Tag Archives: Community Health Centers Funding

How Are Health Centers Responding to the Funding Delay?

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How Are Health Centers Responding to the Funding Delay?

 

Health centers play an important role in our health care system, providing comprehensive primary care services as well as dental, mental health, and addiction treatment services to over 25 million patients in medically underserved rural and urban areas throughout the country. Health care anchors in their communities and on the front lines of health care crises, including the opioid epidemic and the current flu outbreak, health centers rely on federal grant funds to support the care they provide, particularly to patients who lack insurance coverage. However, the Community Health Center Fund (CHCF), a key source of funding for community health centers, expired on September 30, 2017, and has since been extended through only March 31, 2018. The CHCF provides 70% of grant funding to health centers. With these funds at risk, health centers have taken or are considering taking a number of actions that will affect their capacity to provide care to their patients. This fact sheet presents preliminary findings on how health centers are responding to the funding uncertainty.

WHAT FUNDING IS AT STAKE FOR HEALTH CENTERS

The Community Health Center Fund represents 70% of federal grant funding for health centers. Established by the Affordable Care Act, the CHCF increased federal grant fund support for health centers, growing from $1 billion in 2011 to $3.6 billion in 2017.1Authorized for five years beginning in 2010, and extended for two years through September 2017, the CHCF also provided a more stable source of grant funding for health centers that was separate from the annual appropriations process. Prior to the CHCF, federal 330 grant funds were appropriated annually. In fiscal year 2017, federal section 330 grant funding totaled $5.1 billion, $3.6 billion from the CHCF and $1.5 billion from the annual appropriation.

Federal health center grants represent nearly one-fifth of health center revenues. Federal Section 330 grant funds are the second largest source of revenues for health centers behind revenues from Medicaid. Overall, 19% of health center revenues (including US territories) come from federal grants; however, reliance on 330 grant funds varies across health centers. Federal grant funds are especially important for health centers in southern and rural non-expansion states where Medicaid accounts for a smaller share of revenue (Figure 1).2 These funds finance care for uninsured patients and support vital services, such as transportation and case management, that are not typically covered by insurance

HOW ARE HEALTH CENTERS RESPONDING TO THE LOSS OF FEDERAL FUNDS?

Health centers have taken or are considering taking a number of actions that will affect their ability to serve their patients. Overall, seven in ten responding health centers indicated they had taken or planned to take action to put off large expenditures or curtail expenses in face of reduced revenue. Some of these actions involve delaying or canceling capital projects and other investments or tapping into reserve funds. Other actions, however, have or will reduce the number of staff or the hours they work, which may in turn, affect the availability of services. Already 20% of health centers reported instituting a hiring freeze and 4% have laid off staff. Another 45% are considering a hiring freeze and 53% said they might lay off staff. While health centers seemed to focus on shorter-term actions that could easily be reversed were funding to be restored, 3% of responding health centers had already taken steps to close one or more sites and an additional 36% indicated they are considering doing so

 

 

Lawmakers near deal on funds for community health centers

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The Hill Issuewatch Healthcare

Funding for community health centers could finally pass in the coming week as Congress faces a new government funding deadline.

House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) told The Hill on Friday that lawmakers “hope” to add money for the health centers to the short-term spending bill to be considered before a Feb. 8 deadline for funding the government.

Funding for the health centers, which serve millions of primarily poor people, has been delayed for months, causing uncertainty and in some cases hiring freezes or other steps.

Lawmakers are considering providing two years of funding.

In addition, a number of other health-care items could ride on the next government funding bill, or wait until a longer-term deal in a few weeks. A range of Medicare programs known as “extenders” need to be renewed, for example.

There is also the more controversial issue of actions aimed at stabilizing the ObamaCare marketplaces.

Momentum appears to be increasing for funding known as reinsurance that is aimed at reducing premiums.

Walden is backing a bill to provide the funding in the House, and Sen. Susan Collins (R-Maine) has been pushing for a similar measure in the Senate.

There is still some uncertainty and many conservatives deride the funding as a “bailout” of ObamaCare insurers.

Any action on ObamaCare stabilization appears more likely to wait as lawmakers try to craft a longer-term government funding deal by March.

Congressional committees are stepping up their efforts to examine the opioid epidemic.

On Tuesday, the House Ways and Means Committee will hold a hearing on preventing opioid abuse through Medicare. On Thursday, the Senate health committee will hold a hearing on the effects of opioid abuse on children and families.

Later in February, the House Energy and Commerce Committee will begin holding hearings to examine specific legislation related to the crisis.

5 Key Healthcare Points From Trump’s State of the Union

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The president outlined healthcare accomplishments from his first year in office, addressing a closely watched issue for many Americans.

President Donald Trump delivered his first State of the Union address Tuesday night, highlighting policy goals while welcoming a “new American moment.”

Over the course of 90 minutes, Trump discussed several healthcare-related legislative achievements, including adjustments to the Affordable Care Act as well as new care accountability measures for the Department of Veterans Affairs (VA).

Below are five key takeaways from the president’s speech to Congress:

1. ‘The individual mandate is now gone.’

Trump touted the repeal of the individual mandate penalty, calling the eliminated provision “an especially cruel tax.”

The measure, which required Americans without health insurance to pay a fine, was removed as part of the tax reform bill passed late last year.

The penalty is $695 or 2.5% of an individual’s income, whichever amount is greater, and remains in effect for 2018. The elimination will take place next year.

Though Trump did not call for a renewed effort to repeal the ACA in its entirety, he said the Republican-controlled Congress successfully repealed “the core of disastrous Obamacare.”

2. No mention of upcoming funding deadline or community health centers.

Trump did not acknowledge the recent six-year extension granted to the Children’s Health Insurance Program (CHIP), which was part of the continuing resolution that reopened the government last week after a three-day shutdown.

There was also no mention of the February 8 deadline to pass another continuing resolution or pass an omnibus budget package. Such action would likely have to address the fate of over 10,000 community health center (CHC) sites across the country. Federal funding for CHCs lapsed on October 1, so they have been funded by temporary spending packages since then.

Despite the next deadline coming in little more than a week, Trump did not speak on the issue last night.

3. Will call for unity result in bipartisan solutions?

The president’s speech centered on a call for unity among Americans and members of Congress alike. Such bipartisanship will be important in order to avoid a second government shutdown in as many months and to address lingering healthcare policy concerns.

There are two bills in the Senate with bipartisan cosponsors seeking to stabilize the federal insurance exchange markets: Alexander-Murray and Collins-Nelson. Trump’s call for bipartisanship in the final crafting and debate over these measures will play a role in determining their road to passage.

Newly confirmed Health and Human Services Secretary Alex Azar applauded the speech in a statement released late Tuesday night.

“I commend President Trump for delivering a speech that celebrated the economic boom we have seen under his leadership, which has brought new opportunity and prosperity to the American people,” Azar said. “A healthier economy means a healthier America, and we look forward to more such success in the coming year, including through reforms to make healthcare more affordable and accessible for all Americans.”

4. Reduce price of prescription drugs, endorse “right to try.”

Continuing with a campaign promise to lower prescription drug costs, Trump said the FDA is following his administration’s lead to approve more generic drugs and medical devices.

“One of my greatest priorities is to reduce the price of prescription drugs,” Trump said. “In many other countries, these drugs cost far less than what we pay in the United States. That is why I have directed my Administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down.”

Trump also urged Congress to take up the issue of the “right to try,” a policy allowing terminally ill patients to access experimental treatments without having to leave the U.S.

“President Trump says reducing price of prescription drugs is one of his highest priorities,” tweeted Bob Doherty, senior vice president for government affairs and public policy at the American College of Physicians. “Doctors and patients certainly hope so and will be glad to do their part.”

5. Signed VA healthcare accountability bill into law.

Trump promised to ensure veterans have a choice in their healthcare decisions, after reports of substandard care at VA medical facilities surfaced in recent years.

In June, Trump signed the VA Accountability Act, which eased restrictions on removing employees who were accused of wrongdoing while also protecting whistleblowers.

The president said the VA has already fired more than 1,500 employees who “failed to give our veterans the care they deserve.”

VoteVets, a progressive veterans advocacy group, criticized Trump’s remarks Tuesday night. The organization highlighted the push by Republican lawmakers to cut $1.7 trillion from federal healthcare programs, which 1.75 million veterans rely on for coverage.

 

Bipartisan Bill Would Increase Competition Among Drug Manufacturers and Lower Drug Prices

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Congress is considering including bipartisan legislation that could expedite the availability of lower-priced generic drugs in its must-pass bill to fund the federal government in 2018. The legislation, called the CREATES Act, tackles one of the numerous problems driving high drug prices — brand-name drug manufacturers’ use of anticompetitive tactics to block access to generic drugs — that we describe in our report, Getting to the Root of High Prescription Drug Prices: Drivers and Potential Solutions. If passed, the CREATES Act, which has bipartisan support, would increase the development and availability of generic drugs by addressing anticompetitive behaviors of certain brand-name manufacturers that use limited distribution systems and congressionally mandated risk-mitigation programs as a way to delay generic drug development. And because the Act could save the federal government more than $3 billion over 10 years, it could help pay for other necessary federal spending, including funding for community health centers.

Purpose of the Bill

The Drug Price Competition and Patent Term Restoration Act of 1984 — commonly referred to as the Hatch-Waxman Act — created the generic drug market in order to balance incentives for innovation (i.e., extended patent terms and market exclusivity protections) with a system that ensures safe, therapeutically equivalent generic drugs are available at lower prices when patents and exclusivities expire. Before a generic drug can be approved by the Food and Drug Administration (FDA) it must demonstrate that it is bioequivalent to the brand-name drug it intends to compete against on the market.

The Food and Drug Administration Amendments Act of 2007 authorized the FDA, when there are safety concerns like increased toxicity or risk factors, to require manufacturers to adhere to a Risk Evaluation and Mitigation Strategy, or REMS. A REMS program can have four components: patient information, communication plan, elements to assure safe use (ETASU), and implementation system.

Some brand-name drug manufacturers have misused REMS programs to block generic drug manufacturer access in two different ways. First, a brand-name manufacturer may prevent a potential generic competitor from getting access to samples for bioequivalence testing by using the REMS program with ETASU to limit who can access or purchase the drug. More than half of drugs with REMS programs have limited distribution, which restricts access for generic manufacturers. Without access to samples of brand-name products, generic manufacturers cannot conduct bioequivalence testing, which is required for FDA approval of a generic.

Second, if a brand-name drug is subject to an FDA-mandated REMS, then the generic competitor drug is also.1  Shared REMS programs are generally required by statute to be implemented for the brand-name drug and the generic versions. Negotiations between manufacturers for a shared REMS program include confidentiality, product liability concerns, antitrust concerns, and access to a license for REMS program elements that are patented. Brand-name manufacturers can intentionally delay establishing a single, shared REMS program, which blocks the generic drug from the market. As of January 26, 2018, 10 of the 72 REMS programs were shared.

In addition to FDA-mandated REMS programs, manufacturers may voluntarily institute a REMS program or create a limited distribution system to control who may access their drug by allowing dispensing from a limited number of specialty pharmacies. For example, an investigation by the Senate Aging Committee found that Turing Pharmaceuticals put a limited distribution system into place in order to block competitors’ access to samples and significantly increase the drug price. (Daraprim was not subject to an FDA-mandated REMS program.) The anticompetitive behaviors associated with REMS programs and limited distribution systems are estimated to cost patients more than $5 billion each year.

Potential Impact

The CREATES Act would enable a generic manufacturer facing one of these delay tactics to bring an action in federal court for injunctive relief (i.e., to obtain the sample it needs, or to enter into court-supervised negotiations for a shared safety protocol). The CREATES Act would expedite legal review and change the burden from proving a violation of antitrust law to one in which the generic manufacturer would need to only prove that sufficient quantity of samples were being withheld by the brand-name manufacturer. In addition, the CREATES Act would permit the generic manufacturer to work with the FDA to establish its own REMS with ETASU that are comparable to the brand-name manufacturer’s REMS program.

The Congressional Budget Office (CBO) has not officially scored the CREATES Act, but has estimated that similar legislation would save the federal government more than $3 billion over 10 years.2

Taking these steps to counter brand-name manufacturer tactics to delay generic competition could help address one of the factors driving high prescription drug prices. Such action also may serve as an important opening for further conversations on how we can regain the balance of incentives for drug innovation and competition that was established under the Hatch-Waxman Act.