Drugmakers say 'patients lose when the government sets prices.'
Payers, providers, and patient advocates are mostly praising the healthcare provisions included in Sunday's passage of the $750 billion Inflation Reduction Act.
On a hyper-partisan 51-50 vote -- with no Republicans voting for the 750-page bill -- the Senate needed the vote of Vice President Kamala Harris to send the bill to the Democrat-controlled House, which is expected to take it up this month.
The IRA has three key healthcare provisions.
First, it earmarks about $64 billion to extend through 2025 the health insurance subsidies created under the American Rescue Plan, which Democrats say will ensure affordable health insurance for 13 million people, with some premiums continuing to be as low as $10 a month.
Second, the bill gives the Department of Health and Human Services the long-sought authority to negotiate lower drug prices for Medicare, starting in 2026. However, that negotiating power will be limited to only 10 drugs in 2026, 15 drugs in 2027, and 20 drugs in 2029 and beyond.
The Congressional Budget Office estimates that these provisions would cut the deficit by $287 billion through 2031, with $321 billion in gross savings and $34 billion in new spending.
Third, the bill caps monthly insulin costs at $35 for Medicare patients, and limits overall drug costs to $2,000 a year. Democrats had attempted unsuccessfully to include that monthly cap for commercial plans, but that provision was stripped by Republicans in the reconciliation process.
PhRMA Hates It
Pharmaceutical Research and Manufacturers of America President and CEO Stephen J. Ubl says passage of the IRA "may feel like a political win for Democrats, but it’s really a tragic loss for patients."
"This drug pricing plan is based on a litany of false promises," Ubl says. "They say they're fighting inflation, but the Biden administration's own data show that prescription medicines are not fueling inflation. They say this is "negotiation," but the bill gives the government unchecked authority to set the price of medicines. And they say the bill won't harm innovation, but various experts, biotech investors and patient advocates agree that this bill will lead to fewer new cures and treatments for patients battling cancer, Alzheimer's and other diseases."
“They’re also misleading the American people when they say this bill fixes the affordability challenges patients face. This bill provides almost no relief to millions of individuals trapped in an insurance system that discriminates against sick patients. Under this bill, patients will still be forced to pay more for medicine than their insurance company pays. Democratic leaders seized every opportunity to make this bill worse for patients, including giving insurers the green light to raise premiums by six percent and delaying a rebate rule that would provide immediate relief to millions of seniors. When given the choice to stand with patients or insurers and middlemen, Senate Democrats stood by insurers and middlemen.
"Once the government can set prices for life saving medicines, it will demand even more control over the healthcare of American patients and the collateral damage from this bill will only grow," Ubl says. "There is still time to reject this partisan bill and work on bipartisan reforms that lower costs at the pharmacy and protect the hope patients have for new treatments. We urge the House to do what's needed to stop this dangerous bill and deliver the kind of meaningful patient-centered reforms the American people are counting on."
Hospitals
Providers generally noted that the bill is lacking in some areas, but they embraced it as a significant step forward.
Bruce Siegel, MD, president and CEO of America's Essential Hospitals, says extending the health insurance subsidies "would safeguard access to care for millions of individuals and families—a critically important outcome, given the ongoing threat of COVID-19 and emerging public health challenges, such as monkeypox."
Still, Siegel says hospitals didn't get all they wanted.
"We are disappointed it lacks funding for hospital workforce and infrastructure needs. Essential hospitals face persistent staffing shortages, high labor costs, and infrastructure constraints," he says. "They need more funding from Congress to meet these challenges as the impacts of the pandemic continue."
Payers
Blue Cross Blue Shield Association President and CEO Kim Keck says extending the tax credits "will protect nearly 13 million Americans from cost increases at a time when the price of everything—from gas to groceries—is rising. This move keeps real money in the pocketbooks of Americans and gives them real peace of mind."
Matt Eyles, president and CEO of America's Health Insurance Plans, says "every American deserves access to affordable coverage and high-quality care, and the Senate's action will continue vital support that millions of hardworking American families need to purchase their own health coverage in the years to come."
Margaret A. Murray, CEO of the Association for Community Affiliated Plans, says her organization "led the call for the extension of enhanced APTCs for the past year to keep premiums affordable and to promote the uptake of comprehensive health coverage through Marketplaces."
"There is more work for Congress and the Administration to do, particularly to strengthen Medicaid and CHIP for children and postpartum individuals, but this is an excellent start," Murray says. "Because this bill helps keep millions of people covered, we urge the House to send this bill to President Biden's desk for his signature with all due haste."
Employers
The Purchaser Business Group on Health has raised concerns about stripping the insulin price cap from commercial plans.
"Since the measures will now apply to Medicare only, the legislation would actually increase prices for those with commercial coverage, above the unsustainably high prices they’re already paying, as costs are shifted from Medicare to employer plans," PBGH said in a media release. "If prices are reduced in Medicare with no corresponding protections for commercial markets, working families may well foot the bill as costs will rise to recoup losses from Medicare drug sales."
Patient Advocates
Louise Norris, an analyst with HealthInsurance.org, says the subsidies will bolster marketplace enrollment.
"Without action from Congress, millions of people will likely see their subsidies decrease or disappear in 2023, and 3 million current enrollees might lose their coverage altogether," Norris says. "The Senate's vote to pass this legislation is a step toward ensuring these hard working Americans will still be able to afford their health coverage next year, and we hope to see it pass quickly in the House."
Calling access to affordable insulin "a matter of life or death for people with type 1 diabetes," the Juvenile Diabetes Research Foundation blasted as "unconscionable" the vote of 43 Republican Senators who stripped away the provision to cap insulin costs at $35 for commercial plans.
"While the Senate removed the $35 per month cap for commercial plans, the Inflation Reduction Act still contains other critically important insulin affordability measures, including a Medicare provision to cap the monthly cost of insulin and limit overall drug costs to $2,000 per year," JDRTF says.
Robert Weissman, president of Public Citizen, noted but did not identify "serious flaws and gaps in this legislation," but nonetheless called the bill "a huge step forward for the American people."
Beyond the musical chairs shuffle, the top hospital rankings, now in its 33rd year, are essentially unchanged from 2021.
Four California health systems have maintained their place atop U.S. News & World Report's widely read and influential "Honor Roll" of the nation’s Top 20 hospitals in 2022, although the rankings for some hospitals shifted slightly.
Cedars-Sinai Medical Center was ranked 2nd in the nation (up from 6th last year), behind Mayo Clinic (No. 1 for seven straight years).
Beyond the musical chairs shuffle, the top hospital rankings, now in its 33rd year, are essentially unchanged from 2021.
"Thanks to the dedication of our physicians, nurses, academic leaders and thousands of others on our staff, Cedars-Sinai continues to provide innovative healthcare, enhanced by our commitment to pioneering research, teaching and education," CEO Thomas M. Priselac says in a media release. "We are proud of Cedars-Sinai's contributions to our diverse Los Angeles community as well as nationally and globally."
Johnese Spisso, president of UCLA Health and CEO of UCLA Hospital System, says his health system's long-standing place among the nation's top hospitals "reflects the unwavering dedication and immense skill of our physicians, nurses, healthcare professionals and support staff."
"Being among the best in the country requires continually striving for improvement to enhance all aspects of patient care," Spisso says. "I'm proud of the dedication and commitment of our team in pursuit of excellence in providing world-class care with compassion to patients who come to UCLA Health from near and far."
The methodologies used to rank the hospitals are based on measures collected by the federal government and hospital stakeholders, such as risk-adjusted survival and discharge-to-home rates, volume, and quality of nursing, among other care-related indicators for more than 30 specialties, procedures and conditions, such as cardiology, oncology, diabetes, orthopedics, geriatrics, and psychiatry.
This year, the magazine has added ovarian, uterine, and prostate cancer surgeries to its list of specialties and has expanded health equity metrics that highlight care for low-income patients and racial disparities in surgical outcomes.
(Editor's note: The version of this story that ran in the August 1, 2022 issue of California Health Facts included incorrect numbers and ratings. The article has now been corrected with the 2022 numbers.)
Health plans pledged to standardize finance, support and metrics for the delivery of advanced primary care.
Six of California's largest health insurance companies have signed a memorandum of understanding to expand investment and improve access to advanced primary care.
The first-of-its-kind California Advanced Primary Care Initiative -- led by California Quality Collaborative, a program of the nonprofit Purchaser Business Group on Health, and the Integrated Healthcare Association -- aims to enable primary care providers to transform to a high-performing, value-based care model that reduces costs and improves quality and equity.
The six payers that signed the MOU -- Aetna, Aledade, Blue Shield of California, Health Net, Oscar, and UnitedHealthcare – have pledged to standardize finance, support and metrics for the delivery of advanced primary care.
"This initiative reflects our understanding that the impact of any one payer alone is limited," says Peter Long, executive vice president of Strategy and Health Solutions at Blue Shield of California. "That’s why Blue Shield is committed to partnering with our peer payers and providers to scale delivery of high-quality primary care across the state. Ultimately, we know this is what is best for our members, and we all must work together to make this vision a reality."
Under the MOU, the payers identified four areas of focus, including:
* Transparency: Report primary care investment and adoption of value-based payment models that support the delivery of advanced primary care and performance on the advanced primary care measure set jointly developed by CQC and IHA.
* Payment: Adopt an agreed upon value-based payment model for primary care providers that offers flexibility, supports team-based care delivery and incentivizes the right care at the right time.
* Investment: Collaboratively set increased primary care investment quantitative goals without increasing the total cost of care.
* Practice Transformation: Provide technical assistance to primary care practices to implement clinical and business models for success in value-based payment models, integration of behavioral health and reduction of disparities.
"Primary care is the heart of all healthcare," says Jeff Hermosillo, California Market President, Aetna. "This innovative initiative will help ensure accessible, affordable and high-quality primary care to improve the well-being of all Californians. Working together with our peers, providers, plan sponsors and members, we are committed to primary care that makes a difference in people's lives."
CQC and IHA have been collaborating since 2019 to develop shared standards of advanced primary care, including common definitions of practice attributes, a performance measure set, methods to identify quality at the practice level and a value-based primary care payment model.
AHA says they're "pleased" with the increase, but complain it "still falls short".
Acute care hospitals could see a 4.3% bump in reimbursements in fiscal year 2023 under a revised Inpatient Prospective Payment System final rule released Monday, about $1 billion more than the federal government had proposed in April, the Centers for Medicare & Medicaid Services announced.
"This reflects a FY 2023 hospital market basket update of 4.1% reduced by a 0.3 percentage point productivity adjustment and increased by a 0.5 percentage point adjustment required by statute," CMS says in a media release. "This update reflects the most recent data available, including a revised outlook regarding the U.S. economy and, as a result, is 1.1 percentage point higher than the proposed update for FY 2023."
The higher reimbursement will go to hospitals that successfully participate in the Hospital Inpatient Quality Reporting Program and that are meaning users of electronic medical records, CMS says.
The cost of the IPPS payment increase will be about $2.6 billion. CMS projects that increase will be partially offset with decreases in disproportionate share payments and uncompensated care costs totaling about $300 million, and reductions of about $750 million for inpatient payments for cases involving new technologies.
In April, CMS had initially proposed an IPPS increase of 3.2% for FY 2023, an additional $1.6 billion. However, that proposal drew flack from the hospital lobby. The Federation of American Hospitals called the proposed increase "woefully inadequate."
"It does not reckon for the hyper-inflation, staffing crisis, and the continuing pandemic, which will impact resources necessary for patient care well into the future," FAH said in April.
The announcement Monday that the reimbursement would be bumped up to 4.3% brought a tepid response from a "pleased" American Hospital Association.
"This update still falls short of what hospitals and health systems need to continue to overcome the many challenges that threaten their ability to care for patients and provide essential services for their communities," AHA Executive Vice President Stacey Hughes says in a media release.
"This includes the extraordinary inflationary expenses in the cost of caring hospitals are being forced to absorb, particularly related to supporting their workforce while experiencing severe staff shortages," Hughes says. "We will continue to urge Congress to take action to support the hospital field, including by extending the low-volume adjustment and Medicare-dependent hospital programs."
HCA denies the allegations and calls the new complaint 'a rehash of claims this group purported in 2020.'
A union-backed investment group has filed a complaint with federal regulators against HCA Healthcare, claiming that the nation's largest for-profit hospital chain failed to disclose "elevated risk" to shareholders stemming from allegations of Medicare fraud.
The complaint was filed Thursday with the Securities and Exchange Commission by the Strategic Organizing Center Investment Group (formerly known as the Change to Win Federation), formed in 2006 by a coalition of labor unions that includes the Service Employees International Union, which represents workers at a number HCA facilities.
SOC said it filed the complaint six months after a report written by the SEIU revealed that HCA may be unnecessarily admitting patients from hospital ERs, putting shareholders at grave risk.
"Since at least 2014, HCA has consistently explained its corporate strategy to investors by noting that higher hospital admissions reliably translate into high company earnings, and that emergency departments are one of the key mechanisms through which hospitals can increase their admission rates," the complaint reads. "For over a decade, Medicare regulators at HHS have identified high levels of emergency department admissions as a potential indicator of improper practices."
In its February report, the SEIU said that "HCA has potentially been engaging in widespread Medicare fraud through the systematic over-admittance of patients from Emergency Departments at HCA hospitals—a practice that may have continued throughout the pandemic."
"Data from the report reveals that HCA may have collected nearly $2 billion in excess Medicare payments since 2008 through these potential ED over-admissions—information that HCA failed to disclose to shareholders," the SOC says.
The complaint asks the SEC to investigate HCA's "failure to disclose to shareholders potential liability of these alleged practices and for the agency to hold the nation's largest for-profit healthcare corporation accountable for alleged wrongdoing."
SOC says there is precedent for the federal action, noting that in 2007 the SEC leveled civil fraud charges against Tenet Healthcare for "failing to disclose to investors that the company's earnings between 1999 and 2002 were 'driven by exploiting a loophole in the Medicare reimbursement system,' a scheme that cost investors billions in lost share value when brought to light."
HCA responds
HCA issued this statement when contacted by HealthLeaders.
"SOC Investment Group is a union-backed organization that formerly called themselves CtW Investment Group, and this appears to be a rehash of claims this group purported in 2020."
"We took their concerns seriously and we analyzed the data and our procedures, and our publicly filed-response can be found here. We remain confident in our processes and robust audit systems. In addition to our internal reviews, independent third-party audits provide additional confidence in our compliance with regulatory requirements. Our hospitals are staffed by physicians, clinicians and nurses who work tirelessly to ensure our patients receive medically necessary care in the appropriate clinical setting."
"This year, HCA Healthcare was named one of Ethisphere's World’s Most Ethical Companies for the 12th time and we are confident that our operational processes and procedures are working well and that we are meeting the healthcare needs of our patients and communities."
HHS OIG says CMS has not properly documented more than half of overpayment collections it claims to have made.
Federal watchdogs say the Centers for Medicare & Medicaid Services still has not collected the nearly $500 million in Medicare overpayments identified in audits over a two-year period dating back to 2014.
The Office of the Inspector General at the Department of Health and Human Services did a follow-up review of 148 Medicare audits it conducted between October 1, 2014, and December 31, 2016, and could verify that CMS had collected only $120 million of the $498 million in overpayments.
CMS told auditors that it has collected $272 million (55%) of the overpayments. However, OIG says the agency’s documentation shows that it had collected only $120 million, and that CMS failed to properly document the recovery of the remaining $152 million.
“In that audit report, issued on May 18, 2012, we made six recommendations and CMS agreed to implement four of them. Of those four recommendations, CMS implemented two, partially implemented one, and did not implement one.”
In this new audit, OIG recommends that CMS: (1) continue to recover the $226 million in uncollected overpayments, (2) determine what portion of the $152 million was collected and recorded in its accounting system, (3) revise 42 CFR section 405.980 and corresponding manual instructions related to the reopening period for claims to be consistent with statutory provisions contained in section 1870 of the Social Security Act, and (4) develop a plan for resolving cost reports applicable to the nine audit reports discussed in this report.
CMS agreed with only one of nine recommendations put forward by OIG – to continue efforts to collect $226 million in overpayments.
The ship would operate in federal waters — up to nine miles off the coasts of Texas, Alabama, Louisiana and Mississippi — and beyond their jurisdiction.
A UCSF OBGYN professor has launched an initiative to provide abortions for women from the Deep South in federal waters off the Gulf Coast.
Meg Autry, MD, who describes herself as "a lifelong educator, a lifelong career abortion advocate," began PRROWESS before the recent U.S. Supreme Court ruling that overturned the right to an abortion, but she said theDobbsruling has increased the urgency.
"Part of the reason we’re working on this project so hard is because wealthy people in our country are always going to have access [to abortions], so once again it’s a time now where poor, people of color, marginalized individuals, are going to suffer — and by suffering I mean like lives lost," Autry told NBC Bay Area.
PRROWESS would operate in federal waters — anywhere from three to nine miles off the coasts of Texas, Alabama, Louisiana and Mississippi — and beyond the jurisdiction of those states. Autry and other licensed clinicians would offer surgical abortions for up to 14 weeks of pregnancy, and other gynecological services such as testing and treatment for sexually transmitted infections.
It's not immediately clear how much PRROWESS hopes to raise, or how much it has raised to date.
"PRROWESS is a solution for individuals seeking reproductive healthcare and surgical abortion where it is illegal or impossible," the initiative's website states. "Those in the most southern parts of Mississippi, Alabama, Louisiana, and Texas may be closer to the coast than to facilities in bordering states where abortion and reproductive healthcare are available."
"PRROWESS is committed to providing a safe haven for individuals in states where their rights are severely impacted by legislation limiting their access to reproductive healthcare. PRROWESS believes that no matter how draconian measures targeting reproductive rights become, together we can and will re-assert control over our bodies and lives," the website says.
A hospital coalition is circulating a petition to get the 41,000 signatures needed for force a referendum on the issue.
Los Angeles County hospitals and other providers are working to repeal the recently enacted ordinance mandating $25 per hour minimum wage for some healthcare workers.
The No Unequal Pay coalition, sponsored by the California Association of Hospitals and Health Systems, says the ordinance – which took effect this month -- exempts workers at state and county healthcare facilities and unfairly penalizes private hospitals and providers.
“These measures mandate higher wages for workers at private health care facilities but provide zero increases for workers at public hospitals and smaller clinics that primarily serve uninsured and disadvantaged communities,” the coalition’s website says. “This will lead to workforce shortages at smaller clinics and public health care facilities, jeopardizing access and quality of care for Southern California’s most disadvantaged and already underserved communities.”
The coalition is circulating a petition to get the 41,000 signatures needed for force a referendum on the issue.
The SEIU-UHW had sought to put the wage mandate on the Nov. 8 ballot, and had already collected more than 145,000 signatures when the Los Angeles City County preempted that and adopted the measure last month.
The ordinance has the support of Los Angeles Mayor Eric Garcetti, who said during a signing ceremony on July 8 that “our healthcare heroes deserve fair compensation for their critical work, countless sacrifices and incredible service to our city and its people.”
However, the Los Angeles Times reports that Gateways Hospital and Mental Health Center in Echo Park is considering scaling back services — possibly by as much as 20% — to account for increased costs, and that the nonprofit Motion Picture and Television Fund in Woodland Hills anticipates a $1.5-million yearly increase in labor costs and it has yet to identify how to cover it.
The payer also allocated $45.2 million for digital transformation assistance to improve provider interactions.
CalOptima's board of directors has approved $64 million in supplemental funding for its contracted Orange County providers, including $58.2 million for COVID-19 expenses, and $6 million to cover Medicare funding cuts.
The CalOptima board also allocated $45.2 million for digital transformation assistance to streamline and improve interactions with providers.
The COVID-19 payment hikes of up to 7.5% will fund efforts by providers to administer COVID-19 vaccinations, cover costs for tests and treatment, and address virus variant outbreaks.
"COVID-19 cases are fluctuating, and providers are continuing to grapple with the pandemic. CalOptima wants to support our partners with the resources they need to ensure quality care for our vulnerable member population," CalOptima CEO Michael Hunn says. "The supplemental funding will provide stability for the health care system as we prepare to transition out of the Public Health Emergency."
The payments will be made for a full year, from July 1, 2022, to June 30, 2023. The board first approved supplemental payments in 2020 after noting the strain on providers. The supplemental funding also supports the healthcare safety net, as CalOptima membership has grown 23% during the pandemic to nearly 900,000.
CalOptima's Medicare programs OneCare, OneCare Connect Cal MediConnect Plan, and the Program of All-Inclusive Care for the Elderly are subject to 2% federal cuts that total $6 million a year.
The board voted to protect providers from this reduction particularly during this time as CalOptima will transition approximately 14,500 members from OneCare Connect to OneCare on Jan. 1, 2023. California is closing Cal MediConnect Plans as part of a larger initiative known as California Advancing and Innovating Medi-Cal.
CalOptima's digital transformation is part of a new three-year strategic plan to deliver efficiencies for providers, including same-day treatment authorizations and real-time claims payment. CalOptima's new budget allocates $45.2 million to this effort and signifies that the agency is moving forward with strengthening its systems on behalf of Orange County providers.
A few initiatives identified for the first year are provider portal enhancements, a provider data management system the integrates contracting and credentialling, and robotic process automation to better connect members to providers offering the services they need.
The gap between the state's wealthiest and poorest widened by an additional four years over the two-year span.
Life expectancy in California fell by more than three years during the first two years of the COVID-19 pandemic, with lower-income people and communities of color suffering disproportionately, new research shows.
In the study, published this month in JAMA Network, Northwestern University and UCLA researchers looked at nearly 2 million deaths in California between 2015 and 2021 and found that life expectancy shortened from 81.40 years in 2019 to 79.20 years in 2020, and 78.37 years in 2021.
The life expectancy gap between the state's wealthiest ($232,261 mean household income) and poorest ($21 279 MHI) widened by an additional four years over the two-year span, growing from 11.52 years in 2019 to 14.67 years in 2020 and 15.51 years in 2021, while life expectancy for the richest 1% dropped less than one year, the study found.
"Families of lower socioeconomic status are more vulnerable to economic instability and were less likely to access income support programs during the pandemic," the study says, "raising concerns that the stresses brought on by the pandemic might have widened health gaps related to income and race and ethnicity."
Study co-author and Northwestern University Prof. Hannes Schwandt, PhD, says he was "shocked by how big the differences were, and the degree of inequality that they reflected."
"We've had indications that the pandemic affected economically disadvantaged people more strongly, but we never really had numbers on actual life expectancy loss across the income spectrum," he says.
Communities of color were disproportionately affected by the pandemic, with life expectancy declining 5.74 years among Hispanics, 3.04 years among the non-Hispanic Asians, 3.84 years among the non-Hispanic Blacks, and 1.9 years among the non-Hispanic Whites.
"The disproportionately large decreases in life expectancy among Hispanic and non-Hispanic Black populations reflect their exposure to higher COVID-19 infection, hospitalization, and death rates, especially early in the pandemic," the study notes. "This disparity, much like other racial and ethnic inequities, has roots in the social determinants of health as well as structural barriers resulting from systemic racism that have helped perpetuate disparities for generations."
"In the case of COVID-19, Hispanic and non-Hispanic Black populations were more likely to rely on jobs (often as frontline workers), transportation, and housing conditions that heightened viral exposure and to encounter barriers to healthcare, a higher prevalence of comorbid conditions, and socioeconomic challenges that jeopardized their health."
