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Five controversial health actions on Trump’s agenda

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Five controversial health actions on Trump’s agenda

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The Trump administration is expected to push ahead with a range of controversial health policies next year despite Democrats retaking the House.

Democrats captured the House majority in part on their health-care message. But despite that there are a slew of actions where the administration is moving ahead on its own agenda.

Here are five controversial moves Trump officials are expected to make on health care.

 

Roll back transgender protections

A new policy from the Trump administration could limit or completely eliminate federal protections for transgender individuals.

The move would narrow the definition of gender under a federal civil rights law to either male or female, as defined by a person’s sex at birth.  It’s being spearheaded by the Department of Health and Human Services and reportedly being pushed across multiple agencies.

The potential change has alarmed activists and medical professionals. The American Medical Association, the country’s largest physician lobbying group, said it will “oppose efforts to deny an individual’s right to determine their stated sex marker or gender identity.”

The new policy could be related to a broader proposed rule that’s been under review by the White House Office of Management and Budget since April, that opponents say would make it easier for doctors and hospitals to deny treatment to transgender patients and women who have had abortions.

That rule is expected to roll back a controversial anti-discrimination provision buried within ObamaCare, which prohibits health care providers and insurers who receive federal money from denying treatment or coverage to anyone based on sex, gender identity, or termination of pregnancy, among other conditions.

Religious providers say they expect the Trump administration’s rule would merely reinforce their right not to provide treatment that’s against their beliefs.

 

Limit abortion providers from getting federal money

The administration is expected to finalize regulations in January that would make it harder for Planned Parenthood and other abortion providers to receive federal family planning money.

The rule would ban clinics that receive Title X family planning funds from referring women for abortions while also removing a requirement that clinics counsel women on abortion as an option.

It would also require Title X grantees have a physical and financial separation from abortion providers.

Anti-abortion groups, like the Susan B. Anthony List, have pushed the Trump administration to implement these rules as a way to cut Planned Parenthood and other abortion providers from the program.

Title X funds organizations offering family planning services, like birth control and pregnancy tests, to low-income women and men.

Similar regulations were issued under former President Ronald Reagan, and later upheld by the Supreme Court, but never went into effect due to a lengthy legal battle.

The regulations are expected to be in effect for the next batch of Title X grants, which begin in April.

 

Approve more state Medicaid work requirements

The Department of Health and Human Services is committed to allowing states to impose work requirements on Medicaid beneficiaries.

The administration has approved work requirements in five states so far, and several more are expected in the coming months.

Just this week, the administration reapproved a plan in Kentucky to charge premiums, impose work requirements and remove people from the Medicaid program if they don’t comply.

The initial effort was blocked by a federal judge, but by re-approving it with only technical changes, the administration showed its commitment to forge ahead despite criticism.

Opponents say the requirements are a way to punish poor people. They argue the requirements are only meant to kick people off Medicaid and save states money.

Arkansas was the first state to implement a work requirement, and more than 12,000 people have lost health coverage as a result.

The administration insists work requirements are empowering, and help people lift themselves out of poverty and government dependence.

Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma sounded a defiant tone when she announced the administration’s approval of Wisconsin’s work requirements at the end of October.

“We will not retreat from this position,” Verma said. “Community engagement requirements in Medicaid are not a blunt instrument. This is a thoughtful and reasonable policy, and one that is rooted in compassion.”

 

Indefinitely detain migrant families

The Trump administration is seeking to indefinitely jail migrant children with their families, a policy that would overturn 20 years of protections for immigrant children.

The administration is expected to issue final regulations that would terminate and replace the Flores agreement, which has governed the detention of migrant children since 1997.

The plan, which was issued in September, would allow immigration officials to keep children and their parents detained together for the entire length of their court proceedings, which could take months in some cases.

Comments on the proposal were due earlier this month, and the rule could be made final next year.

The Flores rules are the result of a settlement in a federal class-action lawsuit over the physical and emotional harm done to children held in jail-like settings for extended periods. The settlement was only meant to be temporary, until it could be written into federal law.

Multiple administrations have challenged the rules and attempted to extend the time migrant children can be detained, but the federal judge overseeing the case has rejected those attempts.

The Trump administration is trying something novel; no administration has attempted to replace the Flores agreement with new regulations. It’s not a guarantee of success, and advocates have promised a challenge as soon as the final rules are announced.

 

Loosen nursing home emergency preparedness rules

Senate Democrats are decrying a move by the Trump administration to change safety rules for nursing homes.

The administration says the proposal would reduce a regulatory burden and save money for providers. But critics say that instead of making nursing homes safer, the proposal would put seniors at risk.

Sen. Ron Wyden (D-Ore.), ranking member of the Senate Finance Committee, said the administration is moving in the opposite direction of what they should be doing in the wake of hurricanes last year that left dozens of people dead across multiple states.

Last year, 12 people died when a Florida nursing home lost power in the wake of Hurricane Irma. In Texas, multiple facilities decided not to evacuate after Hurricane Harvey, despite warnings about the threat of catastrophic flooding.

The original emergency preparedness requirements went into effect just last year, more than a decade after the Department of Health and Human Services (HHS) Office of Inspector General first called for reform in the wake of hurricanes Katrina and Rita.

A report from Senate Finance Committee Democrats included 18 recommendations to improve nursing home safety during natural disasters. But Wyden said the administration is ignoring them in order to “pad the pockets of medical providers.” 

 

Trump Administration Invites Health Care Industry to Help Rewrite Ban on Kickbacks

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The Trump administration has labored zealously to cut federal regulations, but its latest move has still astonished some experts on health care: It has asked for recommendations to relax rules that prohibit kickbacks and other payments intended to influence care for people on Medicare or Medicaid.

The goal is to open pathways for doctors and hospitals to work together to improve care and save money. The challenge will be to accomplish that without also increasing the risk of fraud.

With its request for advice, the administration has touched off a lobbying frenzy. Health care providers of all types are urging officials to waive or roll back the requirements of federal fraud and abuse laws so they can join forces and coordinate care, sharing cost reductions and profits in ways that would not otherwise be allowed.

From hundreds of letters sent to the government by health care executives and lobbyists in the last few weeks, some themes emerge: Federal laws prevent insurers from rewarding Medicare patients who lose weight or take medicines as prescribed. And they create legal risks for any arrangement in which a hospital pays a bonus to doctors for cutting costs or achieving clinical goals.

The existing rules are aimed at preventing improper influence over choices of doctors, hospitals and prescription drugs for Medicare and Medicaid beneficiaries. The two programs cover more than 100 million Americans and account for more than one-third of all health spending, so even small changes in law enforcement priorities can have big implications.

Federal health officials are reviewing the proposals for what they call a “regulatory sprint to coordinated care” even as the Justice Department and other law enforcement agencies crack down on health care fraud, continually exposing schemes to bilk government health programs.

“The administration is inviting companies in the health care industry to write a ‘get out of jail free card’ for themselves, which they can use if they are investigated or prosecuted,” said James J. Pepper, a lawyer outside Philadelphia who has represented many whistle-blowers in the industry.

Federal laws make it a crime to offer or pay any “remuneration” in return for the referral of Medicare or Medicaid patients, and they limit doctors’ ability to refer patients to medical businesses in which the doctors have a financial interest, a practice known as self-referral.

These laws “impose undue burdens on physicians and serve as obstacles to coordinated care,” said Dr. James L. Madara, the chief executive of the American Medical Association. The laws, he said, were enacted decades ago “in a fee-for-service world that paid for services on a piecemeal basis.”

Melinda R. Hatton, senior vice president and general counsel of the American Hospital Association, said the laws stifle “many innocuous or beneficial arrangements” that could provide patients with better care at lower cost.

Hospitals often say they want to reward doctors who meet certain goals for improving the health of patients, reducing the length of hospital stays and preventing readmissions. But federal courts have held that the anti-kickback statute can be violated if even one purpose of the remuneration is to induce referrals or generate business for the hospital.

The premise of the kickback and self-referral laws is that health care providers should make medical decisions based on the needs of patients, not on the financial interests of doctors or other providers.

The Trump administration is calling its effort a “regulatory sprint to coordinated care.”CreditSarah Silbiger/The New York Times.

Health care providers can be fined if they offer financial incentives to Medicare or Medicaid patients to use their services or products. Drug companies have been found to violate the law when they give kickbacks to pharmacies in return for recommending their drugs to patients. Hospitals can also be fined if they make payments to a doctor “as an inducement to reduce or limit services” provided to a Medicare or Medicaid beneficiary.

Doctors, hospitals and drug companies are urging the Trump administration to provide broad legal protection — a “safe harbor” — for arrangements that promote coordinated, “value-based care.” In soliciting advice, the Trump administration said it wanted to hear about the possible need for “a new exception to the physician self-referral law” and “exceptions to the definition of remuneration.”

Almost every week the Justice Department files another case against health care providers. Many of the cases were brought to the government’s attention by people who say they saw the bad behavior while working in the industry.

“Good providers can work within the existing rules,” said Joel M. Androphy, a Houston lawyer who has handled many health care fraud cases. “The only people I ever hear complaining are people who got caught cheating or are trying to take advantage of the system. It would be disgraceful to change the rules to appease the violators.”

But the laws are complex, and the stakes are high. A health care provider who violates the anti-kickback or self-referral law may face business-crippling fines under the False Claims Act and can be excluded from Medicare and Medicaid, a penalty tantamount to a professional death sentence for some providers.

Federal law generally prevents insurers and health care providers from offering free or discounted goods and services to Medicare and Medicaid patients if the gifts are likely to influence a patient’s choice of a particular provider. Hospital executives say the law creates potential problems when they want to offer social services, free meals, transportation vouchers or housing assistance to patients in the community.

Likewise, drug companies say they want to provide financial assistance to Medicare patients who cannot afford their share of the bill for expensive medicines.

AstraZeneca, the drug company, said that older Americans with drug coverage under Part D of Medicare “often face prohibitively high cost-sharing amounts for their medicines,” but that drug manufacturers cannot help them pay these costs. For this reason, it said, the government should provide legal protection for arrangements that link the cost of a drug to its value for patients.

Even as health care providers complain about the broad reach of the anti-kickback statute, the Justice Department is aggressively pursuing violations.

A Texas hospital administrator was convicted in October for his role in submitting false claims to Medicare for the treatment of people with severe mental illness. Evidence at the trial showed that he and others had paid kickbacks to “patient recruiters” who sent Medicare patients to the hospital.

The owner of a Florida pharmacy pleaded guilty last month for his role in a scheme to pay kickbacks to Medicare beneficiaries in exchange for their promise to fill prescriptions at his pharmacy.

The Justice Department in April accused Insys Therapeutics of paying kickbacks to induce doctors to prescribe its powerful opioid painkiller for their patients. The company said in August that it had reached an agreement in principle to settle the case by paying the government $150 million.

The line between patient assistance and marketing tactics is sometimes vague.

This month, the inspector general of the Department of Health and Human Services refused to approve a proposal by a drug company to give hospitals free vials of an expensive drug to treat a disorder that causes seizures in young children. The inspector general said this arrangement could encourage doctors to continue prescribing the drug for patients outside the hospital, driving up costs for consumers, Medicare, Medicaid and commercial insurance.

 

 

 

The Health 202: Here’s how Trump and Bernie Sanders agree on lowering drug prices

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https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2018/11/21/the-health-202-here-s-how-trump-and-bernie-sanders-agree-on-lowering-drug-prices/5bf42bd91b326b3929054956/?utm_term=.143e3b258cb2

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Have you heard about the trendy new approach to lowering prescription drug spending? Copy other countries.

The Trump administration and Sen. Bernie Sanders (I-Vt.) are strange bedfellows on drug prices. But they’re both eyeing similar approaches to lowering the country’s astronomically high spending on prescription medicines: pegging U.S. drug prices to lower international levels.

Sanders proposed a bill Tuesday incentivizing companies to develop cheaper generic versions of brand-name medications that the government determines to be “excessively priced” in comparison to the median price in Canada, the United Kingdom, Germany, France and Japan.

This is similar to an idea advanced in October by Health and Human Services Secretary Alex Azar, whose agency is experimenting with pegging some Medicare payments to an index based on sales prices in those five countries plus 11 more: Austria, Belgium, the Czech Republic, Finland, Greece, Ireland, Italy, Portugal, Slovakia, Spain and Sweden.

Both proposals stem from the reality that drug prices are much higher in the United States because the government doesn’t engage in price-setting, unlike in many other countries with similar economies. That means pharmaceutical companies pocket a lot more money in this country — and rely more heavily on their U.S. profits to pay for developing new medications.

Trump and Sanders have adopted similar rhetoric when they talk about the issue, even though the Republican president and the self-described democratic socialist senator couldn’t be further apart on other topics such as taxes and immigration. The United States pays unfairly high prices for prescription drugs, they argue, even as other countries demand — and obtain – steep discounts.

It’s not the first time Trump and Sanders have shared common ground. During their 2016 campaigns, both candidates advocated allowing Medicare’s prescription drug program to directly negotiate lower prices with drugmakers and private companies. Trump has since backed away from that idea, but HHS surprised many with its bold suggestion of  creating an international price index (which I explained in this Health 202).

Granted, HHS’s experiment is quite limited in scope. It applies only to drugs administered to Medicare patients by doctors themselves and will last just five years. The experiment — called a “demonstration” in administration-speak — won’t start until sometime after the Centers for Medicare and Medicaid Services propose a rule early next year.

Sanders’s proposal, also sponsored by Rep. Ro Khanna (D-Calif.), would go much further by affecting all drugs, including those purchased by Americans with private health insurance. If HHS determined a drug price to be excessive, the secretary would be directed to strip its maker of exclusivity rights and open the door for competitors to develop a generic version.

Sanders gave a nod to Trump’s Part B proposal but emphasized that his approach would help the more than 150 million Americans who get private health coverage from their employer. The monthly cost for the popular insulin Lantus (used for diabetes) could fall from $387 to $220 and the medication Humira (used for arthritis) could fall from $2,770 to $1,576, according to some examples provided by Sanders’s office.

There’s little to no chance Sanders’s bill will advance in Congress. Many Republicans aren’t enthused even about Trump’s limited Part B demonstration, because it smacks of government price-setting.

There is something else Sanders shares with the president: strong resistance from the pharmaceutical industry. A spokeswoman for the Pharmaceutical Research and Manufacturers of America said both proposals would be “devastating” if implemented.

“This legislation would have the same devastating impact on patients as the administration’s proposed International Pricing Index model,” PhRMA spokeswoman Nicole Longo said in a statement provided to The Health 202.

“Patients in countries whose governments set prices wait years for new medicines and have far fewer treatment options,” she added. “These policies reduce investment in research and development, slow progress in creating tomorrow’s cures and will result in Americans having access to fewer new medicines.”

 

 

 

Something Happened to U.S. Drug Costs in the 1990s

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International Comparison of Drug Spending

American pharmaceutical spending started taking off in the late 1990s compared with other advanced nations. 

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Two decades ago, the costs began rising well beyond that of other nations, and in recent years have shot up again. What can explain it?

There was a time when America approximated other wealthy countries in drug spending. But in the late 1990s, U.S. spending took off. It tripled between 1997 and 2007, according to a study in Health Affairs.

Then a slowdown lasted until about 2013, before spending shot up again. What explains these trends?

By 2015, American annual spending on prescription drugs reached about $1,000 per person and 16.7 percent of overall personal health care spending. The Commonwealth Fund compared that level with that of nine other wealthy nations: Australia, Canada, France, Germany, the Netherlands, Norway, Sweden, Switzerland and Britain.

Among those, Switzerland, second to the United States, was only at $783. Sweden was lowest, at $351. (It should be noted that relative to total health spending, American spending on drugs is consistent with that of other countries, reflecting the fact that we spend a lot more on other care, too.)

Several factors could be at play in America’s spending surge. One is the total amount of prescription drugs used. But Americans do not take a lot more drugs than patients in other countries, as studies document.

In fact, when it comes to drugs primary care doctors typically prescribe — including medications for hypertension, high cholesterol, depression, gastrointestinal conditions and pain — a recent study in the journal Health Policy found that Americans use prescription drugs for 12 percent fewer days per year than their counterparts in other wealthy countries.

Another potential explanation is that Americans take more expensive brand-name drugs than cheaper generics relative to their overseas counterparts. This doesn’t hold up either. We use a greater proportion of generic drugs here than most other countries — 84 percent of prescriptions are generic.

Though Americans take a lower proportion of brand-name drugs, the prices of those drugs are a lot higher than in other countries. For many drugs, U.S. prices are twice those found in Canada, for example.

Prices are a lot higher for brand-name drugs in the United States because we lack the widespread policies to limit drug prices that many other countries have.

“Other countries decline to pay for a drug when the price is too high,” said Rachel Sachs, who studies drug pricing and regulation as an associate professor of law at Washington University in St. Louis. “The United States has been unwilling to do this.”

For example, except in rare cases, Britain will pay for new drugs only when their effectiveness is high relative to their prices. German regulators may decline to reimburse a new drug at rates higher than those paid for older therapies, if they find that it offers no additional benefit. Some other nations base their prices on those charged in Britain, Germany or other countries, Ms. Sachs added.

That, by and large, explains why we spend so much more on drugs in the United States than elsewhere. But what drove the change in the 1990s? One part of the explanation is that a record number of new drugs emerged in that decade.

In particular, sales of costly new hypertension and cancer drugs took off in the 1990s. The number of drugs with sales that topped $1 billion increased to 52 in 2006 from six in 1997. The combination of few price controls and rapid growth of brand-name drugs increased American per capita pharmaceutical spending.

“The scientific explosion of the 1970s and 1980s that allowed us to isolate the genetic basis of certain diseases opened a lot of therapeutic areas for new drugs,” said Aaron Kesselheim, an associate professor of medicine at Harvard Medical School.

He pointed to other factors promoting the growth of drug spending in the 1990s, including increased advertising to physicians and consumers. Regulations on drug ads on TV were relaxed, which led to more advertising. More rapid F.D.A. approvals, fueled by new fees collected from pharmaceutical manufactures that began in 1992, also helped push new drugs to market.

In addition, in the 1990s and through the mid-2000s, coverage for drugs (as well as for other health care) expanded through public programs. Expansions of Medicaid and the Children’s Health Insurance Program also coincided with increased drug spending. And Medicare adopted a universal prescription drug benefit in 2006. Studies have found that when the potential market for drugs grows, more drugs enter it.

In 2007, U.S. drug spending growth was the slowest since 1974. The slowdown in the mid-2000s can be explained by fewer F.D.A. approvals of blockbuster drugs. Annual F.D.A. approvals of new drugs fell from about 35 in the late 1990s and early 2000s to about 20 per year in 2005-07.

In addition, the patents of many top-selling drugs (like Lipitor) expired, and as American prescription drug use tipped back toward generics, per capita spending leveled off.

The spike starting in 2014 mirrors that of the 1990s. The arrival of expensive specialty drugs for hepatitis C, cystic fibrosis and other conditions fueled spending growth. Many of the new drugs are based on relatively recent advances in science, like the completion of the human genome project.

“Many of the new agents are biologics,” said Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center. “These drugs have no meaningful competition, and therefore command very high prices.”

A U.S. Department of Health and Human Services issue brief estimated that 30 percent of the rise in drug spending between 2000 and 2014 could be attributed to price increases or greater use of higher-priced drugs. Coverage expansions of the Affordable Care Act also contributed to increased drug spending. In addition, “there has been a lowering of approval standards,” Dr. Bach said. “So more of these new, expensive drugs are making it to market faster.”

“As in the earlier run-up in drug spending, we’re largely uncritical of the price-value trade-off for drugs in the U.S.,” said Michelle Mello, a health law scholar at Stanford. “Though we pay high prices for some drugs of high value, we also pay high prices for drugs of little value. The U.S. stands virtually alone in this.”

If the principal driver of higher American drug spending is higher pricing on new, blockbuster drugs, what does that bode for the future? “I suspect things will get worse before they get better,” Ms. Sachs said. The push for precision medicine — drugs made for smaller populations, including matching to specific genetic characteristics — may make drugs more effective, therefore harder to live without. That’s a recipe for higher prices.

Democratic politicians have tended to be the ones advocating governmental policies to limit drug prices. But recently the Trump administration announced a Medicare drug pricing plan that seems to reflect growing comfort with how drug prices are established overseas, and there’s new optimism the two sides could work together after the results of the midterms. Although the effectiveness of the plan remains unclear, it is clearly a response to public concern about drug prices and spending.

CVS also recently announced it would devise employer drug plans that don’t include drugs with prices out of line with their effectiveness — something more common in other countries but unheard-of in the United States. Even if these efforts don’t take off rapidly, they are early signs that attitudes might be changing.

 

 

 

 

Three-fourths of Medicare Advantage denials overturned on appeal, OIG finds

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https://www.healthcaredive.com/news/three-fourths-of-medicare-advantage-denials-overturned-on-appeal-oig-finds/533463/

Dive Brief:

  • An investigation by the HHS Office of Inspector General found large numbers of overturned denials upon appeal from Medicare Advantage organizations, raising concerns that some needed payments and services aren’t going to providers and patients.
  • Between 2014 and 2016, MAOs reversed 75% of their own denials, or about 216,000 a year, according to a report released Thursday. Additional denials were overturned by independent reviewers at higher levels of the appeals process.
  • The numbers are particularly troubling because of the infrequency with which beneficiaries and providers used the appeals process — for just 1% of denials at the initial appeal level, according to the report. 

Dive Insight:

The findings are important in light of the growing popularity of Medicare Advantage. Payers like the stability of the marketplace, and it’s popular with patients, too. In a recent Avalere Health study, MA beneficiaries with chronic conditions had 23% fewer inpatient stays and 33% fewer emergency department visits than people enrolled in Medicare fee-for-service plans.

That said, neither providers nor patients want to feel like they regularly have to appeal payment or service denials, especially with out-of-pocket costs on the rise.

Of the roughly 216,000 overturned denials, more than 80% were payments to providers for services the beneficiary had already received. The remainder — 18% — were for preauthorization of services not yet rendered.

But while some denials are justified, filing and processing appeals puts a burden on providers, MAOs and beneficiaries, especially those needing immediate care, OIG says. 

“Further, although overturned payment denials do not affect access to services for the associated beneficiaries, the denials may impact future access,” the report states. “Providers may be discouraged from ordering services that are frequently denied — even when medically necessary —to avoid the appeals process.”

OIG also points to CMS audits that show “widespread and persistent” problems with MAO denials of payment and care. In 2015, for instance, CMS cited more than half of audited contracts for inappropriate denials and 45% for sending incomplete denial letters. The latter could hinder efforts to successfully appeal a denial, the report notes.

While the agency imposed penalties and sanctions against the affected MAOs, more action is needed, the HHS watchdog says.

Specifically, OIG recommends CMS boost oversight of MAO contracts, with an eye toward identifying those with high overturn rates, and take enforcement actions when needed. The report also calls on CMS to address chronic issues around inappropriate denials and deficient denial letters and inform beneficiaries of serious MAO violations. 

CMS agreed to all three suggestions.

 

Should Hospitals Limit the Number of Patients Nurses Can Help?

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http://www.governing.com/topics/health-human-services/gov-massachusetts-ballot-nurses-patient-ratio-health-care.html

A male nurse with an elderly patient.

 

The medical community is divided over a November ballot measure that would make Massachusetts only the second state with such staffing requirements.

Voters this fall could make Massachusetts only the second state in the country to limit the number of patients that hospital nurses can help at one time.

Question 1 would create legal ratios based on the type of patients that nurses are dealing with. Nurses aiding women during birth and up to two hours after, for instance, would be limited to one patient. If they’re working with children, they could see four patients at once. In the psychiatric ward, nurses could help up to five patients.

While nurses unions and progressive political groups back the ballot measure, most medical groups — including the Massachusetts chapter of the American Nurses Association and the state’s Health and Hospital Association — oppose it.

The ballot measure’s supporters argue that not regulating this negatively impacts patient care and overall health outcomes.

“There is overwhelming evidence when you look at studies and talk to nurses that when there are limits, there are better health outcomes,” says Kate Norton, campaign spokewoman for the Committee to Ensure Safe Patient Care, which is the official campaign for the ballot measure.

A 2011 study in the journal Health Affairs found that nurse-patient ratios in California resulted in decreased mortality rates after surgery and an additional half-hour of care for patients overall.

Seven states have laws that require hospitals to have committees that address staffing issues, but California is the only state with a cap on the number of patients a nurse can see during one shift. Advocates have struggled to gain support for ratio laws elsewhere, in part because the hospital industry doesn’t believe there’s enough evidence to support them.

California’s regulations were drafted by the state’s department of health and have been in effect since 2004. There was some fear at the time that hospitals would be forced to hire more nurses with less education in order to comply with the ratios. But according to the 2011 study, that didn’t happen.

Opponents of Massachusetts’ measure also worry that it would force hospitals “to make deep cuts to critical programs, such as opioid treatment and mental health services. Many community hospitals will not be able to absorb the added cost and will be forced to close.”

In California’s experience, those fears are likely overblown.

Research by the California Healthcare Foundation in 2009 shows that while “leaders reported difficulties in absorbing the costs of the ratios, and many had to reduce budgets, reduce services or employ other cost-saving measures,” the impact of the ratios was not discernible on hospital finances.

Research further shows that hiring levels only increased slightly after the mandate. But California is expected to have a nursing shortage of more than 44,000 by 2030. It’s not clear how big a role, if any, the staffing ratios play in this shortage.

In Massachusetts, opponents of the measure argue that it would worsen the existing nurse shortage there. Right now the vacancy rate for registered nurses in Massachusetts hospitals is 6.4 percent.

“If it passes, the estimates are that hospitals will have to hire 6,000 more nurses [according to a study led by the opposition camp]. Where will they get them?” says Jake Krilovich, director of policy and public affairs for the Home Care Alliance of Massachusetts, which opposes the measure.

But according to data from the U.S. Department of Health and Human Services, the state is projected to have a surplus of nurses by 2030.

Although well-financed organizations like the Massachusetts Business Roundtable, Massachusetts Health and Hospital Association and 11 local chamber of commerces oppose the measure, the supporting campaign has much more cash on hand: $1 million to just over $11,000 in the opposition camp.

There hasn’t been any formal polling done on the measure.

 

Montana health plan strikes victory over cost-sharing reduction payments

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https://www.healthcarefinancenews.com/news/montana-health-plan-strikes-victory-over-cost-sharing-reduction-payments?mkt_tok=eyJpIjoiTWpNM05qYzVPR1k0TldKbCIsInQiOiJTd2RzaU9sS1FuKzBOaVF3RXp5RkNqc3plbXp0NFlhdkk1MFlSNGY1NUJKa2NHd3IrXC9OdlJoSW1EQ2FIM3hkVkVzZ2FuaUhkcTNXcUtNczhNQWI2NFd1ckNCOHViSzdFbjRUS2xGMTdrXC90M1BjbCtRcVVnbkxweFwvdlY5VnZGViJ9

Montana Health Co-Op. Credit: Google Street View

The insurer says it is owed $5 million in payments mandated under the Affordable Care Act.

Health insurers in the Affordable Care Act market got a major win Tuesday when the Montana Health Co-op became the first plan to win its case for cost-sharing reduction payments.

Montana Health Co-op said it is owed an estimated $5 million in CSRs for 2017.

United States Court of Federal Claims Judge Elaine Kaplan said it didn’t matter that Congress never appropriated the funds, as argued by the Department of Justice. Kaplan sided with the Montana Health Co-op that said the Affordable Care Act created the mandatory obligation whether Congress approved the funds or not.

Judge Kaplan directed the parties to file a joint status report on or before October 4.

CSRs were set up under the ACA to allow insurers to pay the deductibles and other out-of-pocket costs for lower-income consumers.

The Department of Health and Human Services began making the CSR payments in 2014.

In that same year, Republicans in the House of Representatives sued the Obama Administration over the payments, saying they and others in Congress had never approved the funds. They won and an appeal was brought, but under President Donald Trump, the appeal became moot.

In 2017, Attorney General Jeff Sessions issued an opinion that the funds were never appropriated and the government stopped the payments.

While insurers no longer received the funds, they were still mandated under the ACA to offer to qualifying consumers the benefit of lower out-of-pocket costs.

Several insurers filed lawsuits, including Blue Cross Blue Shield of Vermont, Maine Community Health Options, LA Care Health Plan and Sanford Health Plan, according to Health Affairs. Common Ground Healthcare Cooperative led a class action lawsuit.

Insurers have also filed lawsuits to get payments promised through another ACA program, risk corridors. Under the three-year, budget neutral risk corridors program, the government was to take money from plans that had fewer higher risk beneficiaries and give the  funds to those that suffered losses in insuring higher risk consumers.

In making her decision Tuesday, Judge Kaplan cited a lawsuit brought by Moda Health Plan over risk corridor payments. In that case, the Federal Circuit Court said the government was obligated to make risk corridor payments to insurers.

But that case was overturned in mid-June, when a majority of a three-judge panel of the Court of Appeals for the Federal Circuit said the government did not have to pay health insurers the full amount owed to them in risk corridors payments.

 

 

Senators Consider Dueling Bills Over Texas Individual Mandate Litigation

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Litigation in Texas over the constitutionality of the individual mandate and, with it, the entire Affordable Care Act (ACA) is receiving more and more attention in Congress. On August 23, 2018, Republican Senators released new legislation that they believe would help blunt the impact of a ruling for the plaintiffs in Texas v. United States. The stated aim of the bill is to “guarantee” equal access to health care coverage regardless of health status or preexisting conditions. However, in the event that the court agrees with the plaintiffs—or even just the Trump administration—the legislation leaves significant gaps.

At the same time, Democratic Senators had their efforts to potentially intervene in the litigation rebuffed during the debate over a recent appropriations bill for the Departments of Labor, Health and Human Services (HHS), Education, and Defense. With a hearing on Texas scheduled for September 5, 2018—the same time as hearings are set to begin in Congress over the confirmation of D.C. Circuit Judge Brett Kavanaugh to the Supreme Court—attention on the case is only likely to increase.

Brief Background On Texas

In Texas, 20 Republican state attorneys general and two individual plaintiffs challenge the constitutionality of the individual mandate, which was zeroed out by Congress beginning in 2019. Without the penalty, the plaintiffs argue that the mandate is unconstitutional. Because the mandate cannot be severed from the rest of the law, they believe the entire ACA should also be struck down.

In June, the Department of Justice (DOJ) declined to defend the constitutionality of the individual mandate alongside the ACA’s provisions on guaranteed issue (42 U.S.C. §§ 300gg-1, 300gg-4(a)), community rating (42 U.S.C. §§ 300gg(a)(1), 300gg-4(b)), and the ban on preexisting condition exclusions and discrimination based on health status (42 U.S.C. § 300gg-3). These provisions collectively ensure that individuals with preexisting conditions cannot be charged more for their coverage or denied coverage or benefits based on health status or other factors.

The plaintiffs have asked Judge Reed O’Connor of the federal district court in the Northern District of Texas to enjoin HHS and the Internal Revenue Service (IRS) from enforcing the ACA and its implementing regulations—or, at a minimum, to strike down the law’s guaranteed issue and community rating provisions alongside the mandate. Judge O’Connor is considering ruling on the merits of the case (instead of issuing a preliminary injunction) and has scheduled a hearing on the motion for a preliminary injunction for September 5.

As noted above, the hearing will coincide with confirmation hearings for Judge Kavanaugh. Texas will likely be a focal point in the Kavanaugh proceedings because of the possibility that the case will reach the Supreme Court and because previous decisions suggest that Judge Kavanaugh believes that a President can decline to enforce laws that he or she believes to be unconstitutional.

The New Republican Legislation

Recognizing the potential impact of the Texas lawsuit, 10 Republican Senators released new legislation on August 23. The bill is sponsored by Senators Thom Tillis (NC), Lamar Alexander (TN), Chuck Grassley (IA), Dean Heller (NV), Bill Cassidy (LA), Lisa Murkowski (AK), Joni Ernst (IA), Lindsey Graham (SC), John Barrasso (WY), and Roger Wicker (MS). It is tied directly to the Texas litigation: Press releases acknowledge the September 5 hearing and state that “protections for patients with pre-existing conditions could be eliminated” if Judge O’Connor rules in favor of the plaintiffs.

The legislation would amend the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Although HIPAA offered significant new protections at the time it was passed, these protections were limited in terms of ensuring that people with preexisting conditions could access affordable, comprehensive coverage, particularly in the individual market. HIPAA established a minimum set of federal protections for certain consumers—for example, those who lost their group coverage—facing certain situations, such as job lock because of a new preexisting condition exclusion period. HIPAA also required guaranteed issue in the small group market and guaranteed renewability in the individual and group markets.

As mentioned, the DOJ has declined to defend the ACA’s provisions on guaranteed issue (42 U.S.C. §§ 300gg-1, 300gg-4(a)) and community rating (42 U.S.C. §§ 300gg(a)(1), 300gg-4(b)), and the ban on preexisting condition exclusions and discrimination based on health status (42 U.S.C. § 300gg-3). Thus, their position in the lawsuit implicates parts of four provisions of federal law: 42 U.S.C. §§ 300gg, 300gg-1, 300gg-3, and 300gg-4.

The legislation introduced by Republican Senators would restore only two of the four provisions that stand to be invalidated in Texas: 42 U.S.C. § 300gg-1 (guaranteed issue) and most of § 300gg-4 (guaranteed issue and rating based on health status). So the bill would prohibit the denial of coverage and rating based on health status, but it would not prohibit preexisting condition exclusions or rating based on other factors, such as age, gender, tobacco use, or occupation. This means that many individuals, including those with preexisting conditions, could still face higher premiums, higher out-of-pocket costs, and the denial of benefits because of a preexisting condition even after paying premiums for many months.

Implications 

The protections offered by the restoration of the two provisions included in the Senate GOP bill, § 300gg-1 and most of § 300gg-4, are largely illusory without the other parts of the ACA—community rating and the ban on preexisting condition exclusions—that are at risk in the lawsuit. Assuming the at-risk provisions are struck down and the new legislation is adopted, consumers would still face significant gaps. For instance, a woman with a history of cancer could purchase a policy under the new bill, but she could be charged more based on her gender and age, potentially pricing her out of the market. In addition, her policy could have a preexisting condition exclusion, meaning that any recurrence of cancer—or any other health condition—might not be covered at all; this could lead to much higher out-of-pocket costs and far less financial protection.

If Congress were to enact this bill today, it would largely be duplicative of existing law (and would do nothing to disturb the ACA). If Congress were to enact this bill in response to the Texas litigation, its effect would depend on how (if at all) a court would invalidate the ACA provisions in Texas. Would a court strike the entire provisions, including what was adopted under HIPAA and other federal laws? Or would a court simply strike the amendments that were made by the ACA?

If the latter, the new legislation might do even less than its authors think, because much of the bill is, in fact, devoted to readopting existing federal law that may not be at issue in Texas. These provisions were adopted before the ACA and touch on, for instance, genetic information nondiscrimination and long-standing exceptions to guaranteed issue.

No Vote On Manchin Resolution To Potentially Intervene In Texas

In July, Democratic Senators led by Joe Manchin (WV) introduced a resolution with the goal of intervening in Texas to defend the ACA’s protections for people with preexisting conditions. The resolution would authorize the Senate Legal Counsel to move to intervene in the case on behalf of the Senate and defend the ACA. During last week’s debate over an HHS appropriations bill, Senate leadership blocked a vote on the amendment.

 

 

CMS allows Medicare Advantage plans to negotiate Part B drug prices, implement step therapy

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The Centers for Medicare & Medicaid Services (CMS) is giving Medicare Advantage (MA) plans more power in how they pay for Part B drugs.

The agency will allow MA plans to negotiate Part B drug prices with manufacturers, as well as to implement step therapy for Part B drugs. Plans will be required to pass half of the savings generated through negotiation to patients.

Negotiating Part B drug prices will foster competition and allow MA plans to get a better deal for their enrollees, according to CMS. These negotiations may also lead to price decreases in traditional Medicare.

The move represents perhaps the most significant step in the administration’s push to reduce drug prices, offering a new lever to combat ever-increasing costs.

Step therapy is a form of prior authorization that requires patients to try a “preferred” drug—that is, a less-expensive biosimilar— before the plan will cover a different, more expensive one. CMS says this will reduce costs for plans and beneficiaries alike.

Under the Affordable Care Act, at least 85% of plans’ savings must go toward healthcare services and quality improvement activities.

Further, the new policy requires “more than half of the savings required to be passed on directly to patients,” CMS said in a press release. A memo (PDF) from the agency says the savings may come in the form of “gift cards or other items of value.”

It is “unique that Medicare Advantage has not done this,” said CMS administrator Seema Verma in a press call on Tuesday evening, noting that traditional Medicare and private insurance plans have long been allowed to implement a step therapy policy.

MA plans will not be required to implement step therapy. Those that decide to do so must inform beneficiaries before the next enrollment period in October.

Verma added that patients and doctors can appeal the step therapy requirement through the existing appeals process.

The Pharmaceutical Care Management Association (PCMA), a trade association representing pharmacy benefit managers (PBMs), called the move “an important step toward reducing costs for the program and beneficiaries,” adding that “some of the highest priced drugs are found in Medicare Part B.”

Opponents of step therapy, who sometimes call it “fail first,” say limiting medication options can have negative consequences for consumers.

Step therapy policies “dangerously intrude on patient safety” and “weaken the doctor/patient relationship by negating the healthcare plan that they created together,” according to patient advocacy organization Fail First Hurts.

Part B drugs are either generally administered by a physician, administered via durable medical equipment, or otherwise specified by statute.

 

 

CMS Reevaluates Stark Law in Response to Value-Based Care Initiatives

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On June 20, 2018, CMS and HHS issued a “request for information” (RFI) seeking input on strategies to reduce the burden of the federal physician self-referral law or “Stark Law,” including the law’s impact on the transition to value-based care.

In the RFI, CMS solicits information on the ways in which the Stark Law creates challenges for coordinated, value-based care, and the transition to alternative payment and delivery models; it also seeks ideas and input on how the Stark Law may be changed to facilitate these models.

What’s driving the RFI

The RFI is launched as part of the agency’s “Regulatory Sprint to Coordinated Care” led by HHS Deputy Secretary Eric Hargan, which is directed at addressing regulatory barriers to coordinated care.  As such, the Regulatory Sprint and the RFI represent the administration’s efforts to reduce regulatory burden, while also demonstrating a commitment to the transition to more value-based, coordinated care and risk-based payment.  In public statements, HHS and CMS officials have suggested that the Regulatory Sprint may support similar flexibility in other laws, including the Anti-Kickback Statute.

Although the agency does not commit to any specific regulatory changes in this document, it is notable that HHS issued a similar RFI in 2010 just before it issued sweeping waivers of the Stark Law and Anti-Kickback Statute for the Medicare Shared Savings Program.  While many of the questions focus on “Alternative Payment Models” under the Quality Payment Program, the RFI is not limited to these programs.  Instead, the RFI invites the public to propose new exceptions and revised interpretations of the statute to advance the goals of coordinated care.

What CMS wants to know

In the RFI, CMS poses twenty specific questions related to the Stark Law, Alternative Payment Arrangements, and delivery system innovation strategies. The topics and questions range from:

  • Requests for details on Alternative Payment Models and innovations considered or engaged in by healthcare delivery system participants, including details on the financial and operational details of the arrangements, such as financial risk;
  • Solicitation of ideas and input on additional and/or new exceptions to the Stark Law that would facilitate existing and innovative arrangements;
  • Thoughts on changes to existing provisions of the final rule implementing the Stark Law, such as definitions of “commercial reasonableness” and “fair market value,” and thoughts on other potential definitions and terms such as “Alternative Payment Model,” clinical and financial integration and others;
  • Comments on key concepts in the existing law including compensation formulas that do and do not take into account the volume or value of referrals or other business within the meaning of the Stark Law and other novel financial arrangements; an
  • Requests for information on the Stark Law’s compliance cost, the potential role of increased transparency to promote compliance and how CMS should assess the Stark Law’s effectiveness in achieving its underling policy goals related to improper financial incentives.

The RFI may represent an important opportunity for the healthcare industry to educate CMS on current experiences and challenges, and to shape the content of future rules implementing changes to the Stark Law, particularly in a time of industry integration across the continuum of care.  The RFI also offers tangible evidence of the administration’s commitment to continue a migration to value-based care, and potentially reflects an enhanced commitment and desire to migrate away from fee-for-service payment to arrangements involving financial risk.