating headwinds to retire to historical levels of stronger financial performance,” Moody’s said.
2.NYC Health + Hospitals — from “AA-” to “A+” (Fitch Ratings) “The downgrade of the NYCHCC bonds is tied to the downgrade of the city’s IDR to ‘AA-‘ from ‘AA’, and reflects Fitch’s expectation that the impact of the coronavirus and related containment measures will have a longer-lasting impact on New York’s economic growth than most other parts of the country,” Fitch said.
3. The Methodist Hospitals (Gary, Ind.) — from “BBB” to “BBB-” (Fitch Ratings) “The downgrade to ‘BBB-‘ is based on continued operating constraints after significant losses in 2017 through 2019. Interim nine-month fiscal 2020 operating income results, despite the pandemic, reflect an early stabilization trend but at weaker levels that are more consistent with the prior three years,” Fitch said.
4. Tower Health (West Reading, Pa.) — from “BB+” to “BB-” (S&P Global Ratings); from “BB+” to “B+” (Fitch Ratings) “The two-notch downgrade reflects our view of Tower Health’s continued significant operating losses through the interim period ended Dec. 31, 2020, which have been higher than expected, coupled with recent resignations of members of the senior management team,” said S&P Global Ratings credit analyst Anne Cosgrove.
The likelihood that U.S. hospitals will default on debt within the next year fell significantly since the 2020 peak amid the early days of the pandemic, according to a March 10 report from S&P Global Market Intelligence.
In 2020, the median default odds jumped to 8.1 percent. However, as of March 8, the probability of default rate fell to 0.9 percent.
Samuel Maizel, a partner from law firm Dentons, told S&P Global that many hospitals operate on razor-thin margins, and they are seeing less cash flow amid the pandemic as patients shy away from receiving care, but stimulus funds should help avert a tidal wave of hospital bankruptcies in the next year.
“They’re sitting on a lot of cash, which gives them a cushion, even though they’re continuing to lose money,” Mr. Maizel told S&P Global.
S&P said that as stimulus funds dry up other pressures may challenge healthcare facilities.
The financial challenges caused by the COVID-19 pandemic forced hundreds of hospitals across the nation to furlough, lay off or reduce pay for workers, and others have had to scale back services or close.
Lower patient volume, canceled elective procedures and higher expenses tied to the pandemic have created a cash crunch for hospitals, and hospitals are taking a number of steps to offset financial damage. Executives, clinicians and other staff are taking pay cuts, capital projects are being put on hold, and some employees are losing their jobs. More than 260 hospitals and health systems furloughed workers in the last year, and dozens of others have implemented layoffs.
Below are six hospitals and health systems that are laying off employees in the next 2 months. Some of the layoffs were attributed to financial strain caused by the pandemic.
1. Sacramento, Calif.-based Sutter Healthis laying off hundreds of employees, most of whom work in information technology. In a filing with the state, Sutter said it plans to lay off 277 employees on April 2. The 277 jobs being eliminated include 92 analysts, 43 engineers and 28 project managers, according to the Sacramento Business Journal, citing the system’s filing with California’s Employment Development Department.
2. Plattsburgh, N.Y.-based Champlain Valley Physicians Hospitalplans to cut 60 jobs. The hospital, which is facing a $6.5 million deficit in fiscal year 2021, said the cuts include 10 people who were laid off or had permanent hour reductions, 12 people who are planning retirement, and the rest are open positions that will not be filled.
3. Hialeah (Fla.) Hospital is closing its maternity ward and laying off 62 employees April 5, according to a notice filed with the state. Most of those affected by the layoffs are registered nurses.
4. The outgoing owners of Providence Behavioral Health Hospitalin Holyoke, Mass., are laying off the hospital’s 151 employees, effective April 20, according to MassLive. Trinity Health of New England, part of Livonia, Mich.-based Trinity Health, is selling the hospital to Health Partners New England, which plans to take over the hospital April 20.
5. Olympia Medical Center in Los Angeles is slated to close March 31. The closure will result in the layoffs of about 450 employees.
6. Minneapolis-based Children’s Minnesota is laying off 150 employees, or about 3 percent of its workforce. Children’s Minnesota cited several reasons for the layoffs, including the financial hit from the COVID-19 pandemic. Some layoffs occured in December and the rest will occur at the end of March.
Wealthy nations — including the U.S., the U.K. and the EU — have vaccinated their citizens at a rate of one person per second over the last month, while most developing countries still haven’t administered a single shot, according to the People’s Vaccine Alliance.
Why it matters:As higher-income countries aim to achieve herd immunity in a matter of months, most of the world’s vulnerable people will remain unprotected.
Experts say that mutations that may arise while the virus spreads could be a danger to us all, vaccinated or not.
The big picture: Even though more vaccines will arrive in developing nations soon, only 3% of people in those countries are likely to be vaccinated by mid-2021.
At best, only a fifth of their population will be vaccinated by the end of the year, per the People’s Vaccine Alliance.
What we’re watching: Three dozen countries have bought several times the amount of vaccine that they’ll need to vaccinate their entire population.
The U.S. alone has ordered more than a billion extra doses, Science Magazine reports. Global health leaders are saying it’s time to figure out where all of these excess doses will go.
“Over the next year or two, U.S. surplus doses and those from other countries could add up to enough to immunize everyone in the many poorer nations that lack any secured COVID-19 vaccine,” Science writes.
No matter how hard you squint, or what angle you look at it from, the coronavirus vaccines are a triumph. They are saving lives today; they will help end this pandemic eventually; and they will pay scientific dividends for generations.
The big picture: The pandemic isn’t over. There are still big threats ahead of us and big problems to solve. But for all the things that have gone wrong over the past year, the vaccines themselves have shattered even the most ambitious expectations.
The vaccines represent a “stunning scientific achievement for the world … unprecedented in the history of vaccinology,” said Dan Barouch, an expert on virology and vaccines at Harvard, who worked on the Johnson & Johnson vaccine.
Details: Developing a vaccine takes an average of 10 years — if it works at all. Despite years of well-funded research, there are still no vaccines for HIV or malaria, for example.
We now have multiple COVID-19 vaccines, all developed in less than a year.
The Pfizer and Moderna vaccines are the world’s first successful mRNA vaccines — which, to oversimplify it, teach our bodies to generate an immune response without relying on weakened or inactivated viruses. It’s a milestone that scientists have been working toward for 30 years.
Moderna’s vaccine is the company’s first licensed product of any kind.
Most importantly, all the leading vaccines work extremely well.
All four vaccines or vaccine candidates in the U.S. — from Pfizer, Moderna, AstraZeneca and Johnson & Johnson — appear to prevent coronavirus deaths, and to offer total or near-total protection against serious illness.
Some of the vaccines are more effective than others at preventing mild or asymptomatic infections, but all of them significantly exceed the FDA’s threshold to be considered effective.
The catch:South Africa on Sunday halted distribution of the AstraZeneca vaccine because it appeared not to work against the dangerous variant discovered there — which is spreading across the world.
The other vaccine makers have also said their products aren’t as effective against the South African variant.
But that’s a reason for the rest of the world to lean into the existing vaccines, not to be wary of them.
Viruses can mutate when they spread widely. The best defense against widespread variants is to vaccinate as many people as possible and step up social distancing to contain the virus.
Drugmakers may need to develop booster shots or new recipes to deal with variants, but waiting for a vaccine that addresses every variant will only leave the door open for more variants.
Our biggest problemsare not with the vaccines, but rather the processes that surround them.
Supplies need to increase; distribution needs to become far more efficient; we need to ensure that people get their second shots, when applicable; and people need to be willing to get vaccinated once they’re eligible.
That’s a long and difficult to-do list, and getting those things wrong could drag the pandemic out for years. But if we can get the process right, the vaccines themselves are powerful enough to do the job.
“Once the history of this is written,they are going to be referred to as some of the greatest achievements of science,” Zeynep Tufekci, a University of North Carolina sociologist with a track record of prescience on the coronavirus, told The New York Times’ Ezra Klein.
“It’s the kind of thing you would have national celebration and fireworks and church bells ringing and all of that,” she said.
This wasn’t a miracle, and it didn’t happen overnight. “What we’ve seen over the last year is the result and culmination of decades of scientific advances,” Barouch said.
Researchers have been building toward mRNA-based vaccines for roughly 30 years, fueled by broader advances in genetic science.
Those same advances have also greatly accelerated genetic sequencing — which is why researchers were able to map out COVID-19’s structure within weeks of discovering the virus, and to then begin working on potential vaccines.
What’s next: The vaccine race is one of the few areas of this entire pandemic where the U.S. and the world will be able to learn from our successes, rather than our failures.
The breakthrough of successful mRNA vaccines will, scientists hope, pave the way fora new generation of products that are more effective and easier to develop than previous vaccines.
Shoveling money at vaccine developers and establishing early, step-by-step communication with regulatory agencies also helped accelerate this process, and can help again in future pandemics.
The bottom line: “Good funding, great science and great collaboration with the regulatory agencies — that’s how they were able to do something that I didn’t think could be done in a year,” said Mark Slifka, an immunology professor at Oregon Health & Science University.
