Striking nurses at Illinois hospital return to work without new contract

https://www.healthcaredive.com/news/university-illinois-nurses-back-to-work-after-strike/585631/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202020-09-22%20Healthcare%20Dive%20%5Bissue:29794%5D&utm_term=Healthcare%20Dive

Dive Brief:

  • Nurses at the University of Illinois Hospital in Chicago returned to work Monday following a weeklong strike over their new contract. The two sides were unable to reach an agreement despite negotiations “that ran well into the evening” each night of the strike and planned to resume talks Monday.
  • They made some progress on key issues. The hospital agreed to hire more than 200 nurses to quell staff-to-patient ratio concerns at the forefront of the strike, according to the Illinois Nurses Association. UIH also proposed slight wage increases for nurses opposed to previously offered freezes, though the union countered with larger increases, INA said.
  • UIH agreed that it’s closer to making a deal on the contract despite not reaching a tentative agreement. Nurses will report to work under the existing terms of their past contract until a new deal is reached.

Dive Insight:

Nurse staffing levels have been an issue since long before the COVID-19 pandemic, but the crisis has accelerated those concerns, along with labor activity, as clinicians on the front lines have faced grueling conditions.

Before the strike began, UIH said staff-patient ratios are too rigid and remove flexibility, instead favoring acuity-based models focused on “obtaining the right nurse at the right time for each patient.”

But it amended that proposal last week, now agreeing to hire 200 nurses “to improve the staffing ratio, addressing the most important issue the nurses insisted on as a primary reason to strike,” according to INA.

Illinois has a Safe Patient Limits bill before its legislature that would spell out the maximum number of patients who may be assigned to a registered nurse in specified situations. HB 2604 was introduced in February 2019 and is currently before the House rules committee, though it has not received a full vote.

On Sept. 11, the day before the UIH strike began, a judge granted a temporary restraining order forbidding nurses in certain critical care units from going on strike.

The lawsuit, filed by the University of Illinois Board of Trustees, claimed a work stoppage among those nurses would endanger public safety due to the unique nature of the services provided in the units, specialized needs of patients they serve and lack of qualified substitutes to perform nurses’ duties.

About 525 nurses out of 1,400 represented by INA were barred from striking at UIH, according to the union.

Two days after UIH nurses walked off the job, service workers at the university main campus, hospital and various other facilities also went on strike.

Some 4,000 clerical, professional, technical, service and maintenance workers represented by Service Employees International Union 73 went on strike Sept. 14 over similar issues as the nurses, mainly staffing and pay.

The planned duration of the SEIU strike is unclear, though it’s been a week since it began.

“As UIC nurses return to work, we will continue our strike,” the union said in a statement. “We won’t quit until UIC respects us, protects us and pays us. Working through a pandemic and seeing our co-workers die has stiffened our resolve to fight for however long it takes to ensure the safety of all workers and those we serve.”

 

 

 

 

Chicago hospital defeats allegations of ‘ghost payroll’ scheme

https://www.beckershospitalreview.com/finance/chicago-hospital-defeats-allegations-of-ghost-payroll-scheme.html?utm_medium=email

False Claims Act & Physicians - Basic Primer

An Illinois federal court has dismissed a whistleblower lawsuit alleging University of Chicago Medical Center, Medical Business Office and Trustmark Recovery Services violated the False Claims Act, according to Bloomberg Law

MBO and Trustmark provided medical billing and debt collection services for UCMC. The whistleblowers, Kenya Sibley, Jasmeka Collins and Jessica Lopez, alleged MBO and Trustmark engaged in a “ghost payroll” scheme that involved regularly falsifying UCMC invoices, listing employes who didn’t work on the hospital’s collections and time charges from people who were not employees.

The whistleblowers, former employees of MBO and Trademark, alleged the companies and UCMC knew about the “ghost payroll” scheme, and that the allegedly falsified invoices caused the hospital to report overstated wages to the federal government, triggering a larger Medicare reimbursement than it was entitled to.

The complaint further alleged that MBO and Trustmark engaged in a “bad debt” scheme. “MBO would regularly write-off Medicare bad debts for amounts a Medicare beneficiary owed without conducting a reasonable collection effort, when Medicare beneficiaries were still paying on the debts, or when Medicare beneficiaries did not actually owe a debt,” the amended complaint states.

After writing off the bad debt, MBO would allegedly send the bad debt to Trustmark or another collection agency for further collection efforts.

On Sept. 14, Judge Harry Leinenweber of the U.S. District Court for the Northern District of Illinois dismissed the amended complaint, saying the whistleblowers failed to adequately allege the defendants engaged in a scheme to inflate bad debts and falsify invoices in University of Chicago’s cost reports. 

The allegations of a “ghost payroll” scheme fail because the whistleblowers failed to allege that defendants certified compliance with any regulation, which is required when filing a false claims case, the judge said in the decision. The amended complaint also fails to establish sufficiently UCMC’s knowledge of the alleged scheme.

The judge also ruled that the amended complaint failed to adequately allege a “bad debt” scheme. Allegations related to MBO’s and Trustmark’s bad debt reports to clients cannot satisfy the requirements to show that companies or their clients submitted improper claims for bad debt reimbursements to the government, reads the decision.

 

 

 

 

Why Your Hand Sanitizer May Be Ineffective Or Tainted By Cancer-Causing Chemicals

https://www.forbes.com/sites/ericmack/2020/09/10/why-your-hand-sanitizer-may-be-ineffective-or-tainted-by-cancer-causing-chemicals/?utm_source=newsletter&utm_medium=email&utm_campaign=coronavirus&cdlcid=5d2c97df953109375e4d8b68#115d2e346241

Since the start of the coronavirus pandemic, hand sanitizers have become a sought-after staple of life in a Covid-19-afflicted world. But supply chains have been turned upside down in our new normal, and some sketchy suppliers have at times stepped in to fill the vacuum. The result for consumers could be hand sanitizer that doesn’t work as advertised and might even be filled with impurities that can cause cancer.

When the pandemic set in during the spring, New Mexico’s Rolling Still Distillery began switching gears from making its trademark green chile vodka and other spirits to producing hand sanitizer for sale and free distribution during the early days of lockdown.

In the middle of May, Rolling Still founder Dan Irion (disclosure: Irion and I have lived in the same small town for years and occasionally hang out socially) began to receive a number of emails from bulk ethanol producers, offering up the alcohol for sanitizer production at prices as low as $1.60 a gallon, quite a deal over the $9 per gallon or more Rolling Still normally pays for its key ingredient.

To take advantage of the steep discount, Rolling Still would need to come up with $60,000 and take possession of a huge tank of the stuff.

Irion balked at the offer after he couldn’t get a straight answer about the quality of the ethanol. He asked one of the suppliers if organic alcohol was available and was told simply: “It’s all good. Don’t worry about it.”

He called Brian Coutu from Rolling Still’s regular alcohol supplier, Greenfield Global, who warned him away from what he says is fuel-grade ethanol potentially loaded with chemicals that are known to cause cancer.

Coutu knew this because Greenfield was getting the same cold calls Irion received, but as a large corporation, it could easily test samples.

“They send us a sample and it’s just God awful…it’s got acetaldehyde and benzene and all kind of nasty stuff in it; it’s not pure,” Coutu told me over the phone. “What (fuel producers) are trying to do is dump it off to these companies that run it through charcoal and try to do a million other things to make it USP grade (safe for food, drug or medicinal use), which it’s still not.”

Irion and Coutu both told me that the cold calls had largely stopped by the end of June. The price of ethanol cratered at the end of March as the pandemic took hold and fuel demand dropped. It stayed low through May before edging back near pre-pandemic levels at the end of June.

“Because of the fast and furious nature of the hand sanitizer industry at that time, we might have done it,” Irion says. “I’m sure there are others who saw this as a way to do something good and make money.”

And this is the big question for right now. How much of the sanitizer that made it to warehouses, store shelves and ultimately into our homes, cars and hands was produced from industrial fuel-grade ingredients rather than safe medical or food grade alcohol?

“You’re seeing less pure forms get into the market because there is a shortage of ethanol,” says Mike Sandoval, President and Chief Operating Officer of Santé Laboratories. “We see tert-butyl impurities, we see methanol, we see benzene in many of the hand sanitizers we test… We’ve seen some tequila grade ethanol that when you open the bottle it smells terrible, unless you like tequila… we’re seeing a lack of transparency in this space.”

 

Not just distilleries

Santé Labs works primarily in the hemp and CBD markets, providing quality testing and other services. CBD manufacturers can work with large amounts of ethanol and also turned to making hand sanitizers in the spring.

Sandoval says he began seeing CBD manufacturers and related companies using “untraditional sources” of ethanol from places like Mexico, Guatemala, South America and the fuel industry. The raw alcohol often came with a certificate of authenticity claiming 100 percent purity, but in reality it might actually contain chemical impurities and a significant amount of water.

“They come from a price sensitive market where no one wants to pay for high quality tests… They’re not used to operating in sophisticated manufacturing where you are required to test incoming raw material. For example the ethanol or isopropyl alcohol that goes in a hand sanitizer. You’re supposed to test (according to Food and Drug Administration rules) the purity of that ingredient before you formulate it, and that’s just not happening.”

For its part, the FDA has recently made public guidance on a testing method to detect impurities in hand sanitizers like those seen by Greenfield and Sante Labs.

“The agency’s investigation of contaminated hand sanitizers is ongoing,” the FDA said in an email. “Producing, importing and distributing toxic hand sanitizers poses a serious threat to the public and will not be tolerated.”

The takeaway from all this is that the ethanol market for manufacturers new to the production of hand sanitizer was flooded with sketchy raw alcohol that could be diluted or tainted with carcinogens. If that raw material isn’t tested on the front end, the resulting final product can come out with those impurities and an alcohol concentration that doesn’t meet the claims stated on the label.

The FDA maintains a list of hand sanitizers to avoid because they’ve been found to contain dangerous amounts of methanol, or an insufficient amount of its actual sanitizing ingredient, such as ethanol or isopropyl alcohol. However, the FDA’s enforcement powers are limited. A new waiver program created in response to the pandemic makes it easier for manufacturers to get around substantiating their label claims.

“Nine out of ten people are not meeting the label claim,” Sandoval says. “So most of the hand sanitizer you’re using from stores – and I even saw one from Wal-Mart that was a big brand… their hand sanitizers were crystallizing and turning green. I guarantee that they’re at 50 percent ethanol when they need to be at 70 percent.”

This brings up yet another concern, which is the shortage of proper plastic bottles and containers for sanitizer. Sandoval suspects that some manufacturers may have resorted to using the wrong type of containers, which then react with the alcohol, leaching chemicals into the sanitizer and turning its color.

“This entire supply chain is upside down because there’s a shortage of everything.”

 

Covering the stink of subpar sanitizer

Coutu at Greenfield Global says he’s aware of companies that have purchased their alcohol from unconventional sources, lured by prices as much as 90 percent lower than what Greenfield would charge.

The FDA relaxed the allowable limit of impurities like acetaldehyde and benzene that can make it into hand sanitizer, but Coutu says the limits still only allow a very small amount, whereas the samples Greenfield was testing had levels of contamination ten to 100 times higher than the new limits.

“And the odor on it is just not acceptable. It smells like burnt tequila… there’s some pretty nasty stuff out there and it’s dangerous.”

New services have even popped up this year, with fragrance manufacturers offering up products to help reduce the bad odor of some ethanol-based hand sanitizers.

Irion feels like he dodged a bullet by not jumping at the deeply discounted supply of ethanol others may not have been able to resist.

Rolling Still continued buying the organic alcohol it uses in both its spirits and sanitizer. It’s now ramping up production of sanitizer, which Irion says has no need for added fragrances to mask any ethanol odors, but some local osha and sage is infused to lighten the scent.

The alcohol used is also distilled five times just to make sure all impurities are removed.

 

 

 

 

Urgent care network to pay $12.5M in billing fraud case

https://www.beckershospitalreview.com/legal-regulatory-issues/urgent-care-network-to-pay-12-5m-in-billing-fraud-case.html?utm_medium=email

Different Types of Fraud and Abuse found in Medical Billing - Leading Medical  Billing Services | medicalbillersandcoders

A company that owned and operated more than 30 urgent care centers has agreed to pay $12.5 million to resolve overbilling allegations, the Department of Justice announced Sept. 3. 

UCXtra Umbrella, which did business in Arizona as Urgent Care Extra, previously admitted to engaging in healthcare fraud and monetary transactions derived from unlawful activity. The company admitted that it had billing procedures in place that caused its providers to overstate the complexity of the medical services provided to patients. This resulted in falsely inflated reimbursement rates from health insurance companies, according to the Justice Department. 

The company also admitted that staff were encouraged to order tests and procedures that may not have been medically necessary to justify higher billing codes and reimbursement. 

Health insurance companies overpaid the company by an estimated $12.5 million due to the fraud scheme, according to the Justice Department.

 

 

Einstein’s flagship hospital at risk without merger, Jefferson and Einstein say

https://www.beckershospitalreview.com/hospital-transactions-and-valuation/einstein-s-flagship-hospital-at-risk-without-merger-jefferson-and-einstein-say.html?utm_medium=email

FTC says merger of Jefferson and Einstein would raise hospital prices 6.9%

The merger of Einstein Healthcare Network and Jefferson Health is a matter of survival for Einstein’s flagship hospital, the two Philadelphia systems argued in a federal court filing this week, according to The Philadelphia Inquirer.

The health systems are attempting to overcome opposition to their merger from the Pennsylvania attorney general and the Federal Trade Commission.

A Sept. 14 hearing is slated on the FTC’s preliminary injunction request. 

A court filing from the two health systems argued that Einstein, which has only had annual operating profits twice since 2012, is on a path to financial failure and needs $500 million to invest in key capital projects and deferred maintenance.

Without the infusion, Jefferson and Einstein said Einstein will continue to weaken “as it is forced to cut services or close facilities,” the Inquirer reported.

“Einstein was unable to identify any alternative buyer to Jefferson that possessed the financial strength and scale necessary to address Einstein’s financial problems,” the filing read, according to the Inquirer. “No other potential strategic partners were willing and able to commit to keep EMCP [Einstein Medical Center Philadelphia] open with its current set of services.”

The FTC announced in February its intent to sue to block the merger, arguing that combining the two systems would reduce competition in Philadelphia and Montgomery County.

“Jefferson and Einstein have a history of competing against each other to improve quality and service,” the FTC said in the February announcement. “The proposed merger would eliminate the robust competition between Jefferson and Einstein for inclusion in health insurance companies’ hospital networks to the detriment of patients.”

The FTC said that with a combination, the two parties would own at least 60 percent of the inpatient general acute care service market around Philadelphia and at least 45 percent of that same market in Montgomery County.

 

 

 

Battle over COVID-19 school openings goes to the courts

Battle over COVID-19 school openings goes to the courts

Nearly 800 COVID-19 lawsuits have been filed, according to law firm's  tracker

Teachers unions are waging court fights across the country aimed at unwinding what they say are unsafe and politically motivated timetables for reopening schools that risk exposing personnel to the coronavirus pandemic.

State officials eager to ramp up brick-and-mortar operations are facing lawsuits from Florida to Texas to Iowa over reopening plans as well as access to the COVID-19 infection data needed to monitor the rate of spread within school communities. 

At the same time, lawsuits are flying from the opposition direction: Parents in several states, including New York, Massachusetts and Oregon, dissatisfied with web-based teaching alternatives, are suing to force state officials to reopen physical schools sooner as courts are increasingly called upon to referee the fight over education in the age of coronavirus.

“A legal storm is brewing as safety and social distancing requirements for a physical return to school begin to take shape around the country,” Maria Ferguson, executive director of the Center on Education Policy at George Washington University, wrote on the education website The 74.

As millions of students prepare for the first day of school — whether in-person, remote or a hybrid of the two — the fight over the reopening physical school buildings is likely to intensify.

The debate over in-person K-12 instruction planning is inseparably tied to the issues of child care needs and parents’ ability to return to the workforce to help revive the struggling economy, all of which is playing out against the backdrop of a fast-approaching November election in a country that has seen nearly 6 million cases and more than 181,000 deaths from COVID-19.

Perhaps the highest-profile legal battle is taking place in the courts of Florida, where Republican Gov. Ron DeSantis signed off last month on an emergency order over school reopenings.

Under the order, most Florida school districts would be required to hold in-person classes five days a week by the end of August or risk losing funding. President Trump, who counts DeSantis as a close ally, has also threatened to cut off federal funding for schools if they do not resume in-person learning this fall.

The Florida policy prompted a lawsuit from the Florida Education Association (FEA), a statewide teachers union, and several other plaintiffs in favor of a more cautious return to in-person teaching.

“Public schools are not designed for COVID safety, and indeed, the government has recognized that they are high-contact environments,” said Kendall Coffey, the lead plaintiff’s attorney in the Florida case, who likened prematurely opened schools to “disease factories” and called the Florida policy “financial bullying.”

There are any number of issues, in terms of hallway sizes, the flow of students in and out of classrooms, ventilation, even how many students go into the bathroom,” he told The Hill. “There are many elements that are virtually impossible to guarantee when you’re dealing with children in large amounts.”

On Aug. 24, a Florida judge ruled in favor of the union and temporarily halted the statewide order. In his decision, Judge Charles Dodson struck down the order’s unconstitutional provisions and blasted DeSantis for having “essentially ignored” the state’s constitutional requirement that schools be operated safely.

“The districts have no meaningful alternative,” wrote Dodson, of Leon County. “If an individual school district chooses safety, that is, delaying the start of schools until it individually determines it is safe to do so for its county, it risks losing state funding, even though every student is being taught.”

A Florida appeals court agreed to temporarily halt Judge Dodson’s order from taking effect while DeSantis appeals.

The state contends that the benefit of in-person instruction outweighs the health risks associated with reopening brick-and-mortar schools. Some Florida school officials have also declined to disclose incidents of positive COVID-19 cases to school communities, citing the need for patient privacy. 

Attorneys for Florida have also argued in hearings that courts should not substitute their judgment for that of policymakers who have balanced all the equities and decided a prompt in-person reopening is the best policy.

Randi Weingarten, president of the American Federation of Teachers (AFT), one of the largest teachers unions in the country, said Florida has its priorities backward.

“What their arguments show is that they don’t care about human life,” Weingarten told The Hill.

According to Weingarten, internal AFT polling in June showed that about 3 in 4 teachers said they would be comfortable returning to the classroom if guidelines from the Centers for Disease Control and Prevention (CDC) were implemented in schools.

But she predicts that attitudes among teachers have shifted dramatically in past months as the Trump administration has failed to adequately manage the virus to ensure schools can be reopened safely.

“We’re polling right now,” she said. “And my hunch is that just like the public polls, it’s totally flipped.”

The AFT is backing lawsuits in Florida, New Mexico and Texas. Before schools can reopen safely — for what Weingarten calls “the biggest move indoors that the nation has done since March” — the group says local positivity rates should be below 3 percent and schools should have visibility into daily transmission rates. 

The union is also pushing for protocols that involve testing, contact tracing and isolation and implement best practices from the CDC for things such as ventilation, cleaning, physical distancing, mask-wearing and other safeguards.

As teachers unions make their case in court, parents in at least five states have filed lawsuits of their own to accelerate school reopenings.

A nonprofit litigation group called the Center for American Liberty, co-founded by lawyer and GOP official Harmeet Dhillon, is backing one such suit in California. Democratic Gov. Gavin Newsom’s restrictions on in-person school openings in the Golden State will affect an estimated 80 percent of K-12 students.

“The effects of this ham-handed policy are as predictable as they are tragic,” the lawsuit filed in a federal court in California states. “Hundreds of thousands of students will essentially drop out of school, whether because they lack the technological resources to engage with ‘online learning’ or because their parents cannot assist them.”

The litigation raises concerns about everything from school closures exacerbating the achievement gap and disproportionately harming special needs students and those without convenient internet access to challenges over the constitutional validity of government health orders.

Weingarten, of AFT, said it’s important to remember that despite seemingly irreconcilable differences over the policy details, all parties want to see schools reopen as soon as it’s safe to do so.

“None of us believes that remote is a substitute,” she said. “It’s a supplement.”

 

 

Ex-California hospital CFO pleads not guilty to felony charges

https://www.beckershospitalreview.com/legal-regulatory-issues/ex-california-hospital-cfo-pleads-not-guilty-to-felony-charges.html?utm_medium=email

Binghamton Embezzlement Lawyer | Embezzlement Charges in NY

The former CFO of Health Care Conglomerate Associates pleaded not guilty to charges of embezzlement, conflict of interest and using his official position for personal gain, according to The Sun-Gazette

Alan Germany formerly served as CFO of HCCA, which previously managed Tulare (Calif.) Regional Medical Center. He also served as the acting CFO of Tulare Regional and Inyo Hospital in Lone Pine, Calif. Mr. Germany was one of three HCCA executives indicted Aug. 11. 

Mr. Germany was charged with 11 counts of embezzlement, four counts of conflict of interest, and one count each of using his official position for personal gain and failing to file a statement of economic interest. On Aug. 19, he pleaded not guilty to the charges, according to the report. 

The charges against Mr. Germany include accusations of having hospital staff generate false billing invoices and working with HCCA’s former CEO Yorai “Benny” Benzeevi, MD, to embezzle U.S. Treasury funds meant for hospital districts, according to the report.

If convicted on all charges, Mr. Germany could face more than 10 years in prison, according to the Visalia Times Delta. His next hearing is set for Sept. 30. 

 

 

 

 

Drugmakers getting bolder in fight over 340B drug discounts

https://www.fiercehealthcare.com/hospitals/drug-makers-getting-bolder-fight-over-340b-drug-discounts?mkt_tok=eyJpIjoiTTJRMlkySTJZV1ZoWldGbSIsInQiOiJYVUFLbDJLQ2hkbzBrWjBpOVwvbm5YYUpVWExRZ21QRXBkWGJFWldLVGxCZXlFOENlazZBdUhpVm5RUTczOGFxZFVLSEszOTZra20zYzdOQllvMjVHVXNvOUFcL0J3Rk0reFwvV1VHRytoUTYwaDNxelgwcmw5RHhuSEZtNGtlcXZ6MCJ9&mrkid=959610

Drugmakers getting bolder in fight over 340B drug discounts ...

Drugmakers are getting bolder in their bid to restrict access to drugs discounted under the 340B program as legal experts say a lack of enforcement has created a regulatory void.

Hospitals are imploring the Department of Health and Human Services (HHS) to clamp down on several moves by drug companies, including Novartis and AstraZeneca, to limit distribution of certain 340B drugs. But experts say an administration-wide change in what agencies can enforce is likely behind drugmakers’ aggressive moves.

“It is an outrage that these actions are being taken at a time when hospitals are in the midst of their response to the COVID-19 public health emergency, which has further demonstrated the fractured, inadequate state of the prescription drug supply chain,” the American Hospital Association said in a release last week.

Hospitals and 340B advocates are furious that AstraZeneca announced last Friday that starting Oct. 1 it will not offer any discounted drugs to contract pharmacies, which are third-party entities that dispense drugs acquired under the program. 

It is the most aggressive move in a fight sparked last month between drug companies against contract pharmacies, which are a popular tool among 340B hospitals.

The back story

In exchange for participating in Medicaid, a drug manufacturer is required to offer discounts to safety-net hospitals that participate in 340B. But the program has been beset with controversy in recent years as drug companies claim the program has gotten too large and patients aren’t benefiting from the discounts.

Eli Lilly decided last month to restrict sales to contract pharmacies of certain formulations of erectile dysfunction drug Cialis. Merck and Novartis also said contract pharmacies would need to submit claims data to avoid duplicate discounts.

We’ve reached out to pharmaceutical companies for comment and will update when we hear back.

Industry advocacy organization Pharmaceutical Research and Manufacturers of America (PhRMA) has previously called for reforms to the 340B program, including to the ability for covered entities to contract with multiple outside pharmacies to dispense drugs that receive 340B discounts. Even though the number of Americans who are insured has risen, 340B is growing exponentially, they said. “Not all 340B hospitals are good stewards of the program,” PhRMA said.

Hospital groups and 340B allies charge that the moves blatantly violate a 2010 guidance released by the Health Resources and Services Administration (HRSA), which oversees the 340B program.

The guidance permits a hospital participating in 340B to voluntarily use a contract pharmacy and outlines the requirements to do so. The guidance also says a manufacturer must still sell a drug at a price not to exceed the statutory 340B price.

But an October 2019 executive order said federal agencies cannot enforce guidance documents unless they are part of a contract amid other exceptions.

HRSA has said that it doesn’t have the authority under the 340B statute to take enforcement action on “requirements that have been established under guidance,” said Emily Cook, a partner with law firm McDermott Will & Emery.

The agency’s current position is that it can only take enforcement actions on clear violations of the 340B statute, she added.

HRSA told Fierce Healthcare in a statement it is considering the issues raised by the manufacturers and “evaluating our next steps.”

What’s next

Hospitals are hoping HHS steps in and clears up the issue.

If not, then hospitals could either take drug companies to court or lobby Congress to give HRSA more authority over the program.

The advocacy group 340B Health said last week that if the administration refuses to step in then it will “pursue all legislative and legal avenues available to us to defend the safety net.”

Hospitals need to re-examine their 340B contract pharmacy deals to exclude AstraZeneca drugs, according to an article from Brenda Maloney Shafer and Richard Davis of law firm Quarles & Brady.

If they fail to do this, then the contract pharmacy could pay for dispensing and administrative fees for drugs that won’t get a 340B discount.

This is the latest spat over the controversial program. Hospitals took the administration to court after it tried to cut payments under the program by nearly 30%.

An appeals court recently ruled that HHS does have the authority to institute the cuts.

 

 

 

 

Drug payment cuts to 340B hospitals spur debate on best path forward

https://www.healthcarefinancenews.com/news/drug-payment-cuts-340b-hospitals-spur-debate-best-path-forward

340B hospitals breathing easier under Dem-controlled House

Hospitals say revenue from the 340B program is essential, while others contend the original law is being abused.

On August 3, an federal appeals court ruled that 340B hospitals will now be subject to Medicare cuts in outpatient drug payments by nearly 30%, reversing an earlier ruling calling those cuts illegal. The 2-1 decision by the U.S Court of Appeals for the District of Columbia Circuit essentially gives the Trump Administration and the Department of Health and Human Services the legal authority to reduce payment for Medicare Part B drugs to 340B hospitals.

HHS Secretary Alex Azar said the action means patients – particularly those who live in vulnerable areas – will pay less out-of-pocket for drugs in the Medicare Part B program. But providers, including the American Hospital Association, the Association of American Medical Colleges and America’s Essential Hospitals, said the 340B decision will hurt hospitals and patients in these vulnerable areas.

Hospitals that serve large numbers of Medicaid, Medicare and uninsured patients were getting the drugs for a discounted price, but, getting reimbursed at the higher price, HHS pays all hospitals for Medicare Part B drugs. The hospitals, many of which are in the red or operating on thin margins, were using the pay gap in the price difference to cover operational expenses. HHS deemed it inappropriate that these facilities would use Medicare to subsidize other activities and initiatives, and the appeals court agreed.

As per the original 340B legislation, discounts on drugs can range from 13% to 32% off the average retail price for participating providers, but Medicare Part D sets reimbursement in an entirely different way, leading to the significant reimbursement discrepancies – until the ruling, which furthered HHS’ push to narrow the spread between acquisition price and reimbursement.

THE DEBATE

“The opportunity to exploit this buy/sell differential probably has something to do with the explosive growth there’s been in the number of participating institutions in 340B,” said Michael Abrams, cofounder and managing partner of Numerof and Associates. “According to the data I came across, discounted 340B purchases grew 23% from 2018 to 2019, and currently make up about 8% of the total of the U.S. drug market. So from my perspective this looks like a loophole that’s been used by a small number of large institutions, who in many cases don’t serve that many disadvantaged patients, but nonetheless serve enough to qualify for the 340B program and to purchase the drugs they buy at the discounted rate.”

Groups representing U.S. hospitals would disagree with that assessment, and, in fact, when the appeals court handed its ruling, the AHA, AAMC and America’s Essential Hospitals said 340B hospitals and their patients would “suffer lasting consequences.”

“The decision conflicts with Congress’ clear intent and defers to the government’s inaccurate interpretation of the law, a point that was articulated by the judge who dissented from the opinion,” the groups wrote in a statement. “For more than 25 years, the 340B program has helped hospitals stretch scarce federal resources to reach more patients and provide more comprehensive services. Hospitals that rely on the savings from the 340B drug pricing program are also on the front-lines of the COVID-19 pandemic, and today’s decision will result in the continued loss of resources at the worst possible time.”

President and CEO of 340B Health Maureen Testoni also lamented the appeals court’s decision, calling the cuts “discriminatory.”

“These cuts of nearly 30% have caused real and lasting pain to safety-net hospitals and the patients they serve,” she said earlier this month. “Keeping these cuts in place will only deepen the damage of forced cutbacks in patient services and cancellations of planned care expansions. These effects will be especially detrimental during a global pandemic.

Abrams contends that much of the confusion and legal wrangling can be attributed to the vagueness of the original 340B legislation, the stated goal of which was to “enable participating institutions to stretch scarce financial dollars.” With little else to go on in terms of the language, those on each side of the issue were able to interpret it in their own way, with participating institutions saying it’s within the bounds of the law to use that revenue stream to enhance their mission – another phrase that’s open to wide interpretation.

“There’s no question this is being put to uses that were never intended,” said Abrams, adding that the profits generated by the buy/sell differential often disappear into balance sheets with little to no accountability.

Hospitals, for their part, feel they’re under siege by HHS at a critical time for the healthcare system’s financial viability. Even before the COVID-19 pandemic, hospitals saw the migration of lucrative inpatient procedures, such as hip and knee replacements, to freestanding outpatient facilities, which in some cases are not owned by the hospital. That represents a significant loss of revenue. Factor in the lost revenue from cancelled or delayed elective procedures due to the coronavirus, as well as patients who are too cautious to enter the healthcare system, and hospitals are hurting. AHA President and CEO Rick Pollack said in July that half of all U.S. hospitals will likely be in the red by the end of the year.

A COMPLICATED PICTURE

Actions by the pharmaceutical industry are also adding to the complication. A recent statement from America’s Essential Hospitals alleges that recent actions by pharmaceutical manufacturers “hinder access to affordable medications for millions of people who face financial hardships and defy clear statutory requirements that they provide drugs to 340B Drug Pricing Program covered entities.”

The manufacturers have threatened punitive actions – including withholding 340B drugs to contract pharmacies – for failing to comply with reporting requirements that Essential Hospitals call “arbitrary.”

“These data requests have no clear link to program integrity,” the group said. “Rather, they seem to be little more than a fishing expedition.”

A concrete example can be found in AstraZeneca’s decision to refuse 340B pricing to hospitals with on-site pharmacies for any drugs that will be dispensed through contract pharmacies. In a statement this week, Testoni of 340B called this action an “attack” on the 340B program that will hurt healthcare institutions as well as low-income and rural Americans.

“We believe that refusing to offer discounts that the 340B statute requires is a violation of federal law,” said Testoni. “We are calling on Health and Human Services Secretary (Alex) Azar to exercise his authority to stop these overcharges before they cause permanent damage to the healthcare safety net.”

Abrams sides more with the appeals court decision, saying that requiring the pharmaceutical industry to sell drugs at a discount comes with significant regulation to ensure they do so – a stark contrast to the lack of regulation around the resulting revenue. Though another appeal certainly isn’t out of the question, Abrams expects participation in the program to shrink back to a level reflecting the size of the target populations.

“This is about helping disadvantaged patients get their drugs, and that should be the driving activity of the program,” he said. “I’m fine with HHS taking this problem on, because it was an abuse that was never intended in the original legislation. It just seems to me that HHS really wants the healthcare sector to deliver care that is more accountable both for efficient use of resources and outcomes.”

One person who disagrees is Circuit Judge Cornelia Pillard, who wrote the dissenting opinion in the appeals court decision.

“The challenged rules took a major bite out of 340B hospitals’ funding,” she said. “Often operating at substantial losses, 340B hospitals rely on the revenue that Medicare Part B provides in the form of standard drug-reimbursement payments that exceed those hospitals’ acquisition costs. 340B hospitals have used the additional resources to provide critical healthcare services to communities with underserved populations that could not otherwise afford these services.”

 

 

 

 

Payers win again, court rules Admininistration violated law in axing ACA cost-sharing payments

https://www.healthcaredive.com/news/payers-win-again-court-rules-trump-admin-violated-law-in-axing-aca-cost-sh/583565/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202020-08-17%20Healthcare%20Dive%20%5Bissue:29123%5D&utm_term=Healthcare%20Dive

Payers win again, court rules Trump admin violated law in axing ...

Dive Brief:

  • A federal court ruled Friday that insurers are owed subsidies mandated by the Affordable Care Act to help them cover people with low incomes in the exchanges and the Trump administration violated the law when it halted the payments in 2017.
  • In a separate but related ruling, the same court found that payers that were able to raise premiums to offset the loss of those payments in 2018, however, should not receive the entire unpaid amount.
  • The judges with the U.S. Court of Appeals for the Federal District in their decision relied on a recent ruling in favor of insurers from the U.S. Supreme Court on a separate cost-sharing program in the ACA. “We see no sufficient basis for reaching a different conclusion,” they wrote.

Dive Insight:

The Affordable Care Act took into account that payers participating in the exchanges it created would be somewhat flying blind when setting premium rates for a new population. To safeguard them, multiple programs were established to help manage the inherent risk.

One of them was the risk corridors program, which was supposed to redistribute some of the profits insurers received in the exchanges to other companies seeing losses. But far more companies reported losses than profits, and the program quickly ran out of funds to pay out.

The Trump administration argued the ACA does not properly appropriate the funding anyway. 

The high court, however, ruled in April those insurers are owed about $12 billion from the program and that the language indeed creates what is called a money-mandating provision.

The decisions released Friday use that precedent for one of the other risk programs, which provided the subsidies for coverage of people with low-incomes, called cost-sharing reduction payments.

HHS abruptly stopped making the payments in October 2017, making the argument that the money had not been appropriated. But litigation of the issue goes back farther. Republicans in Congress sued HHS in 2014 making the same claim.

In 2018, with the payments still halted, payers increased their premium rates to help account for the lack of cost-sharing reduction payments, and thus received additional premium tax credits (a practice known as silver loading). The judges Friday said that although they agreed with a February 2019 decision from the U.S. Court of Federal Claims that the payers were owed the payments, they disagreed that insurers should be reimbursed in full despite the 2018 premium adjustments.

“The complexity of the process cannot obscure the underlying economic reality that the government is paying at least some of the increased costs that the insurers incurred as a result of the government’s failure to make cost-sharing reduction payments,” they wrote.

The judges remanded the case back to the Court of Federal Claims to determine the amount Maine Community Health Options is owed, and instructed them to take into account what amount of silver loading can be attributed to the loss of the payments.

Montana Co-op is owed $1.23 million for missed 2017 payments and Sanford Health Plan is owed $360,254.