CMS Administrator Seema Verma promotes cuts to 340B drug payments

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Senate committee is taking a closer look at the drug discount program.

The Centers for Medicare and Medicaid Services’ focus on lowering drug prices now includes the contentious 340B drug pricing program.

On Wednesday, CMS Administrator Seema Verma told the Pharmacy Quality Alliance that the agency’s change in the 340B payment rate to qualifying hospitals would save Medicare beneficiaries $320 million this year.

Under 340B, hospitals that serve a large number of vulnerable patients are able to buy drugs from manufacturers at discounted prices. However, Verma said Wednesday, “these discounts were not being passed on to our beneficiaries. So, CMS reduced the amount that beneficiaries and the federal government will pay hospitals for drugs that they acquire through this program.”

Medicare beneficiaries will save a total of $320 million in drug spending this year from the change, Verma said.

Last November, several hospital groups including the American Hospital Associationsued CMS for the $1.6 billion in cuts, representing a 28 percent decrease.

On Tuesday, a Senate health committee got involved when members questioned why a rule that would set ceiling prices on drugs in the program has been delayed five times.

The final rule would impose monetary penalties for manufacturers that charge more than the ceiling price for an outpatient drug and imposes other restrictions.

340B hospitals want to see the rule enforced.

The Government Accountability Office will be looking into the issue and the work of the Health Resource and Services Administration, the agency which manages the program and is responsible for the latest delay in implementation of the final rule until July 2019.

The problem is that states and providers do not know the ceiling prices. Confidentiality rules prevent the HRSA from sharing ceiling prices with states or 340B providers.

Because of this, 340B hospitals don’t know what they ought to be paying for discounted drugs, according to Ann Maxwell, assistant inspector general for evaluation and inspections for the Office of the Inspector General, speaking before the Senate Committee on Health, Education, Labor and Pensions.

This lack of transparency prevents ensuring that 340B providers are not overpaying pharmaceutical manufacturers and that state Medicaid programs are not overpaying 340B providers, Maxwell said.

The 340B drug pricing program debate pits the hospitals that benefit from the discounted prices of the program against organizations that contend these providers are taking advantage of the financial incentive.

The 340B program, established in 1992, generates savings for certain safety-net providers by allowing them to purchase outpatient drugs at discounted prices.

Opponents of 340B say seniors get none of the benefit and pay full price and that the disproportionate share hospitals that get the discount take advantage of the financial incentive by buying larger quantities of drugs and more expensive drugs.

HRSA reported that total 340B sales in 2016 amounted to approximately $16 billion, or about 3.6 percent of the U.S. drug market.

The Alliance for Integrity and Reform of 340B, or AIR340B released a new report with analytics by the Berkeley Research Group on Medicare Part B hospital outpatient reimbursements that found in 2016, 340B hospitals accounted for nearly two-thirds of Medicare Part B reimbursements – while only representing slightly more than half of all Medicare hospital outpatient revenue.

“Medicare patients treated in 340B hospitals have disproportionately high outpatient drug spend as compared to patients treated at non-340B hospitals,” AIR340B said

PhRMA said it was encouraged to see the Senate HELP Committee continuing to take a closer look at issues within the 340B program.

The New England Journal of Medicine concluded that financial gains for 340B hospitals have not been associated with clear evidence of expanded care or lower mortality among low-income patients, PhRMA said.

340B also drives a shift of treatment to more expensive hospital settings for physician-administered medicines, PhRMA said.

Hospitals and proponents say the 340B drug pricing program is one of the few federal programs to curb drug costs that is working.

“Sadly, the administration’s policy proposals would erode that progress and just put more money into the pockets of pharmaceutical companies,” 340B Heath said. “The administration’s proposals are based on a faulty understanding of the 340B program and the pharmaceutical market. The notion that 340B discounts are raising drug prices is simply false. Drug companies set the prices for their products and they, alone, decide how high those prices go.”

Hospitals participating in the 340B program account for 60 percent of all uncompensated care in the U.S. and serve a high proportion of low-income patients on Medicaid, 340B Health said.

“There is a clear history of manufacturers overcharging 340B providers. Delaying enforcement of this rule will have a tremendous adverse impact on hospitals, clinics and health systems caring for low-income and rural patients,” said Maureen Testoni, interim president and CEO of 340B Health.

America’s Essential Hospitals said federal scrutiny of manufacturer pricing practices has found overcharges in the 340B drug pricing program.

“These overcharges undermine the program’s ability to make drugs affordable for vulnerable patients and increase costs for their hospitals, which already operate with thin margins,” the group said.

 

Tax Bill Threatens Our Health and Our Democracy

http://www.chcf.org/articles/2017/12/tax-bill-threatens-our-democracy

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Earlier this month, the Senate passed legislation that would overhaul the tax code, make dramatic changes to federal health care policy, and undermine the budgets of Medicaid and Medicare, two pillars of the American health care system. The House and Senate are now trying to reconcile their two tax bills. Each passed the legislation on a party-line vote, with one Republican voting against the bill in the Senate.

Congress is now one step away from passing a tax bill that will have a profound effect on the health and well-being of Americans for a generation. No one should forget that, to get this close, the Senate rushed to approve a deeply unpopular proposal with little transparency and due diligence — and no bipartisanship. Left unchecked, these actions will harm millions of Americans — and American democracy itself.

Even though the legislation has been framed as a tax bill, it is very much a health care bill. The Senate bill would eliminate the Affordable Care Act’s individual health insurance mandate, which would lead to the destabilization of the individual health insurance market. The Congressional Budget Office (CBO) projects that this change alone would increase individual premiums by 10% a year and cause as many as 13 million Americans to join the ranks of the uninsured by the end of the next decade. In California, the uninsured population would grow by 1.7 million people. Congress may still pass separate legislation to restore some stability to the individual market, but the leading proposals are too modest to prevent much damage.

Seismic Impact

On its own, the language in the tax bills would trigger a major earthquake in the health care system, and the aftershocks of this tax bill would be just as dangerous. By eliminating more than $1 trillion of federal revenue, the administration and congressional leaders are manufacturing a budget crisis that would likely lead to automatic cuts to Medicare under federal rules. The CBO, which examined the House bill, has estimated that those cuts could be around $25 billion a year. Republican leaders have also indicated they intend to use the revenue shortfall that they are engineering with this tax bill to seek deep cuts in safety-net programs, starting with Medicaid.

This isn’t merely about what the legislation will do to health care, because it also would exacerbate inequality and worsen health disparities in this country. Under both the House and Senate bills, low- and middle-income families would pay more in taxes and have a harder time paying not just for health care, but also for food, housing, child care, education, and other basic needs. When people struggle so much to make ends meet, they suffer more from illness and die younger. And if inequality keeps getting worse, it will undermine the economic, social, and political stability upon which our nation depends.

The burden on Californians would be particularly heavy. Our families would no longer be able to deduct what they pay in state and local taxes on their federal tax returns. This change alone would take more than $112 billion a year out of the pockets of hardworking Californians — more than any other state. The fact that Californians would be paying more in federal taxes would inevitably put new pressure on our state and municipal governments to reduce their taxes. Under that scenario, it is not hard to imagine a new wave of painful state and local budget cuts.

The irony is that California actually has the power to stop this runaway train. If the entire California congressional delegation worked together to protect their constituents, and if they were united and strong, they could prevent many — if not all — of the worst provisions in the tax bills from becoming law.

This moment is a test of leadership. Nothing less than the health of our people — and our democracy — are at stake.

GOP confronts an inconvenient truth: Americans want a healthcare safety net

http://www.latimes.com/politics/la-na-pol-obamacare-repeal-analysis-20170728-story.html?utm_campaign=KHN%3A%20First%20Edition&utm_source=hs_email&utm_medium=email&utm_content=54783651&_hsenc=p2ANqtz-8QmJGr2PDeEKnnZdJs6m30vcZz9vHx060Bw8uOKvZtYf4f6oENTqr97q-xzfjpCjyNwrlUVZAQ0cufacwlbeutnNBlnQ&_hsmi=54783651

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The dramatic collapse of Senate legislation to repeal the Affordable Care Act may not end the Republican dream of rolling back the 2010 healthcare law.

But it lay bare a reality that will impede any GOP effort to sustain the repeal campaign: Americans, though ambivalent about Obamacare in general, don’t want to give up the law’s landmark health protections.

“There may be a whole lot of Americans who are complaining about government, but that doesn’t mean they agree with eliminating the safety net,” said former Sen. Dave Durenberger, a Minnesota Republican and healthcare policy leader in the 1980s and ’90s. “We saw that with Social Security and Medicare in Reagan’s day. Now it is a much broader group of people who rely on those health protections.”

And as the Senate debate this week illustrated, Obamacare’s safety net — both guaranteed insurance for the sick and expanded Medicaid coverage for the poor — proved too valued to tear apart.

That means that, while attacks on Obamacare will probably continue, it’s increasingly unlikely that President Trump or GOP congressional leaders will be able to rip out the law “root and branch,” as Senate Majority Leader Mitch McConnell (R-Ky.) once promised.

The GOP’s failure to dismantle the expanded healthcare safety net also may provide an opening for Republicans and Democrats to cooperate on measures to help Americans who have struggled in recent years with rising premiums brought about, in part, by Obamacare.

“Now the real work lies before us,” March of Dimes President Stacey D. Stewart said Friday, following the defection overnight of three GOP senators who voted against a last-ditch Republican bill to begin unraveling the law.

“Our healthcare system and the laws that govern it are far from perfect, and many opportunities exist to find areas of common ground to make improvements,” Stewart said.

The March of Dimes is among scores of patient advocacy organizations, hospitals, physicians’ groups and others who bitterly fought the GOP repeal push, warning of disastrous consequences for tens of millions of sick and vulnerable Americans.

This was not how Republicans had sketched out repeal.

For years, GOP politicians cast themselves as saviors, promising to deliver Americans from a law that former Republican presidential candidate Ben Carson, now Trump’s Housing secretary, once called the “worst thing that has happened in this nation since slavery.”

Demonizing Obamacare, initially a derisive label the GOP coined for the ACA, proved good politics. Republicans scored major victories in the 2010, 2014 and 2016 elections on pledges to roll back the law.

But the successful political message — which built off deep partisan divisions — obscured much broader support for the law’s core elements.

For example, 80% of Americans in a national survey last fall reported favorable views of allowing states to expand Medicaid to cover more poor adults, and of providing aid to low- and moderate-income Americans to help them buy health coverage, two pillars of the law.

The same proportion, according to the poll by the nonprofit Kaiser Family Foundation, liked the law’s insurance marketplaces, which allow consumers to shop among health plans that must offer a basic set of benefits.

Nearly 70% backed the law’s coverage guarantee, which prohibits insurers from turning away people due to their medical history of preexisting conditions.

“As a law, Obamacare got caught up in the politics of the time. It became the symbol of the Obama administration,” said Mollyann Brodie, who oversees polling for the Kaiser Family Foundation. “But the policies themselves have always been quite popular, even among Republicans.”

GOP politicians didn’t have to reckon with that contradiction as they took dozens of essentially meaningless repeal votes while Obama was still in the White House to veto their bills.

That changed after the 2016 elections. No longer was repeal an abstract political slogan.

It was a concrete set of plans that cut insurance subsidies for millions of Americans, slashed hundreds of billions of dollars in federal Medicaid assistance to states and weakened coverage guarantees by allowing insurers to once again charge sick people more for coverage.

That is not what Americans wanted, said Dr. Jack Ende, president of the American College of Physicians.

“No version of legislation brought up this year would have achieved the types of reforms that Americans truly need: lower premiums and deductibles, with increased access to care,” said Ende, a University of Pennsylvaniaprimary care doctor.

Independent analyses of the GOP repeal bills by the Congressional Budget Office and others estimated they would leave tens of millions more Americans without health coverage and drive up costs for many older and sicker consumers.

In the crosshairs were not just unemployed adults whom conservative critics derided as freeloaders, but also poor children, disabled Americans and seniors who worked all their lives but depended on Medicaid for nursing home care.

Altogether, nearly 1 in 4 Americans rely on Medicaid and the related Children’s Health Insurance Program for coverage.

And as the repeal debate dragged on in Washington and in congressional districts across the country, stories of these Americans and others who rely on Obamacare’s healthcare protections brought the safety net to life.

National polls ultimately showed that fewer than 1 in 5 Americans surveyed supported the Republican repeal legislation.

By contrast, 60% of Americans in a recent Pew Research Center poll said that it is the federal government’s responsibility to ensure all Americans have health coverage — the highest level in nearly a decade.

Even many Republican state leaders — including the governors of Ohio, Nevada and Arizona — balked at the congressional rush to roll back the Medicaid safety net. In a bipartisan letter to Senate leaders this week, several of these governors urged lawmakers to turn away from the repeal push.

“We ask senators to work with governors on solutions to problems we can all agree on: fixing our unstable insurance markets,” wrote the governors — five Republicans and five Democrats.

Some congressional Republicans seemed reluctant to give up the repeal campaign. “As long as there is breath in my body, I will be fighting for the working men and women of this country that are being hurt by Obamacare,” Texas Sen. Ted Cruz said after the vote early Friday morning.

And conservative activists continue to demand action. “In Washington, there are no permanent victories or permanent defeats,” said Heritage Foundation President Edwin J. Feulner.

The president, meanwhile, reiterated his threats to “let Obamacare implode,” as he said in a Twitter post after the early Friday vote.

The administration could potentially sabotage insurance markets across the country by refusing to enforce the current law’s requirement to buy insurance or withholding payments to health insurers that subsidize costs for very low-income consumers.

But at the Capitol, Democrats and some Republicans appear willing to begin considering legislation to protect those markets and help millions of American consumers who have seen insurance premiums rise dramatically in recent years.

“Simply letting Obamacare collapse will only cause even more pain,” warned Rep. Kevin Brady (R-Texas), chairman of the powerful House Ways and Means Committee.

Fixing the safety net represents a far better approach than a new push to tear it down, said Durenberger, the former GOP senator.

“Bipartisanship is the only option,” he said.

Safety Net CEO: AHCA Passage Rests on Backs of Poorest, Sickest

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The CEO of Grady Health System says the bill’s passage by the Senate would cut $50 to 60 million from the health system’s annual revenues and many who gained insurance through Obamacare will lose it.

The recent passage by the U.S. House of Representatives of the American Health Care Act, will affect all hospitals to some degree, but none more than safety net hospitals, which treat a large percentage of poor patients.

Why? Because a much larger percentage of their revenue depends on reimbursement from Medicaid, which expanded under the ACA, but is targeted for the majority of cuts under the AHCA.

John Haupert is not just CEO of Grady Health System, the $917 million (operating revenue) Atlanta safety-net health system. He’s also the board chair of America’s Essential Hospitals, the 275-member safety net hospital association.

In the wake of the House’s passage of the AHCA, and in anticipation of the Senate’s upcoming consideration of the Republican bid for repeal and replacement of the Affordable Care Act, HealthLeaders spoke with Haupert about his thoughts on the bill (or its Senate version) and the effects it could have on hospitals and health systems like Grady.

Following is a lightly edited transcript of that conversation.

GOP governors confront Medicaid divide

http://thehill.com/policy/healthcare/320914-gop-governors-confront-medicaid-divide

GOP governors confront Medicaid divide

Governors are descending on Washington this weekend as Republicans wrestle with the future of ObamaCare’s expansion of Medicaid.

GOP lawmakers say they are looking to governors for advice on what to do about the program, which is one of the toughest issues Republicans face as they look to repeal and replace the healthcare law.

Many of the lawmakers representing states that accepted the Medicaid expansion are looking to keep it. But they are at odds with conservatives and Republicans from states that rejected the expansion; they are pushing full repeal.

It will be hard for any repeal and replace bill to pass Congress unless Republicans can bridge that divide, and they are looking to the governors, who help run Medicaid as a joint federal-state program, for help.

“We’re in extensive discussions with them and we’ll talk with them more when they get here and then move ahead on both Medicaid and the individual market,” Sen. Lamar Alexander (R-Tenn.) told reporters earlier this month, speaking of the governors meeting.

Republican governors are almost evenly divided on the Medicaid issue, with 17 hailing from states that rejected the expansion, and 16 hailing from states that accepted it.

States that took the expansion broadened eligibility for Medicaid — the government healthcare program for the poor and disabled — up to 138 percent of the federal poverty line. About 11 million people have gained coverage because of the Medicaid expansion.

The healthcare plan that House Republicans outlined last week calls for eventually eliminating the extra federal funding for the Medicaid expansion. If states wanted to continue covering the additional people, they would have to spend more of their own money.

Some Republican governors from states that accepted the expansion have been vocal about wanting to protect it — and none more so than Ohio Gov. John Kasich.

Over the weekend Kasich called the House GOP plan “a very, very bad idea, because we cannot turn our back on the most vulnerable.”

AEH: Safety-nets will face $40.5B in losses without similar ACA replacement

http://www.beckershospitalreview.com/finance/america-s-essential-hospitals-says-it-will-face-40-5b-in-losses-without-similar-aca-replacement.html

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Washington D.C.-based America’s Essential Hospitals said if Congress repeals the ACA and does not replace it with a “comparable” plan, its safety-net hospital members will lose up to $40.5 billion nationwide.

The losses would reflect the decrease in coverage under an ACA repeal, cuts to Medicaid disproportionate share hospital funding and Medicare from 2018 through 2026, according to the association’s policy brief.

In addition, the association said even if Congress followed a December 2015 repeal plan, which rescinded the Medicaid DSH cuts, its members would face a $16.8 billion loss over the same period.

“These numbers really show what’s at stake for the patients who depend on the doors being open at essential hospitals,” said Bruce Siegel, MD, president and CEO of America’s Essential Hospitals. “These are unsustainable losses that would jeopardize vital services and access to care in communities across the country.”

Trump administration withdraws 340B mega-guidance: 6 things to know

http://www.beckershospitalreview.com/finance/trump-administration-withdraws-340b-mega-guidance-6-things-to-know.html

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The Trump administration has withdrawn guidance on the 340B Drug Pricing Program that was under review at the end of the Obama administration.

Here are six things to know about the guidance.

1. HHS’ Health Resources and Services Administration released the omnibus guidance on the 340B Drug Pricing Program in August 2015. The 340B Drug Pricing Program allows certain safety-net healthcare organizations to purchase outpatient drugs at discounted prices.

2. The guidance addressed a broad range of topics within the 340B program, including the definition of patient, contract pharmacy compliance requirements, hospital eligibility criteria and eligibility of off-site outpatient locations.

3. On Jan. 30, the White House Office of Management and Budget marked the final guidance document as withdrawn.

4. Although the pharmaceutical drug industry generally supported the guidance, hospitals raised concerns about the proposal. The American Hospital Association previously expressed concern about the guidance, arguing that redefining patient eligibility for the 340B program would have inappropriately narrowed the number of drugs that qualify for 340B pricing.

5. On Wednesday, AHA Executive Vice President Tom Nickels said, “We are pleased that the administration chose not to finalize the Health Resources and Services Administration’s guidance, which, if enacted, would have jeopardized hospitals’ ability to service vulnerable populations, including low-income and uninsured individuals and patients receiving cancer treatments.”

6. For HRSA’s guidance to move forward, it would have to be resubmitted to the Office of Management and Budget.