Who Gets Obesity Drugs Covered by Insurance? In NC, it Helps if You're on Medicaid

KFF Health News, December 2, 2024

Advocates say making these drugs available through Medicaid is in the state's long-term financial interest.

This article was published on Monday, December 2, 2024 in KFF Health News.

By Melba Newsome

After losing and regaining the same 20-plus pounds more times than she could count, Anita Blanchard concluded that diets don't work.

So when the University of North Carolina-Charlotte professor learned that Ozempic — developed to treat Type 2 diabetes — helped people lose weight and keep it off, Blanchard was determined to try it.

The state employee's health insurance initially covered the prescription with Blanchard kicking in a $25 copayment. Over the next seven months, she said, she lost 45 pounds and lowered her blood pressure and cholesterol. The most significant benefits, though, were psychological.

"It stopped the food noise in my head, relieved my anxiety, and I was no longer drinking like a fish," said Blanchard, now 60. "I'd have a glass of wine, and then that's it."

But North Carolina suffered from sticker shock as Blanchard shed pounds and thousands of others on the state insurance program — which covers more than 76,000 employees across 178 agencies, plus their dependents — tried to do the same. Ozempic and other glucagon-like peptide-1 (GPL-1) agonist medications accounted for 10% of the state employee health plan's annual prescription drug spending, according to a North Carolina State Health Plan fact sheet. The state treasurer projected the class of drugs would cost the state more than $170 million this year, with costs jumping to more than $1 billion over the next six years.

"This exceeds the amount the State Health Plan spends on cancer, rheumatoid arthritis, and chemotherapy medications," the State Health Plan said in a March statement.

The health plan's board of trustees eliminated coverage of this class of medications for weight loss starting in April. The plan continues to cover the drug for Type 2 diabetes management.

But in a twist this August, a separate part of North Carolina's government allowed the Medicaid program to start covering the drugs for weight loss — not just diabetes — for the state's poorest residents, who are disproportionately affected by obesity and related diseases. The state's Medicaid program covers more than 2 million people.

And now the outgoing Biden administration wants to follow suit, proposing on Nov. 26 for the federal government to cover the medications to treat obesity or Medicaid patients nationwide, in addition to Medicare patients.

Still, the North Carolina coverage change left state employees like Blanchard facing a stark choice — stop taking what she views as a miracle drug or pay as much as $1,200 out-of-pocket each month.

"They know diets don't work long-term for weight loss, yet they are denying coverage for a medication that has been effective," Blanchard said. "It's indicative of a profit-driven mindset that is more about cost savings than prioritizing patients' health."

The coverage switch highlights concerns about the cost of these medications and ongoing questions about who should get to have such drugs covered by insurance.

Several other states are also trying to reel in the expense of the medications. West Virginia canceled its pilot program to cover the drugs for its state employees. Connecticut state employees who are prescribed the drugs must participate in a clinical lifestyle management program.

The high prices have also raised concerns about the cost for taxpayer-funded health care programs, such as Medicare. The Centers for Medicare & Medicaid Services estimated that coverage under the Biden proposal would cost about $40 billion over 10 years, including an extra $3.8 billion for states. But the requirement wouldn't take effect until after President-elect Donald Trump takes office Jan. 20, giving his administration a chance to change it.

GLP-1 agonist medications, known by the brand names Ozempic, Trulicity, and Wegovy, have proved to be effective for weight loss as well as managing Type 2 diabetes. They work by triggering the pancreas to release insulin, slowing the rate at which the stomach empties, increasing satiety, and regulating appetite by sending signals to the brain to tell the body it is satisfied. But patients typically need to stay on the medications to maintain their weight loss, meaning they face long-term costs.

In clinical trials, patients taking Ozempic also showed significant reductions in cardiovascular problems such as heart attacks and strokes, even those without diabetes, or before weight loss started, said Duke University cardiologist and researcher Nishant Shah.

Making these drugs available through Medicaid is in the state's long-term financial interest, said Kody Kinsley, secretary of the North Carolina Department of Health and Human Services, which doesn't oversee the state employee health plan. Unlike private or employer insurance plans, the Medicaid program receives generous rebates on these types of drugs, significantly reducing the cost, he said.

Calling North Carolina the buckle of the "Barbecue Belt," Kinsley noted that state's obesity rate exceeds the national average. The latest analysis from NORC research organization at the University of Chicago showed that 45% of adults in the state had a body mass index above 30, the threshold for clinical obesity, compared with 42% nationwide. That number was 55% for non-Hispanic Black adults in the state.

In addition, Kinsley said, with Medicaid the primary payer for long-term care, covering the drugs helps Medicaid's bottom line by reducing the need for nursing home care often driven by unmanaged chronic diseases.

"We're trying to put our dollars where they will lower costs in the long run," he said. "I spend almost a billion dollars a year on obesity-related diseases. If I can reduce that spend by even 1%, then these drugs are a no-brainer."

But what about people who aren't on Medicaid? Duke's Shah said the U.S. health care system needs to eliminate hurdles that make it difficult to obtain the drugs. Besides making the medication more affordable, he said, it should encourage the use of weight loss drugs and treatment of obesity as a chronic disease instead of stigmatizing it as a moral failing.

"Whether it is drug cost, conditions that require the payer to approve them, the patient's health insurance plan, or the unaffordability of a plan that would cover weight loss, there are real-world barriers in our health care system," Shah said.

Family medicine physician Melissa Jones of Charlotte said she has often seen a bias against people in her weight management practice when they try to get these medications covered by private insurance.

"There's no shame in saying ‘I have high blood pressure' or ‘I inherited this condition from my family,'" Jones said. "But for some reason, there's shame associated with saying, ‘I struggle with my weight.'"

Although Blanchard can't get her Ozempic covered anymore as a state employee, a concierge doctor gave her a prescription for a nonbrand version of the anti-obesity medications from a compounding pharmacy, available for now because of shortages of the brand-name versions. Though she believes it is less effective, she pays $225 a month for it.

"I can handle that," she said.

Homebound Seniors Living Alone Often Slip Through Health System's Cracks

KFF Health News, December 2, 2024

Nearly 40% have five or more chronic medical conditions, such as heart or lung disease. Almost 30% are believed to have 'probable dementia.' 

This article was published on Monday, December 2, 2024 in KFF Health News.

By Judith Graham

Carolyn Dickens, 76, was sitting at her dining room table, struggling to catch her breath as her physician looked on with concern.

"What's going on with your breathing?" asked Peter Gliatto, director of Mount Sinai's Visiting Doctors Program.

"I don't know," she answered, so softly it was hard to hear. "Going from here to the bathroom or the door, I get really winded. I don't know when it's going to be my last breath."

Dickens, a lung cancer survivor, lives in central Harlem, barely getting by. She has serious lung disease and high blood pressure and suffers regular fainting spells. In the past year, she's fallen several times and dropped to 85 pounds, a dangerously low weight.

And she lives alone, without any help — a highly perilous situation.

Across the country, about 2 million adults 65 and older are completely or mostly homebound, while an additional 5.5 million seniors can get out only with significant difficulty or assistance. This is almost surely an undercount, since the data is from more than a dozen years ago.

It's a population whose numbers far exceed those living in nursing homes — about 1.2 million — and yet it receives much less attention from policymakers, legislators, and academics who study aging.

Consider some eye-opening statistics about completely homebound seniors from a study published in 2020 in JAMA Internal Medicine: Nearly 40% have five or more chronic medical conditions, such as heart or lung disease. Almost 30% are believed to have "probable dementia." Seventy-seven percent have difficulty with at least one daily task such as bathing or dressing.

Almost 40% live by themselves.

That "on my own" status magnifies these individuals' already considerable vulnerability, something that became acutely obvious during the covid-19 outbreak, when the number of sick and disabled seniors confined to their homes doubled.

"People who are homebound, like other individuals who are seriously ill, rely on other people for so much," said Katherine Ornstein, director of the Center for Equity in Aging at the Johns Hopkins School of Nursing. "If they don't have someone there with them, they're at risk of not having food, not having access to health care, not living in a safe environment."

Research has shown that older homebound adults are less likely to receive regular primary care than other seniors. They're also more likely to end up in the hospital with medical crises that might have been prevented if someone had been checking on them.

To better understand the experiences of these seniors, I accompanied Gliatto on some home visits in New York City. Mount Sinai's Visiting Doctors Program, established in 1995, is one of the oldest in the nation. Only 12% of older U.S. adults who rarely or never leave home have access to this kind of home-based primary care.

Gliatto and his staff — seven part-time doctors, three nurse practitioners, two nurses, two social workers, and three administrative staffers — serve about 1,000 patients in Manhattan each year.

These patients have complicated needs and require high levels of assistance. In recent years, Gliatto has had to cut staff as Mount Sinai has reduced its financial contribution to the program. It doesn't turn a profit, because reimbursement for services is low and expenses are high.

First, Gliatto stopped in to see Sandra Pettway, 79, who never married or had children and has lived by herself in a two-bedroom Harlem apartment for 30 years.

Pettway has severe spinal problems and back pain, as well as Type 2 diabetes and depression. She has difficulty moving around and rarely leaves her apartment. "Since the pandemic, it's been awfully lonely," she told me.

When I asked who checks in on her, Pettway mentioned her next-door neighbor. There's no one else she sees regularly.

Pettway told the doctor she was increasingly apprehensive about an upcoming spinal surgery. He reassured her that Medicare would cover in-home nursing care, aides, and physical therapy services.

"Someone will be with you, at least for six weeks," he said. Left unsaid: Afterward, she would be on her own. (The surgery in April went well, Gliatto reported later.)

The doctor listened carefully as Pettway talked about her memory lapses.

"I can remember when I was a year old, but I can't remember 10 minutes ago," she said. He told her that he thought she was managing well but that he would arrange testing if there was further evidence of cognitive decline. For now, he said, he's not particularly worried about her ability to manage on her own.

Several blocks away, Gliatto visited Dickens, who has lived in her one-bedroom Harlem apartment for 31 years. Dickens told me she hasn't seen other people regularly since her sister, who used to help her out, had a stroke. Most of the neighbors she knew well have died. Her only other close relative is a niece in the Bronx whom she sees about once a month.

Dickens worked with special-education students for decades in New York City's public schools. Now she lives on a small pension and Social Security — too much to qualify for Medicaid. (Medicaid, the program for low-income people, will pay for aides in the home. Medicare, which covers people over age 65, does not.) Like Pettway, she has only a small fixed income, so she can't afford in-home help.

Every Friday, God's Love We Deliver, an organization that prepares medically tailored meals for sick people, delivers a week's worth of frozen breakfasts and dinners that Dickens reheats in the microwave. She almost never goes out. When she has energy, she tries to do a bit of cleaning.

Without the ongoing attention from Gliatto, Dickens doesn't know what she'd do. "Having to get up and go out, you know, putting on your clothes, it's a task," she said. "And I have the fear of falling."

The next day, Gliatto visited Marianne Gluck Morrison, 73, a former survey researcher for New York City's personnel department, in her cluttered Greenwich Village apartment. Morrison, who doesn't have any siblings or children, was widowed in 2010 and has lived alone since.

Morrison said she'd been feeling dizzy over the past few weeks, and Gliatto gave her a basic neurological exam, asking her to follow his fingers with her eyes and touch her fingers to her nose.

"I think your problem is with your ear, not your brain," he told her, describing symptoms of vertigo.

Because she had severe wounds on her feet related to Type 2 diabetes, Morrison had been getting home health care for several weeks through Medicare. But those services — help from aides, nurses, and physical therapists — were due to expire in two weeks.

"I don't know what I'll do then, probably just spend a lot of time in bed," Morrison told me. Among her other medical conditions: congestive heart failure, osteoarthritis, an irregular heartbeat, chronic kidney disease, and depression.

Morrison hasn't left her apartment since November 2023, when she returned home after a hospitalization and several months at a rehabilitation center. Climbing the three steps that lead up into her apartment building is simply too hard.

"It's hard to be by myself so much of the time. It's lonely," she told me. "I would love to have people see me in the house. But at this point, because of the clutter, I can't do it."

When I asked Morrison who she feels she can count on, she listed Gliatto and a mental health therapist from Henry Street Settlement, a social services organization. She has one close friend she speaks with on the phone most nights.

"The problem is I've lost eight to nine friends in the last 15 years," she said, sighing heavily. "They've died or moved away."

Bruce Leff, director of the Center for Transformative Geriatric Research at the Johns Hopkins School of Medicine, is a leading advocate of home-based medical care. "It's kind of amazing how people find ways to get by," he said when I asked him about homebound older adults who live alone. "There's a significant degree of frailty and vulnerability, but there is also substantial resilience."

With the rapid expansion of the aging population in the years ahead, Leff is convinced that more kinds of care will move into the home, everything from rehab services to palliative care to hospital-level services.

"It will simply be impossible to build enough hospitals and health facilities to meet the demand from an aging population," he said.

But that will be challenging for homebound older adults who are on their own. Without on-site family caregivers, there may be no one around to help manage this home-based care.

Judith Graham: khn.navigatingaging@gmail.com, @judith_graham

Make America Healthy Again: An Unconventional Movement That May Have Found Its Moment

KFF Health News, November 26, 2024

A cadre of health business leaders and nonmainstream doctors are influencing Trump's focus on health policy.

This article was published on Tuesday, November 26, 2024 in KFF Health News.

By Stephanie Armour

Within days of Donald Trump's election victory, health care entrepreneur Calley Means turned to social media to crowdsource advice.

"First 100 days," said Means, a former consultant to Big Pharma who uses the social platform X to focus attention on chronic disease. "What should be done to reform the FDA?"

The question was more than rhetorical. Means is among a cadre of health business leaders and nonmainstream doctors who are influencing President Donald Trump's focus on health policy.

Trump's return to the White House has given Means and others in this space significant clout in shaping the nascent health policies of the new administration and its federal agencies. It's also giving newfound momentum to "Make America Healthy Again," or MAHA, a controversial movement that challenges prevailing thinking on public health and chronic disease.

Its followers couch their ideals in phrases like "health freedom" and "true health." Their stated causes are as diverse as revamping certain agricultural subsidies, firing National Institutes of Health employees, rethinking childhood vaccination schedules, and banning marketing of ultra-processed foods to children on TV.

Public health leaders say the emerging Trump administration's interest in elevating the sometimes unorthodox concepts could be catastrophic, eroding decades of scientific progress while spurring a rise in preventable disease. They worry the administration's support could weaken trust in public health agencies.

Georges Benjamin, executive director of the American Public Health Association, said he welcomes broad intellectual scientific discussion but is concerned that Trump will parrot untested and unproven public health ideas he hears as if they are fact.

Experience has shown that people with unproven ideas will have his ear and his "very large bully pulpit," he said. "Because he's president, people will believe he won't say things that aren't true. This president, he will."

But those in the MAHA camp have a very different take. They say they have been maligned as dangerous for questioning the status quo. The election has given them an enormous opportunity to shape politics and policies, and they say they won't undermine public health. Instead, they say, they will restore trust in federal health agencies that lost public support during the pandemic.

"It may be a brilliant strategy by the right," said Peter McCullough, a cardiologist who has come under fire for saying COVID-19 vaccines are unsafe. He was describing some of the election-season messaging that mainstreamed their perspectives. "The right was saying we care about medical and environmental issues. The left was pursuing abortion rights and a negative campaign on Trump. But everyone should care about health. Health should be apolitical."

The movement is largely anti-regulatory and anti-big government, whether concerning raw milk or drug approvals, although implementing changes would require more regulation. Many of its concepts cross over to include ideas that have also been championed by some on the far left.

Robert F. Kennedy Jr., an anti-vaccine activist Trump has nominated to run the Department of Health and Human Services, has called for firing hundreds of people at the National Institutes of Health, removing fluoride from water, boosting federal support for psychedelic therapy, and loosening restrictions on raw milk, consumption of which can expose consumers to foodborne illness. Its sale has prompted federal raids on farms for not complying with food safety regulations.

Means has called for top-down changes at the U.S. Department of Agriculture, which he says has been co-opted by the food industry.

Though he himself is not trained in science or medicine, he has said people had almost no chance of dying of COVID-19 if they were "metabolically healthy," referring to eating, sleeping, exercise, and stress management habits, and has said that about 85% of deaths and health care costs in the U.S. are tied to preventable foodborne metabolic conditions.

A co-founder of Truemed, a company that helps consumers use pretax savings and reimbursement programs on supplements, sleep aids, and exercise equipment, Means says he has had conversations behind closed doors with dozens of members of Congress. He said he also helped bring RFK Jr. and Trump together. RFK Jr. endorsed Trump in August after ending his independent presidential campaign.

"I had this vision for a year, actually. It sounds very woo-woo, but I was in a sweat tent with him in Austin at a campaign event six months before, and I just had this strong vision of him standing with Trump," Means said recently on the Joe Rogan Experience podcast.

The former self-described never-Trumper said that, after Trump's first assassination attempt, he felt it was a powerful moment. Means called RFK Jr. and worked with conservative political commentator Tucker Carlson to connect him to the former president. Trump and RFK Jr. then had weeks of conversations about topics such as child obesity and causes of infertility, Means said.

"I really felt, and he felt, like this could be a realignment of American politics," Means said.

He is joined in the effort by his sister, Casey Means, a Stanford University-trained doctor and co-author with her brother of "Good Energy," a book about improving metabolic health. The duo has blamed Big Pharma and the agriculture industry for increasing rates of obesity, depression, and chronic health conditions in the country. They have also raised questions about vaccines.

"Yeah, I bet that one vaccine probably isn't causing autism, but what about the 20 that they are getting before 18 months," Casey Means said in the Joe Rogan podcast episode with her brother.

The movement, which challenges what its adherents call "the cult of science," gained significant traction during the pandemic, fueled by a backlash against vaccine and mask mandates that flourished during the Biden administration. Many of its supporters say they gained followers who believed they had been misled on the effectiveness of COVID-19 vaccines.

In July 2022, Deborah Birx, COVID-19 response coordinator in Trump's first administration, said on Fox News that "we overplayed the vaccines," although she noted that they do work.

Anthony Fauci, who advised Trump during the pandemic, in December 2020 called the vaccines a game changer that could diminish COVID-19 the way the polio vaccine did for that disease.

Eventually, though, it became evident that the shots don't necessarily prevent transmission and the effectiveness of the booster wanes with time, which some conservatives say led to disillusionment that has driven interest in the health freedom movement.

Federal health officials say the rollout of the COVID vaccine was a turning point in the pandemic and that the shots lessen the severity of the disease by teaching the immune system to recognize and fight the virus that causes it.

Postelection, some Trump allies such as Elon Musk have called for Fauci to be prosecuted. Fauci declined to comment.

Joe Grogan, a former director of the White House's Domestic Policy Council and assistant to Trump, said conservatives have been trying to articulate why government control of health care is troublesome.

"Two things have happened. The government went totally overboard and lied about many things during COVID and showed no compassion about people's needs outside of COVID," he said. "RFK Jr. came along and articulated very simply that government control of health care can't be trusted, and we're spending money, and it isn't making anyone healthier. In some instances, it may be making people sicker."

The MAHA movement capitalizes on many of the nonconventional health concepts that have been darlings of the left, such as promoting organic foods and food as medicine. But in an environment of polarized politics, the growing prominence of leaders who challenge what they call the cult of science could lead to more public confusion and division, some health analysts say.

Jeffrey Singer, a surgeon and senior fellow at the Cato Institute, a libertarian public policy research group, said in a statement that he agrees with RFK Jr.'s focus on reevaluating the public health system. But he said it comes with risks.

"I am concerned that many of RFK Jr.'s claims about vaccine safety, environmental toxins, and food additives lack evidence, have stoked public fears, and contributed to a decline in childhood vaccination rates," he said.

Measles vaccination among kindergartners in the U.S. dropped to 92.7% in the 2023-24 school year from 95.2% in the 2019-20 school year, according to the Centers for Disease Control and Prevention. The agency said that has left about 280,000 kindergartners at risk.

Stephanie Armour: sarmour@kff.org, @StephArmour1

Florida's Deloitte-Run Computer System Cut Off New Moms Entitled to Medicaid

KFF Health News, November 26, 2024

A class-action lawsuit alleges that Florida did not explain to people with Medicaid the reasons for disenrollment and their rights to appeal the decision.

This article was published on Tuesday, November 26, 2024 in KFF Health News.

By Daniel Chang and Samantha Liss

In mid-May, Mandi Rokx had a 3-month-old baby and a letter from a Florida agency warning that they both would be cut from Medicaid, the health insurance program for people with low incomes or disabilities.

Under a Florida law passed in 2021, Rokx was supposed to receive 12 months of continuous coverage after giving birth. But the letter from Florida's Department of Children and Families said their coverage would end May 31.

The explanation: "You failed to complete or follow through with your Medicaid renewal."

Rokx said she didn't understand why the state was cutting coverage. She had provided everything it asked for, she said.

She worried about what losing Medicaid would mean for her daughter, Vernita. Initially after the coverage ended, Rokx said, she paid out-of-pocket for the infant's checkups. She then turned to a free health fair put on once a month by a local nonprofit near her home in Melrose, Florida.

"I just hope she doesn't get sick," she said.

An unknown number of mothers in Florida have abruptly lost Medicaid coverage after giving birth, despite being eligible, according to an ongoing federal lawsuit filed against the state in August 2023. The issue is linked to the state's computer eligibility system, run by Deloitte Consulting, according to trial testimony from state and Deloitte employees. It is yet one more example of problems states and beneficiaries have encountered with Medicaid management systems operated by Deloitte, a giant consulting firm.

As of July, Florida had awarded the global firm contracts valued at more than $100 million to modernize, operate, and maintain the state's integrated eligibility system for Medicaid and other benefits.

Deloitte did not respond to requests for comment about its work in Florida.

In total, 25 states have awarded Deloitte eligibility system contracts, making the company the dominant player in this crucial slice of government business. These agreements, in which Deloitte commits to design, develop, or operate state-owned systems, are worth at least $6 billion, according to a KFF Health News analysis of state contracts.

The KFF investigation found that errors in Deloitte-run eligibility systems can cost millions and take years to fix while denying benefits like health insurance to eligible people.

In response to the investigation, Deloitte spokesperson Karen Walsh said the firm's clients — state governments — "understand large system implementations are challenging due to the complexity of the programs they support and that all IT systems require ongoing maintenance, periodic enhancements and upgrades to software and hardware, and database management."

Senate Democrat John Fetterman of Pennsylvania, which is one of Deloitte's state clients, sees it much differently. "Let's call this what it is: a racket," he said. "This isn't an occasional glitch. It's a pattern of systemic failure. And the worst part? We're paying them billions to do it."

In July, Kimber Taylor of Jacksonville and Lily Mezquita of Orlando testified in a federal courtroom in Florida that state officials removed them from Medicaid even though their pregnancies made them eligible. The class-action lawsuit alleges that Florida did not adequately explain to people with Medicaid the reason for cutting their health insurance, or explain to them that they could appeal the decision before losing coverage.

Florida has denied the allegations in court filings. But the trial revealed problems with the computer system the state uses to determine Medicaid eligibility and inform people that they are no longer eligible. Deloitte did not respond to questions about the trial, in which a judge's decision is pending.

Although Deloitte is not a named defendant in the lawsuit, an employee was called to testify about the firm's role in operating Florida's eligibility system. Harikumar Kallumkal, a Deloitte managing director who is responsible for Florida's system, said that a "defect" may have led to coverage losses for new mothers.

William Roberts, a state worker who reviews Medicaid eligibility decisions, also testified that the agency learned about a "glitch" that cut postpartum coverage for eligible new mothers in April 2023 — the same month Florida launched a Medicaid eligibility review process known as "unwinding," which all states undertook after pandemic-era coverage protections ended in March of that year. Kallumkal testified that Deloitte fixed the problem by April or May 2024.

And yet Rokx's coverage was cut May 31.

During the unwinding, Florida disenrolled nearly 2 million people, including kids, from Medicaid, according to the Centers for Medicare & Medicaid Services.

Patient advocates say flaws in Florida's Deloitte-operated computer system prevented some of the state's most vulnerable residents from getting care they were entitled to receive.

"Florida's Medicaid officials knew from the start of the unwinding period that their system was not handling pregnancy and postpartum Medicaid correctly, and proceeded full steam ahead anyway," said Lynn Hearn, an attorney with the Florida Health Justice Project, a nonprofit legal aid and advocacy group that together with the National Health Law Program represents the class-action plaintiffs. "To this day, we don't know that the problems have been fully corrected. The mothers of this state deserve better from their government."

Medicaid is the largest insurance payer for childbirths in Florida, covering nearly 98,000, or 44%, of all deliveries in 2022, according to the state health department. But it's unclear how many mothers have been cut from the Medicaid coverage they were entitled to receive. Florida's Department of Children and Families on Sept. 9 cashed a check from KFF Health News to cover the processing fee for records it requested about eligible mothers who were disenrolled. As of Nov. 22, the state had not released the records.

The state did provide an estimate during the trial, but that number was not made available by the state to KFF Health News. In a court filing, the plaintiffs cited the state's estimate as showing that 19,802 women were removed from pregnancy coverage as of March 2024, one year after Florida began unwinding. It's unclear how many of these women lost coverage incorrectly. The figure is probably a conservative estimate — it excludes anyone who was removed from coverage because of paperwork issues.

Mallory McManus, deputy chief of staff for the Department of Children and Families, told KFF Health News that after identifying the problem, agency workers "manually corrected cases until necessary system updates were in place." She added that the department also reviewed the system to "ensure there were no gaps in coverage."

McManus said that Floridians who were disenrolled from Medicaid "were properly noticed and provided with information on requesting an appeal."

Rokx, Taylor, and Mezquita ultimately regained their Medicaid coverage after seeking help from the Florida Health Justice Project. Attorneys there have said they are often able to get coverage restored for eligible people by reaching out directly to the state agency's general counsel — an avenue not known to most Floridians.

While the class-action lawsuit awaits a judgment, the problems revealed at trial echo those encountered in other states with Deloitte-run Medicaid eligibility systems, such as Arkansas, Colorado, Florida, Georgia, Kentucky, Michigan, Pennsylvania, Rhode Island, Tennessee, and Texas.

In Texas, according to a July report by the U.S. Government Accountability Office, "about 100,000 eligible individuals had been disenrolled due to eligibility system errors," including denial of postpartum coverage for some eligible women.

The error-plagued systems and widespread denials of Medicaid for eligible people have caught the attention of lawmakers on congressional committees that oversee social programs. They blame state leaders who they say aren't holding vendors like Deloitte accountable.

"As the errors compound, contractors are rewarded with more billing hours and higher payouts," said Rep. Lloyd Doggett (D-Texas). "This is an alarming and unacceptable waste of taxpayer dollars."

Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, which oversees Medicaid, said that too many people "can't even get in through the front door due to outdated and inaccurate eligibility systems."

And Rep. Kathy Castor (D-Fla.) said that "there's such a pattern of trying to discourage and inappropriately cutting families off of Medicaid in Florida."

"It appears to be intentional," she said, "and I think it clearly is."

Daniel Chang: dchang@kff.org, @dchangmiami

Samantha Liss: sliss@kff.org, @samanthann

IN Hospitals Pull Merger Application After Pushback Over Monopoly Concerns

KFF Health News, November 26, 2024

Union will re-apply after working with regulators to 'ensure the benefits' such as 'improved access, quality' are included.

This article was published on Tuesday, November 26, 2024 in KFF Health News.

By Samantha Liss

Two rival hospitals in Terre Haute, Indiana, pulled back their merger application Monday, just days before the state was due to rule on the deal amid growing backlash to such medical monopolies.

The proposed merger between Union Health and Terre Haute Regional Hospital, the only acute care hospitals in Vigo County, Indiana, would have left Terre Haute's 58,000 residents and those in the surrounding region with a single hospital operator. Although federal laws prohibit monopolies, the hospitals sought the merger under a state provision known as a "Certificate of Public Advantage" law, or COPA.

"Recognizing the COPA process is a very complex, innovative approach to improving access and quality health care for area residents, we believe it is best to withdraw the current application," Union Health said in a statement posted on its website.

Union said it plans to submit a new application after working with Indiana regulators to "ensure the benefits" such as "improved access, quality" are included.

The withdrawal came nine days before a Dec. 4 deadline for state regulators to rule on whether to OK the merger. In recent months, the state health agency had received a deluge of public comments from residents and the Federal Trade Commission opposed to the deal between Union Health, a nonprofit whose main hospital is licensed as a 341-bed facility, and the 278-bed Terre Haute Regional Hospital, owned by for-profit chain HCA Healthcare. The commenters cited concerns about longer travel times to get emergency care, higher prices, and fewer choices. 

Union Health and HCA declined to answer questions about what prompted the decision to pull back the application.

"There could be any number of reasons why they pulled the application with the stated intention to refile," said Christopher Garmon, a University of Missouri-Kansas City economist who has studied COPA mergers. Given the status of the application, he said, it's unlikely the deal was headed toward an approval. "Either way, I think it's clear that the state was not ready to approve the COPA with conditions similar to past COPAs." 

It was the latest setback against mergers under COPA laws. Indiana and 18 other states have such laws that shield hospital mergers from federal enforcement by the Federal Trade Commission.

As a condition of the deals, states typically agree to monitor hospital performance and quality while limiting price hikes. Supporters of COPAs argue that state oversight built into the agreements can mitigate the harms of a monopoly. But health economists and the FTC have said that oversight cannot replace competition and that these mergers ultimately harm patients.

"We know that COPAs generally benefit the merging hospitals, but not local residents," said Zack Cooper, a health economist and associate professor at Yale University.

His analysis of the Terre Haute deal suggested that it would have damaged the local economy and squeezed residents' wallets. Cooper said he hopes that states faced with similar merger decisions will see Indiana's waylaid case and the pushback against other COPA mergers as a cause for pause.

In comments to Indiana regulators, the FTC said COPAs "have proven unwieldy," are "difficult to manage," and "have failed to protect local communities from the harmful effects of anticompetitive hospital mergers."

In 2018, Ballad Health formed as the nation's largest state-approved hospital monopoly, with COPA agreements in Virginia and Tennessee. Since then, KFF Health News has reported, Ballad has fallen short on meeting quality and charity care goals, according to annual reports from Ballad and the Tennessee Department of Health. After years of complaints from patients, the state is now trying to hold Ballad more accountable for its quality of care. 

Ballad Health has said that "the most important thing to our patients is the quality of care they receive" and that its system is rebounding after hospital quality slipped due to the pressure of the coronavirus pandemic.

Problems have also occurred when a COPA — and its oversight — are removed, leaving the merged hospital system as an "unregulated monopoly." After North Carolina repealed its COPA in 2015, a subsidiary of HCA Healthcare bought Mission Health, a COPA-created monopoly in Asheville, for $1.5 billion in 2019. The monopoly in Asheville remained, but none of the COPA's conditions applied to the new owner.

Last year, government inspectors found "deficiencies" at Mission Health that contributed to four patient deaths and posed an "immediate jeopardy" to patients' health and safety, according to the 384-page federal inspection report. HCA has said it promptly addressed the issues. But the state and the hospital system are now engaged in a lawsuit.

Four states besides North Carolina — Maine, Minnesota, Montana, and North Dakota — have repealed COPA laws. Maine ended its law last year amid warnings from the FTC regarding such mergers.

Bill Montejo, a director at Maine's Department of Health and Human Services, pointed to an FTC study as he urged lawmakers on a health committee last year to repeal its COPA law due to "the growing concerns about the ineffectiveness and potential negative effects of COPAs."

The Union-Regional merger was years in the making. In 2021, Union Health leaders were instrumental in the passage of Indiana's COPA law. They supplied draft language for the bill to one of the bill's authors, according to legislative testimony, and Union Health CEO Steve Holman testified before lawmakers that the merger would improve the county's poor public health rankings.

In 2023, Union Health and Regional had signed an agreement to merge, beginning the COPA application process.

Union faces a July 1, 2026, deadline to refile an application, according to Indiana's COPA law.

Samantha Liss: sliss@kff.org, @samanthann

Anti-Fraud Efforts Meet Real-World Test During ACA Enrollment Period

KFF Health News, November 25, 2024

CMS says its efforts are working, pointing to the 30% drop in complaint casework.

This article was published on Monday, November 25, 2024 in KFF Health News.

By Julie Appleby

Unauthorized switching of Affordable Care Act plans appears to have tapered off in recent weeks based on an almost one-third drop in casework associated with consumer complaints, say federal regulators. The Centers for Medicare & Medicaid Services, which oversees the ACA, credits steps taken to thwart enrollment and switching problems that triggered more than 274,000 complaints this year through August.

Now, the annual ACA open enrollment period that began Nov. 1 poses a real-world test: Will the changes curb fraud by rogue agents or brokerages without unduly slowing the process of enrolling or reducing the total number of sign-ups for 2025 coverage?

"They really have this tightrope to walk," said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University. "The more you tighten it up to prevent fraud, the more barriers there are that could inhibit enrollment among those who need the coverage."

CMS said in July that some types of policy changes — those in which the agent is not "affiliated" with the existing plan — will face more requirements, such as a three-way call with the consumer, broker, and a healthcare.gov call center representative.

In August, the agency barred two of about a dozen private sector online-enrollment platforms from connecting with healthcare.gov over concerns related to improper switching.

And CMS has suspended 850 agents suspected of being involved in unauthorized plan-switching from accessing the ACA marketplace.

Still, the clampdown could add complexity to enrollment and slow the process. For example, a consumer might have to wait in a queue for a three-way call, or scramble to find a new agent because the one they previously worked with had been suspended.

Given that phone lines with healthcare.gov staff already get busy — especially during mid-December — agents and policy analysts advise consumers not to dally this year.

"Hit the ground running," said Ronnell Nolan, president and CEO of Health Agents for America, a professional organization for brokers.

Meanwhile, reports are emerging that some rogue entities are already figuring out workarounds that could undermine some of the anti-fraud protections CMS put in place, Nolan said.

"Bottom line is: Fraud and abuse is still happening," Nolan said.

Brokers assist the majority of people actively enrolling in ACA plans and are paid a monthly commission by insurers for their efforts. Consumers can compare plans or enroll themselves online through federal or state marketplace websites. They can also seek help from people called assisters or navigators — certified helpers who are not paid commissions. Under a "find local help" button on the federal and state ACA websites, consumers can search for nearby brokers or navigators.

CMS says it has "ramped up support operations" at its healthcare.gov marketplace call centers, which are open 24/7, in anticipation of increased demand for three-way calls, and it expects "minimal wait times," said Jeff Wu, deputy director for policy of the CMS Center for Consumer Information and Insurance Oversight.

Wu said those three-way calls are necessary only when an agent or a broker not already associated with a consumer's enrollment wants to change that consumer's enrollment or end that consumer's coverage. It does not apply to people seeking coverage for the first time.

Organizations paid by the government to offer navigator services have a dedicated phone line to the federal marketplace, and callers are not currently experiencing long waits, said Xonjenese Jacobs, director of Florida Covering Kids & Families, a program based at the University of South Florida that coordinates enrollment across the state through its Covering Florida navigator program.

Navigators can assist with the three-way calls if a consumer's situation requires it.

"Because we have our quick line in, there's no increased wait time," Jacobs said.

The problem of unauthorized switches has been around for a while but took off during last year's open enrollment season.

Brokers generally blamed much of the problem on the ease with which rogue agents can access ACA information in the federal marketplace, needing only a person's name, date of birth, and state of residence. Though federal regulators have worked to tighten that access with the three-way call requirement, they stopped short of instituting what some agent groups say is needed: two-factor authentication, which could involve a code accessed by a consumer through a smartphone.

Unauthorized switches can lead to a host of problems for consumers, from higher deductibles to landing in new networks that do not include their preferred physicians or hospitals. Some people have received tax bills when unauthorized policies came with premium credits for which they did not qualify.

Unauthorized switches posed a political liability for the Biden administration, a blemish on two years of record ACA enrollment. The practice drew criticism from lawmakers on both sides of the aisle; Democrats demanded more oversight and punishment of rogue agents, while Republicans said fraud attempts were fueled by Biden administration moves that allowed for more generous premium subsidies and special enrollment periods. The fate of those enhanced subsidies, which are set to expire, will be decided by Congress next year as the Trump administration takes power. But the premiums and subsidies that come with 2025 plans that people are enrolling in now will remain in effect for the entire year.

The actions taken this year to thwart the unauthorized enrollments apply to the federal marketplace, used by 31 states. The remaining states and the District of Columbia run their own websites, with many having in place additional layers of security.

For its part, CMS says its efforts are working, pointing to the 30% drop in complaint casework. The agency also noted a 90% drop in the number of times an agent's name was replaced by another's, which it says indicates that it is tougher for rival agents to steal clients to gain the monthly commissions that insurers pay.

Still, the move to suspend 850 agents has drawn pushback from agent groups that initially brought the problem to federal regulators' attention. They say some of those accused were suspended before getting a chance to respond to the allegations.

"There will be a certain number of agents and brokers who are going to be suspended without due process," said Nolan, with the health agents' group. She said that it has called for increased protections against unauthorized switching and that two-factor authentication, like that used in some state marketplaces or in the financial sector, would be more effective than what's been done.

"We now have to jump through so many hoops that I'm not sure we're going to survive," she said of agents in general. "They are just throwing things against the wall to see what sticks when they could just do two-factor."

The agency did not respond to questions asking for details about how the 850 agents suspended since July were selected, the states where they were located, or how many had their suspensions reversed after supplying additional information.

Julie Appleby: jappleby@kff.org, @Julie_appleby

FL Gov. DeSantis' Canadian Drug Import Plan Goes Nowhere After FDA Approval

KFF Health News, November 22, 2024

A Florida health official familiar says there is no planned date yet for the state to begin importing drugs.

This article was published on Friday, November 22, 2024 in KFF Health News.

By Phil Galewitz

Nearly a year after the Biden administration gave Florida the green light to become the first state to import lower-cost prescription drugs from Canada — a longtime goal of politicians across the political spectrum, including President-elect Donald Trump — the program has yet to begin.

Florida Gov. Ron DeSantis hailed the FDA's approval of his plan in January, calling it a victory over the drug industry, which opposes importation on the grounds that it would lead to a surge in counterfeit medications.

A Florida health official familiar with the importation program told KFF Health News there was no planned date yet for the state to begin importing drugs. The official asked not to be identified because they weren't authorized to speak publicly about the program.

Florida applied to create an importation program in November 2020, just months after the Trump administration gave states the option. DeSantis, a Republican, complained publicly for years about the pace of the federal approval process under the Biden administration and in 2022 filed suit against the FDA for what he called a "reckless delay."

Trump touted his administration's move to bring medicines over the border in a preelection interview published last month by AARP, the advocacy group for older Americans, which supports allowing Americans to buy drugs from Canada. He vowed to "continue my efforts to protect Americans from unaffordable drug prices" in a second term.

It's not clear whether his second administration will or can do more to help Florida and other states set up programs, because it's ultimately up to the states to act. Colorado is the only other state that has an importation plan pending with the FDA.

DeSantis administration officials have refused for months to answer questions from KFF Health News about the program. Alecia Collins, deputy chief of staff for the Florida Agency for Health Care Administration, said in October that officials were traveling and unavailable. In mid-November, she said she still had no answers.

DeSantis press secretary Jeremy Redfern said he had been "slammed" since the first week of November and could not answer questions.

FDA spokesperson Cherie Duvall-Jones said she could not answer whether Florida had submitted documents the agency requires before the state can start importing medicines. She referred all questions to the state.

Drug companies typically sell medications for far less in Canada than in the United States, as a result of Canadian government price controls. But because of safety and efficacy concerns, federal law prohibits consumers from buying drugs from outside U.S. borders except in rare cases.

Politicians ranging from conservatives such as DeSantis to liberals such as Sen. Bernie Sanders of Vermont have long pushed for importing lower-cost prescription drugs from Canada.

In 2000, Congress passed a law allowing states to import prescription drugs from north of the border, with the caveat that it could go forward only if the secretary of the Department of Health and Human Services affirmed it was safe. That didn't happen until 2020, when Trump's HHS secretary, Alex Azar, made such a declaration.

Since 2022, Azar has been chairman of the board at LifeScience Logistics, a Dallas-based company that Florida is paying millions of dollars to set up its drug importation program, including warehousing its medicines.

Azar on Nov. 13 refused to answer questions from KFF Health News about drug importation, saying he wasn't authorized to speak on the matter.

Florida's program would not directly assist consumers at the pharmacy. It's instead aimed at lowering costs for the state Medicaid program and for the corrections and health departments.

Matthew Baxter, a senior director at Ontario-based Methapharm Specialty Pharmaceuticals, which has contracted with LifeScience to export drugs, would not say whether Methapharm has sent any medicines over the border.

The pharmaceutical industry and the Canadian government oppose U.S. drug importation. Drug companies say importation would increase the risk of counterfeit drugs appearing on U.S. pharmacy shelves, while the government in Ottawa has warned it won't allow medicines to be exported if Canadians could experience shortages as a result.

Florida's predicted savings would also be relatively minor. DeSantis estimated the program would save state agencies up to $180 million in its first year. Florida's annual Medicaid budget tops $30 billion.

Florida identified 14 drugs, including for cancer and AIDS, that it would attempt to import from Canada for its state agencies.

Camm Epstein, a health policy analyst in Saratoga Springs, New York, said drug importation is a seemingly simple concept that resonates with the public, which is why DeSantis and others have turned to the idea as a response to rising drug prices. "It riles up the crowd," he said. "Who doesn't want to pay lower drug costs?"

But bringing drugs over the border is complicated because of the FDA's many requirements, including finding companies to work with — a Canadian exporter and a U.S. importer — and following a process that ensures the drugs are authentic, Epstein said.

"This was, at best, a boondoggle," he said.

Florida has spent tens of millions of dollars to stand up its drug importation program. The state has already paid LifeScience Logistics $50 million to set up a warehouse to store the medicines. DeSantis noted the costs in his 2022 lawsuit against the FDA.

"Plaintiffs have paid their retained importer and distributor over $24 million thus far — and increasing at the rate of $1.2 million every month — even though not a single prescription pill has been imported, relabeled, or distributed, solely because of the FDA's idleness," the state said in its suit.

Florida's delay may be due to operational challenges, Epstein said. "Predictably, even if they turned on the spigot there would be no flow, because Canada was not going to permit for the supply," he said.

Colorado and Florida are among at least nine states that have passed laws allowing for Canadian drug importation. Colorado's 2022 application to the FDA is still pending. In December 2023, Colorado officials released a report noting the state was unable to find a drugmaker willing to sell it medicines from Canada.

Phil Galewitz: pgalewitz@kff.org, @philgalewitz

Washington Power Has Shifted. Here's How the ACA May Shift, Too.

KFF Health News, November 21, 2024

Congress could theoretically change the ACA without a single Democratic vote.

This article was published on Thursday, November 21, 2024 in KFF Health News.

By Stephanie Armour and Sam Whitehead and Julie Rovner

President-elect Donald Trump's return to the White House could embolden Republicans who want to weaken or repeal the Affordable Care Act, but implementing such sweeping changes would still require overcoming procedural and political hurdles.

Trump, long an ACA opponent, expressed interest during the campaign in retooling the health law. In addition, some high-ranking Republican lawmakers — who will now have control over both the House and the Senate — have said revamping the landmark 2010 legislation known as Obamacare would be a priority. They say the law is too expensive and represents government overreach.

The governing trifecta sets the stage for potentially seismic changes that could curtail the law's Medicaid expansion, raise the uninsured rate, weaken patient protections, and increase premium costs for millions of people.

"The Republican plans — they don't say they are going to repeal the ACA, but their collection of policies could amount to the same thing or worse," said Sarah Lueck, vice president for health policy at the Center on Budget and Policy Priorities, a research and policy institute. "It could happen through legislation and regulation. We're on alert for anything and everything. It could take many forms."

Congressional Republicans have held dozens of votes over the years to try to repeal the law. They were unable to get it done in 2017 after Trump became president, even though they held both chambers and the White House, in large part because some GOP lawmakers wouldn't support legislation they said would cause such a marked increase in the uninsured rate.

Similar opposition to revamping the law could emerge again, especially because polls show the ACA's protections are popular.

While neither Trump nor his GOP allies have elaborated on what they would change, House Speaker Mike Johnson said last month that the ACA needs "massive reform" and would be on the party's agenda should Trump win.

Congress could theoretically change the ACA without a single Democratic vote, using a process known as "reconciliation." The narrow margins by which Republicans control the House and Senate mean just a handful of "no" votes could sink that effort, though.

Many of the more ambitious goals would require Congress. Some conservatives have called for changing the funding formula for Medicaid, a federal-state government health insurance program for low-income and disabled people. The idea would be to use budget reconciliation to gain lawmakers' approval to reduce the share paid by the federal government for the expansion population. The group that would be most affected is made up largely of higher-income adults and adults who don't have children rather than "traditional" Medicaid beneficiaries such as pregnant women, children, and people with disabilities.

A conservative idea that would let individuals use ACA subsidies for plans on the exchange that don't comply with the health law would likely require Congress. That could cause healthier people to use the subsidies to buy cheaper and skimpier plans, raising premiums for older and sicker consumers who need more comprehensive coverage.

"It's similar to an ACA repeal plan," said Cynthia Cox, a vice president and the director of the Affordable Care Act program at KFF, a health information nonprofit that includes KFF Health News. "It's repeal with a different name."

Congress would likely be needed to enact a proposal to shift a portion of consumers' ACA subsidies to health savings accounts to pay for eligible medical expenses.

Trump could also opt to bypass Congress. He did so during his previous tenure, when the Department of Health and Human Services invited states to apply for waivers to change the way their Medicaid programs were paid for — capping federal funds in exchange for more state flexibility in running the program. Waivers have been popular among both blue and red states for making other changes to Medicaid.

"Trump will do whatever he thinks he can get away with," said Chris Edelson, an assistant professor of government at American University. "If he wants to do something, he'll just do it."

Republicans have another option to weaken the ACA: They can simply do nothing. Temporary, enhanced subsidies that reduce premium costs — and contributed to the nation's lowest uninsured rate on record — are set to expire at the end of next year without congressional action. Premiums would then double or more, on average, for subsidized consumers in 12 states who enrolled using the federal ACA exchange, according to data from KFF.

That would mean fewer people could afford coverage on the ACA exchanges. And while the number of people covered by employer plans would likely increase, an additional 1.7 million uninsured individuals are projected each year from 2024 to 2033, according to federal estimates.

Many of the states that would be most affected, including Texas and Florida, are represented by Republicans in Congress, which could give some lawmakers pause about letting the subsidies lapse.

The Trump administration could opt to stop defending the law against suits seeking to topple parts of it. One of the most notable cases challenges the ACA requirement that insurers cover some preventive services, such as cancer screenings and alcohol use counseling, at no cost. About 150 million people now benefit from the coverage requirement.

If the Department of Justice were to withdraw its petition after Trump takes office, the plaintiffs would not have to observe the coverage requirement — which could inspire similar challenges, with broader implications. A recent Supreme Court ruling left the door open to legal challenges by other employers and insurers seeking the same relief, said Zachary Baron, a director of Georgetown University's Center for Health Policy and the Law.

In the meantime, Trump could initiate changes from his first day in the Oval Office through executive orders, which are directives that have the force of law.

"The early executive orders will give us a sense of policies that the administration plans to pursue," said Allison Orris, a senior fellow at the Center on Budget and Policy Priorities. "Early signaling through executive orders will send a message about what guidance, regulations, and policy could follow."

In fact, Trump relied heavily on these orders during his previous term: An October 2017 order directed federal agencies to begin modifying the ACA and ultimately increased consumer access to health plans that didn't comply with the law. He could issue similar orders early on in his new term, using them to start the process of compelling changes to the law, such as stepped-up oversight of potential fraud.

The administration could early on take other steps that work against the ACA, such as curtailing federal funding for outreach and help signing up for ACA plans. Both actions depressed enrollment during the previous Trump administration.

Trump could also use regulations to implement other conservative proposals, such as increasing access to health insurance plans that don't comply with ACA consumer protections.

The Biden administration walked back Trump's efforts to expand what are often known as short-term health plans, disparaging the plans as "junk" insurance because they may not cover certain benefits and can deny coverage to those with a preexisting health condition.

The Trump administration is expected to use regulation to reverse Biden's reversal, allowing consumers to keep and renew the plans for much longer.

But drafting regulations has become far more complicated following a Supreme Court ruling saying federal courts no longer have to defer to federal agencies facing a legal challenge to their authority. In its wake, any rules from a Trump-era HHS could draw more efforts to block them in the courts.

Some people with ACA plans say they're concerned. Dylan Reed, a 43-year-old small-business owner from Loveland, Colorado, remembers the days before the ACA — and doesn't want to go back to a time when insurance was hard to get and afford.

In addition to attention-deficit/hyperactivity disorder and anxiety, he has scleroderma, an autoimmune disease associated with joint pain and numbness in the extremities. Even with his ACA plan, he estimates, he pays about $1,000 a month for medications alone.

He worries that without the protections of the ACA it will be hard to find coverage with his preexisting conditions.

"It's definitely a terrifying thought," Reed said. "I would probably survive. I would just be in a lot of pain."

Stephanie Armour: sarmour@kff.org, @StephArmour1

Sam Whitehead: swhitehead@kff.org

Julie Rovner: jrovner@kff.org, @jrovner

 

CA Sets 15% Target for Primary Care Spending Over Next Decade

KFF Health News, November 21, 2024

The funding boost aims to improve Californians' health and reduce the need for costlier care.

This article was published on Thursday, November 21, 2024 in KFF Health News.

By Vanessa G. Sánchez

A California agency charged with slowing health costs has set a lofty goal for insurers to direct 15% of their spending to primary care by 2034, part of the state's effort to expand the primary care workforce and give more people access to preventive care services.

The board of the state Office of Health Care Affordability in October set its benchmark well above the industry's current 7% primary care spending rate, in hopes of improving Californians' health and reducing the need for costlier care down the road.

"It's ambitious but achievable," said Elizabeth Landsberg, director of the state's Department of Health Care Access and Information, which oversees the affordability agency. "Plans and health systems need time to build the infrastructure to really change the way they're providing care."

But California's target comes just six months after the affordability board set an annual cap of 3.5% for overall growth in health care spending, potentially squeezing insurers from two sides.

"How these two policies will interact is unclear and we believe it is important to not lose sight of our overall goal of reducing the growth of health care costs," Mary Ellen Grant, a spokesperson for the California Association of Health Plans, said in a statement.

The affordability agency argues health plans are best positioned to promote more spending on preventive care services, since insurers are the ones that negotiate payment with providers. Landsberg said health plans could dangle incentives, such as offering higher reimbursement rates for primary care providers or paying for comprehensive care instead of for individual visits.

If successful, the agency says, the spending target could expand the primary care workforce through the hiring of staff and lead to better health management, disease prevention, and early diagnosis and treatment for more patients across the state.

California faces a shortage of primary care providers, which has limited people's access to preventive care. Approximately 6 million Californians live in parts of the state where there aren't enough doctors to meet people's needs, according to a data analysis by KFF, a health information nonprofit that includes KFF Health News.

A 2021 report by the National Academies of Sciences, Engineering, and Medicine found that while more than 35% of health care visits in the U.S. are to primary care physicians, only about 5% of health spending is on primary care. That's compared with about 13% for some other developed nations.

"People have high regard for primary care, understand how important it is," said Kevin Grumbach, a professor of family and community medicine at the University of California-San Francisco who helped develop the state's primary care target. "They way overestimate how much of their tax dollars are actually going to support primary care."

Beginning next year, the affordability agency will start collecting data on how much health plans spend annually on primary care, particularly in settings such as community-based clinics, schools, and homeless shelters. Doctors, nurses, and pharmacists are among the providers whose services can be counted toward the goal. But the agency is excluding obstetricians, who sometimes serve as primary care providers for pregnant women, to focus on those offering "coordinated, comprehensive care" for patients.

Health plans will be expected to increase primary care spending from 0.5% to 1% of their total medical expenses each year until 15% is reached in 2034.

At least six states — Colorado, Connecticut, Delaware, Oregon, Rhode Island, and Washington — have already implemented primary care targets with some success. Rhode Island, which set a 10.7% goal, more than doubled its primary care spending from 2008 to 2018, while also reducing overall health spending.

The Biden administration has launched initiatives to improve primary care, but it has not set a primary care target for Medicare.

In California, the affordability agency collects health care spending data that captures nearly 33 million of the state's 39 million residents. The agency said it will begin to collect primary care spending data in fall 2025, but that information may not be released for two more years.

The state agency lacks enforcement authority in primary care spending, so to get health plans to hit the target, the agency is dangling financial incentives. At a primary care summit at the University of California-Davis in October, Landsberg said the agency could allow insurers to exceed the 3.5% overall growth cap if they show their spending went to boost primary care.

Efrain Talamantes, chief operating officer for AltaMed Health Services, one of the state's largest federally qualified community health centers, said these payments could help the health center expand services by training and hiring staff.

If health plans comply, the policy should lead to more primary care providers, timelier appointments, and better health outcomes, especially for disadvantaged communities that historically haven't had good access to care, Talamantes said.

"We should see an improvement where people are able to access their primary care the same day," he said.

As discussions continue, the state is working on targets to increase spending on behavioral health, another underinvested service. A vote on that measure could come next summer.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

Vanessa G. Sánchez: vsanchez@kff.org, @vanesanchez_g

 

FTC, Indiana Residents Pressure State to Block Hospital Merger

KFF Health News, November 20, 2024

Research shows hospital consolidation fuels price hikes and healthcare spending, driving up costs for families, employers, Medicare and Medicaid.

This article was published on Wednesday, November 20, 2024 in KFF Health News.

By Samantha Liss

Indiana residents and federal officials are urging state health regulators to stop two rival hospitals in Terre Haute from merging. The deal, if approved, would leave residents with a hospital monopoly.

Union Health, a nonprofit whose main hospital is licensed as a 341-bed facility, would buy the county's only other acute care hospital, the 278-bed Terre Haute Regional Hospital, owned by for-profit chain HCA Healthcare and located 5 miles south across the city's downtown area. Union says the merger to create one larger nonprofit health system would improve the area's poor public health rankings.

The Indiana Department of Health received hundreds of comments on the proposed merger, according to documents KFF Health News obtained through a state public records request. Most people expressed opposition to the deal, citing concerns about longer travel times to get emergency care, higher prices, and fewer choices for Terre Haute's 58,000 residents and those in Vigo County's nearby rural communities.

"Monopoly should be just a board game. Not a healthcare system," a commenter listed as H. Osborne wrote to the state health agency.

Doctors, health economists, and the Federal Trade Commission called on the Indiana Department of Health to deny Union Hospital's merger application. Such mergers became possible after Indiana enacted a Certificate of Public Advantage law, or COPA, in 2021, shielding the deals from federal anti-monopoly laws.

Two dozen states have had COPA laws on their books at some point, despite FTC warnings that such mergers can become difficult to control and may decrease the overall quality of care. The trend has come amid a broader wave of hospital consolidation, which research shows fuels price hikes and healthcare spending, driving up costs for families, employers, and taxpayers who foot the bill for Medicare and Medicaid.

Union Health said its proposed deal would improve care and increase access to services while "maintaining cost efficiency" for patients.

"This is not merely a business transaction; it is a strategic effort to improve healthcare delivery in our community," Union said in a statement.

John Collett, an executive with Garmong Construction who also serves on the board of the Terre Haute Chamber of Commerce, wrote that the deal would help the region achieve its goal of boosting population and income levels. (Garmong Construction served as construction manager for Union on multiple projects, including one worth hundreds of millions of dollars, according to an online brochure of its past projects.)

"I firmly believe this to be a step in the right direction," Collett wrote.

But the FTC — using italics for emphasis — said the deal is "unlikely to result in improved quality and access" and "would not lead to a healthier workforce or a stronger local economy," according to comments the agency submitted to Indiana regulators.

Zack Cooper, a health economist and associate professor at Yale University, said the merger would probably damage the local economy and squeeze residents' wallets. Cooper's analysis estimates the price of care would rise by at least 10% for area residents and lead to 500 lost jobs, while nurses' pay would drop by at least 7%. His research predicts the deal also would lead to unnecessary deaths from suicide or overdose, stemming from those job losses.

"I firmly believe this merger would harm members of the public in Terre Haute and Vigo County," Cooper wrote.

As a condition of these types of mergers, state agencies typically agree to monitor hospital quality and prices to make up for the loss of competition. Union said monitoring would hold it accountable, according to its response to the FTC's public comments opposing the deal.

The FTC pushed back, saying the oversight mechanism "would be insufficient to contain costs" and is a "poor substitute" for competition. Even though Union would face limits on raising prices in Vigo County, the FTC said, the system might be able to hike them elsewhere, including at its hospital in neighboring Vermillion County to the north.

Indiana has some of the highest hospital prices in the nation, according to studies by Rand Corp., a research organization.

In Terre Haute, some doctors worry the deal would exacerbate existing problems. Kathleen Stienstra, a physician in private practice, voiced her concerns about Union's management style, saying it has led to an exodus of doctors.

"A monopoly will lead to further deterioration in services," she wrote.

Separately, the FTC referenced KFF Health News' reporting on Tennessee's Ballad Health, a 20-hospital monopoly in Appalachia, as a cautionary tale against such mergers.

Ballad Health was granted the nation's largest state-sanctioned hospital monopoly in 2018. Since then, its emergency rooms have become more than three times as slow.

COPAs, such as the one that Ballad operates under, "have proven unwieldy," are "difficult to manage," and "have failed to protect local communities from the harmful effects of anticompetitive hospital mergers," the FTC said in its comments on the Union-Regional merger.

Since Ballad launched in 2018 and became the nation's largest state-approved hospital monopoly, it has not lived up to some of its promises, KFF Health News reported. It has fallen short on meeting quality and charity care goals, according to annual reports from Ballad and the Tennessee Department of Health. After years of problems and complaints from patients, the state is now trying to hold Ballad more accountable for its quality of care.

Ballad declined to respond to KFF Health News inquiries regarding the FTC's comments.

Now the Indiana Department of Health must consider the comments and decide by early December whether the proposed merger would improve health outcomes, access to services, and quality of care. Under the department's standards, those benefits must "outweigh any potential disadvantages."

KFF Health News correspondent Brett Kelman contributed to this report.

Samantha Liss: sliss@kff.org, @samanthann

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