Cartoon – What goes on above and below the table
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Bipartisan group of senators seek to block Trump cuts to drug discount program
Six senators, including three Republicans, are asking GOP leadership to block a Trump administration rule that slashes funding for a federal drug discount program.
The program, called 340B, requires drug companies give discounts to health-care organizations that serve high volumes of low-income patients.
But a new rule from the Centers for Medicare and Medicaid Services, which takes effect Jan. 1, cuts Medicare payments to hospitals enrolled in the program by $1.6 billion.
The senators are urging the cuts to be reversed in the year-end spending deal.
“We recognize there are opportunities to strengthen the program through targeted clarifications and improvements to ensure it continues to fulfill its purpose with integrity and efficiency and are willing to work with stakeholders to find productive solutions in this space,” the senators wrote in a letter to Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Charles Schumer (D-N.Y.).
“However, with a January 1, 2018 start date and over half of the Senate and half of the House of Representatives having expressed concerns with CMS’ rule, we request your help in ensuring the long-term sustainability of the 340B program by preventing these changes in an end of the year package.”
Sens. John Thune (R-S.D.), Rob Portman (R-Ohio), Shelley Moore Capito (R-W.Va.), Bill Nelson (D-Fla.), Tammy Baldwin (D-Wis.) and Debbie Stabenow(D-Mich.) all signed the letter.
The request follows a letter 51 senators sent to CMS earlier this year expressing concerns over the changes.
Hospital groups argue the rule would jeopardize the ability to serve low-income patients.
The American Hospital Association, America’s Essential Hospitals and the Association of American Medical Colleges are suing the administration to block the rule.
CMS has argued that the changes will increase access to care and lower out-of-pocket drug costs for Medicare beneficiaries.
Ryan eyes push for ‘entitlement reform’ in 2018
House Speaker Paul Ryan (R-Wis.) on Wednesday said House Republicans will aim to cut spending on Medicare, Medicaid and welfare programs next year as a way to trim the federal deficit.
“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said during an interview on Ross Kaminsky’s talk radio show.
Health-care entitlements such as Medicare and Medicaid “are the big drivers of debt,” Ryan said, “so we spend more time on the health-care entitlements, because that’s really where the problem lies, fiscally speaking.”
Ryan said he’s been speaking privately with President Trump, who is beginning to warm to the idea of slowing the spending growth in entitlements.
During his campaign, Trump repeatedly promised not to cut Medicare, Medicaid or Social Security.
“I think the president is understanding choice and competition works everywhere, especially in Medicare,” Ryan said.
House and Senate Republicans are currently working on their plans for tax reform, which are estimated to add more than $1 trillion to the deficit. Democrats have voiced concerns that the legislation could lead to cuts to the social safety net.
Ryan is one of a growing number of GOP leaders who have mentioned the need for Congress to cut entitlement spending next year.
Last week, House Ways and Means Committee Chairman Kevin Brady (R-Texas) said that once the tax bill was done, “welfare reform” was up next.
Sen. Marco Rubio (R-Fla.), last week, said “instituting structural changes to Social Security and Medicare for the future” will be the best way to reduce spending and generate economic growth.
Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, told Bloomberg TV that “the most important thing we can do with respect to the national debt, what we need to do, is obviously reform current entitlement programs for future generations.”
Ryan also mentioned that he wants to work on changing the welfare system, and Republicans have in the past expressed a desire to add work requirements to programs such as food stamps.
Speaking on the Senate floor while debating the tax bill last week, Senate Finance Committee Chairman Orrin Hatch (R-Utah) said he had a “rough time wanting to spend billions and billions and trillions of dollars to help people who won’t help themselves, won’t lift a finger and expect the federal government to do everything.”
His comments were echoed by Ryan.
“We have a welfare system that’s trapping people in poverty and effectively paying people not to work,” Ryan said Wednesday. “We’ve got to work on that.”
AARP to Congress: Don’t Cut Medicare
The tax bill would trigger an automatic funding cut in the vital program.
AARP Chief Executive Officer Jo Ann Jenkins called on congressional leaders Thursday to keep their promise to America’s seniors and prevent a large cut to Medicare that the tax bill now being debated on Capitol Hill would trigger.
The tax measure would result in a $1.5 trillion increase in the federal deficit over the next decade, according to the nonpartisan Congressional Budget Office (CBO). Such a deficit would prompt an automatic $25 billion cut to Medicare as soon as January because of the “pay-as-you-go” law, commonly referred to as PAYGO.
The law was designed to keep the deficit in check by requiring the administration to reduce spending in many mandatory federal programs if Congress enacts a law that increases the deficit but doesn’t provide offsetting revenue.
In a letter to Senate Majority Leader Mitch McConnell, Minority Leader Charles Schumer, House Speaker Paul Ryan and Minority Leader Nancy Pelosi, Jenkins reminded McConnell and Ryan that they had recently issued a statement promising that “we will work to ensure these spending cuts are prevented.”
In their statement, the Republican leaders pointed out that the PAYGO law has never been enforced since it was passed in 2010 and “we have no reason to believe that Congress would not act again” to forestall the cuts PAYGO would require.
Medicaid, Social Security, food stamps and some other social safety net programs are exempt from the PAYGO law. But Medicare and programs like federal student loans, agricultural subsidies and the operations of U.S. Customs and Border Protection are not exempt.
The law caps how much the government can trim from Medicare at 4 percent. That’s $25 billion the first year, according to CBO. The amount could be higher in subsequent years, depending on the size of the deficit and Medicare’s budget.
The reduction would affect the payments that doctors, hospitals and other health care providers receive for treating Medicare patients. Individual benefits would not be directly cut, but the reduction could have implications for the care beneficiaries receive.
“The sudden cut to Medicare provider funding in 2018 would have an immediate and lasting impact, including fewer providers participating in Medicare and reduced access to care for Medicare beneficiaries,” Jenkins wrote. Health care providers might stop taking Medicare patients, she added, even as 10,000 older adults are enrolling in the health program each day.
In addition, Medicare Advantage plans and Part D prescription drug plans may compensate for the cuts by charging higher premiums or shifting more costs to beneficiaries in future years.
“Our members and other older Americans are counting on you to preserve their access to Medicare services, including their doctors and hospitals,” Jenkins wrote.
Nurses to the Rescue!
Our latest Freakonomics Radio episode is called “Nurses to the Rescue!” (You can subscribe to the podcast at Apple Podcasts or elsewhere, get the RSS feed, or listen via the media player above.)
They are the most-trusted profession in America (and with good reason). They are critical to patient outcomes (especially in primary care). Could the growing army of nurse practitioners be an answer to the doctor shortage? The data say yes but — big surprise — doctors’ associations say no.
Trump Asked Kellyanne Conway To Tackle The Opioid Crisis & Here’s Why Experts Are So Worried
On Wednesday, Attorney General Jeff Sessions announced that President Donald Trump’s counselor Kellyanne Conway will take on the opioid crisis, overseeing all White House initiatives combating the current overdose epidemic. More than 52,000 people lost their lives to drug overdoses in 2016 alone, according to a CNN report, with at least 33,000 of them were due to opioid drugs, including prescription painkillers. Trump labeled the opioid crisis a public health emergency in October.
Now, the president is calling for an “opioids czar” to lead efforts against the epidemic — and Conway is taking on that role. She will “coordinate and lead the effort from the White House” related to the opioid crisis, Sessions said at a news conference on Wednesday.
One opioid policy expert, Andrew Kolodny of Brandeis University’s Opioid Policy Research Collaborative, told BuzzFeed he thinks this is a good move.
However, he also pointed out that the administration still doesn’t have anyone leading the Office of National Drug Control Policy, nor has it released a comprehensive strategy for addressing this public health crisis. Trump has previously said he’d like to launch an advertising campaign similar to Nancy Reagan’s “Just Say No” campaign, which was widely unsuccessful.
There’s also less than $60,000 in the national public health emergency fund, and so far no one has requested more money from Congress to allocate towards this epidemic — which is expected to cost more than $500 billionannually. According to Sessions, in the new budget, Trump is requesting “more than $1 billion in anti-opioid efforts,” adding that he would consider additional funds if they can show their efforts are working.
Only, a lot of people aren’t impressed with that number. New Jersey Gov. Chris Christie said at a congressional hearing on Tuesday that “$1 billion [is] nothing for [a] national problem when [New Jersey] alone [is] spending $500M a year on [the] problem,” tweeted BuzzFeed’s Dan Vergano.
Christie also called the need for an opioids czar “overblown.” He feels that they already know how to handle the issue, and it starts with limiting the prescriptions for painkillers, cutting fentanyl exports from China, and providing naloxone to communities, BuzzFeed reported. Naloxone blocks and reverses the effects of opioid drugs, and gives non-medical people the ability to save lives. While it’s controversial, as some say it enables more drug use, it’s been shown to decrease the number of overdoses. There are also drugs, like methadone and buprenorphine, shown to help recovering addicts stay in treatment longer.
Unfortunately, there’s a stigma surrounding a lot of these treatments — people view it as trading one drug, for instance heroin, for another, like methadone. But scientific evidence continues to show the benefits of medication-assisted treatment versus complete abstinence. This has led the Hazelden Betty Ford Foundation, a top treatment provider in the United States, to even start providing anti-addition medications as part of its recovery program.
But Conway’s expertise isn’t so much in medicine or addiction as it is in “messaging,” according to Sessions.
He also emphasized a focus on law enforcement to deal with the crisis.
Still, many feel the country needs a lot more than a good ad campaign and stricter laws. “We have spent billions on the failed ‘war on drugs’ and have learned that exclusive focus on law enforcement will not end the epidemic or save lives,” Pfeifer says. “The evidence is with addiction treatment — and that is where funding should go.”
The CHIP Program Is Beloved. Why Is Its Funding in Danger?
Laquita Gardner, a sales manager at a furniture rental store here, was happy to get a raise recently except for one problem. It lifted her income just enough to disqualify her and her two young sons from Medicaid, the free health insurance program for the poor.
She was relieved to find another option was available for the boys: the Children’s Health Insurance Program, known as CHIP, that covers nearly nine million children whose parents earn too much for Medicaid, but not enough to afford other coverage.
But CHIP, a program that has had unusually strong bipartisan support since it was created in 1997, is now in limbo — an unexpected victim of the partisan rancor that has stymied legislative action in Washington this year. Its federal funds ran out on Sept. 30, and Congress has not agreed on a plan to renew the roughly $14 billion a year it spends on the program.
“I’m kind of shocked, because this is something for kids,” Ms. Gardner said Thursday as her 7-year-old, Alexander, braced for a flu shot at a bright, busy neighborhood clinic run by the Nemours Children’s Health System. Ms. Gardner pays $25 a month for her sons’ CHIP coverage, with no deductible or co-payments.
Congressional leaders may provide some temporary relief to a handful of states that expect to exhaust their CHIP funds before the end of this year. It would be tucked into a short-term spending bill intended to avert a government shutdown after Friday. Lawmakers from both parties hope to provide more money for CHIP in a separate, longer-term deal on federal spending. But Republicans will almost surely need Democratic votes to pass such legislation, and the antagonism between President Trump and Democrats in Congress is so great that no one can be sure of the outcome.
The uncertainty has been unsettling to parents, pediatricians and state officials around the country. States are weighing whether to freeze enrollment in CHIP, shut down their programs or find money from other sources. Last week Colorado sent letters to CHIP families, advising them to start researching private health insurance options because there was “no guarantee” that Congress would continue the program. Texas has drawn up a detailed “termination timeline” under which the state could begin mailing insurance cancellation notices on Dec. 22, three days before Christmas.
“It crushes me to think we’re in an environment where kids’ health is up for debate — that this somehow got tossed into the wrangling,” said Dr. Todd Wolynn, a pediatrician in Pittsburgh and a member of the American Academy of Pediatrics. “There are kids on protocols and regimens and treatment plans, and their families have got to try to figure out, what are we going to do?”
Here in Delaware, health officials anticipate running out of money for CHIP at the end of January if Congress does not act.
“I’ve been around a while and I’ve never seen a program that is this popular, and that goes across the aisle,” said Stephen Groff, director of the state’s Division of Medicaid and Medical Assistance. “To be having this discussion, that we may be in a funding crisis, is beyond belief.”
Members of both parties in the House and the Senate agree that Congress should provide money for CHIP for five years, through 2022. But they disagree over how to pay for it.
In early November, the House passed a bill to extend the CHIP program. But most Democrats voted against it because the legislation would have cut funds for other public health programs and ended insurance coverage for several hundred thousand people who had failed to pay their share of premiums for insurance purchased under the Affordable Care Act.
In the Senate, senior members of the Finance Committee say they have been making progress toward a bipartisan deal on CHIP, but they have been preoccupied for several weeks with their tax bill. The committee approved a five-year extension of funding for the program in early October, but did not specify a way to pay for the measure.
As Congress dithered, Minnesota received an emergency infusion of federal funds to continue CHIP for October and November, but is expected to be the first state to run out of federal money for the program. Emily Piper, the commissioner of the Minnesota Department of Human Services, said the state would use its own funds to fill the gap temporarily.
“I don’t think Washington is working the way anyone in the country expects it to work right now,” she said. “A dysfunctional Washington has real consequences for people.”
Oregon, which expects to exhaust its federal CHIP funds this month, will also use state funds to continue coverage, said Gov. Kate Brown, a Democrat. “As Congress rebuffs its responsibilities, it is up to us, Oregonians, to stand up for our children,” she said.
Colorado was the first state to send warning letters to families with CHIP coverage. “We felt it was important that folks covered by CHIP understand what’s happening,” said Marc Williams, a spokesman for the state Department of Health Care Policy and Financing.
In Texas, more than 450,000 children could lose CHIP coverage on Feb. 1 unless the state can obtain $90 million. Even if it comes through, supporters of the program worry about the effect of cancellation warnings.
“It gets very, very complicated once the state sends those letters out and starts walking down that road,” said Laura Guerra-Cardus, deputy director of the Children’s Defense Fund-Texas. “It can really affect trust in the program. So many families still don’t realize this is coming, and the few I’ve informed, they go immediately into a state of alarm.”
Representative Greg Walden, Republican of Oregon and the chairman of the Energy and Commerce Committee, which is responsible for the program, said last week that “we need to get CHIP done” because “states are in a real mess right now.”
Democrats said Congress should have provided money for CHIP months ago, but that Republicans had placed a higher priority on dismantling the Affordable Care Act and cutting taxes.
“Because Congress failed to do its job — a bunch of elected officials who have insurance paid by taxpayers failed to do their job — children here in America are about to be kicked off of their health insurance,” said Senator Sherrod Brown, Democrat of Ohio.
Senator Orrin G. Hatch, Republican of Utah and the chairman of the Senate Finance Committee, insisted: “We’re going to get CHIP through. There is no question about that.”
Mr. Hatch led efforts to create the program in collaboration with Senator Edward M. Kennedy, Democrat of Massachusetts, in 1997. “Nobody believes in the CHIP program more than I,” Mr. Hatch said on the Senate floor last week. “I invented it.”
Doctors at the Nemours/Alfred I. duPont Hospital for Children, here in Wilmington, were continuing to see CHIP patients last week at the flagship of a system that treats 15,000 children with CHIP coverage each year. Dr. Jonathan Miller, chief of the system’s Division of General Pediatrics, said many receive therapy for developmental delays and treatment for chronic conditions like asthma and obesity.
“It provides specialized care for children that’s more comprehensive than a lot of private coverage,” he said, “which is really designed with adults in mind.”
Research has also found CHIP increasingly helps people whose employer-provided insurance is too expensive for their entire family. Ariel Haughton, a mother of two in Pittsburgh, said it would cost more than $100 more a month to put her two children on the plan her husband gets through his job as an apprentice plumber, which also requires them to pay a high deductible before the coverage kicks in. Without CHIP, Ms. Haughton said, she might have delayed visiting the pediatrician this summer when her daughter had a fever and rash that turned out to be Lyme disease.
“It makes it so much easier for me to actually take good care of my children,” said Ms. Haughton. “We’ve had a rocky last few years, but at least I can take them to the doctor without having to be like, ‘Their fever isn’t 105 so I guess I’d better skip it.’”
Olivia Carrow, who had brought her 2-year-old to the children’s hospital here to test for an infection, said her other three children were newly uninsured and she had heard they might qualify for CHIP. The 2-year-old, William, qualifies for Medicaid because of a serious condition that causes his trachea to collapse.
The rest of the family had insurance through Ms. Carrow’s job as a nurse, but lost it after she cut back her hours this fall. She and her husband started a chicken farm this year and delayed exploring other coverage options, she said, partly because of the protracted fight in Congress over proposals to repeal the Affordable Care Act.
“Not knowing how things are going to go — I feel that way about health coverage in general,” Ms. Carrow said. “It doesn’t surprise me, but it gets very sad.”
20 charged in $146M healthcare fraud scheme in Brooklyn
Twenty people—four of whom are doctors—are facing charges related to a massive fraud scheme that bilked Medicare, Medicaid and other managed care organizations out of $146 million.
Prosecutors from the Brooklyn District Attorneys Office said the defendants ran an enterprise in which recruiters offered cash to low-income and homeless patients to get them to undergo a series of medically unnecessary tests at participating clinics.
They then allegedly billed publicly funded insurance programs for performing those tests and laundered the fraudulently obtained funds through the bank accounts of a series of shell companies in far-flung countries such as Taiwan and Lithuania.
Once that money reached the defendants, prosecutors said, they used it to buy expensive real estate—such as a $3.25 million apartment in downtown Brooklyn, New York—and fund shopping sprees at high-end stores like Hermes and Bulgari.
“This massive scheme, which provided no patient care at all, wasted millions of taxpayer dollars dedicated to Medicaid and Medicare,” Acting Brooklyn District Attorney Eric Gonzalez said in the announcement.
The investigation began following a referral from the Department of Health and Human Services Office of Inspector General. To uncover the alleged scheme, investigators employed undercover detectives, intercepted communications and conducted surveillance and financial analyses.
The defendants are facing charges including enterprise corruption, healthcare fraud, grand larceny and money laundering. Prosecutors said 35-year-old Kristina Mirbabayeva, of Brooklyn, was the ringleader of the scheme, and 53-year-old New Jersey resident Kevin Custis, M.D., was her business partner.
Another one of the doctors charged, 61-year-old Robert Vaccarino, was also employed as a New York Police Department surgeon, according to The Wall Street Journal. The police department said Tuesday that Vaccarino had been suspended.
At a news conference this week, representatives from the Brooklyn District Attorneys Office said the scheme was the biggest healthcare case in the office’s history, the article added.
In other antifraud news:
Prosecutors insist Florida eye doctor stole $136M from Medicaid
The attorney for Salomon Melgen, M.D., a Florida eye doctor who has been convicted of a $100 million Medicare fraud, argued at a sentencing hearing on Thursday that the government has only proven Melgen stole about $64,000.
Attorney Josh Sheptow said Melgen—who was charged separately with bribing New Jersey Democratic Sen. Bob Menendez—injected patients with then-experimental drugs that are now approved, the Associated Press reported. Sheptow suggested Melgen may have falsified billing statements to get around the fact that Medicare doesn’t pay for experimental treatments—so since the treatments were actually legitimate, the government didn’t lose money on paying for them.
But Assistant U.S. Attorney Alexandra Chase argued that the judge should accept the government’s estimate that Melgen stole $136 million, noting that even if he stole half as much, he would be eligible for a life sentence. Prosecutors are asking for a 30-year sentence.
Cartoon – The Agency Bid
Cartoon – Short Change Machine
HENRY KOTULA 