Allowing the marketing of these short-term plans 'puts us at risk of going back to the pre-ACA era where women were left without the coverage they needed.'
This article first appeared August 16, 2018 on Medpage Today.
By Joyce Frieden
WASHINGTON -- Allowing insurers to sell short-term health insurance plans that are not subject to Affordable Care Act (ACA) coverage provisions will result in patients being unable to get coverage at a time they need it most, Democratic senators said Thursday.
"These policies are not going to be worth the paper they're written on," Sen. Ron Wyden (D-Ore.), ranking member of the Senate Finance Committee, said at a briefing on short-term health insurance plans called by a group of Senate Democrats. Wyden said that when he was running the Gray Panthers, a senior citizens' group in Oregon, group members successfully fought against allowing worthless Medicare supplemental insurance plans to be sold. "These junk insurance policies look like they may end up beating those ripoff Medigap supplements as one of the biggest ripoffs of our time."
Wyden read a question from an application for a short-term health insurance policy that was just approved for sale in the Midwest. Sales of the plans, which don't have to follow the ACA's coverage requirements, are now permitted under the new rules for short-term, limited-duration health insurance plans recently finalized by the Department of Health and Human Services (HHS). The rules allow such policies to last for up to 12 months, and they can be renewed for another 2 years after that. Previously, the Obama administration limited the policies to 3 months' duration.
"One of the [questions] reads, 'Within the past 5 years, have you or any other person to be insured been aware of being diagnosed, treated by a member of the medical profession, or taken [medication] for: cancer, tumors, stroke, a heart disorder, heart attack, coronary bypass or stent, peripheral vascular disease, carotid artery disease, chronic obstructive pulmonary disease, emphysema, a kidney disorder, liver disorder, a neurological disorder, a degenerative disk disease, rheumatoid arthritis, degenerative joint disease, diabetes, Crohn's disease, bipolar disorder, or any eating disorder, alcohol abuse, or chemical dependency, or does anyone listed on the application currently weigh over 250 pounds (for women) or 300 pounds (for men)?'" Wyden said.
Answering "yes" to any of those items could get you disqualified for coverage, he said. "That, folks, is not some kind of abstraction ... People ought to have airtight, loophole-free protection. What I read you doesn't exactly meet that test."
Constance Bohon, MD, legislative co-chair of District IV of the American College of Obstetricians & Gynecologists, said that as someone who has been a practicing ob/gyn for 35 years, "I have seen firsthand the negative impact that lack of insurance coverage has on the health of my patients. I have seen a patient with a risk for preterm birth not have coverage for critical preventive healthcare during her pregnancy, increasing her risk of having a preterm baby."
Allowing the marketing of these short-term plans "puts us at risk of going back to the pre-ACA era where women were left without the coverage they needed," said Bohon. "A Kaiser Family Foundation analysis found that, of 24 distinct short-term insurance plans currently marketed in 45 states and D.C., none of the plans included maternity care coverage. These plans will turn back the clock on women's health."
The event also included testimony from a patient who had been hurt by a short-term policy. Two years ago, Sam Bloechl, a self-employed landscaper from Chicago, began having lower back pain. He decided to see an insurance broker to get his health insurance coverage upgraded before he was diagnosed with anything serious.
"During the conversation I was very upfront about my problem," he said. "I told the broker I had been experiencing back pain since October and had been to the chiropractor numerous times. I shared that the chiropractor had taken x-rays, but he had not made a diagnosis. I told the broker I was still experiencing pain and that I would most likely be going in for an MRI in January. She assured me that as long as there was no diagnosis, the plan she recommended for me was the right plan."
Sam was eventually diagnosed at age 28 with stage IV non-Hodgkin's lymphoma; his doctors gave him chemotherapy and radiation and recommended a bone marrow transplant. However, "my insurance company told me that they would not pay for any of my treatment," including the transplant, he said.
Bloechl appealed the decision but was denied, leaving him with $800,000 in medical bills. The insurer said the cancer was a pre-existing condition because he had already been to see a chiropractor about his back pain before getting the new insurance. "Instead of planning a life together with my fiance and a future for my business, I am kept up at night worrying about staying afloat, how to pay the next bill, how to avoid bankruptcy."
Baldwin and Sen. Elizabeth Warren (D-Mass.) who also attended the briefing, are among six co-sponsors of S. 2582, the Consumer Health Insurance Protection Act of 2018, which would require that short-term insurance plans cover the 10 essential benefit categories included in the ACA. The bill was introduced in March, but no other action has been taken on it.
HHS Secretary Alex Azar defended the short-term health plans in an opinion piece in Thursday's Washington Post. He pointed out that the plans will cost 50% to 80% less than other plans and that "consumers can also buy separate renewability protection, which will allow them to lock in low rates in their renewable plans even if they get sick."
"These short-term plans can be a good option for many Americans priced out of Obamacare's regulations -- especially small-business owners, independent contractors in today's 'gig economy,' and younger Americans transitioning between school and employment," he wrote. "Fundamentally, this administration believes in more options, not fewer, for consumers. Expanding short-term insurance is just part of President Trump's larger agenda to improve healthcare choice and competition for Americans."
'As we undertake our efforts to free up competition from the federal level, we hope all of you will examine what can be done in the states.'
This article first appeared August 09, 2018 on Medpage Today.
By Joyce Frieden
NEW ORLEANS -- States should consider relaxing restrictions on scope of practice and lessening Certificate of Need requirements in order to broaden the free market for healthcare, Health and Human Services (HHS) Secretary Alex Azar told state lawmakers Thursday.
"I would urge all of you to take a look at how state and local regulations can be impeding healthcare competition, raising costs for American patients, and depriving them of choices," Azar said at a meeting of the American Legislative Exchange Council, a group of conservative state legislators. "Regulations like Certificates of Need and scope of practice can have a legitimate purpose. But too often, these rules can be a significant barrier to new competition and lower-cost market disruptors."
"Fundamentally, when we wonder why American healthcare costs so much, why patients feel so disempowered, so often the answer is that government rules are standing in the way of necessary innovation," Azar said. "As we undertake our efforts to free up competition from the federal level, we hope all of you will examine what can be done in the states."
Azar was interrupted by applause several times in his 20-minute speech, after which the audience gave him a standing ovation. The first applause came when he said, before outlining his department's top priorities, "In each of these areas, one of our first steps is to see how we at HHS can get out of the way: how we might be inhibiting innovation by state governments and private actors."
He also received a warm response when he mentioned the department's new rules allowing for short-term insurance plans. "We look forward to offering states all the flexibility possible under the law to craft solutions that promote affordability, fiscal sustainability, private coverage, and consumer choice. As one example, we recently finalized new regulations for short-term, limited-duration insurance plans that are free from most Obamacare regulations and, therefore, as much as 50% to 80% cheaper than Obamacare plans."
But he chided some states "[that] place restrictions on these plans that can limit their usefulness, like limiting the initial contract period to around 6 months, rather than up to a year. We believe sensible state regulation of these plans is important. But millions of Americans are in need of affordable insurance options, and states can help build this market outside of Obamacare's broken regulations."
Azar also used the speech as an opportunity to announce a new HHS policy regarding the rebates that drugmakers pay to the Medicaid program. "I am pleased to announce ... that HHS is issuing a guidance today to drug manufacturers that will ensure they are paying the full Medicaid rebates they owe on certain prescription drugs," he said.
"When drug manufacturers roll out what's called a 'line extension' for a drug, like an extended release, once-daily form of a pill they already sell, some of them have used it in the past to reset the price that's used to calculate the inflation rebates they have to pay," Azar explained. "This meant they could pay less than they would otherwise owe, just by introducing a new drug formulation."
"This is the kind of abusive behavior from drug companies that this administration will not tolerate. Starting today, we've made clear that manufacturers must pay the full amount of rebates that they owe under the law."
HHS chief takes Heritage Foundation stage to bash ACA, plug administration's programs.
This article first appeared July 26, 2018 on Medpage Today.
By Shannon Firth
WASHINGTON -- Health and Human Services (HHS) Secretary Alex Azar, JD, described the free-market principles driving the Trump Administration's approach to healthcare policy at a briefing hosted by the Heritage Foundation on Wednesday.
Specifically, Azar celebrated the expansion of alternatives to Obamacare, such as association health plans; doubled down on the administration's commitment to work requirements -- despite a federal court decision rejecting the idea -- and plugged the administration's new blueprint for lowering drug prices.
Azar likened President Trump's economic philosophy to that of former President Ronald Reagan, who summed up the failures of the big government approach to the economy this way: "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
"When things don't work the way they should ... often the culprit is government action," Azar said, citing the lack of digitization in the healthcare field as one example.
"The Trump administration's first instincts are the opposite of the big government nightmare that President Reagan described."
Azar noted that, in some cases, the government must intervene to correct past wrong-headed approaches.
"Always, however, our actions will be aimed at building markets and competition restoring price signals and incentives and empowering consumers through choice, rather than having government decide what is best for the individual," he said.
He went on to list a handful of health policy priority areas where he felt these free-market principles were most relevant: reforming the individual insurance market, curbing high drug costs, and rethinking the Medicaid expansion.
Obamacare's Flaws
In speaking about the individual insurance market, Azar blasted the Affordable Care Act, for "creat[ing] a thicket of subsidies, regulations, and taxes," while failing to expand private coverage and to lower costs. From 2013 to 2017, individual premiums more than doubled in 39 states, he said.
Azar also took aim at the ACA's age-rating mechanism -- currently, older Americans can be charged only three times what a younger American can for premiums -- saying it forces young people to foot the bill for older adults.
"Congress created this broken system, and it's going to take an act of Congress to fix it," he said.
In continuing the theme of bashing Obamacare, Azar also slammed the Medicaid expansion and extolled the promise of community engagement.
Azar also spoke of Medicaid expansion extending health insurance to "able-bodied adults."
Under the ACA, the government pays more to ensure healthcare coverage for these newly covered individuals than for the "traditional, vulnerable, Medicaid populations" -- e.g. low-income mothers, children, and the disabled.
"Supporting legislation to undo those perverse incentives is a priority for this administration," he said.
"We suffered one blow.... We are undeterred," Azar said of the judge's decision and HHS's commitment to work-requirement provisions.
More than a dozen states have applied for Medicaid waivers to enact such changes.
Alternatives to ACA Plans
In spaces where HHS can independently intervene to reshape the individual market unilaterally, it has, he noted.
Azar also touted the Trump administration's proposed rules to expand access to short-term health insurance policies that cost one-third of Affordable Care Act plans. Critics view such insurance as "junk plans" and argue that making them more available would bifurcate the health insurance market, making premiums unaffordable for older and sicker patients who need conventional full-coverage plans.
He touched briefly on the president's 2019 budget, which continues to call for ACA repeal and for replacing all of the Obamacare subsidies and the Medicaid expansion with block grants.
This idea and its variations, while trumpeted by many conservative think tanks -- including the Heritage Foundation -- has so far failed to win a majority in Congress.
Curbing Drug Prices
Looking beyond the individual market, Azar turned his eye to drug prices, claiming there is no "real market" for prescription drugs in the U.S. because of the maze of relationships between drugmakers, insurers, and pharmacy benefit managers that seek to squelch price-based competition.
Azar said that HHS has the authority to right this flawed system by closing regulatory loopholes.
Lastly, the Secretary highlighted his decision last week to direct the FDA to establish a working group that would explore the idea of importing drugs from other countries to address "patient access problems caused by spikes in drug prices."
But he stressed that he and the president had been clear in launching their blueprint to curb drug costs: "We are open to all solutions that put American patients first -- meaning [ideas that] are safe, effective, and respectful of patient choice and the incentives that drive American innovation."
The law against physician self-referral needs to be updated, but there was disagreement on how much reform needs to occur.
This article first appeared July 18, 2018 on Medpage Today.
By Joyce Frieden
WASHINGTON -- Members of a House committee generally seemed to agree that the Stark law against physician self-referral needs to be updated, but there was disagreement on how much reform needs to occur.
"For rural districts like mine, these laws do present a disproportionately heavy regulatory burden for our hospitals," said Rep. Lynn Jenkins (R-Kan.), a member of the House Ways & Means Health Subcommittee, at a hearing Tuesday on modernizing the Stark law. Because there are fewer employees living in rural areas, it "increases the probability that a physician or family member may work with an employer" that triggers the law, she noted.
Rep. Sander Levin (D-Mich.), the committee's ranking member, was more cautious. "On this issue we should proceed with care," he said. "The Stark law is an important tool, which for many years has protected beneficiaries from inappropriate referrals and overutilization of care ... Evidence continues to documents that these self-referrals have a detrimental impact on care." He cited a Government Accountability Office report finding that an exception to the law for in-office referrals has increased Medicare's costs by millions of dollars.
The Obama administration "has provided leeway through the regulatory process to facilitate new payment models" that wouldn't violate the Stark law, Levin said.
The 1989 law was named for former congressman Fortney H. "Pete" Stark (D-Calif.), and it "prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment, or compensation), unless an exception applies," CMS notes on its website.
Designated health services include clinical lab services, physical therapy, occupational therapy, radiology, durable medical equipment, home health services, outpatient prescription drugs, and inpatient and outpatient hospital services.
Made Sense at the Time
The Stark law made sense as a way to protect the public and the Medicare program from abuse at the time it was enacted, Eric Hargan, deputy secretary of the Department of Health and Human Services (HHS), said in his testimony at the hearing.
"The law did it in two specific ways. First, it banned doctors from referring patients for certain designated health services payable by Medicare to an entity in which the physician, or any immediate family member, holds a financial relationship. Second, it prohibited the entity from filing claims with Medicare, or billing another individual, entity, or third-party payer for those referred services. He noted that "the law grants HHS the authority to carve out exceptions for financial relationships that do not pose a risk of program or patient abuse."
However, "what made sense for the healthcare system of the 1980s does not necessarily translate to the modern healthcare system," he continued. "[The law] does not always work in a system transitioning and moving to value-based payments for healthcare. It may unduly limit ways that physicians and healthcare providers can coordinate patient care by restricting ways physicians can organize and work together and with others."
"In considering changes to the Stark Law, we must be cognizant of the need to preserve competition in the healthcare marketplace where such competition achieves the goal of patient-centered quality care while also controlling costs," Hargan said.
Barriers to Cooperation
Gary Kirsh, MD, a Cincinnati urologist speaking on behalf of the Large Urology Group Practice Association, explained that independent urology practices like his that want to participate in an alternative payment model (APM) are in a "Catch-22" when it comes to both the Stark laws and the federal anti-kickback statute, which "prohibits the knowing and willful payment of 'remuneration' to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients)," according to the HHS Inspector General's website.
"[Independent] practices cannot test an APM in the real world without financial waivers to Stark and anti-kickback laws, yet these waivers cannot be granted unless there is an approved APM," Kirsh said. "Organizations may spend ... years of work, resources, and substantial investments designing an APM, but it remains a theoretical, mathematical model whose actual impact on patient care and healthcare financing is unknown without testing in the clinical environment."
Kirsh's group and 24 other physician groups are supporting H.R. 4206, the Medicare Care Coordination Improvement Act, which would widen the Stark law's exemption for accountable care organizations to include all types of alternative payment models. But as it stands now, the Stark law's restrictions make it too hard to even conceptualize new APMs, said Latha Alaparthi, MD, of the Digestive Health Physicians Association, a gastroenterology organization.
When it comes to inflammatory bowel disease, for example, "there are multiple areas we can partner with [other physicians on] in terms of radiology, patient care, and drug costs, if we can get into discussion with people in terms of how we can coordinate care," Alaparthi, who was not present at the hearing, said in a phone call. "But we can't conceptualize [doing that through APMs] because we know those things are not allowed."
More Certainty Needed
But Brian DeBusk, PhD, CEO and president of DeRoyal, a medical device manufacturer, took a more nuanced view. "I would like to emphasize the need for caution when considering ways to make changes to the Stark law," he said. Although there are many waivers to the Stark law that are already available to APMs, "the waivers are not apparently used to their fullest."
One reason for that is that the waivers are granted only on a case-by-case basis, DeBusk said. "Codifying them into law would support a transition to value-based care ... More needs to be done to provider certainty and encourage physicians to become active participants in these models."
Levin expressed disappointment that the subcommittee was discussing the issue so late in the legislative year. "It's really sad that the focus of this Congress is to dismantle the Affordable Care Act," he said. "We should really be discussing issues like this ... instead of [trying to dismantle a law] that has provided healthcare coverage for the first time to millions of people. That's a sad commentary on what has been the focus of the majority [party] here."
Subcommittee chairman Pete Roskam (R-Ill.) was more optimistic. "I think there's very good work we could do here," he said. For example, making sure that the anti-kickback statute and the Stark law are in harmony with one another -- rather than each having conflicting and confusing terminology -- is one area all committee members can work on, he said.
No increase in 30-day mortality was observed after the cuts.
This article first appeared June 18, 2018 on Medpage Today.
By Salynn Boyles
A Veterans Affairs program using telemedicine to improve care of critically ill patients in regional VA hospitals appeared to reduce transfers to intensive care units (ICUs) at larger facilities without compromising patient survival, researchers said.
From 2011 to 2014, the VA implemented the program in 52 ICUs in 23 regional acute care hospitals in nine states, explained Spyridon Fortis, MD, of the Iowa City VA Health Care System, and colleagues writing in the journal CHEST.
Under the program, clinicians at these regional hospitals were connected with ICU staff at VA centers in Cincinnati and Minneapolis who were available around the clock to provide guidance on patient management.
Using data collected during the implementation period through 2015 on these 23 regional telemedicine hospitals, as well as 94 others not included in the program, Fortis and colleagues found the following:
Transfers decreased from 3.46% to 1.99% in the telemedicine hospitals and from 2.03% to 1.68% in the non-telemedicine facilities between pre- and post-telemedicine implementation periods (P<0.001).
After adjusting for demographics, illness severity, admission diagnosis and facility, ICU telemedicine was associated with overall reduced transfers with a relative risk of 0.79 (95% CI 0.71-0.87, P<0.001).
This reduction occurred in patients with moderate (RR 0.77; 95% CI 0.61-0.98, P=0.034), moderate to high (RR 0.79; 95% CI 0.63-0.98, P=0.035) and high illness severity (RR 0.73; 95% CI 0.60-0.90, P=0.003) and in non-surgical patients (RR 0.82; 95% CI 0.73-0.92, P=0.001).
Transfers decreased most dramatically in patients admitted with gastrointestinal (RR 0.55; 95% CI 0.41-0.74, P<0.001) and respiratory diagnoses (RR 0.52; 95% CI 0.38-0.71, P<0.001).
Moreover, the telemedicine program was not associated with an increase in 30-day mortality.
The study tracked more than half a million patient admissions overall to VA ICUs, including just over 97,000 with access to telemedicine services. Once intubation was performed, a teleintensivist, in collaboration with the bedside respiratory therapist, helped manage these patients remotely by using cameras to watch the patients and review the vital signs and mechanical ventilator settings and wave forms.
"Telemedicine has been shown in previous studies to improve mortality and reduce hospital length of stay, but our study is among the first to formally examine the effect of telemedicine on hospital transfers," Fortis told MedPage Today.
"That report was limited by small sample size, the close proximity of the community hospital ICUs to the reference tertiary center, and the single tertiary center to which all patients were transferred was the ICU telemedicine hub," the researchers wrote. "The effect of ICU telemedicine on inter-hospital transfers of critically ill patients still remains unclear."
"The transfer decline occurred mainly in patients with respiratory and gastrointestinal admission diagnoses," Fortis and colleagues wrote. "Although it is unclear why transfers decreased in patients with gastrointestinal admission diagnoses, transfer reduction in respiratory patients may occur due to remote availability of critical care expertise through telemedicine. Care of patients with respiratory diseases, in particular those requiring mechanical ventilation, can be challenging and transferring patients requiring mechanical ventilation is common."
Study limitations cited by the researchers included the exclusion of critically ill patients transferred prior to ICU admission and lack of information on diverted patients, bedside staffing levels at various VA facility ICUs or the level of care in the hospitals that received transferred patients.
'Where are the big, bold ideas?' asks ranking Senate Democrat.
This article first appeared June 13, 2018 on Medpage Today.
By Jennifer Reising
WASHINGTON -- Secretary of Health and Human Services Alex Azar, JD, defended President Trump's new blueprint to curb the rising costs of prescription drugs during a hearing of the Senate Health, Education, Labor, and Pensions committee on Tuesday, calling it an aggressive, long-term solution.
Senate Democrats pressed Azar on the details of Trump's "American Patients First" plan, while Republicans argued it laid out solutions to lower drug prices.
In his opening statement, Azar outlined the strategies in the President's blueprint and argued, "We have begun to take action on each of them already."
He cited creating incentives for lowering list prices set by drug companies, better negotiating for Medicare Part B and D, stopping drug companies who are unfairly blocking competition, and curbing out-of-pocket costs by ensuring that patients pay the lower-cost drug option.
In her opening statement, Sen. Patty Murray (D-Wash.), the committee's ranking member, said the president's blueprint has more questions than answers. "Where are the big, bold ideas?" she asked.
Murray pointed out that negotiating drug prices through Medicare was not in the plan. "As a candidate, President Trump constantly brought up that idea."
"So while the administration hyped its drug pricing plan as a big step forward ... it is very clearly not," Murray said. She also noted that when President Trump announced the plan, drug companies' stocks "actually went up."
Sen. Elizabeth Warren (D-Mass.) questioned President's Trump's prediction of voluntary price reductions by drug manufacturers.
"On May 30, the president said that in reaction to the release of the drug pricing blueprint, drug companies would be 'announcing voluntary, massive drops in prices within 2 weeks,'" she said. "That same day, Senator Smith [Tina Smith, D-Minn.] and I sent letters to the top 10 drug manufacturers to see how many had lowered prices in response to the blueprint," continued Warren. "While all of them responded, zero out of 10 said they lowered prices. In fact, one of the 10 said that prices will go up later this year."
Asked by Warren which drug companies were lowering their prices, Azar said there were several drug companies looking at substantial price decreases in competitive drug classes and that the challenge is working with pharmacy benefit managers and distributors to do this.
However, there appeared to be bipartisan support to eliminate rebates, where pharmacy benefit managers and drug companies negotiate fixed-price contracts. When list prices rise, then out-of-pocket costs do too, based on that price.
Warren balked at the blueprint proposal to negotiate lower drug prices by moving patients from Medicare Part B -- where co-pays are capped at 20% -- to getting their drugs as part of Part D, where co-pays are capped as high as 40%. Warren pressed Azar to "guarantee" that no Medicare beneficiary would see increases in out-of-pocket costs.
Azar replied that the purpose was "to create competition where savings can be safely obtained, and leverage existing private-sector options within Part B."
Sen. Tim Kaine (D-Va.) urged the Administration to stop "blaming allies for Americans paying these high prices," and calling it the "blame Canada" argument. Instead, he suggested using "best price" contracts for favored countries. When Azar appeared skeptical, Kaine suggested conducting a pilot project to test the concept. Sen. Doug Jones (D-Ala.) agreed: "Why not give it a real-world try?"
- Says CMMI programs aren't working; have 'failed to deliver.'
This article first appeared June 07, 2018 on Medpage Today.
By Cheryl Clark
WASHINGTON -- The Obama-era strategy to move the healthcare system from volume to value is too complicated and isn't working well, a Trump administration health official said here Wednesday.
The volume-to-value push has resulted in "a big sprawling complicated series of byzantine programs that few people understand" and it "sucks more value out of the system than it delivers," Joseph Grogan, associate director for health programs for the Office of Management and Budget (OMB), said at the start of a three-day conference on accountable care organizations (ACOs), bundled payments and MACRA. The OMB oversees $3 trillion in healthcare spending.
Grogan took specific aim at the Center for Medicare & Medicaid Innovation (CMMI), a division of the Centers for Medicare & Medicaid Services (CMS) created by the Affordable Care Act. He said his office recently sent a rescission package that includes an $800 million cut from what Congress has appropriated to CMMI, "because so far, CMMI has failed to deliver."
Take, for example, CMMI's experiment with ACOs -- groups of doctors and hospitals working together to deliver high-quality, low-cost care to a defined group of patients. When the Congressional Budget Office scored ACOs in 2011, it estimated that the ACO model called the Medicare Shared Savings Program "would save $4.9 billion over 10 years," Grogan said. But so far, programs using that model have cost over $384 million, according to CMS actuaries.
"There were a lot of broken promises and failed estimates in the ACA. But the hope and promise of these complicated value designs is certainly one of them," he added.
In effect, these designs are trying to get doctors and hospitals to act more like insurance companies, absorbing any losses if their enrollees and beneficiaries end up using too many expensive services, Grogan said. But the complexity of these program designs has become overwhelming.
The Trump administration, he said, is trying to reduce reporting requirements, use broader claims data, begin to move toward passive data collection efforts, "and see if we can get people to spend less time treating codes and entering on an iPad, and concentrate more on the patient."
One problem is the way defenders of these models have tried to justify them, saying the metrics used are unfair, and if different data were used, the picture would be different, Grogan said. "If we're constantly using counterfactuals to evaluate (the programs) and waiting for another study to bear out ... They'll never be termed as failures."
Under the current system, he said, it takes 18 months for a new model to get off the ground at CMMI because it must work through at least six different government offices. "Is that because we can't find simple examples of waste to be wrung out of the system, with $1.3 trillion in healthcare spending, there's no low-hanging fruit?"
Solutions are on their way under CMMI's new director, former Landmark Health CEO Adam Boehler, appointed in May by HHS secretary Alex Azar, Grogan said. "He understands the need for simple high-impact models that can be stood up quickly and deliver value to taxpayers," or be shut down fast if they don't work.
One example of Azar's efforts to improve the system is drug pricing proposals designed to reduce costs, which "may be the most promising area for value to be captured from the system," Grogan said.
The right incentives would lower costs, improve EHRs, Mostashari says.
This article first appeared May 24, 2018 on Medpage Today.
by Joyce Frieden
WASHINGTON -- Whose fault is it that electronic health records (EHRs) still aren't fully interoperable? Not the government's, Farzad Mostashari, MD, said Thursday.
"People say, 'Surely it's [the fault of] the government -- they didn't put enough standards in,'" said Mostashari, co-founder and CEO of Aledade, a company that helps primary care physicians start up accountable care organizations (ACOs). "No, that's not the problem with interoperability. The problem is, people don't have a business model where they make more money sharing data." Mostashari spoke at a summit on healthcare costs sponsored by the Alliance for Health Policy.
"The reason we don't have interoperability is not because we don't have the technical standards to do it -- it's because we don't have the business case to do it, or people are feeling like in furtherance of their business model, they can block the flow of information," said Mostashari, who served as National Coordinator for Health Information Technology under President Obama.
He noted that in many states, hospitals aren't notifying physicians when their patients are discharged from the hospital. "One hospital [I know of] said to a primary care doctor, 'If you join our ACO, you can get access to this information.'" In fact, having an interoperable EHR should be a condition of a hospital's Medicare participation, Mostashari suggested.
Health IT also hasn't helped cut healthcare costs, despite all its promise in that area, he continued. "Health IT is not going to do anything [to control costs] unless the people doing health IT are using it to achieve that goal. If you don't have the right goal, the right tools aren't going to help you."
Another reason healthcare costs haven't come down is that no one has really figured out how to make lots of money off of prevention, he said. "How can you make money preventing people from [for example] going into the hospital and needing dialysis? We know how you can make money giving dialysis; how do you make money saving lives? That's the question."
One thing that will help is payment incentives, said Mostashari: "Set the right payment policies and the market will emerge." He noted that although providers seem hesitant to take two-sided risk -- that is, they aren't willing to risk losing money -- when they form an ACO, they have no problems doing so in the Medicare Advantage program. "I know of physician groups that are taking full capitation risk on Medicare Advantage," he said.
Why the hesitation with ACOs? "It's because of the unpredictability of the benchmarks" being used to determine financial rewards and penalties for ACOs, he continued. "If you made [that program] more [predictable] like Medicare Advantage, it would massively open up the amount of potential disruption."
Another way to control healthcare costs, at least in federal programs like Medicare, "is to put programs on a budget and no longer give them an unrestricted draw on the U.S. Treasury," said Douglas Holtz-Eakin, PhD, president of the American Action Forum, a right-leaning think tank here. "Doing that would have a beneficial impact of saying to entire provider/beneficiary sector that 'There is only so much money for this senior; take good care of them with it, and focus your attention on doing that instead of taking more money from the treasury.'"
Topher Spiro, JD, vice president of health policy at the Center for American Progress, a left-leaning think tank here, agreed that healthcare should be put on a budget, "but it should be structured very carefully."
Reducing healthcare costs involves reconstructing the healthcare cost drivers, said Spiro. "In Medicare, it's very clear -- [the cost driver is] the variation in spending on post-acute care ... For that problem, there is an easy solution: we need to have bundled payments that bundle together the cost of hospital care with costs up to 90 days after discharge. I would phase in the bundles so they'd [eventually] apply to up to half of Medicare spending."
As for healthcare that's reimbursed by private insurers, "a recent JAMA study compared the U.S. with other developed countries and found that price, not utilization, was the major difference" that explained why the U.S. spent so much more, said Spiro. "To address this issue, we're ultimately going to need some kind of regulation of healthcare prices or provider payment rates -- such as a system like Maryland's that has all-payer rate setting. I think that's going to be necessary in the long run."
Azar details plan for competitive bidding program in Medicare Part B.
This article first appeared May 14, 2018 on Medpage Today.
By Joyce Frieden
WASHINGTON -- Doctors should get out of the business of making money off of providing prescription drugs to Medicare beneficiaries, Health and Human Services Secretary Alex Azar said Monday.
Currently, physicians who administer drugs paid for under Medicare Part B -- which covers drugs administered in the physician's office -- pay for the drug themselves up front and then are reimbursed at the average sales price plus a 6% markup. This system "gets into the notion of physicians or facilities making money off the arbitrage between acquisition price and reimbursement," Azar explained at a briefing with reporters following a speech he gave on President Trump's plan to lower the cost of prescription drugs.
Instead, the administration is proposing a "competitive acquisition program" for Part B drugs."The concept of the competitive acquisition program is not to have physicians take title to the medications they're administering, but rather, have a competitive program where those drugs would be purchased and the capital outlay would occur elsewhere," so the doctor doesn't have to buy the drug "and the physician is paid ... a fair, appropriate level of reimbursement for their services in administering the drug," Azar said.
The idea of such a program isn't entirely new. "We believe the market has developed sufficiently in terms of the power and scale of group purchasing organizations, specialty pharmacies, specialty distribution [companies] and pharmacy benefit managers that there are now plenty of players in the space compared to when this was tried over a decade ago," Azar said. The current players "could actually execute a program like this well, secure substantial discounts, and work effectively with physicians for whom the 'buy-and-bill' model doesn't make sense, and that's even assuming it's done as a voluntary program," he added.
The current Part B reimbursement system has other problems besides the physician purchase issues, Azar said. "Right now in Part B, essentially as soon as a drug is approved by the FDA, it's covered," Azar explained in his speech. "Medicare gets a bill for the drug, composed of the standard price plus a 6% markup, and we pay it. Compare that with the negotiation in Part D: Plans determine whether a drug should be covered or whether an alternative is superior. Plans negotiate discounts, rather than just paying full price."
"You can imagine what happens when you're developing a drug: It's often much more appealing for the drug to go into Part B than D," he added. And with doctors buying the drugs themselves and then awaiting reimbursement, there's another problem: "Some of the price tags are approaching half a million dollars, which is also an issue for physicians if they don't want to make that investment up front," said Seema Verma, administrator of the Centers for Medicare & Medicaid Services, at the briefing, during which public affairs representatives were also present. "[And] I don't think part B envisioned paying 6% on top of a half-million-dollar drug."
HHS officials also are considering moving some or all Part B drugs into the Medicare Part D program as a way of negotiating more competitive prices, Azar said. "One approach is to move them all [into Part D, but we are also] going to be conducting ... an up-to-date study of U.S. pricing and negotiations for Part B drugs, and we might highlight drugs where we are getting a worse deal compared to other industrialized nations," and maybe conduct a pilot program for purchasing those drugs.
Another possibility would be "to focus on classes where there are drugs within [parts] B and D with a high spend where it would be particularly fruitful to combine B and D to get rid of any perverse incentives around prescribing behavior," said Azar.
Increasing competition in the prescription drug marketplace
Changing the way drugs are paid for under Medicare Part B
Increasing incentives to lower "list prices" for drugs
Changing the system of drug rebates
Azar used part of his talk on Monday to fight back against the perception that the administration was waffling on its earlier promises to allow Medicare to negotiate with drugmakers directly for lower prices for drugs used by Medicare beneficiaries.
"You've probably heard before that Medicare could save tons of money by negotiating directly for drugs," he said. "This just isn't true, and you don't have to take my word for it. The Congressional Budget Office found [several years ago] that the idea of direct negotiation would generate almost no savings. The same conclusion was reached by President Obama's Office of Management and Budget when it assessed the proposal in his budget."
"The only way that direct negotiation saves money is by doing something this administration does not believe in: denying access to certain medicines for all Medicare beneficiaries, or setting prices for drugs by government fiat," Azar continued. "We don't believe either of these proposals would put American patients first. They would move us toward the kind of socialized medicine systems that have such a notorious reputation for poor quality and access."
Officials also were focused Monday on ways to increase generic competition for brand-name drugs. "In one of the most notorious examples, pharma companies use FDA safety rules or commercial distribution restrictions to block generic drug manufacturers from having access to samples of the branded drug," said Azar during his speech. "Those samples are needed to perform the testing that gets generic drugs approved, giving consumers safe and effective lower-cost medications."
"We know that certain brand-name manufacturers are abusing the system by blocking access to samples, and hiding behind FDA's rules when they do it ... FDA is going to begin publicly identifying drug companies suspected of engaging in these abusive practices."
Azar defends actions on handling of women's reproductive health.
This article first appeared May 14, 2018 on Medpage Today.
By Shannon Firth
WASHINGTON -- Senators attempted to wring details about President Trump's highly anticipated drug price speech from Secretary of Health and Human Services (HHS) Alex Azar during a subcommittee hearing of the Senate Committee on Appropriations Thursday.
The hearing was intended to focus on the FY2019 budget, but senators, in addition to querying Azar on drug prices, solicited his views on Medicaid waivers and the impact of short-term limited-duration plans.
Lowering Drug Prices
Sen. Tammy Baldwin (D-Wis.) pressed the secretary on the issues of drug prices. She noted that the pharmaceutical industry spent over $170 million trying to influence Washington policymakers in 2017 and had reaped $12.1 billion in profits in the first quarter of 2018.
The president is expected to outline his plan to lower drug prices shortly. She said, "I am very interested in hearing what will be included."
Baldwin noted that Azar had given only vague responses when asked the reasons for the high costs of prescription drugs at an earlier confirmation hearing.
"You blamed, and I quote, 'the system for the rising cost of prescription drugs,' but you never singled out the role that drug corporations play in this system."
She asked whether the administration's plan will hold drugmakers accountable for their role in increasing drug prices: "Yes or no?"
"Oh yes, it will," Azar said. "All players will be impacted ... It's a systemic issue which requires a systemic multi-factorial solution. That's what the president will be rolling out tomorrow."
However, when asked whether the president's plan would include provisions forcing drug companies to provide "basic transparency" about their plans to increase a drug's price -- similar to a bill Baldwin co-sponsored with Sen. John McCain (R-Ariz.) called the FAIR Drug Pricing Act -- Azar was more tight-lipped.
"I'm sure you'll understand I'm not in a position to preempt the President of the United States tomorrow, by saying what he will and won't announce," Azar said.
He did offer a few other teasers about the plan. At one point he noted that foreign governments that receive, as he put it, a "free ride" from the U.S. with regard to drug prices would also be targeted in the president's speech, slated for Friday afternoon.
Women's Reproductive Health,
While the new FY 2019 budget maintains the same level of funding for Title X programs -- federal programs focused on family planning and related preventive services, including birth control -- Sen. Patty Murray (D-Ore.) criticized the administration for its plan to exclude Planned Parenthood from participating in the program.
Asked whether Azar would pledge to maintain a network of safety net providers who deliver "the full range of high-quality family planning services" to four million people nationwide, Azar said, "Whatever we would do with Title X will ensure appropriate access to Title X services as well as broader services."
Sen. Jeanne Shaheen (D-N.H.) echoed Murray's concerns, and highlighted her worries over a shift in teen pregnancy prevention towards more abstinence-only education.
"We have the lowest teen pregnancy rates ever ... I don't understand. Why are we fooling around with something that's been working ... to focus on an approach that all of the data that I've seen shows doesn't work?"she asked.
Azar again stated that the administration's approach is to provide access to a "broad range of providers" and philosophies and stressed that one would not be favored over another.
Short-Term Limited-Duration Plans
Murray, and other Democrats, also criticized the administration's plans to expand access to partial-coverage health plans, known as short-term limited-duration plans. Insurers selling such products would be allowed to exclude people with pre-existing conditions or charge them higher premiums. Insurers could also exclude essential health benefits, such as cancer treatment or maternity care, Murray said.
Such features -- banning insurers from charging sicker individuals more or excluding them entirely; and guaranteeing coverage for essential health benefits -- are core protections of the Affordable Care Act, but these plans would skirt them, she said.
As a child, Baldwin was one of those patients with a pre-existing condition, and she said her family struggled to find health insurance.
"Your plan would take us back to those days," she said.
Asked why the administration couldn't simply require the plans to include pre-existing conditions, Azar said there was a need for more affordable and competitive plans.
He emphasized that these very same plans had been available during most of the Obama administration.
"They're not going to be right for everybody" he said, adding that "people need to go in with their eyes open."
However, "for some individuals it may be better than nothing.'
State Waivers
On the issue of state flexibility, Sen. Brian Schatz (D-Hawaii) sought assurances from Azar that he would treat requests for both progressive and conservative waivers related to health plan design fairly. As an example, Schatz suggested that a progressive state might want to pursue a public option.
He also noted that the budget proposal offers five states the opportunity to directly negotiate Medicare drug prices.
However, when it came to Medicaid, Sen. John Neely Kennedy (R-La.) appeared to push for less flexibility rather than more.
Kennedy urged that instead of waiting for states to submit waivers that would mandate "community engagement" or work requirements as a condition of Medicaid eligibility, such provisions should be mandatory in all states.
"We don't need to make it optional, and we need you to take the lead ... We're not throwing people out in the cold -- we're going to help them know the dignity of work."