Margaret Parsons, one of three dermatologists at a 20-person practice in Sacramento, California, is in a bind.
Since a Feb. 21 cyberattack on a previously obscure medical payment processing company, Change Healthcare, Parsons said, she and her colleagues haven't been able to electronically bill for their services.
She heard Noridian Healthcare Solutions, California's Medicare payment processor, was not accepting paper claims as of earlier this week, she said. And paper claims can take 3-6 months to result in payment anyway, she estimated.
"We will be in trouble in very short order, and are very stressed," she said in an interview with KFF Health News.
A California Medical Association spokesperson said March 7 that the Centers for Medicare & Medicaid Services had agreed in a meeting to encourage payment processors like Noridian to accept paper claims. A Noridian spokesperson referred questions to CMS.
The American Hospital Association calls the suspected ransomware attack on Change Healthcare, a unit of insurance giant UnitedHealth Group's Optum division, "the most significant and consequential incident of its kind against the U.S. health care system in history." While doctors' practices, hospital systems, and pharmacies struggle to find workarounds, the attack is exposing the health system's broad vulnerability to hackers, as well as shortcomings in the Biden administration's response.
To date, government has relied on more voluntary standards to protect the health care system's networks, Beau Woods, a co-founder of the cyber advocacy group I Am The Cavalry, said. But "the purely optional, do-this-out-of-the-goodness-of-your-heart model clearly is not working," he said. The federal government needs to devote greater funding, and more focus, to the problem, he said.
The crisis will take time to resolve. Comparing the Change attack to others against parts of the health care system, "we have seen it generally takes a minimum of 30 days to restore core systems," said John Riggi, the hospital association's national adviser on cybersecurity.
In a March 7 statement, UnitedHealth Group said two services — related to electronic payments and medical claims — would be restored later in the month. "While we work to restore these systems, we strongly recommend our provider and payer clients use the applicable workarounds we have established," the company said.
"We're determined to make this right as fast as possible," said company CEO Andrew Witty.
Providers and patients are meanwhile paying the price. Reports of people paying out-of-pocket to fill vital prescriptions have been common. Independent physician practices are particularly vulnerable.
"How can you pay staff, supplies, malpractice insurance — all this — without revenue?" said Stephen Sisselman, an independent primary care physician on Long Island in New York. "It's impossible."
Jackson Health System, in Miami-Dade County, Florida, may miss out on as much as $30 million in payments if the outage lasts a month, said Myriam Torres, its chief revenue officer. Some insurers have offered to mail paper checks.
Relief programs announced by both UnitedHealthand the federal government have been criticized by health providers, especially hospitals. Sisselman said Optum offered his practice, which he said has revenue of hundreds of thousands of dollars a month, a loan of $540 a week. Other providers and hospitals interviewed by KFF Health News said their offers from the insurer were similarly paltry.
In its March 7 statement, the company said it would offer new financing options to providers.
Providers Pressure Government to Act
On March 5, almost two weeks after Change first reported what it initially called a cybersecurity "issue," the Health and Human Services Department announced several assistance programs for health providers.
One recommendation is for insurers to advance payments for Medicare claims — similar to a program that aided health systems early in the pandemic. But physicians and others are worried that would help only hospitals, not independent practices or providers.
Anders Gilberg, a lobbyist with the Medical Group Management Association, which represents physician practices, posted on X, formerly known as Twitter, that the government "must require its contractors to extend the availability of accelerated payments to physician practices in a similar manner to which they are being offered to hospitals."
HHS spokesperson Jeff Nesbit said the administration "recognizes the impact" of the attack and is "actively looking at their authority to help support these critical providers at this time and working with states to do the same." He said Medicare is pressing UnitedHealth Group to "offer better options for interim payments to providers."
Another idea from the federal government is to encourage providers to switch vendors away from Change. Sisselman said he hoped to start submitting claims through a new vendor within 24 to 48 hours. But it's not a practicable solution for everyone.
Torres said suggestions from UnitedHealth and regulators that providers change clearinghouses, file paper claims, or expedite payments are not helping.
"It's highly unrealistic," she said of the advice. "If you've got their claims processing tool, there's nothing you can do."
Mary Mayhew, president of the Florida Hospital Association, said her members have built up sophisticated systems reliant on Change Healthcare. Switching processes could take 90 days — during which they'll be without cash flow, she said. "It's not like flipping a switch."
Nesbit acknowledged switching clearinghouses is difficult, "but the first priority should be resuming full claims flow," he said. Medicare has directed its contractors and advised insurers to ease such changes, he added.
Health care leaders including state Medicaid directors have called on the Biden administration to treat the Change attack similarly to the pandemic — a threat to the health system so severe that it demands extraordinary flexibility on the part of government insurance programs and regulators.
Beyond the money matters — critical as they are — providers and others say they lack basic information about the attack. UnitedHealth Group and the American Hospital Association have held calls and published releases about the incident; nevertheless, many still feel they're in the dark.
Riggi of the AHA wants more information from UnitedHealth Group. He said it's reasonable for the conglomerate to keep some information closely held, for example if it's not verified or to assist law enforcement. But hospitals would like to know how the breach was perpetrated so they can reinforce their own defenses.
"The sector is clamoring for more information, ultimately to protect their own organizations," he said.
Rumors have proliferated.
"It gets a little rough: Any given day you're going to have to pick and choose who to believe," Saad Chaudhry, an executive at Maryland hospital system Luminis Health, told KFF Health News. "Do you believe these thieves? Do you believe the organization itself, that has everything riding on their public image, who have incentives to minimize this kind of thing?"
What Happens Next?
Wired Magazine reported that someone paid the ransomware gang believed to be behind the attack $22 million in bitcoin. If that was indeed a ransom intended to resolve some aspect of the breach, it's a bonanza for hackers.
Cybersecurity experts say some hospitals that have suffered attacks have faced ransom demands for as little as $10,000 and as much as $10 million. A large payment to the Change hackers could incentivize more attacks.
"When there's gold in the hills, there's a gold rush," said Josh Corman, another co-founder of I Am The Cavalry and a former federal cybersecurity official.
Longer-term, the attack intensifies questions about how the private companies that comprise the U.S. health system and the government that regulates them are defending against cyberthreats. Attacks have been common: Thieves and hackers, often believed to be sponsored or harbored by countries like Russia and North Korea, have knocked down systems in the United Kingdom's National Health Service, pharma giants like Merck, and numerous hospitals.
The FBI reported 249 ransomware attacks against health care and public health organizations in 2023, but Corman believes the number is higher.
But federal efforts to protect the health system are a patchwork, according to cybersecurity experts. While it's not yet clear how Change was hacked, experts have warned a breach can occur through a phishing link in an email or more exotic pathways. That means regulators need to consider hardening all kinds of products.
One example of the slow-at-best efforts to mend these defenses concerns medical devices. Devices with outdated software could provide a pathway for hackers to get into a hospital network or simply degrade its functioning.
The FDA recently gained more authority to assess medical devices' digital defenses and issue safety communications about them. But that doesn't mean vulnerable machines will be removed from hospitals. Products often linger because they're expensive to take out of service or replace.
Senator Mark Warner (D-Va.) has previously proposed a "Cash for Clunkers"-type program to pay hospitals to update the cybersecurity of their old medical devices, but it was "never seriously pursued," Warner spokesperson Rachel Cohen said. Riggi said such a program might make sense, depending on how it's implemented.
Weaknesses in the system are widespread and often don't occur to policymakers immediately. Even something as prosaic as a heating and air conditioning system can, if connected to a hospital's internet network, be hacked and allow the institution to be breached.
But erecting more defenses requires more people and resources — which often aren't available. In 2017, Woods and Corman assisted on an HHS report surveying the digital readiness of the health care sector. As part of their research, they found a slice of wealthier hospitals had the information technology staff and resources to defend their systems — but the vast majority had no dedicated security staff. Corman calls them "target-rich but cyber-poor."
"The desire is there. They understand the importance," Riggi said. "The issue is the resources."
HHS has proposed requiring minimum cyberdefenses for hospitals to participate in Medicare, a vital source of revenue for the entire industry. But Riggi says the AHA won't support it.
"We oppose unfunded mandates and oppose the use of such a harsh penalty," he said.
In a little more than two years as CEO of a small hospital in Wyoming, Dave Ryerse has witnessed firsthand the worsening financial problems eroding rural hospitals nationwide.
In 2022, Ryerse's South Lincoln Medical Center was forced to shutter its operating room because it didn't have the staff to run it 24 hours a day. Soon after, the obstetrics unit closed.
Ryerse said the publicly owned facility's revenue from providing care has fallen short of operating expenses for at least the past eight years, driving tough decisions to cut services in hopes of keeping the facility open in Kemmerer, a town of about 2,400 in southwestern Wyoming.
South Lincoln's financial woes aren't unique, and the risk of hospital closures is an immediate threat to many small communities. "Those cities dry out," Ryerse said. "There's a huge sense of urgency to make sure that we can maintain and really eventually thrive in this area."
A recently released report from the health analytics and consulting firm Chartis paints a clear picture of the grim reality Ryerse and other small-hospital managers face. In its financial analysis, the firm concluded that half of rural hospitals lost money in the past year, up from 43% the previous year. It also identified 418 rural hospitals across the U.S. that are "vulnerable to closure."
Mark Holmes, director of the Cecil G. Sheps Center for Health Services Research at the University of North Carolina, said the report's findings weren't a surprise, since the financial nosedive it depicted has been a concern of researchers and rural health advocates for decades.
The report noted that small-town hospitals in states that expanded Medicaid eligibility have fared better financially than those in states that didn't.
Leaders in Montana, whose population is nearly half rural, credit Medicaid expansion as the reason their hospitals have largely avoided the financial crisis depicted by the report despite escalating costs, workforce shortages, and growing administrative burden.
"Montana's expansion of Medicaid coverage to low-income adults nearly 10 years ago has cut in half the percentage of Montanans without insurance, increased access to care and preserved services in rural communities, and reduced the burden of uncompensated care shouldered by hospitals by nearly 50%," said Katy Mack, vice president of communications for the Montana Hospital Association.
Not one hospital has closed in the state since 2015, she added.
Hospitals elsewhere haven't fared so well.
Michael Topchik, national leader for the Chartis Center for Rural Health and an author of the study, said he expects next year's update on the report will show rural hospital finances continuing to deteriorate.
"In health care and in many industries, we say, 'No margin, no mission,'" he said, referring to the difference between income and expenses. Rural hospitals "are all mission-driven organizations that simply don't have the margin to reinvest in themselves or their communities because of deteriorating margins. I'm very, very concerned for their future."
People living in rural America are older, sicker, and poorer than their urban and suburban counterparts. Yet, they often live in places where many health care services aren't available, including primary care. The shorter life expectancies in these communities are connected to the lack of success of their health facilities, said Alan Morgan, CEO of the National Rural Health Association, a nonprofit advocacy group.
"We're really talking about the future of rural here," Morgan said.
Like South Lincoln, other hospitals still operating are likely cutting services. According to Chartis, nearly a quarter of rural hospitals have closed their obstetrics units and 382 have stopped providing chemotherapy.
Halting services has far-reaching effects on the health of the communities the hospitals and their providers serve.
While people in rural America are more likely to die of cancer than people in urban areas, providing specialty cancer treatment also helps ensure that older adults can stay in their communities. Similarly, obstetrics care helps attract and keep young families.
Whittling services because of financial and staffing problems is causing "death by a thousand cuts," said Topchik, adding that hospital leaders face choices between keeping the lights on, paying their staff, and serving their communities.
The Chartis report noted that the financial problems are driving hospitals to sell to or otherwise join larger health systems; it said nearly 60% of rural hospitals are now affiliated with large systems. South Lincoln in Wyoming, for example, has a clinical affiliation with Utah-based Intermountain Health, which lets the facility offer access to providers outside the state.
In recent years, rural hospitals have faced many added financial pressures, according to Chartis and other researchers. The rapid growth of rural enrollment in Medicare Advantage plans, which do not reimburse hospitals at the same rate as traditional Medicare, has had a particularly profound effect.
Topchik predicted sustainability for rural health facilities will ultimately require greater investment from Congress.
In 1997, Congress responded to a rural hospital crisis by creating the "Critical Access Hospital" designation, meant to alleviate financial burdens rural hospitals face and help keep health services available by giving facilities cost-based reimbursement rates from Medicare and in some states Medicaid.
But these critical access hospitals are still struggling, including South Lincoln.
In 2021, Congress established a new designation, "Rural Emergency Hospital," which allows hospitals to cut most inpatient services but continue running outpatient care. The newer designation, with its accompanying financial incentives, has kept some smaller rural hospitals from closing, but Morgan said those conversions still mean a loss of services.
"It's a good thing that now we keep the emergency room care, but I think it masks the fact that 28 communities lost inpatient care just last year alone," he said. "I'm afraid that this hospital closure crisis is now going to run under the radar."
"It ends up costing local and state governments more, ultimately, and costs the federal government more, in dollars for health care treatment," Morgan said. "It's just bad public policy. And bad policy for the local communities."
If you went 'anywhere in the world,' you could get a prescription filled for 40% to 60% less than it costs in the U.S. — President Joe Biden, Feb. 22, 2024.
This article was published on Wednesday, March 6, 2024 in KFF Health News.
It's well documented that Americans pay high prices for healthcare. But do they pay double or more for prescriptions compared with the rest of the world? President Joe Biden said they did.
"If I put you on Air Force One with me, and you have a prescription — no matter what it's for, minor or major — and I flew you to Toronto or flew to London or flew you to Brazil or flew you anywhere in the world, I can get you that prescription filled for somewhere between 40 to 60% less than it costs here," Biden said Feb. 22 at a campaign reception in California.
He followed up by touting provisions in the 2022 Inflation Reduction Act to lower drug prices, including capping insulin at $35 a month for Medicare enrollees and limiting older Americans' out-of-pocket prescription spending to $2,000 a year starting in 2025. The law also authorized Medicare to negotiate prices directly with drug companies for 10 prescription drugs, a list that will expand over time.
Research has consistently found that, overall, U.S. prescription drug prices are significantly higher, sometimes two to four times as high, compared with prices in other high-income industrialized countries. Unbranded generic drugs are an exception and are typically cheaper in the U.S. compared with other countries. (Branded generics, a different category, are close to breaking even with other countries.)
However, such factors as country-specific pricing, confidential rebates, and other discounts can obscure actual prices, making comparisons harder.
"The available evidence suggests that the U.S., on average, has higher prices for prescription drugs, and that's particularly true for brand-name drugs," said Cynthia Cox, director of the Peterson-KFF Health System Tracker, which tracks trends and issues affecting U.S. healthcare system performance. "Americans also have relatively high out-of-pocket spending on prescription drugs, compared to people in similarly large and wealthy nations."
Andrew Mulcahy, a senior health economist at Rand Corp., a nonpartisan research organization, agreed that Biden's overall sentiment is on target but ignores some complexities.
He said price comparisons his team has conducted reflect the amounts wholesalers pay manufacturers for their drugs, which can differ sharply from prices consumers and their drug plans pay.
"In many of those other countries, [patients] pay nothing," Mulcahy said. "So I think that's part of the complication here when we talk about prices; there are so many different drugs, prices, and systems at work."
What International Drug Pricing Comparisons Show
A 2024 Rand study that Mulcahy led found that, across all drugs, U.S. prices were 2.78 times as high as prices in 33 other countries, based on 2022 data. The report evaluated most countries in the Organization for Economic Co-operation and Development, or OECD, a group of 38 advanced, industrialized nations.
The gap was largest for brand-name drugs, the study found, with U.S. prices averaging 4.22 times as high as those in the studied nations. After adjusting for manufacturer-funded rebates, U.S. prices for brand-name drugs remained more than triple those in other countries.
The U.S. pays less for one prescription category: unbranded, generic drugs, which are about 33% less than in other studied countries. These types of drugs account for about 90% of filled prescriptions in the U.S., yet make up only one-fifth of overall prescription spending.
"The analysis used manufacturer gross prices for drugs because net prices — the amounts ultimately retained by manufacturers after negotiated rebates and other discounts are applied — are not systematically available," a news release about the report said.
People with health insurance pay prices that include both markups and discounts negotiated with insurers. Uninsured people may pay a pharmacy's "usual and customary" price — which tends to be higher than net prices paid by others — or a lower amount using a manufacturer discount program. But many of these adjustments are confidential, making it hard to quantify how they affect net prices.
In 2021, the Government Accountability Office released an analysis of prices of 20 brand-name drugs in the U.S., Canada, Australia, and France. The study found that retail prices were more than two to four times as high as in the U.S.
Like Rand, the agency adjusted for rebates and other price concessions for its U.S. estimate, but the other countries' estimates reflected gross prices without potential discounts.
"As a result, the actual differences between U.S. prices and those of the other countries were likely larger than GAO estimates," the report said.
Another analysis by the Peterson-KFF Health System Tracker that Cox co-authored compared the prices of seven brand-name drugs in the U.S., Germany, the Netherlands, and the United Kingdom, and found that some U.S. prices were two to four times as high. For unbranded, generic drugs, the price gaps were smaller.
"Despite the fact that the U.S. pays less for generic drugs and Americans appear to use more generic drugs than people in other countries, this did not offset the higher prices paid for brand-name drugs," Cox said.
The Peterson-KFF report, using 2019 OECD data, found that the U.S. spent about $1,126 per person on prescription medicines, higher than any peer nation, with comparable countries spending $552. This includes spending by insurers and out-of-pocket consumer costs.
"Private and public insurance programs cover a similar share of prescription medicine spending in the U.S. compared to peer nations," the report noted. "However, the steep costs in the U.S. still contribute to high U.S. healthcare spending and are passed on to Americans in the form of higher premiums and taxpayer-funded public programs."
Why Is the U.S. Such an Outlier on Drug Pricing?
The U.S. has much more limited price negotiation with drug manufacturers; other countries often rely on a single regulatory body to determine whether prices are acceptable and negotiate accordingly. Many nations conduct public cost-benefit analyses on new drugs, comparing them with others on the market. If those studies find the cost is too high, or the health benefit too low, they'll reject the drug application. Some countries also set pricing controls
In the U.S., negotiations involve smaller government programs and thousands of separate private health plans, lowering the bargaining power.
"It's complicated. Everything in healthcare costs more here, not just [prescriptions]," said Joseph Antos, a senior fellow at the American Enterprise Institute, a conservative-leaning think tank, in an email interview. Although the government's new Medicare drug negotiation is the United States' first attempt to set drug prices, Antos noted that U.S. drug price negotiation still doesn't operate as price-setting for prescriptions in Europe does because it's limited to a few drugs and doesn't apply to Medicaid or private insurance.
Drug patents and exclusivity is another factor keeping U.S. drug prices higher, experts said, as U.S. pharmaceutical companies have amassed patents to prevent generic competitors from bringing cheaper versions to market.
Drug companies have also argued that high prices reflect research and development costs. Without higher consumer prices to offset research costs, the companies say, new medicines wouldn't be discovered or brought to market. But recent studies haven't supported that.
One 2023 study found that from 1999 to 2018, the world's largest 15 biopharmaceutical companies spent more on selling and general and administrative activities, which include marketing, than on research and development. The study also said most new medicines developed during this period offered little to no clinical benefit over existing treatments.
Our Ruling
Biden said, if you went "anywhere in the world," you could get a prescription filled for 40% to 60% less than it costs in the U.S.
He exaggerated by saying "anywhere in the world," but for comparable high-income, industrialized countries, he's mostly on target.
Research has consistently shown that Americans pay significantly higher prices overall for prescription medication, averaging between two times to four times as high, depending on the study. The U.S. pays less for unbranded, generic drugs, but those lower prices don't offset the higher prices paid for brand-name drugs, researchers said.
Factors including country-specific pricing, confidential rebates. and other discounts also obscure true consumer prices, making comparisons difficult.
Biden's statement is accurate but needs clarification and additional information. We rate it Mostly True.
PolitiFact copy chief Matthew Crowley contributed to this report.
A Maryland firm that oversees the nation's largest independent network of primary care medical practices is facing a whistleblower lawsuit alleging it cheated Medicare out of millions of dollars using billing software "rigged" to make patients appear sicker than they were.
The civil suit alleges that Aledade Inc.'s billing apps and other software and guidance provided to doctors improperly boosted revenues by adding overstated medical diagnoses to patients' electronic medical records.
"Aledade did whatever it took to make patients appear sicker than they were," according to the suit.
For example, the suit alleges that Aledade "conflated" anxiety into depression, which could boost payments by $3,300 a year per patient. And Aledade decided that patients over 65 years old who said they had more than one drink per day had substance use issues, which could bring in $3,680 extra per patient, the suit says.
The whistleblower case was filed by Khushwinder Singh in federal court in Seattle in 2021 but remained under seal until January of this year. Singh, a "senior medical director of risk and wellness product" at Aledade from January 2021 through May 2021, alleges the company fired him after he objected to its "fraudulent course of conduct," according to the suit. He declined to comment on the suit.
The case is pending and Aledade has yet to file a legal response in court. Julie Bataille, Aledade's senior vice president for communications, denied the allegations, saying in an interview that "the whole case is totally baseless and meritless."
Based in Bethesda, Maryland, Aledade helps manage independent primary care clinics and medical offices in more than 40 states, serving some 2 million people.
Aledade is one of hundreds of groups known as accountable care organizations. ACOs enjoy strong support from federal health officials who hope they can keep people healthier and achieve measurable cost savings.
Aledade was co-founded in 2014 by Farzad Mostashari, a former health information technology chief in the Obama administration, and has welcomed other ex-government health figures into its ranks. In June 2023, President Joe Biden appointed Mandy Cohen, then executive vice president at Aledade, to head the Centers for Disease Control and Prevention in Atlanta.
Aledade has grown rapidly behind hundreds of millions of dollars in venture capital financing and was valued at $3.5 billion in 2023.
Mostashari, Aledade's chief executive officer, declined to be interviewed on the record.
"As this is an active legal matter, we will not respond to individual allegations in the complaint," Aledade said in a statement to KFF Health News. "We remain focused on our top priority of delivering high-quality, value-based care with our physician partners and will defend ourselves vigorously if needed in a court of law."
The lawsuit also names as defendants 19 independent physician practices, many in small cities in Delaware, Kansas, Louisiana, North Carolina, Pennsylvania, and West Virginia. According to the suit, the doctors knowingly used Aledade software to trigger illegal billings, a practice known in the medical industry as "upcoding." None has filed an answer in court.
More than two dozen whistleblower lawsuits, some dating back more than a decade, have accused Medicare health plans of overcharging the government by billing for medical conditions not supported by patient medical records. These cases have resulted in hundreds of millions of dollars in penalties. In September 2023, Cigna agreed to pay $37 million to settle one such case, for instance.
But the whistleblower suit filed against Aledade appears to be the first to allege upcoding within accountable care organizations, which describe part of their mission as foiling wasteful spending. ACOs including Aledade made headlines recently for helping to expose an alleged massive Medicare fraud involving urinary catheters, for instance.
Finding the 'Gravy'
Singh's suit targets Aledade's use of coding software and guidance to medical practices that joined its network. Some doctors treated patients on standard Medicare through the ACO networks, while others cared for seniors enrolled in Medicare Advantage plans, according to the suit.
Medicare Advantage is a privately run alternative to standard Medicare that has surged in popularity and now cares for more than 30 million people. Aledade has sought to expand its services to Medicare Advantage enrollees.
The lawsuit alleges Aledade encouraged doctors to tack on suspect medical diagnoses that paid extra money. Aledade called it finding "the gravy sitting in the [patient's] chart," according to the suit.
The company "instructed" providers to diagnose diabetes with complications, "even if the patient's diabetes was under control or the complicating factor no longer existed," according to the suit.
Some medical practices in Delaware, North Carolina, and West Virginia billed the inflated code for more than 90% of their Medicare Advantage patients with diabetes, according to the suit.
The lawsuit also alleges that Aledade "rigged" the software to change a diagnosis of overweight to "morbid obesity," which could pay about $2,500 more per patient. Some providers coded morbid obesity for patients on traditional Medicare at 10 times the national average, according to the suit.
"This fraudulent coding guidance was known as ‘Aledade gospel,'" according to the suit, and following it "paid dividends in the form of millions of dollars in increased revenue."
These tactics "usurped" the clinical judgment of doctors, according to the suit.
'No Diagnosis Left Behind'
In its statement to KFF Health News, Aledade said its software offers doctors a range of data and guidance that helps them evaluate and treat patients.
"Aledade's independent physicians remain solely responsible for all medical decision-making for their patients," the statement read.
The company said it will "continue to advocate for changes to improve Medicare's risk adjustment process to promote accuracy while also reducing unnecessary administrative burdens."
In a message to employees and partner practices sent on Feb. 29, Mostashari noted that the Justice Department had declined to take over the False Claims Act case.
"We recently learned that the federal government has declined to join the case U.S. ex rel. Khushwinder Singh v. Aledade, Inc. et al. That's good news, and a decision we wholeheartedly applaud given the baseless allegations about improper coding practices and wrongful termination brought by a former Aledade employee three years ago. We do not yet know how the full legal situation will play out but will defend ourselves vigorously if needed in a court of law," the statement said.
The Justice Department advised the Seattle court on Jan. 9 that it would not intervene in the case "at this time," which prompted an order to unseal it, court records show. Under the false claims law, whistleblowers can proceed with the case on their own. The Justice Department does not state a reason for declining a case but has said in other court cases that doing so has no bearing on its merits.
Singh argues in his complaint that many "unsupported" diagnosis codes were added during annual "wellness visits," and that they did not result in the patients receiving any additional medical care.
Aledade maintained Slack channels in which doctors could discuss the financial incentives for adding higher-paying diagnostic codes, according to the suit.
The company also closely monitored how doctors coded as part of an initiative dubbed "no diagnosis left behind," according to the suit.
President Joe Biden is counting on outrage over abortion restrictions to help drive turnout for his reelection. Former President Donald Trump is promising to take another swing at repealing Obamacare.
But around America's kitchen tables, those are hardly the only health topics voters want to hear about in the 2024 campaigns. A new KFF tracking poll shows that healthcare tops the list of basic expenses Americans worry about — more than gas, food, and rent. Nearly 3 in 4 adults — and majorities of both parties — say they're concerned about paying for unexpected medical bills and other health costs.
"Absolutely healthcare is something on my mind," Rob Werner, 64, of Concord, New Hampshire, said in an interview at a local coffee shop in January. He's a Biden supporter and said he wants to make sure the Affordable Care Act, also known as Obamacare, is retained and that there's more of an effort to control healthcare costs.
The presidential election is likely to turn on the simple question of whether Americans want Trump back in the White House. (Nikki Haley, the former South Carolina governor and U.S. ambassador to the United Nations, remained in the race for the Republican nomination ahead of Super Tuesday, though she had lost the first four primary contests.) And neither major party is basing their campaigns on healthcare promises.
But in the KFF poll, 80% of adults said they think it's "very important" to hear presidential candidates talk about what they'd do to address healthcare costs — a subject congressional and state-level candidates can also expect to address.
"People are most concerned about out-of-pocket expenses for healthcare, and rightly so," said Andrea Ducas, vice president of health policy at the Center for American Progress, a Washington, D.C.-based progressive think tank.
Here's a look at the major healthcare issues that could help determine who wins in November.
Abortion
Less than two years after the Supreme Court overturned the constitutional right to an abortion, it is shaping up to be the biggest health issue in this election.
That was also the case in the 2022 midterm elections, when many voters rallied behind candidates who supported abortion rights and bolstered Democrats to an unexpectedly strong showing. Since the Supreme Court's decision, voters in six states — including Kansas, Kentucky, and Ohio, where Republicans control the legislatures — have approved state constitutional amendments protecting abortion access.
Polls show that abortion is a key issue to some voters, said Robert Blendon, a public opinion researcher and professor emeritus at the Harvard T.H. Chan School of Public Health. He said up to 30% across the board see it as a "personal" issue, rather than policy — and most of those support abortion rights.
"That's a lot of voters, if they show up and vote," Blendon said.
Proposals to further protect — or restrict — abortion access could drive voter turnout. Advocates are working to put abortion-related measures on the ballot in such states as Arizona, Florida, Missouri, and South Dakota this November. A push in Washington toward a nationwide abortion policy could also draw more voters to the polls, Blendon said.
A surprise ruling by the Alabama Supreme Court in February that frozen embryos are children could also shake up the election. It's an issue that divides even the anti-abortion community, with some who believe that a fertilized egg is a unique new person deserving of full legal rights and protections, and others believing that discarding unused embryos as part of the in vitro fertilization process is a morally acceptable way for couples to have children.
Pricey Prescriptions
Drug costs regularly rank high among voters' concerns.
In the latest tracking poll, more than half — 55% — said they were very worried about being able to afford prescription drugs.
Biden has tried to address the price of drugs, though his efforts haven't registered with many voters. While its name doesn't suggest landmark health policy, the Inflation Reduction Act, or IRA, which the president signed in August 2022, included a provision allowing Medicare to negotiate prices for some of the most expensive drugs. It also capped total out-of-pocket spending for prescription drugs for all Medicare patients, while capping the price of insulin for those with diabetes at $35 a month — a limit some drugmakers have extended to patients with other kinds of insurance.
Drugmakers are fighting the Medicare price negotiation provision in court. Republicans have promised to repeal the IRA, arguing that forcing drugmakers to negotiate lower prices on drugs for Medicare beneficiaries would amount to price controls and stifle innovation. The party has offered no specific alternative, with the GOP-led House focused primarily on targeting pharmacy benefit managers, the arbitrators who control most Americans' insurance coverage for medicines.
Costs of Coverage
Healthcare costs continue to rise for many Americans. The cost of employer-sponsored health plans have hit new highs in the past few months, raising costs for employers and workers alike. Experts have attributed the increase to high demand and expensive prices for certain drugs and treatments, notably weight loss drugs, as well as to medical inflation.
Meanwhile, the ACA is popular. The KFF poll found that more adults want to see the program expanded than scaled back. And a record 21.3 million people signed up for coverage in 2024, about 5 million of them new customers.
Enrollment in Republican-dominated states has grown fastest, with year-over-year increases of 80% in West Virginia, nearly 76% in Louisiana, and 62% in Ohio, according to the Centers for Medicare & Medicaid Services.
Public support for Obamacare and record enrollment in its coverage have made it politically perilous for Republicans to pursue the law's repeal, especially without a robust alternative. That hasn't stopped Trump from raising that prospect on the campaign trail, though it's hard to find any other Republican candidate willing to step out on the same limb.
"The more he talks about it, the more other candidates have to start answering for it," said Jarrett Lewis, a partner at Public Opinion Strategies, a GOP polling firm.
"Will a conversation about repeal-and-replace resonate with suburban women in Maricopa County?" he said, referring to the populous county in Arizona known for being a political bellwether. "I would steer clear of that if I was a candidate."
Biden and his campaign have pounced on Trump's talk of repeal. The president has said he wants to make permanent the enhanced premium subsidies he signed into law during the pandemic that are credited with helping to increase enrollment.
Republican advisers generally recommend that their candidates promote "a market-based system that has the consumer much more engaged," said Lewis, citing short-term insurance plans as an example. "In the minds of Republicans, there is a pool of people that this would benefit. It may not be beneficial for everyone, but attractive to some."
Biden and his allies have criticized short-term insurance plans — which Trump made more widely available — as "junk insurance" that doesn't cover care for serious conditions or illnesses.
Entitlements Are Off-Limits
Both Medicaid and Medicare, the government health insurance programs that cover tens of millions of low-income, disabled, and older people, remain broadly popular with voters, said the Democratic pollster Celinda Lake. That makes it unlikely either party would pursue a platform that includes outright cuts to entitlements. But accusing an opponent of wanting to slash Medicare is a common, and often effective, campaign move.
Although Trump has said he wouldn't cut Medicare spending, Democrats will likely seek to associate him with other Republicans who support constraining the program's costs. Polls show that most voters oppose reducing any Medicare benefits, including by raising Medicare's eligibility age from 65. However, raising taxes on people making more than $400,000 a year to shore up Medicare's finances is one idea that won strong backing in a recent poll by The Associated Press and NORC Center for Public Affairs Research.
Brian Blase, a former Trump health adviser and the president of Paragon Health Institute, said Republicans, if they win more control of the federal government, should seek to lower spending on Medicare Advantage — through which commercial insurers provide benefits — to build on the program's efficiencies and ensure it costs taxpayers less than the traditional program.
So far, though, Republicans, including Trump, have expressed little interest in such a plan. Some of them are clear-eyed about the perils of running on changing Medicare, which cost $829 billion in 2021 and is projected to consume nearly 18% of the federal budget by 2032.
"It's difficult to have a frank conversation with voters about the future of the Medicare program," said Lewis, the GOP pollster. "More often than not, it backfires. That conversation will have to happen right after a major election."
Republicans cast addiction as largely a criminal matter, associating it closely with the migration crisis at the U.S. southern border that they blame on Biden. Democrats have sought more funding for treatment and prevention of substance use disorders.
"This affects the family, the neighborhood," said Blendon, the public opinion researcher.
Billions of dollars have begun to flow to states and local governments from legal settlements with opioid manufacturers and retailers, raising questions about how to best spend that money. But it isn't clear that the crisis, outside the context of immigration, will emerge as a campaign issue.
Early in the morning of Feb. 21, Change Healthcare, a company unknown to most Americans that plays a huge role in the U.S. health system, issued a brief statement saying some of its applications were "currently unavailable."
By the afternoon, the company described the situation as a "cyber security" problem.
Since then, it has rapidly blossomed into a crisis.
The company, recently purchased by insurance giant UnitedHealth Group, reportedly suffered a cyberattack. The impact is wide and expected to grow. Change Healthcare's business is maintaining health care's pipelines — payments, requests for insurers to authorize care, and much more. Those pipes handle a big load: Change says on its website, "Our cloud-based network supports 14 billion clinical, financial, and operational transactions annually."
Initial media reports have focused on the impact on pharmacies, but techies say that's understating the issue. The American Hospital Association says many of its members aren't getting paid and that doctors can't check whether patients have coverage for care.
But even that's just a slice of the emergency: CommonWell, an institution that helps health providers share medical records, information critical to care, also relies on Change technology. The system contained records on 208 million individuals as of July 2023. Courtney Baker, CommonWell marketing manager, said the network "has been disabled out of an abundance of caution."
"It's small ripple pools that will get bigger and bigger over time, if it doesn't get solved," Saad Chaudhry, chief digital and information officer at Luminis Health, a hospital system in Maryland, told KFF Health News.
Here's what to know about the hack:
Who Did It?
Media reports are fingering ALPHV, a notorious ransomware group also known as Blackcat, which has become the target of numerous law enforcement agencies worldwide. While UnitedHealth Group has said it is a "suspected nation-state associated" attack, some outside analysts dispute the linkage. The gang has previously been blamed for hacking casino companies MGM and Caesars, among many other targets.
The Department of Justice alleged in December, before the Change hack, that the group's victims had already paid it hundreds of millions of dollars in ransoms.
Is This a New Problem?
Absolutely not. A study published in JAMA Health Forum in December 2022 found that the annual number of ransomware attacks against hospitals and other providers doubled from 2016 to 2021.
"It's more of the same, man," said Aaron Miri, the chief digital and information officer at Baptist Health in Jacksonville, Florida.
Because the assaults disable the target's computer systems, providers have to shift to paper, slowing them down and making them vulnerable to missing information.
Further, a study published in May 2023 in JAMA Network Open examining the effects of an attack on a health system found that waiting times, median length of stay, and incidents of patients leaving against medical advice all increased — at neighboring emergency departments. The results, the authors wrote, mean cyberattacks "should be considered a regional disaster."
Attacks have devastated rural hospitals, Miri said. And wherever health care providers are hit, patient safety issues follow.
What Does It Mean for Patients?
Year after year, more Americans' health data is breached. That exposes people to identity theft and medical error.
Care can also suffer. For example, a 2017 attack, dubbed "NotPetya," forced a rural West Virginia hospital to reboot its operations and hit pharma company Merck so hard it wasn't able to fulfill production targets for an HPV vaccine.
Because of the Change Healthcare attack, some patients may be routed to new pharmacies less affected by billing problems. Patients' bills may also be delayed, industry executives said. At some point, many patients are likely to receive notices their data was breached. Depending on the exact data that has been pilfered, those patients may be at risk for identity theft, Chaudhry said. Companies often offer free credit monitoring services in those situations.
"Patients are dying because of this," Miri said. Indeed, an October preprint from researchers at the University of Minnesota found a nearly 21% increase in mortality for patients in a ransomware-stricken hospital.
How Did It Happen?
The Health Information Sharing and Analysis Center, an industry coordinating group that disseminates intel on attacks, has told its members that flaws in an application called ConnectWise ScreenConnect are to blame. Exact details couldn't be confirmed.
It's a tool tech support teams use to remotely troubleshoot computer problems, and the attack is "apparently fairly trivial to execute," H-ISAC warned members. The group said it expects additional victims and advised its members to update their technology. When the attack first hit, the AHA recommended its members disconnect from systems both at Change and its corporate parent, UnitedHealth's Optum unit. That would affect services ranging from claims approvals to reference tools.
Millions of Americans see physicians and other practitioners employed by UnitedHealth and are covered by the company's insurance plans.
UnitedHealth has said only Change's systems are affected and that it's safe for hospitals to use other digital services provided by UnitedHealth and Optum, which include claims filing and processing systems.
But not many chief information officers "are jumping to reconnect," Chaudhry said. "It's an uneasy feeling."
Miri says Baptist is using the conglomerate's technology and that he trusts UnitedHealth's word that it's safe.
Where's the Federal Government?
Neither executive was sanguine about the future of cybersecurity in health care. "It's going to get worse," Chaudhry said.
"It's a shame the feds aren't helping more," Miri said. "You'd think if our nuclear infrastructure were under attack the feds would respond with more gusto."
While the departments of Justice and State have targeted the ALPHV group, the government has stayed behind the scenes more in the aftermath of this attack. Chaudhry said the FBI and the Department of Health and Human Services have been attending calls organized by the AHA to brief members about the situation.
Miri said rural hospitals in particular could use more funding for security and that agencies like the Food and Drug Administration should have mandatory standards for cybersecurity.
There's some recognition among officials that improvements need to be made.
"This latest attack is just more evidence that the status quo isn't working and we have to take steps to shore up cybersecurity in the health industry," said Sen. Mark Warner (D-Va.), the chair of the Senate Select Committee on Intelligence and a longtime advocate for stronger cybersecurity, in a statement to KFF Health News.
Debra Prichard was a retired factory worker who was careful with her money, including what she spent on medical care, said her daughter, Alicia Wieberg. "She was the kind of person who didn't go to the doctor for anything."
That ended last year, when the rural Tennessee resident suffered a devastating stroke and several aneurysms. She twice was rushed from her local hospital to Vanderbilt University Medical Center in Nashville, 79 miles away, where she was treated by brain specialists. She died Oct. 31 at age 70.
One of Prichard's trips to the Nashville hospital was via helicopter ambulance. Wieberg said she had heard such flights could be pricey, but she didn't realize how extraordinary the charge would be — or how her mother's skimping on Medicare coverage could leave the family on the hook.
Then the bill came.
The Patient: Debra Prichard, who had Medicare Part A insurance before she died.
Medical Service: An air-ambulance flight to Vanderbilt University Medical Center.
Service Provider: Med-Trans Corp., a medical transportation service that is part of Global Medical Response, an industry giant backed by private equity investors. The larger company operates in all 50 states and says it has a total of 498 helicopters and airplanes.
Total Bill: $81,739.40, none of which was covered by insurance.
What Gives: Sky-high bills from air-ambulance providers have sparked complaints and federal action in recent years.
For patients with private insurance coverage, the No Surprises Act, which went into effect in 2022, bars air-ambulance companies from billing people more than they would pay if the service were considered "in-network" with their health insurers. For patients with public coverage, such as Medicare or Medicaid, the government sets payment rates at much lower levels than the companies charge.
But Prichard had opted out of the portion of Medicare that covers ambulance services.
That meant when the bill arrived less than two weeks after her death, her estate was expected to pay the full air-ambulance fee of nearly $82,000. The main assets are 12 acres of land and her home in Decherd, Tennessee, where she lived for 48 years and raised two children. The bill for a single helicopter ride could eat up roughly a third of the estate's value, said Wieberg, who is executor.
The family's predicament stems from the complicated nature of Medicare coverage.
Prichard was enrolled only in Medicare Part A, which is free to most Americans 65 or older. That section of the federal insurance program covers inpatient care, and it paid most of her hospital bills, her daughter said.
But Prichard declined other Medicare coverage, including Part B, which handles such things as doctor visits, outpatient treatment, and ambulance rides. Her daughter suspects she skipped that coverage to avoid the premiums most recipients pay, which currently are about $175 a month.
Loren Adler, a health economist for the Brookings Institution who studies ambulance bills, estimated the maximum charge that Medicare would have allowed for Prichard's flight would have been less than $10,000 if she'd signed up for Part B. The patient's share of that would have been less than $2,000. Her estate might have owed nothing if she'd also purchased supplemental "Medigap" coverage, as many Medicare members do to cover things like coinsurance, he said.
Nicole Michel, a spokesperson for Global Medical Response, the ambulance provider, agreed with Adler's estimate that Medicare would have limited the charge for the flight to less than $10,000. But she said the federal program's payment rates don't cover the cost of providing air-ambulance services.
"Our patient advocacy team is actively engaged with Ms. Wieberg's attorney to determine if there was any other applicable medical coverage on the date of service that we could bill to," Michel wrote in an email to KFF Health News. "If not, we are fully committed to working with Ms. Wieberg, as we do with all our patients, to find an equitable solution."
The Resolution: In mid-February, Wieberg said the company had not offered to reduce the bill.
Wieberg said she and the attorney handling her mother's estate both contacted the company, seeking a reduction in the bill. She said she also contacted Medicare officials, filled out a form on the No Surprises Act website, and filed a complaint with Tennessee regulators who oversee ambulance services. She said she was notified Feb. 12 that the company filed a legal claim against the estate for the entire amount.
Wieberg said other health care providers, including ground ambulance services and the Vanderbilt hospital, wound up waiving several thousand dollars in unpaid fees for services they provided to Prichard that are normally covered by Medicare Part B.
But as it stands, Prichard's estate owes about $81,740 to the air-ambulance company.
The Takeaway: People who are eligible for Medicare are encouraged to sign up for Part B, unless they have private health insurance through an employer or spouse.
"If someone with Medicare finds that they are having difficulty paying the Medicare Part B premiums, there are resources available to help compare Medicare coverage choices and learn about options to help pay for Medicare costs," Meena Seshamani, director of the federal Center for Medicare, said in an email to KFF Health News.
In Tennessee, that counseling is offered by the State Health Insurance Assistance Program. Its director, Lori Galbreath, told KFF Health News she wishes more seniors would discuss their health coverage options with trained counselors like hers.
"Every Medicare recipient's experience is different," she said. "We can look at their different situations and give them an unbiased view of what their next best steps could be."
Counselors advise that many people with modest incomes enroll in a Medicare Savings Program, which can cover their Part B premiums. In 2023, Tennessee residents could qualify for such assistance if they made less than $1,660 monthly as a single person or $2,239 as a married couple. Many people also could obtain help with other out-of-pocket expenses, such as copays for medical services.
Wieberg, who lives in Missouri, has been preparing the family home for sale.
She said the struggle over her mother's air-ambulance bill makes her wonder why Medicare is split into pieces, with free coverage for inpatient care under Part A, but premiums for coverage of other crucial services under Part B.
"Anybody past the age of 70 is likely going to need both," she said. "And so why make it a decision of what you can afford or not afford, or what you think you're going to use or not use?"
Bill of the Month is a crowdsourced investigation by KFF Health News and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!
Nurse midwife Beverly Maldonado recalls a pregnant woman arriving at Ascension Saint Agnes Hospital in Maryland after her water broke. It was weeks before the baby would have any chance of survival, and the patient's wishes were clear, she recalled: "Why am I staying pregnant then? What's the point?" the patient pleaded.
But the doctors couldn't intervene, she said. The fetus still had a heartbeat and it was a Catholic hospital, subject to the "Ethical and Religious Directives for Catholic Health Care Services" that prohibit or limit procedures like abortion that the church deems "immoral" or "intrinsically evil," according to its interpretation of the Bible.
"I remember asking the doctors. And they were like, ‘Well, the baby still has a heartbeat. We can't do anything,'" said Maldonado, now working as a nurse midwife in California, who asked them: "What do you mean we can't do anything? This baby's not going to survive."
The woman was hospitalized for days before going into labor, Maldonado said, and the baby died.
Ascension declined to comment for this article.
The Catholic Church's directives are often at odds with accepted medical standards, especially in areas of reproductive health, according to physicians and other medical practitioners.
The American College of Obstetricians and Gynecologists' clinical guidelines for managing pre-labor rupture of membranes, in which a patient's water breaks before labor begins, state that women should be offered options, including ending the pregnancy.
Maldonado felt her patient made her wishes clear.
"Under the ideal medical practice, that patient should be helped to obtain an appropriate method of terminating the pregnancy," said Christian Pettker, a professor of obstetrics, gynecology, and reproductive sciences at the Yale School of Medicine, who helped author the guidelines.
He said, "It would be perfectly medically appropriate to do a termination of pregnancy before the cessation of cardiac activity, to avoid the health risks to the pregnant person."
"Patients are being turned away from necessary care," said Jennifer Chin, an OB-GYN at UW Medicine in Seattle, because of the "emphasis on these ethical and religious directives."
They can be a powerful constraint on the care that patients receive at Catholic hospitals, whether emergency treatment when a woman's health is at risk, or access to birth control and abortions.
More and more women are running into barriers to obtaining care as Catholic health systems have aggressively acquired secular hospitals in much of the country. Four of the 10 largest U.S. hospital chains by number of beds are Catholic, according to federal data from the Agency for Healthcare Research and Quality. There are just over 600 Catholic general hospitals nationally and roughly 100 more managed by Catholic chains that place some religious limits on care, a KFF Health News investigation reveals.
Maldonado's experience in Maryland came just months before the Supreme Court's ruling in 2022 to overturn Roe v. Wade, a decision that compounded the impact of Catholic health care restrictions. In its wake, roughly a third of states have banned or severely limited access to abortion, creating a one-two punch for women seeking to prevent pregnancy or to end one. Ironically, some states where Catholic hospitals dominate — such as Washington, Oregon, and Colorado — are now considered medical havens for women in nearby states that have banned abortion.
KFF Health News analyzed state-level birth data to discover that more than half a million babies are born each year in the U.S. in Catholic-run hospitals, including those owned by CommonSpirit Health, Ascension, Trinity Health, and Providence St. Joseph Health. That's 16% of all hospital births each year, with rates in 10 states exceeding 30%. In Washington, half of all babies are born at such hospitals, the highest share in the country.
"We had many instances where people would have to get in their car to drive to us while they were bleeding, or patients who had had their water bags broken for up to five days or even up to a week," said Chin, who has treated patients turned away by Catholic hospitals.
Physicians who turned away patients like that "were going against evidence-based care and going against what they had been taught in medical school and residency," she said, "but felt that they had to provide a certain type of care — or lack of care — just because of the strength of the ethical and religious directives."
Following religious mandates can be dangerous, Chin and other clinicians said.
When a patient has chosen to end a pregnancy after the amniotic sac — or water — has broken, Pettker said, "any delay that might be added to a procedure that is inevitably going to happen places that person at risk of serious, life-threatening complications," including sepsis and organ infection.
Reporters analyzed American Hospital Association data as of August and used Catholic Health Association directories, news reports, government documents, and hospital websites and other materials to determine which hospitals are Catholic or part of Catholic systems, and gathered birth data from state health departments and hospital associations. They interviewed patients, medical providers, academic experts, advocacy organizations, and attorneys, and reviewed hundreds of pages of court and government records and guidance from Catholic health institutions and authorities to understand how the directives affect patient care.
Nationally, nearly 800,000 people have only Catholic or Catholic-affiliated birth hospitals within an hour's drive, according to KFF Health News' analysis. For example, that's true of 1 in 10 North Dakotans. In South Dakota, it's 1 in 20. When care is more than an hour away, academic researchers often define the area as a hospital desert. Pregnant women who must drive farther to a delivery facility are at higher risk of harm to themselves or their fetus, research shows.
Many Americans don't have a choice — non-Catholic hospitals are too far to reach in an emergency or aren't in their insurance networks. Ambulances may take patients to a Catholic facility without giving them a say. Women often don't know that hospitals are affiliated with the Catholic Church or that they restrict reproductive care, academic research suggests.
And, in most of the country, state laws shield at least some hospitals from lawsuits for not performing procedures they object to on religious grounds, leaving little recourse for patients who were harmed because care was withheld. Thirty-five states prevent patients from suing hospitals for not providing abortions, including 25 states where abortion remains broadly legal. About half of those laws don't include exceptions for emergencies, ectopic pregnancies, or miscarriages. Sixteen states prohibit lawsuits against hospitals for refusing to perform sterilization procedures.
"It's hard for the ordinary citizen to understand, ‘Well, what difference does it make if my hospital is bought by this other big health system, as long as it stays open? That's all I care about,'" said Erin Fuse Brown, who is the director of the Center for Law, Health & Society at Georgia State University and an expert in health care consolidation. Catholic directives also ban medical aid in dying for terminally ill patients.
People "may not realize that they're losing access to important services, like reproductive health [and] end-of-life care," she said.
'Our Faith-Based Health Care Ministry'
After the Supreme Court ended the constitutional right to abortion in June 2022, Michigan resident Kalaina Sullivan wanted surgery to permanently prevent pregnancy.
Michigan voters in November that year enshrined the right to abortion under the state constitution, but the state's concentration of Catholic hospitals means people like Sullivan sometimes still struggle to obtain reproductive health care.
Because her doctor worked for the Catholic chain Trinity Health, the nation's fourth-largest hospital system, she had the surgery with a different doctor at North Ottawa Community Health System, an independent hospital near the shores of Lake Michigan.
Less than two months later, that, too, became a Catholic hospital, newly acquired by Trinity.
To mark the transition, Cory Mitchell, who at the time was the mission leader of Trinity Health Muskegon, stood before his new colleagues and offered a blessing.
"The work of your hands is what makes our faith-based health care ministry possible," he said, according to a video of the ceremony Trinity Health provided to KFF Health News. "May these hands continue to bring compassion, compassion and healing, to all those they touch."
Trinity Health declined to answer detailed questions about its merger with North Ottawa Community Health System and the ethical and religious directives. "Our commitment to high-quality, compassionate care means informing our patients of all appropriate care options, and trusting and supporting our physicians to make difficult and medically necessary decisions in the best interest of their patients' health and safety," spokesperson Jennifer Amundson said in an emailed statement. "High-quality, safe care is critical for the women in our communities and in cases where a non-critical service is not available at our facility, the physician will transfer care as appropriate."
Leaders in Catholic-based health systems have hammered home the importance of the church's directives, which are issued by the U.S. Conference of Catholic Bishops, all men, and were first drafted in 1948. The essential view on abortion is as it was in 1948. The last revision, in 2018, added several directives addressing Catholic health institution acquisitions or mergers with non-Catholic ones, including that "whatever comes under control of the Catholic institution — whether by acquisition, governance, or management — must be operated in full accord with the moral teaching of the Catholic Church."
"While many of the faithful in the local church may not be aware of these requirements for Catholic health care, the local bishop certainly is," wrote Sister Doris Gottemoeller, a former board member of the Bon Secours Mercy Health system, in a 2023 Catholic Health Association journal article. "In fact, the bishop should be briefed on a regular basis about the hospital's activities and strategies."
Now, for care at a non-Catholic hospital, Sullivan would need to travel nearly 30 miles.
"I don't see why there's any reason for me to have to follow the rules of their religion and have that be a part of what's going on with my body," she said.
Risks Come With Religion
Nathaniel Hibner, senior director of ethics at the Catholic Health Association, said the ethical and religious directives allow clinicians to provide medically necessary treatments in emergencies. In a pregnancy crisis when a person's life is at risk, "I do not believe that the ERDs should restrict the physician in acting in the way that they see medically indicated."
"Catholic health care is committed to the health of all women and mothers who enter into our facilities," Hibner said.
The directives permit care to cure "a proportionately serious pathological condition of a pregnant woman" even if it would "result in the death of the unborn child." Hibner demurred when asked who defines what that means and when such care is provided, saying, "for the most part, the physician and the patients are the ones that are having a conversation and dialogue with what is supposed to be medically appropriate."
It is common for practitioners at any hospital to consult an ethics board about difficult cases — such as whether a teenager with cancer can decline treatment. At Catholic hospitals, providers must ask a board for permission to perform procedures restricted by the religious directives, clinicians and researchers say. For example, could an abortion be performed if a pregnancy threatened the mother's life?
How and when an ethics consultation occurs depends on the hospital, Hibner said. "That ethics consultation can be initiated by anyone involved in the direct care of that situation — the patient, the surrogate of that patient, the physician, the nurse, the social worker all have the ability to request a consultation," he said. When asked whether a consultation with an ethics board can occur without a request, he said "sometimes it could."
How strictly directives are followed can depend on the hospital and the views of the local bishop.
"If the hospital has made a difficult decision about a critical pregnancy or an end-of-life care situation, the bishop should be the first to know about it," Gottemoeller wrote.
In an interview, Gottemoeller said that even when pregnancy termination decisions are made on sound ethical grounds, not informing the bishop puts him in a bad position and hurts the church. "If there's a possibility of it being misunderstood, or misinterpreted, or criticized," Gottemoeller said, the bishop should understand what happened and why "before the newspapers call him and ask him for an opinion."
"And if he has to say, ‘Well, I think you made a mistake,' well, all right," she said. "But don't let him be blindsided. I mean, we're one church and the bishop has pastoral concern over everything in his diocese."
Katherine Parker Bryden, a nurse midwife in Iowa who works for MercyOne, said she regularly tells pregnant patients that the hospital cannot perform tubal sterilization surgery, to prevent future pregnancies, or refer patients to other hospitals that do. MercyOne is one of the largest health systems in Iowa. Nearly half of general hospitals in the state are Catholic or Catholic-affiliated — the highest share among all states.
The National Catholic Bioethics Center, an ethics authority for Catholic health institutions, has said that referrals for care that go against church teaching would be "immoral."
"As providers, you're put in this kind of moral dilemma," Parker Bryden said. "Am I serving my patients or am I serving the archbishop and the pope?"
In response to questions, MercyOne spokesperson Eve Lederhouse said in an email that its providers "offer care and services that are consistent with the guidelines of a Catholic health system."
Maria Rodriguez, an OB-GYN professor at Oregon Health & Science University, said that as a resident in the early 2000s at a Catholic hospital she was able to secure permission — what she calls a "pope note" — to sterilize some patients with conditions such as gestational diabetes.
Annie Iriye, a retired OB-GYN in Washington state, said that more than a decade ago she sought permission to administer medication to hasten labor for a patient experiencing a second-trimester miscarriage at a Catholic hospital. She said she was told no because the fetus had a heartbeat. The patient took 10 hours to deliver — time that would have been cut by half, Iriye said, had she been able to follow her own medical training and expertise. During that time, she said, the patient developed an infection.
Chin says it's not realistic that the onus be put on patients to avoid Catholic hospitals' care restrictions. Their health insurance may not include other hospitals, "or that's where the ambulance is taking them and they don't really have a say."(Dan DeLong for KFF Health News)
Iriye and Chin were part of an effort by reproductive rights groups and medical organizations that pushed for a state law to protect physicians if they act against Catholic hospital restrictions. The bill, which Washington enacted in 2021, was opposed by the Washington State Hospital Association, whose membership includes multiple large Catholic health systems.
Hibner said Catholic hospitals are committed to instituting systemic changes that improve maternal and child health, including access to primary, prenatal, and postpartum care. "Those are the things that I think rural communities really need support and advocacy for," he said.
Maldonado, the nurse midwife, still thinks of her patient who was forced to stay pregnant with a baby who could not survive. "To feel like she was going to have to fight to have an abortion of a baby that she wanted?" Maldonado said. "It was just horrible."
KFF Health News data editor Holly K. Hacker contributed to this report.
Methodology
By Hannah Recht
KFF Health News identified areas of the country where patients have only Catholic hospital options nearby. The "Ethical and Religious Directives for Catholic Health Care Services" — which are issued by the U.S. Conference of Catholic Bishops, all men — dictate how patients receive reproductive care at Catholic health facilities. In our analysis, we focused on hospitals where babies are born.
We constructed a national database of hospital locations, identified which ones are Catholic or Catholic-affiliated, found how many babies are born at each, and calculated how many people live near those hospitals.
Hospital Universe
We identified hospitals in the 50 states and the District of Columbia using the American Hospital Association database from August 2023. We removed hospitals that had closed or were listed more than once, added hospitals that were not included, and corrected inaccurate or out-of-date information about ownership, primary service type, and location. We excluded federal hospitals, such as military and Indian Health Service facilities, because they are not open to everyone.
Catholic Affiliation
To identify Catholic hospitals, we used the Catholic Health Association's member directory. We also counted as Catholic a handful of hospitals that are not part of this voluntary membership group but explicitly follow the Ethical and Religious Directives, according to their mission statements, websites, or promotional materials.
We also tracked Catholic-affiliated hospitals: those that are owned or managed by a Catholic health system, such as CommonSpirit Health or Trinity Health, and are influenced by the religious directives but do not necessarily adhere to them in full. To identify Catholic-affiliated hospitals, we consulted health system and hospital websites, government documents, and news reports.
We combined both Catholic and Catholic-affiliated hospitals for analysis, in line with previous research about the influence of Catholic directives on health care.
Births
To determine the share of births that occur at Catholic or Catholic-affiliated hospitals, we gathered the latest annual number of births by hospital from state health departments. Where recent data was not publicly available, we submitted records requests for the most recent complete year available.
The resulting data covered births in 2022 for nine states and D.C., births in 2021 for 23 states, births in 2020 for nine states, and births in 2019 for one state. We used data from the 2021 American Hospital Association survey, the latest available at the time of analysis, for the eight remaining states that did not provide birth data in response to our requests. A small number of hospitals have recently opened or closed labor and delivery units. The vast majority of the rest record about the same number of births each year. This means that the results would not be substantially different if data from 2023 were available.
We used this data to calculate the number of babies born in Catholic and Catholic-affiliated hospitals, as well as non-Catholic hospitals by state and nationally.
We used hospitals' Catholic status as of August 2023 in this analysis. In 10 cases where the hospital had already closed, we used Catholic status at the time of the closure.
Because our analysis focuses on hospital care, we excluded births that occurred in non-hospital settings, such as homes and stand-alone birth centers, as well as federal hospitals.
Several states suppressed data from hospitals with fewer than 10 births due to privacy restrictions. Because those numbers were so low, this suppression had a negligible effect on state-level totals.
Drive-Time Analysis
We obtained hospitals' geographic coordinates based on addresses in the AHA dataset using HERE's geocoder. For addresses that could not be automatically geocoded with a high degree of certainty, we verified coordinates manually using hospital websites and Google Maps.
We calculated the areas within 30, 60, and 90 minutes of travel time from each birth hospital that was open in August 2023 using tools from HERE. We included only hospitals that had 10 or more births as a proxy for hospitals that have labor and delivery units, or where births regularly occur.
We combined the drive-time areas to see which areas of the United States have only Catholic or Catholic-affiliated birth hospitals nearby, both Catholic and non-Catholic, non-Catholic only, or none. We then joined these areas to the 2021 census block group shapefile from IPUMS NHGIS and removed water bodies using the U.S. Geological Survey's National Hydrography Dataset to calculate the percentage of each census block group that falls within each hospital access category. We calculated the number of people in each area using the 2021 "American Community Survey" block group population totals. For example, if half of a block group's land area had access to only Catholic or Catholic-affiliated hospitals, then half of the population was counted in that category.
For weeks, more than half a million Anthem Blue Cross enrollees who receive healthcare from the University of California were held in suspense. It wasn't clear whether they would have to find new doctors or switch plans as the health system and one of its largest insurance partners struggled to reach agreement on a new contract.
UC Health accused Anthem of not negotiating in good faith, while Anthem leaders retorted that UC Health had demanded too much and rebuffed the insurer's request for administrative efficiencies. In fact, roughly 8 million Anthem members in California were at risk of losing in-network access to UC Health's vast network of prestigious hospitals and medical facilities, which could have left them with much higher out-of-pocket expenses. While not all patients were made aware of the situation, Anthem notified some enrollees they would be reassigned to new primary care doctors if no deal were reached.
But even as the parties announced an eleventh-hour agreement on Feb. 5, industry analysts say the conflict has become part of a trend in which patients are increasingly caught in the crossfire of contract disputes. Amid negotiations over rising labor and equipment costs, it's often patients who are ultimately saddled with higher bills as the health industry continues to consolidate.
"This type of contract dispute is a routine feature of the healthcare system," said Kristof Stremikis, director of market analysis and insight at the California healthcare Foundation. "At the same time, from a patient's perspective, it's an unfortunate feature of our healthcare system because it creates uncertainty and anxiety." (California Healthline is an editorially independent service of the California healthcare Foundation.)
Stremikis noted that as mergers occur in the health industry, patients are left with fewer choices. Any time there are disputes, disruptions are felt more widely. And such fights rarely result in lower costs for consumers long-term across California.
A KFF analysis found widespread evidence that consolidation of health providers leads to higher healthcare prices for private insurance. The same brief from 2020 found some evidence suggesting that large, consolidated insurance companies are able to obtain lower prices from providers, but that has not necessarily led to lower premiums for patients. And a 2022 report from the California Department of healthcare Access and Information found that healthcare costs have grown "at an unsustainable rate," and noted that between 2010 and 2018 "health insurance premiums for job-based coverage increased more than twice the rate of growth for wages." State regulators also found that health plans spent nearly $1.3 billion more on prescription drugs in 2022 than in 2021.
In trying to slow growth, California in 2022 set up an Office of healthcare Affordability, which has proposed a 3% spending growth target for the industry for 2025-2029. But enforcement will start in 2028 at the earliest, using spending data from 2026.
Cathy Jordan, 60, a social worker in Yuba City, California, has been a patient at UC Davis Health for two decades. Jordan was diagnosed at the end of 2021 with aggressive small cell carcinoma, a rare form of cancer. She has undergone surgery, chemotherapy, radiation, and other treatments since then, yet her cancer has returned twice.
"I don't have the luxury of time — my cancer comes back fast," Jordan said.
She is among the group of Anthem-insured patients at UC Health who were at risk of losing access to in-network care there, and when she got a notice from Anthem, she grew alarmed, she said.
Jordan's oncologist, Rebecca Brooks, said in an interview prior to the agreement being reached that it would be "incredibly disruptive" for cancer patients to have to switch providers in the middle of their treatments.
"It's a detriment to their care," said Brooks, director of the gynecologic oncology division at UC Davis Health. "It's going to disrupt treatment and cause worse outcomes."
Jordan said she appreciates that UC Davis Health has a National Cancer Institute comprehensive cancer center designation; the only other cancer center of that caliber in Northern California not part of UC Health is at Stanford University, several hours away in Santa Clara County.
Jordan was worried that she and other UC Health patients would have to compete for treatment elsewhere. She was also uncomfortable with the idea of adjusting to a new setting and routine while undergoing intensive medical treatment.
"Someone needs to say, ‘We need to think about these patients.' Someone needs to step up and say, ‘What's going to be best for our patients?'" Jordan said. "This is my life."
Stremikis said such concerns are ever more urgent as the healthcare industry consolidates. UC San Francisco recently announced it would acquire two struggling hospitals in San Francisco, and it is joining Adventist Health in making a new effort to purchase a bankrupt community hospital in Madera. And UC Irvine recently agreed to buy four hospitals in Southern California.
"There is consolidation vertically up and down the supply chain and horizontally," he explained. "So when there are disputes between these large entities, it has a larger and larger impact because there are fewer choices for patients."
While contract disputes between healthcare providers and insurers are nothing new, there is some evidence that they are increasing, at least in public view. FTI Consulting published data last year that found a steady increase in media coverage of rate negotiations between providers and insurers from 2022 to 2023. In addition to the fight with Anthem, UC Health narrowly avoided a break with Aetna last year by reaching an agreement in April. And regional hospital systems, including Sonoma Valley Hospital and Salinas Valley Health, have been at odds with Anthem within the last few months.
UC and Anthem have now agreed to extend the current contract to April 1 while terms of the new agreement are being finalized. UC Health spokesperson Heather Harper said the rate increases were below the inflation rate.
Anthem spokesperson Michael Bowman said the new contract would allow Anthem members to access care at UC Health for years to come.
"This underscores our mutual commitment to providing Anthem's consumers and employers with access to high quality, affordable care at UC Health," Bowman said in an email.
Last year alone, David Mitchell paid $16,525 for 12 little bottles of Pomalyst, one of the pricey medications that treat his multiple myeloma, a blood cancer he was diagnosed with in 2010.
The drugs have kept his cancer at bay. But their rapidly increasing costs so infuriated Mitchell that he was inspired to create an advocacy movement.
Patients for Affordable Drugs, which he founded in 2016, was instrumental in getting drug price reforms into the 2022 Inflation Reduction Act. Those changes are kicking in now, and Mitchell, 73, is an early beneficiary.
In January, he plunked down $3,308 for a Pomalyst refill "and that's it," he said. Under the law, he has no further responsibility for his drug costs this year — a savings of more than $13,000.
The law caps out-of-pocket spending on brand-name drugs for Medicare beneficiaries at about $3,500 in 2024. The patient cap for all drugs drops to $2,000 next year.
"From a selfish perspective, I feel great about it," he said. But the payment cap will be "truly life-changing" for hundreds of thousands of other Medicare patients, Mitchell said.
President Joe Biden's battle against high drug prices is mostly embodied in the IRA, as the law is known — a grab bag of measures intended to give Medicare patients immediate relief and, in the long term, to impose government controls on what pharmaceutical companies charge for their products. The law represents the most significant overhaul for the U.S. drug marketplace in decades.
With Election Day on the horizon, the president is trying to make sure voters know who was responsible. This month, the White House began a campaign to get the word out to seniors.
"The days where Americans pay two to three times what they pay for prescription drugs in other countries are ending," Biden said in a Feb. 1 statement.
KFF polling indicates Biden has work to do. Just a quarter of adults were aware that the IRA includes provisions on drug prices in July, nearly a year after the president signed it. He isn't helped by the name of the law, the "Inflation Reduction Act," which says nothing about health care or drug costs.
Biden's own estimate of drug price inflation is quite conservative: U.S. patients sometimes pay more than 10 times as much for their drugs compared with people in other countries. The popular weight loss drug Wegovy lists for $936 a month in the U.S., for example — and $83 in France.
Additional sections of the law provide free vaccines and $35-a-month insulin and federal subsidies to patients earning up to 150% of the federal poverty level, and require drugmakers to pay the government rebates for medicines whose prices rise faster than inflation. But the most controversial provision enables Medicare to negotiate prices for certain expensive drugs that have been on the market for at least nine years. It's key to Biden's attempt to weaken the drug industry's grip.
Responding to Pressure
The impact of Medicare's bargaining over drug prices for privately insured Americans remains unclear. States have taken additional steps, such as cutting copays for insulin for the privately insured.
However, insurers are increasing premiums in response to their higher costs under the IRA. Monthly premiums on traditional Medicare drug plans jumped to $48 from $40 this year, on average.
On Feb. 1, the Centers for Medicare & Medicaid Services sent pharmaceutical makers opening bids for the first 10 expensive drugs it selected for negotiation. The companies are responding to the bids — while filing nine lawsuits that aim to kill the negotiations altogether, arguing that limiting their profits will strangle the pipeline of lifesaving drugs. A federal court in Texas dismissed one of the suits on Feb. 12, without taking up the substantive legal issue over constitutionality.
If the government prevails in the courts, new prices for those 10 drugs will be announced by September and take effect in 2026. The government will negotiate an additional 15 drugs for 2027, another 15 for 2028, and 20 more each year thereafter. CMS has been mum about the size of its offers, but AstraZeneca CEO Pascal Soriot on Feb. 8 called the opening bid for his company's drug Farxiga (which earned $2.8 billion in U.S. sales in fiscal year 2023) "relatively encouraging."
Related Biden administration efforts, as well as legislation with bipartisan support, could complement the Inflation Reduction Act's swing at drug prices.
The House and Senate have passed bills that require greater transparency and less self-serving behavior by pharmacy benefit managers, the secretive intermediaries that decide which drugs go on patients' formularies, the lists detailing which prescriptions are available to health plan enrollees. The Federal Trade Commission is investigating anti-competitive action by leading PBMs, as well as drug company patenting tricks that slow the entry of cheaper drugs to the market.
'Sending a Message'
Months after drug companies began suing to stop price negotiations, the Biden administration released a framework describing when it could "march in" and essentially seize drugs created through research funded by the National Institutes of Health if they are unreasonably priced.
The timing of the march-in announcement "suggests that it's about sending a message" to the drug industry, said Robin Feldman, who leads the Center for Innovation at the University of California Law-San Francisco. And so, in a way, does the Inflation Reduction Act itself, she said.
"I have always thought that the IRA would reverberate well beyond the unlucky 10 and others that get pulled into the net later," Feldman said. "Companies are likely to try to moderate their behavior to stay out of negotiations. I think of all the things going on as attempts to corral the market into more reasonable pathways."
The IRA issues did not appear to be top of mind to most executives and investors as they gathered to make deals at the annual J.P. Morgan Healthcare Conference in San Francisco last month.
"I think the industry is navigating its way beyond this," said Matthew Price, chief operating officer of Promontory Therapeutics, a cancer drug startup, in an interview there. The drugs up for negotiation "look to be assets that were already nearing the end of their patent life. So maybe the impact on revenues is less than feared. There's alarm around this, but it was probably inevitable that a negotiation mechanism of some kind would have to come in."
Investors generally appear sanguine about the impact of the law. A recent S&P Global report suggests "healthy revenue growth through 2027" for the pharmaceutical industry.
Back in Washington, many of the changes await action by the courts and Congress and could be shelved depending on the results of the fall election.
The restructuring of Medicare Part D, which covers most retail prescription drugs, is already lowering costs for many Medicare patients who spent more than $3,500 a year on their Part D drugs. In 2020 that was about 1.3 million patients, 200,000 of whom spent $5,000 or more out-of-pocket, according to KFF research.
"That's real savings," said Tricia Neuman, executive director of KFF's Medicare policy program, "and it's targeted to people who are really sick."
Although the drug industry is spending millions to fight the IRA, the Part D portion of the bill could end up boosting their sales. While it forces the industry to further discount the highest-grossing drugs, the bill makes it easier for Medicare patients to pick up their medicines because they'll be able to afford them, said Stacie Dusetzina, a Vanderbilt University School of Medicine researcher. She was the lead author of a 2022 study showing that cancer patients who didn't get income subsidies were about half as likely to fill prescriptions.
States and foundations that help patients pay for their drugs will save money, enabling them to procure more drugs for more patients, said Gina Upchurch, the executive director of Senior PharmAssist, a Durham, North Carolina-based drug assistance program, and a member of the Medicare Payment Advisory Commission. "This is good news for the drug companies," she said.
Relief for Patients
Lynn Scarfuto, 73, a retired nurse who lives on a fixed income in upstate New York, spent $1,157 for drugs last year, while most of her share of the $205,000 annual cost for the leukemia drug Imbruvica was paid by a charity, the Patient Access Network Foundation. This year, through the IRA, she'll pay nothing because the foundation's first monthly Imbruvica payment covered her entire responsibility. Imbruvica, marketed jointly by AbbVie and Janssen, a subsidiary of Johnson & Johnson, is one of the 10 drugs subject to Medicare negotiations.
"For Medicare patients, the Inflation Reduction Act is a great, wonderful thing," Scarfuto said. "I hope the negotiation continues as they have promised, adding more drugs every year."
Mitchell, a PR specialist who had worked with such clients as the Campaign for Tobacco-Free Kids and pharmaceutical giant J&J, went to an emergency room with severe back pain in November 2010 and discovered he had a cancer that had broken a vertebra and five ribs and left holes in his pelvis, skull, and forearm bones. He responded well to surgery and treatment but was shocked at the price of his drugs.
His Patients for Affordable Drugs group has become a powerful voice in Washington, engaging tens of thousands of patients, including Scarfuto, to tell their stories and lobby legislatures. The work is supported in part by millions in grants from Arnold Ventures, a philanthropy that has supported health care policies like lower drug prices, access to contraception, and solutions to the opioid epidemic.
"What got the IRA over the finish line in part was angry people who said we want something done with this," Mitchell said. "Our patients gave voice to that."
Arnold Ventures has provided funding for KFF Health News.