A federal judge's ruling that the Affordable Care Act is unconstitutional was greeted with a chorus of boos from key stakeholders, who are hoping the ruling is reversed on appeal.
Payers and providers are presenting a united front in their condemnation of a federal judge's ruling that the Affordable Care Act is unconstitutional.
U.S. District Judge Reed O'Connor in Fort Worth issued the ruling late Friday, on the eve of the final day of open enrollment for ACA coverage. He sided with Republican plaintiffs in 20 states who argued that the entire ACA was rendered invalid when Congress zeroed out the financial penalties tied to the individual mandate.
California Attorney General Becerra, who with 15 other states and the District of Columbia intervened in defense of the ACA, has already said he would appeal the ruling, which he called "an assault on 133 million Americans with preexisting conditions, on the 20 million Americans who rely on the ACA for healthcare, and on America's faithful progress toward affordable healthcare for all Americans."
However, the ruling has created uncertainty about the future of the ACA, even as many legal experts question O'Connor's reasoning and predict the ruling will get tossed out upon appeal.
Here's a roundup of reactions from key stakeholders, many of whom filed amicus briefs urging O'Connor to reject the plaintiff's complaint against the ACA:
Rick Pollack, president and CEO of the American Hospital Association:
America's hospitals and health systems are extremely disappointed with (Friday's) federal district court ruling on the constitutionality of the Affordable Care Act. The ruling puts health coverage at risk for tens of millions of Americans, including those with chronic and pre-existing conditions, while also making it more difficult for hospitals and health systems to provide access to high-quality care.
We strongly disagree with the ruling and urged the court not to accept the plaintiff’s severability argument in an amicus brief filed earlier this year along with other national organizations representing hospitals and health systems. We join others in urging a stay in this decision until a higher court can review it and will continue advocating for protecting patient care and coverage.
Bruce Siegel, MD, president and CEO of America's Essential Hospitals:
U.S. District Judge Reed O'Connor's ruling is a profoundly troubling development that threatens to leave millions of Americans—including many with pre-existing conditions—little hope for affordable health care coverage and financial stability.
Through the Affordable Care Act’s marketplace and Medicaid expansion, the nation has made significant gains in reducing the ranks of the uninsured. Those gains have translated to better health and productivity for hard-working people who once could not afford the high cost of coverage. We must not return to a time when the emergency department was their only option for care.
The nation’s essential hospitals always will work to meet their mission of caring for those who face economic and social hardships. But the crushing rise in the number of uninsured patients likely to follow this decision, absent a higher court’s reversal, would push these hospitals to the breaking point. Communities across the country are in jeopardy.
Chip Kahn, president and CEO of the Federation of American Hospitals:
The judge got it wrong. FAH believes this ruling would have a devastating impact on the patients we serve and the nation’s health care system as a whole.
Americans deserve access to affordable coverage so they can get the care they need, including consumer protections such as pre-existing conditions. Millions have gained coverage since the passage of the ACA, and this ruling could reverse that progress.
Having this decision come in the closing hours of open enrollment also sows seeds of unnecessary confusion.
Barbara L. McAneny, MD, president of the American Medical Association:
"(Friday's) decision is an unfortunate step backward for our health system that is contrary to overwhelming public sentiment to preserve pre-existing condition protections and other policies that have extended health insurance coverage to millions of Americans.
It will destabilize health insurance coverage by rolling back federal policy to 2009. No one wants to go back to the days of 20% of the population uninsured and fewer patient protections, but this decision will move us in that direction.”
The AMA will work with patient and other health stakeholder groups in pursuing an appeal and reversal of this unfortunate decision at the district court level.
Ana María López, MD, President, American College of Physicians:
If this ruling stands, patients could once again be turned down or charged more for preexisting conditions, and insurers would no longer be required to cover essential benefits like prescription drugs and doctor visits. Additionally, premium subsidies to make coverage affordable would end; insurers would pull out of the marketplaces; and annual and lifetime limits on coverage would return. Federal funding for Medicaid expansion would also be terminated, and seniors would no longer have access to no-cost preventive services.
While ACP hopes and anticipates that this decision by a single federal judge in Texas will be reversed on appeal, we take nothing for granted and will be doing all that we can to ensure that patients do not lose current law protections.
Matt Eyles, president and CEO of America's Health Insurance Plans:
The district court's decision is misguided and wrong. This decision denies coverage to more than 100 million Americans, including seniors, veterans, children, people with disabilities, hardworking Americans with low-incomes, young adults on their parents' plans until age 26,and millions of Americans with pre-existing conditions.
We argued in an amicus brief before the court that provisions of the Affordable Care Act affecting patients with pre-existing conditions, and those covered by Medicaid and Medicare should remain law regardless of what the court ruled on the individual mandate. Unfortunately, this ruling harms all of these Americans.
This is just the first step in a lengthy legal process. AHIP will continue to engage as this decision is appealed.
Scott Serota, president and CEO of the Blue Cross Blue Shield Association:
While we are extremely disappointed in the court's ruling, we will continue to work with lawmakers on a bipartisan basis to ensure that all Americans can access the consistent, quality health coverage they need and deserve.
(Friday's) federal district court ruling in a case challenging the Affordable Care Act is the first step in what we expect will be a lengthy legal process. Blue Cross and Blue Shield members can be assured that their health coverage and the financial assistance they may receive to help them afford it remains in place despite this ruling, and patients will continue to receive the care they need. Open enrollment for 2019 individual coverage also is unaffected, and BCBS companies will continue to help consumers find the coverage they need at the best possible price.
The two states approve the deal after receiving assurances that consumers will not foot the bill for the acquisition costs. The feds approved the deal in September.
The $71 billion megamerger of Express Scripts and Cigna Corp. cleared big hurdles this week with state regulators in New York and California approving the deal.
California Department of Managed Health Care Director Shelley Rouillard said the deal cleared "a high standard of review to ensure consumers' healthcare rights are upheld and access to appropriate health care services continues."
"The conditions imposed on Cigna and Express Scripts will improve plan performance, increase access to health care services and assist in controlling health care costs," she said.
The DMHC's approval requires that Cigna and Express Scripts not increase premiums to cover acquisition costs, and keep premium rate increases to a minimum. In addition, the two companies have agreed to invest $60 million in California's healthcare delivery system.
New York's Department of Financial Services held a hearing on the proposed merger on Nov. 21, but waived a second hearing scheduled for Jan. 10, 2019 after receiving only one written comment, one request to testify and "substantial commitments" from Express Scripts and Cigna to address concerns about cost increases for consumers. DFS said the deal was subject to ongoing regulatory oversight.
The deal, which received approval from the federal government in September, is expected to close by the end of the year, now that New York regulators have cancelled the January hearing. However, New Jersey regulators have yet to approve it.
The Cigna/Express Scripts merger is the second major vertical integration of a pharmacy benefits management company and health insurance company to be approved by state and federal regulators this fall.
In November, CVS Health and Aetna Inc. announced the completion of their approximately $70 billion merger, days after New York state regulators signed off on a deal. Since then, however, a federal judge reminded CVS and Aetna that the deal still must get his approval.
Observers believe these mergers have the potential to fundamentally change healthcare delivery by more effectively addressing consumer concerns about rising healthcare costs and price transparency.
New York regulators placed the overall valueof the Cigna/Express Scripts deal at $71 billion.
Cigna will pay $58 billion to acquire Express Scripts. This includes $27.5 billion in cash—$24.5 billion in new debt comprised of approximately $20 billion in senior notes, $1.5 billion in commercial paper, $3 billion per term loan credit agreement, and $3 billion cash on hand.
The remaining $30.5 billion in new equity will be issued to Express Scripts' shareholders. Cigna will also assume $13 billion of Express Scripts' debt, with the total value of the merger being approximately $71 billion.
Plaintiffs in the class-action suit allege that the nation's 36 Blue Cross Blue Shield companies have entered non-compete clauses that result in higher premiums and less choice for consumers.
A federal appeals court has upheld a ruling that agreements among Blue Cross Blue Shield companies across the nation to carve out markets and limit competition can be reviewed as inherent violations of the Sherman Anti-Trust Act.
In a one-page memorandum issued Wednesday, the 11th U.S. Circuit Court of Appeals sided with U.S. District Judge David R. Proctor, who last April ruled that the healthcare consumers who filed the suit against the Blue Cross Blue Shield companies "have presented evidence of an aggregation of competitive restraints…which, considered together, constitute a per se violation of the Sherman Act."
The plaintiffs, who include a class of BCBS customers, allege that the 36 Blue Cross Blue Shield companies have entered non-compete pacts that allocates the markets in which they sell health insurance and caps the amount of unbranded health insurance they offer.
The suit, filed nearly six years ago, claims that the pact artificially inflates premiums and decreased consumer choice for health insurance.
Blue Cross Blue Shield Association General Counsel Scott Nehs said this week's ruling denying the insurers' appeal "was not unexpected, as pre-trial appeals are rare."
"This is another step in a very long process and we look forward to continuing to defend our case in the U.S. District court. We remain confident that we will ultimately prevail," Nehs said in prepared remarks.
"Blue Cross and Blue Shield companies have been at the heart of the U.S. health care system for almost a century," he said. "We provide substantial benefits to medical professionals and currently serve nearly 106 million people with competitive pricing, secure and stable healthcare coverage and reliable service."
By upholding the district court's per se standard for the suit, the plaintiffs' attorneys say the appellate court has made it easier to prove their case without involving extensive documentation of economic damages.
Edith Kallas and Joe Whatley, lead attorneys for the plaintiffs, issued a joint statement calling the appeals court ruling "an important positive step for all healthcare providers and subscribers in America. It is our sincere hope that the parties can now engage in a dialogue to increase competition in health insurance and to improve healthcare for all Americans."
Whatley noted that attorneys for the Blues had asked Proctor to certify the appeal, arguing that, because its the largest antitrust suit in U.S. history, the appeal would be granted.
"Now, they are saying they never expected the appeal to be granted, which means that they were only filing the petition to delay the proceedings," Whatley said in an email to HealthLeaders.
"As the court has found, 15 of the largest 25 health insurance companies in the country are Blues, including two of the largest four or five," Whatley said. "Those 15 have agreed that they will not compete with each other, which is a major reason why we have so little competition in health insurance."
New CEO Gino Santorio has served as COO at the five-hospital health system since 2017, and he takes over immediately.
Broward Health has a new CEO, again.
Gino Santorio, the COO at Broward Health, on Wednesday night was promoted to president and CEO of the five-hospital health system after a unanimous vote by the hospital district's board of commissioners.
Santorio is Broward Health's fifth CEO the past three years, and he takes over immediately, the Fort Lauderdale-based health system said in a media release.
"I am excited to have been selected to lead Broward Health," Santorio said. "Our team is motivated and looking forward to building on our successes. We are committed to our mission of providing the highest quality of care."
Broward Health has been plagued by leadership churn. CEO Beverly Capasso resigned abruptly in October, citing personal reasons, just eight months after signing a three-year contract with the health system.
Capasso and four other Broward Health leaders—General Counsel Lynn Barrett, board Chairman Rocky Rodriguez, and board members Christopher Ure and Linda Robison—face misdemeanor charges for allegedly mishandling the dismissal of former interim CEO Pauline Grant in 2016 in violation of Florida's Sunshine Law, which requires public entities to conduct their business publicly.
Before joining Broward Health, Santorio was senior vice president and CEO for Jackson North Medical Center and was VP/COO of Jackson Memorial Hospital. He has served as COO and CFO/Hospital Compliance Officer at Spring Hill Regional Hospital in Spring Hill, Florida, and assistant CFO at Brooksville Regional Hospital.
"Gino is innovative and forward-thinking, and we are confident he will bring Broward Health to the next level of service," said Andrew Klein, chairman of the North Broward Hospital District Board of Commissioners. "This is an excellent step in the right direction for the organization."
Santorio's appointment as CEO came shortly after Moody's Investors Service changed its rating outlook for North Broward Hospital District to stable from negative.
The bond-rating agency said Broward Health's Baa2 rating "would continue to benefit from the system's role as a large and diversified health system, a strong unrestricted cash and investments relative to total debt and operations as well as modest debt structure risks."
However, Moody's also warned that "thin cash-flow, an above average and rising average age of plant, high reliance on Medicaid and supplemental funding, an extraordinary level of external scrutiny under a Corporate Integrity Agreement, and an unusual degree of turnover of senior leadership will continue to constrain the rating."
Prosecutors allege that the Pennsylvania-based, for-profit health system improperly unbundled claims billed to Medicare and other government payers in order to inflate reimbursements.
Coordinated Health Holding Company, LLC and its founder and CEO Emil DiIorio, MD, will pay $12.5 million to resolve allegations that the health system improperly billed Medicare and other government-sponsored health plans for orthopedic surgeries, the Department of Justice said.
The government alleges that Coordinated Health and DiIorio improperly unbundled the global claims used for reimbursements for orthopedic surgeries in order to artificially inflate reimbursements from federal healthcare payers, including Medicare, Medicaid, the Federal Employee Health Benefits Program, and the U.S. Department of Labor's Office of Workers' Compensation Programs.
Under the deal, announced this week by federal prosecutors in Philadelphia, Coordinated Health will pay $11.25 million, and Dilorio will pay $1.25 million. The company also entered a five-year Corporate Integrity Agreement with DOJ.
"The alleged corporate culture and leadership that promoted this conduct and allowed it to continue despite crystal clear warnings is shameful," William M. McSwain, U.S. Attorney for the Eastern District of Pennsylvania, said in a media release.
"If true, it amounts to theft of public funds and a fraud on Medicare, Medicaid, and federal employee health insurers. We are unaware of any unbundling scheme that has had a bigger impact on federal funds," he said.
Coordinated Health, based in the Lehigh Valley region of Pennsylvania, employs 100 physicians, about 30 of whom are orthopedic surgeons.
Florence Brown, director of communications at Coordinated Health, said the provider was "pleased to have come to a resolution with the federal government regarding allegations of our past use of a specific Medicare billing modifier, involving a complex Centers for Medicare and Medicaid Services rule, which does not relate to the quality of patient care."
"We have already updated our billing practice to resolve the issue in question, and have taken a number of decisive actions to reduce the potential for issues in the future," Brown said.
Misused Modifier 59
Prosecutors allege that Coordinated Health and Dilorio knowingly circumvented electronic safeguards designed to block separate reimbursements for parts of the same surgery when a global fee is paid, and that they continued to do so even after they were explicitly warned that it was illegal.
Specifically, prosecutors allege that from 2007 through mid-2014 Coordinated improperly used the billing code Modifier 59 to unbundle claims and bill government payers separately for parts of the same orthopedic surgeries.
DiIorio, an orthopedic surgeon, allegedly changed how he wrote operative reports beginning in April 2009 so that Coordinated Health could use Modifier 59 to maximize improperly unbundled reimbursements for his knee, hip and shoulder surgeries.
For example, in his total knee replacement operative reports before April 2009, DiIorio rarely diagnosed any patient with poor patellar tracking and said in almost every report that a "lateral retinacular release" incision was unnecessary. The procedure is part of the global surgery reimbursement for a knee replacement.
However, in almost every knee replacement operative report after April 1, 2009, DiIorio diagnosed the patient with poor patellar tracking and claimed he performed a lateral retinacular release. Each time, Coordinated Health used Modifier 59 to improperly bill for a lateral retinacular release as if one was performed separate from the knee replacement, DOJ said.
Outside consultants hired by Coordinated Health told top executives in 2011 and again in 2013 that they were misusing Modifier. The 2013 consultant told Coordinated Health to self-report and repay Medicare and other federal payers. The second consultant also provided on-site training on the proper use of Modifier 59 to Coordinated Health coders in November 2013.
"Motivated by its bottom line, Coordinated Health simply ignored the consultants' recommendations and continued abusing Modifier 59 to improperly unbundle orthopedic surgery claims until mid-2014," DOJ said.
Federal prosecutors noted that the claims resolved in the settlement are only allegations and that there has been no determination of liability.
Veteran health system executive Michael Slubowski, Trinity's president and COO, will become the Livonia, Michigan-based health system's next CEO, effective July 1, 2019.
Trinity Health CEO Richard J. Gilfillan, MD, said Tuesday that he will leave the Livonia, Michigan-based the health system in June 2019 after five years at the helm.
Trinity President and COO Michael Slubowski was named by the health system's board to become the next CEO, effective July 1, 2019.
Gilfillan, who is also a primary care physician, told the board in September that he was tired of commuting from his home in Washington, DC, and wanted to spend more time with his family. The board initiated a succession plan and Slubowski was elected unanimously on Dec. 5, according to a media release.
Gilfillan said he was "extraordinarily privileged" to serve as CEO for the non-profit, Catholic health system over the past five years.
"The board’s vision is for Trinity Health to lead nationally in creating a high-value health system. While we have made significant progress toward that goal there is still much work to be done," Gilfillan said. "Mike Slubowski has been a great partner over these past 18 months and is committed to continuing that effort."
Gilfillan joined Trinity Health as CEO in November 2013, following the merger with Catholic Health East in May 2013.
At that time, the health system had 82 hospitals and 89 continuing care locations in 21 states with annual operating revenue of $13.3 billion. In 2018, Trinity had 94 hospitals and 109 continuing care locations in 22 states with operating revenue of $18.3 billion.
"Rick's bold and innovative leadership has transformed Trinity Health from a system focused primarily on acute care to an accountable, people-centered health system that provides outstanding episodic care, population health management and community health and well-being services to address the social determinants of health," Trinity Health Board Chair James Bentley said in prepared remarks.
Slubowski, a veteran hospital executive, was named Trinity Health president and COO in May 2017. Before that, he was president and CEO of SCL Health. Before that, he was president of Hospital and Health Networks at Trinity Health and had worked at Trinity Health for 13 years. He also spent 10 years at Henry Ford Health System in Detroit, where he was vice president of Ambulatory Satellites and Prepayment Programs.
"We are fortunate that Mike already has been deeply involved in Trinity Health operations for the past two years," Bentley said. "We know that he is committed to executing our people-centered health system strategy. As evident in his selection as the board chair of the Catholic Health Association, we also know that he is deeply committed to the mission of Catholic health care."
Trinity provides care for more than 6 million people each year through an integrated health system that includes 7,800 physicians and advanced practitioners. Trinity's Clinically Integrated Networks include 15,000 physicians and clinicians serving 1.3 million people.
Japan-based Olympus Medical Systems and a former top regulator at the company admit they knowingly distributed endoscopes in the U.S. that carried a risk of serious infection.
Olympus Medical Systems and a former senior executive pleaded guilty this week to distributing endoscopes after failing to file FDA-required adverse event reports of serious infections, the Department of Justice said.
Olympus, which is headquartered in Tokyo, Japan, and Hisao Yabe, 62, of Japan, both entered guilty pleas in a federal district court in Newark, New Jersey.
Olympus pleaded guilty to three counts, and Yabe to one count, of distributing misbranded medical devices in interstate commerce in violation of the Federal Food, Drug, and Cosmetic Act, under a deal reached with DOJ.
Olympus will pay an $80 million fine and surrender $5 million in criminal forfeitures.
Yabe will be sentenced on March 27, 2019, and faces a maximum potential penalty of a year in prison and a $100,000 fine, which is twice the gain or loss from the offense.
According to DOJ, Olympus admitted that it failed to file with the FDA required adverse event reports in 2012 and 2013 relating to three separate events involving infections in Europe connected to Olympus’s TJF-Q180V duodenoscope involving 30 patients.
Yabe admitted his own personal responsibility for the failure to file the necessary information with FDA. At the time, Yabe was Olympus's Division Manager for the Quality and Environment Division – Olympus's top regulatory official, whose responsibilities included adverse event reporting in the United States, DOJ said.
Rachael Honig, U.S. Attorney for the District of New Jersey, said the infractions were "especially troubling" because Olympus and Yabe were told about the safety concerns by an independent expert.
"Patient safety must always be a paramount concern for medical device companies, and these defendants simply failed to treat that concern with the gravity it deserves," Honig said.
The FDCA requires medical device manufacturers to file adverse event reports—known as Medical Device Reports—when the manufacturer becomes aware of information that reasonably suggests that the manufacturer’s device may have caused or contributed to a death or serious injury.
Under the FDCA, devices for which required MDRs have not been filed are deemed misbranded, and it is a crime to ship such devices in interstate commerce.
Between August 2012 and October 2014, Olympus shipped hundreds of misbranded duodenoscopes in the United States, generating approximately $40 million in revenue and approximately $33 million in total gross profit.
Olympus's payment of $85 million is more than 2½ times Olympus’s total profit from sales of the misbranded duodenoscopes.
Yabe admitted that he was aware of Olympus's obligation to file supplemental MDRs
An independent report—which Olympus obtained in the summer of 2012—found numerous problems with the Q180V, including that the scope's tip had various cracks, corners, and crevices that could harbor bacteria and could be cleaned only with great difficulty.
The report recommended immediate further investigation of all such scopes, updating the cleaning instructions, and improving the quality of the seals.
The partnership would affiliate stand-alone Boca Regional with the 10-hospital Baptist system, which is a dominant health system in South Florida.
Miami-based Baptist Health South Florida and Boca Raton Regional Hospital have signed a letter of intent to pursue a strategic partnership, the two health systems said Monday in a joint media release.
Baptist Health South Florida CEO and President Brian Keeley said the two health systems are completing due diligence now, and expect to have a definitive agreement in place early next year to finalize the affiliation by next summer.
“Like Baptist Health, Boca Raton Regional Hospital is a top-ranked organization with a not-for-profit mission and commitment to providing high-quality compassionate care," Keeley said. "We are confident that the synergies between our organizations will allow us to better serve our communities and increase access to affordable, high quality care for our patients."
Boca Raton Regional Hospital is a 400-bed, tertiary medical center with more than 2,800 employees and more than 800 primary and specialty physicians on staff. The hospital began looking for a partner last year and in July announced that it would negotiate with Baptist Health out of 12 prospective partners.
"Our goal was to use our success in recent years to attract other providers and establish a partnership that would enhance our capabilities and mitigate the challenges of a stand-alone hospital in a complex and evolving healthcare industry," said Jerry Fedele, president and CEO of Boca Raton Regional.
Keeley said the partnership makes sense at a time when Baptist Health expands its regional footprint.
"As Baptist Health has grown in recent years to meet the needs of our communities, we have clearly defined our service area as being from Palm Beach County down to the Florida Keys," Keeley said. "Boca Raton Regional Hospital will be a strong complement to the services we offer at Bethesda Hospital East and Bethesda Hospital West, along with our outpatient centers in the area."
Christine E. Lynn, Boca Raton Regional Hospital Board Chair Christine E. Lynn said the partnership "will serve to secure both our goals and objectives and those of Baptist Health South Florida."
"We have now advanced closer to a most important evolution for our hospital, one that will accelerate and elevate our position as a preeminent academic regional referral medical center," Lynn said.
Baptist Health South Florida is the largest health system in the region, and includes 10 hospitals, more than 40 physician practices, 50 outpatient and urgent care centers, more than 19,500 employees and more than 3,000 affiliated physicians.
The nine-member group wants Congress to protect consumers from excessive out-of-network charges and require provider transparency on treatment options and costs.
Healthcare makes for strange bedfellows.
A motley group of health insurance, business, and consumer protection organizations have formed a broad coalition against surprise medical bills.
"Every American deserves affordable, high-quality coverage and care, as well as control over their own healthcare choices," the nine organizations, which include America's Health Insurance Plans, Families USA, and the National Retail Federation, said Monday in a joint media release.
Federal laws are needed to protect patients from surprise medical bills.
Patients should be told when their services are out of network, and they have a right to know about the costs of their treatment and options.
Federal laws and policies designed to protect patients against surprise medical bills should not simultaneously raise premiums or care costs for consumers.
Out-of-network payments for physicians should be based on a federal standard, especially for the more than 100 million people enrolled in self-funded health plans.
The coalition cited a recent poll from Kaiser Family Foundation which found that one in 10 insured adults said they received a surprise medical bill from an out-of-network provider in the past year.
"Patients who are doing the right thing, going to in-network hospitals, often are surprised when doctors or hospitals send them large, unexpected bills," said coalition member Annette Guarisco Fildes, president/CEO, The ERISA Industry Committee.
"Companies that sponsor health plans for their employees believe that it is imperative that we protect patients from these bills, and that we do so by eliminating the bills—not forcing someone else to pay, rewarding providers who want to charge without regard to networks, contracts or patient care," she said.
Other members of the coalition include: American Benefits Council, Blue Cross Blue Shield Association, Consumers Union, National Association of Health Underwriters, and National Business Group on Health.
"Surprise bills are an unnecessary outrage presented to families at the worst of times," said Neil Trautwein, with the National Retail Federation. "The solution to surprise billing is not to shift the bills to employers or insurers. That will only increase costs for the families we cover, a fresh outrage no one can afford."
Legislation addressing surprise billing may be one of the few issues that has support from both sides of the aisle in what is expected to be a deeply divided Congress next year.
Members of the bipartisan Senate health care price transparency working group in September released draft legislation that they said was "intended to jumpstart discussions in Congress about how to best stop the use of balanced billing to charge patients for emergency treatment or treatment provided by an out-of-network provider at an in-network facility."
"Patients should have the power, even in emergency situations when they are unable to negotiate," said Sen. Bill Cassidy, R-LA, a physician and member of the working group.
"Our proposal protects patients in those emergency situations where current law does not, so that they don't receive a surprise bill that is basically uncapped by anything but a sense of shame."
Providers Blame Coverage Gaps
On the provider side, American Hospital Association President and CEO Rick Pollack and the Federation of American Hospitals President and CEO Chip Kahn issued a joint statement Monday insisting that hospitals, patients, insurers and employers agree that "a common ground solution" is needed to eliminate surprise bills.
However, the two hospital association leaders said the blame falls on health insurers.
"Inadequate health plan provider networks that limit patient access to emergency care is one of the root causes of surprise bills. Patients should be confident that they can seek immediate lifesaving care at any hospital," they said. "The hospital community wants to ensure that patients are protected from surprise gaps in coverage that result in surprise bills, and we look forward to working with policymakers to achieve this goal."
Earlier this month, the AHA and the American Medical Association this month joined with AHIP to produce a consumer guide against surprise billing, and those groups are urging hospitals and other providers to make the guides available to their patients.
Prosecutors allege the Johnson & Johnson subsidiary used a charity as a funnel to pay Medicare patients' copays for pulmonary arterial hypertension drugs.
Actelion Pharmaceuticals US, Inc. will pay $360 million to resolve claims that it illegally paid the copays of thousands of Medicare patients who used the drug maker's hypertension drugs, the Justice Department announced.
Federal prosecutors said the San Francisco-based Actelion usedCaring Voice Coalition Inc., a tax-exempt patient financial assistance charity as an illegal conduit to pay the copays for a number of expensive pulmonary arterial hypertension drugs, including Tracleer, Ventavis, Veletri, and Opsumit.
The illegal copays induce Medicare patients to buy the drugs that would be otherwise unaffordable.
The Anti-Kickback Statute bans drug makers from payment in any form to induce Medicare patients to purchase the company's drugs.
This week's settlement is the third time in the past year that a drug maker has been caught using charities to skirt anti-kickback laws.
In December, 2017, United Therapeutics Corp. agreed to pay $210 million to resolve claims that it used a foundation to pay the copays of Medicare patients taking UT’s pulmonary arterial hypertension drugs. Pfizer paid $24 million in Aprilto settle similar allegations.
"This settlement, like prior settlements concerning similar misconduct, makes clear that the government will hold accountable companies that pay illegal kickbacks," DOJ Civil Division Assistant Attorney General Jody Hunt said in a media release.
"Pharmaceutical companies cannot increase drug prices while engaging in conduct designed to defeat mechanisms put in place to check such prices and then expect Medicare to pay for the ballooning costs," Hunt said.
Actelion spokesperson Caroline Pavis on Thursday issued a brief statement noting that the allegations occurred before the company was acquired by Johnson & Johnson in 2017, and that the company is "committed to full compliance with all laws and regulations in our work to help patients get the medicines they need."
According to DOJ, from 2014 to 2015, Actelion made donations to Caring Voice Coalition, which used the money to pay copays of patients for the drugs. During the time covered in the settlement, prosecutors said Actelion raised the price of Tracleer by nearly 30 times the rate of inflation in the United States.
Actelion routinely obtained data from CVC detailing how much it had spent for patients on each drug, and then used the information to decide how much to donate to the foundation and to confirm that its contributions were sufficient to cover the copays of only patients taking Actelion's drugs.
Prosecutors said Actelion also would not allow Medicare patients to participate in its free drug program for financially needy patients, even if the Medicare patients couldn't afford the copays.
Instead, Actelion allegedly referred Medicare patients to CVC, which paid the copays, allowing the claims to be paid for by Medicare.
Actelion continued to do this even after CVC warned the company about the impropriety, DOJ said.
CVC's website published a notice last January that it would no longer offer financial assistance for drug copays.
Greg Smiley, CEO of Richmond, VA-based CVC, told HealthLeaders that the charity "cannot comment on ongoing legal matters."
"Still, we know people throughout the U.S. continue to struggle with healthcare costs and access," Smiley said.
"Although CVC is no longer providing financial assistance to patients for therapies, we continue to help as many patients as we can navigate challenges within the health care system.”
