Sometimes Tiny Is Just The Right Size: ‘Microhospitals’ Filling Some ER Needs

KFF Health News, July 19, 2016

Unlike freestanding EDs, microhospitals are fully licensed hospitals with inpatient beds. So far, they are being developed primarily in a few states: Texas, Colorado, Nevada, and Arizona.

This article first appeared July 18, 2016 on the Kaiser Health News website.

By Michelle Andrews

Eyeing fast-growing urban and suburban markets where demand for health care services is outstripping supply, some health care systems are opening tiny, full-service hospitals with comprehensive emergency services but often fewer than a dozen inpatient beds.

These "microhospitals" provide residents quicker access to emergency care, and they may also offer outpatient surgery, primary care and other services. They are generally affiliated with larger health care systems, which can use the smaller facility to expand in an area without incurring the cost of a full-scale hospital. So far, they are being developed primarily in a few states — Texas, Colorado, Nevada and Arizona.

"The big opportunity for these is for health systems that want to establish a strong foothold in a really attractive market," said Fred Bentley, a vice president at the Center for Payment & Delivery Innovation at Avalere Health. "If you're an affluent consumer and you need services, they can fill a need."

SCL Health has two microhospitals operating in the Denver metropolitan area and another two in the works. Microhospitals "are helping us deliver hospital services closer to home, and in a way that is more appropriately sized for the population compared to larger, more complex facilities," said spokesman Brian Newsome.

The concept is appealing, and some people suggest they should be developed in rural or medically underserved areas where the need for services is great.

State Regs Rule Freestanding EDs; Regs Are All Over the Place

Small hospitals, even tiny ones, with robust outpatient services could be a real boon for people who live far from major metro areas.

"Right now they seem to be popping up in large urban and suburban metro areas," said Priya Bathija, senior associate director for policy development at the American Hospital Association. However, "we really think they have the potential to help in vulnerable communities that have a lack of access."

Analysts liken microhospitals to standalone emergency departments, which have been cropping up in recent years in fast-growing metropolitan areas where people are often well-insured and waits at regular hospital emergency departments may be long. Both can handle many emergencies and are equipped with lab, imaging and some diagnostic capabilities.

However, patients facing serious emergencies, such as severe chest pain or major medical trauma, should call 911 and let trained medical personnel decide where best to seek treatment, said Dr. Bret Nicks, an associate professor of emergency medicine at Wake Forest Baptist Health.

The SCL Health Community Hospital-Southwest facility opened in Denver in May. The microhospital offers two operating rooms. (Courtesy of Emerus and SCL Health)

Unlike standalone EDs, microhospitals are fully licensed hospitals with inpatient beds to accommodate people admitted from the emergency room. They may have other capabilities as well, including surgical suites, a labor and delivery room, and primary care or specialist services on site or nearby.

Dignity Health, a health care system with facilities in Nevada, Arizona and California, opened its first microhospital in the Phoenix area more than a year ago and will open another one there this year, said Peggy Sanborn, vice president of strategic growth, mergers and acquisitions. It also plans to open four microhospitals in the Las Vegas area and is exploring the model for California.

One of the advantages of a microhospital is that it can help connect patients with specialty and primary care physician networks, said Sanborn. In Las Vegas, for example, the microhospital design includes a second floor with separate specialty and primary care physician offices to which patients could be referred.

The growing interest in microhospitals can be linked to the shift toward providing more care in outpatient settings, said Bathija. In addition to the emergency department, the facilities can include medical home services and other outpatient services.

Between 2010 and 2014, the annual number of inpatient hospital admissions declined by more than 2 million to 33.1 million, according to figures from the American Hospital Association. Meanwhile, the total number of outpatient hospital visits increased to 693.1 million in 2014 from 651.4 million four years earlier.

Microhospitals offer an opportunity to "really ramp up outpatient services," Bathija said.

Fraud Concerns Emerge as Compounding Drug Sales Skyrocket

KFF Health News, July 18, 2016

A spending jump, along with a sharp increase in the number of patients getting the compounded drugs “may indicate an emerging fraud trend,” says a researcher involved with a report by the OIG.

This article first appeared July 17, 2016 on the Kaiser Health News website.

By Julie Appleby

Government spending on "compounded" drugs that are handmade by retail pharmacists has skyrocketed, drawing the attention of federal investigators who are raising fraud and overbilling concerns.

Spending on these medications in Medicare's Part D program, for example, rose 56 percent last year, with some of the costliest products, including topical pain creams, priced at hundreds or thousands of dollars per tube. The federal workers' compensation program has also seen a recent spike in spending.

The spending jump, along with a sharp increase in the number of patients getting the compounded drugs "may indicate an emerging fraud trend," said Miriam Anderson, who helped oversee a June report on the Medicare spending by the inspector general's office at the Department of Health and Human Services.

Some of the prescriptions may not have been medically necessary — or even dispensed at all, notes the report, which also details recent fraud cases brought by U.S. attorneys in several states.

The practice of compounding drugs, which is done by mixing drugs in pharmacies or special compounding centers by licensed pharmacists, is as old as the pharmacy profession itself. By creating specifically tailored medications, compounding is aimed at patients who can't take commercially available, FDA-approved medications.

But use among Medicare beneficiaries and federal employees in workers' compensation insurance plans has recently soared, according to Anderson's report and a separate Postal Service inspector general's study of the workers' comp program released last spring.

Similar run-ups in spending for compounded drugs were also noted by private-sector benefit managers in recent years.

In Medicare's drug program, known as Part D, the number of Medicare beneficiaries getting compounded drugs has grown 281 percent since 2006 to nearly 280,000 in 2015. Spending on such drugs in Medicare's Part D grew 625 percent between 2006 and 2015, to $509 million, according to the OIG report. That is still a tiny fraction of the program's total spending on drugs.

The fastest-growing category of compounded drugs are topical creams and gels, often used for pain. Spending on those increased 3,466 percent in the Medicare program since 2006, the report said, while the average cost per prescription hit $331, up from $40 in 2006.

A large spike in spending for compounded drugs led the U.S. Postal Service to try to hold back payments for its share of federal workers' compensation costs last year, saying the agency overseeing the program had failed to more strictly police the use of such drugs. It eventually paid.

Overall, the federal government's worker's compensation program, which includes the Postal Service, saw spending on compounded medications grow from $2.35 million in fiscal 2011 to $214 million in fiscal 2015, according to the Department of Labor, which oversees the program.

New rules from the DOL went into effect July 1, aimed at slowing the spending. Among other changes, the agency will now limit initial prescriptions to 90 days.

While legitimately prescribed compounded drugs "can dramatically improve a patients' quality of life," it is also important to have "proper controls around billing," said John Voliva, executive vice president of the International Academy of Compounding Pharmacists, last week in a written statement. The HHS inspector general's report demonstrated that such controls "are not in place," he said.

Benefits Vs. Drawbacks

The studies come amid ongoing scrutiny of the drug compounding industry, particularly following a meningitis outbreak that killed 64 Americans in 2012. Those deaths were linked to a Massachusetts pharmacy that sold tainted injectable medications.

Following that outbreak, some states tightened their oversight of such pharmacies, particularly those producing products that must be sterile.

Compounding pharmacies are generally overseen by state boards of pharmacy, and the drugs they produce are not considered FDA approved. The agency does get involved, however, when it is concerned that pharmacies might not be making medications properly or have started to mass produce treatments, rather than preparing them for individual patients.

When prescribed appropriately, compounded drugs allow patients who can't take or tolerate commercially prepared products to have special formulations mixed just for them. Patients who can't swallow pills, for example, can get liquid formulations or those allergic to certain dyes can get products made without them.

And sometimes such drugs can be more cost-effective.

When Turing Pharmaceuticals raised the price of a drug used for patients with compromised immune systems from $13.50 a pill to $750 last year, for example, one of the nation's largest pharmacy benefit managers partnered with a compounding pharmacy to produce its own version for $1 a pill, said Glen Stettin, senior vice president for clinical research of Express Scripts.

"Some compounding we should be happy for," said Stettin.

But his organization nonetheless has sharply toughened its rules about what pharmacy-made products it will cover after seeing a sharp increase in spending that started in 2012.

Nationally, since 2012, pharmacies have been required to report all the ingredients they used to make a compounded drug. The idea was to provide insurers with more information about what they were being billed for and to make sure there were no hidden ingredients.

The effect that had on drug prices is up for debate. Stettin and others say a few unscrupulous pharmacies began adding more ingredients so they could charge more.

"They are [creating] combinations of things that have never been tested together," said Stettin. "We saw a diaper cream that was billed at $1,000, where a patient could get one over the counter for $2.50."

In California, federal investigators say a marketer for one pharmacy paid doctors to write prescriptions for compounded pain creams formulated to include a "five-pack" of the most expensive ingredients. Then the pharmacy could bill California's worker's compensation program $3,000 per tube for creams it cost about $20 to make, according to a federal indictment filed in June.

In Florida, federal prosecutors also in June unsealed an indictment against a doctor who allegedly was given kickbacks — including a $72,000 BMW — for sending prescriptions to a particular pharmacy, which then billed Tricare, Medicare and other government health programs for compounded creams. Prices ranged from about $900 to $21,000 for a one-month supply, according to court documents.

To combat rising spending, Express Scripts in 2014 drew up a list of about 1,000 ingredients used by compounders for which it would no longer pay, saying they were high priced and weren't any safer or more effective than other treatments. Many of its clients, including the military health program Tricare, have incorporated that list into their health plans.

Since the limit, Express Scripts says it has seen its clients' spending on pharmacy-made drugs fall sharply. The list has also prompted two antitrust lawsuits filed against Express Scripts in federal court by compounding pharmacies.

Awaiting Action

What actions Medicare will take — and the effectiveness of a July 1 change in how such medications are paid for in the federal compensation program — remain unclear. The Medicare report does not make any recommendations, although investigators expect to issue a follow up report that will.

In its March report, the inspector general criticized a lack of action by the Labor Department to address the growing spending, saying that it estimated the Postal Service "has incurred over $81.8 million in excessive compound drug costs and nearly $4.1 million in excessive administrative fees" for the past two fiscal years.

Following that, Labor issued new rules it says will "contain the cost of compound drugs … but still allow for appropriate medical treatment," according to Leonard J. Howie III, director of the Office of Workers' Compensation Programs.

Few Young Doctors Are Training To Care For U.S. Elderly

KFF Health News, July 15, 2016

The United States has 130 geriatric fellowship programs, with 383 positions. In 2016, only 192 of them were filled.

This article first appeared July 15, 2016 on the Kaiser Health News website.

By Kara Lofton, West Virginia Public Broadcasting

At Edgewood Summit retirement community in Charleston, W.Va., 93-year-old Mary Mullens is waxing eloquent about her geriatrician, Dr. Todd Goldberg.

"He's sure got a lot to do," she said, "and does it so well."

West Virginia has the third oldest population in the nation, right behind Maine and Florida. But Goldberg is one of only 36 geriatricians in the state.

"With the growing elderly population across America and West Virginia, obviously we need healthcare providers," Goldberg said.

That includes geriatricians — physicians who specialize in the treatment of adults age 65 and older — as well as nurses, physical therapists and psychologists who know how to care for this population.

"The current workforce is inadequately trained and inadequately prepared to deal with what's been called the silver tsunami — a tidal wave of elderly people — increasing in the population in West Virginia, across America and across the world really," Goldberg said.

The deficit of properly trained physicians is expected to get worse. By 2030, one in five Americans will be eligible for Medicare, the government health insurance for those 65 and older.

Goldberg also teaches at the Charleston division of West Virginia University and runs one of the state's four geriatric fellowship programs for medical residents. Geriatric fellowships are required for any physician wanting to enter the field.

For the past three years, no physicians have entered the fellowship program at WVU-Charleston. In fact, no students have enrolled in any of the four geriatric fellowship programs in West Virginia in the past three years.

"This is not just our local program, or in West Virginia," said Goldberg. "This is a national problem."

The United States has 130 geriatric fellowship programs, with 383 positions. In 2016, only 192 of them were filled. With that kind of competition, Goldberg laments, why would a resident apply to a West Virginia School, when they could get into a program like Yale or Harvard?

Adding to the problem, the average medical student graduates with $183,000 in debt, and every year of added education pushes that debt higher.

Dr. Shirley Neitch, head of the geriatrics department at Marshall University Medical School in Huntington, W.Va., says students express interest in geriatrics almost every year. But, "they fear their debt," she said, "and they think that they need to get into something without the fellowship year where they can start getting paid for their work."

This trend troubles many people, including Todd Plumley, whose mother, Gladys, has dementia and lives in West Virginia.

"It's kind of scary that [older patients] don't have the care that they really need to help them through these times, and help them prolong their life and give them a better life," Plumley said.

There are no geriatricians in the family's hometown of Hamlin, so Plumley drives his mother almost 45 minutes to another town, Huntington, to see one. He says seeing this specialist has helped stabilize his mother's symptoms.

"Right now, if we didn't have the knowledge and resource," he said, "I believe my mother would have progressed a lot further along, quicker."

Plumley is in his 50s. He worries that if he needs the care of a geriatrician as he gets older, driving even 45 minutes may not be an option.

Obama Renews Call For A Public Option In Health Law

KFF Health News, July 12, 2016

President Barack Obama Monday called on Congress to revisit the controversial idea of providing a government-run insurance plan as part of the offerings under the Affordable Care Act.

This article first appeared July 12, 2016 on the Kaiser Health News website.

By Julie Rovner

President Barack Obama Monday called on Congress to revisit the controversial idea of providing a government-run insurance plan as part of the offerings under the Affordable Care Act.

The so-called "public option" was jettisoned from the health law by a handful of conservative Democrats in the Senate in 2009. Every Democrat's vote was needed to pass the bill in the face of unanimous Republican opposition.

But in a "special communication" article published on the website of the Journal of the American Medical Association, the president said a lack of insurance plan competition in some areas may warrant a new look.

"Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited," Obama wrote.

The president also called on Congress to take more steps to rein in the cost of prescription drugs and make government assistance more generous for those who still cannot afford health coverage, while urging the 19 states that have not yet expanded the Medicaid program under the health law to do it.

The public option has been a point of controversy from the start. It was included in the version of the health law passed by the House, and had support from most Democrats in the Senate, before it was dropped. Many liberals hoped — and conservatives feared — that having the government provide insurance alongside private companies would be a step toward a full government-run system.

Presumptive Democratic presidential nominee Hillary Clinton — under pressure from Sen. Bernie Sanders' call for a single-payer government system — in February endorsed the idea of including a public option to allow people age 55 and older to purchase Medicare coverage. On Saturday, as part of a deal with Sanders, Clinton announced she will also "pursue efforts to give Americans in every state in the country the choice of a public-option insurance plan," which is broader than what Obama is endorsing.

But even if Clinton wins and the Democrats take back control of Congress in November, a true public option remains a political longshot.

The article, titled "United States Health Care Reform: Progress to Date and Next Steps," is apparently the first by a sitting president published by the prestigious medical journal.

It includes a justification for the health law, statistics on how its implementation has improved both insurance coverage and health care quality, as well as recommendations for further action.

Kristie Canegallo, the White House deputy chief of staff for implementation, told a group of health reporters that the article grew out of a comprehensive review of the law ordered by the president late last year.

The review was to look at "what's working, what's not, and what we should do about it," she said. Upon receiving the review, she added, Obama "thought it was important to share some of this publicly."

Among those parts of the law the administration says are working are the coverage provisions. "The number of uninsured individuals in the United States has declined from 49 million in 2010 to 29 million in 2015," the president wrote.

The article also claims that the health law has played a substantial role in slowing the rate of health spending.

"While the Great Recession and other factors played a role in recent trends, the [president's] Council of Economic Advisers has found evidence that the reforms introduced by the ACA helped both slow health care costs growth and drive improvements in the quality of care," says the article.

Jason Furman, chairman of the council, told reporters at the briefing that the continuing slow growth in health spending so many years out from the recession makes the argument that the economy is mostly responsible for the slowdown "absurd at this point."

While most of the piece is a chart-driven, footnoted recitation of the impact of the health law, Obama did use his perch to suggest the current state of politics in Washington threatens progress going forward.

"Any change is difficult, but it is especially difficult in the face of hyperpartisanship," he wrote. "Republicans reversed course and rejected their own ideas once they appeared in the text of a bill that I supported."

Republicans, however, are continuing their assault on the health law. Just last week, two House Committees released a joint investigative report and held two hearings asserting that the administration is illegally providing funds to help lower-income individuals pay for their health coverage.

The claim is also the subject of a lawsuit currently in federal court.

The White House, however, remains unimpressed with by the claim.

"The Department of Justice … has made clear we have a permanent appropriation for this," said Canegallo.

Inaccurate Provider Lists A Major Barrier To Care, Study Finds

KFF Health News, July 11, 2016

Callers posing as patients were able to schedule an appointment with a primary care physician less than 30% of the time.

This article first appeared July 11, 2016 on the Kaiser Health News website

By Emily Bazar

Provider directories for some health plans sold through Covered California and in the private market are so inaccurate that they create an "awful" situation for consumers trying to find doctors, according to the lead author of a new study published in the journal Health Affairs.

In the study, "secret shoppers" posing as patients were able to schedule an appointment with a primary care physician less than 30 percent of the time.

The callers contacted 743 doctors in five different regions of California who were listed as primary care physicians in their health plans' online directories. They focused on Blue Shield of California and Anthem Blue Cross plans sold to individuals and families through the state health insurance exchange and in the open market.

"We were a little bit surprised at how bad the numbers were," said the study's lead author, Simon Haeder, an assistant professor of political science at West Virginia University.

Haeder said the pseudo-patients, who made the calls in June and July of last year, encountered a variety of obstacles to making an appointment.

About 10 percent of the time, the providers either were no longer with the medical group listed in the directory or never had been.

In about 30 percent of cases, the callers were told that the doctor had a different specialty than the one listed in the directory. Roughly 20 percent of the time, the callers were unable to reach the doctors at the numbers listed in the directories — despite repeated attempts — because the lines were disconnected, messages weren't returned, or for other reasons. In about 10 percent of the cases, the doctors did not accept new patients.

Blue Shield and Anthem were chosen because they're large insurers that sell policies across the state. And Anthem sells health plans in many places outside of California, "which should make our findings translatable to other states," Haeder said.

Blue Shield and Anthem both sell plans in the private market that are identical to the ones they sell through Covered California.

"Obtaining access to primary care providers was generally equally challenging both inside and outside" Covered California, the study concluded.

Haeder said the problems were "slightly worse" for plans sold via the exchange, but that the differences were minor. "Both of them are doing relatively terribly," he said.

Blue Shield and Anthem have a history of problems with their provider directories. In November, the state Department of Managed Health Care fined Blue Shield $350,000 and Anthem $250,000 for "unacceptable inaccuracies."

The insurers were instructed to improve their directories and reimburse enrollees who may have been harmed by the errors, including patients who were charged for going out-of-network even though the directory showed the doctor they chose was in-network.

The managed care agency is conducting a follow-up survey to determine whether Anthem and Blue Shield have corrected the problems identified in the initial survey, and it expects to release the results later this year, said spokeswoman Rachel Arrezola.

Both insurers said they are working to fix their directories.

"Anthem has spent millions of dollars over the last three years to make our provider directory more user-friendly and to improve the accuracy of the data," said the company's spokesman, Darrel Ng.

Since the study was conducted a year ago, he said, Anthem has made tens of thousands of updates to its database, with nearly 19,000 revisions in the third quarter of 2015. He added that Anthem has two dozen employees dedicated to maintaining and updating the directory.

Blue Shield also makes thousands of changes and updates to its provider data each month, said spokeswoman Molly Weedn.

"Blue Shield has continued to make investments in people, processes and technology resources to improve our provider directories," Weedn said.

Keeping the directories updated is a challenge, she said, in part because of "constantly changing information — such as whether or not a physician is accepting new patients — that needs to be promptly reported to health plans."

Anthem and Blue Shield are participating in a pilot project run by America's Health Insurance Plans, a national trade association, to improve the accuracy of provider directories.

Covered California spokeswoman Lizelda Lopez said the problem of inaccurate provider directories is "disheartening." But, as the study shows, it isn't unique to health insurance exchanges, and it predates the Affordable Care Act, she added.

Lopez pointed to a new California law that took effect July 1 requiring insurers to update their online directories once a week and their printed ones every quarter.

Starting next year, each Covered California enrollee will choose or be assigned a primary care doctor within 60 days, "so that they will have an entry point for health care as soon as possible after they enroll in coverage," Lopez said.

The exchange also plans to add an online provider directory in time for the next open enrollment period, which begins November 1. It will allow consumers to search physicians by name, she said.

"Every Covered California enrollee should know that if they have difficulty scheduling an appointment, they should contact their health plan for assistance, especially if they have an acute health care need," Lopez said. "All health insurers will assist consumers in finding a provider who can serve them."

The study's findings are "not a surprise," said Betsy Imholz, special projects director of the advocacy group Consumers Union. "It's a longstanding issue. In this new environment, we have to get better. That's what our own work told us and this confirms it."

Consumers Union conducted its own informal secret shopper survey in 2014 and 2015, in the San Francisco area, and got similar results, Imholz noted.

The group co-sponsored a new law that calls for weekly online directory updates.

In addition to the problems with provider directories, the Health Affairs study also found that shoppers with "urgent" health problems such as high fevers or heavy bleeding during menstruation faced wait times of eight to 12 days to get an appointment.

"You need to be able to use your insurance outside of an emergency room," Haeder said. "For someone who is not financially well-off and doesn't speak English and is trying to schedule an appointment but can't, they either give up … or they go to the emergency room, which creates bigger issues for the health care system."

The study suggests that updating provider directories frequently with real-time information, coupled with incentives or penalties for providers and insurers, "might be the only path to truly improved access for patients."

"As our analysis has shown," the study concludes, "access to health insurance is not necessarily synonymous with access to health care services."

Medicaid, Private Insurers Begin To Lift Curbs On Pricey Hepatitis C Drugs

KFF Health News, July 6, 2016

Although up-front costs of covering more people with hepatitis C could be enormous, significant savings are possible longer-term, as transmission of infections is reduced and complications such as liver failure, cancer, and kidney disease are avoided.

This article first appeared July 6, 2016 on the Kaiser Health News website.

By Judith Graham

After legal battles and lobbying efforts, tens of thousands of people with hepatitis C are gaining earlier access to expensive drugs that can cure this condition.

States that limited access to the medications out of concern over sky-high prices have begun to lift those restrictions — many, under the threat of legal action. And commercial insurers such as Anthem Inc. and United HealthCare are doing the same.

Massachusetts is the latest state to decide that anyone with hepatitis C covered by its Medicaid program will qualify for the newest generation of anti-viral drugs. Previously, managed care plans serving Medicaid members often limited the drugs, with a list price of up to $1,000 a pill or more, to people with advanced liver disease only.

The expansion follows a threatened lawsuit against drugmakers by Massachusetts' attorney general, which induced companies to offer the state bigger rebates on the medications, making them more affordable.

Over the past few months, Florida, New York and Delaware have also expanded access in their Medicaid programs. And in April, a federal judge ruled that Washington state couldn't withhold treatments from Medicaid members with hepatitis C who hadn't yet developed serious medical complications.

"I think the writing is on the wall for restrictive policies, and plaintiffs are likely to prevail in these lawsuits," said Nicholas Bagley, a professor of law at the University of Michigan.

"These aren't me-too drugs with marginal benefits: they're actual cures. While their cost is a huge fiscal problem, states aren't permitted under the law to restrict access to medically necessary therapies on the grounds that they cost too much."

Hard Decisions

The problem for states that are lifting restrictions: how to offset the expense of covering thousands of patients who may now come forward for hepatitis C treatment. "We want to give these medications to everybody who needs them, but with the prices they're commanding, something has to give," said Matt Salo, executive director of the National Association of Medicaid Directors. "We've run out of escape valves."

The drugs in question — Sovaldi and Harvoni from Gilead Sciences, Viekira Pak from AbbVie Inc., and Zepatier from Merck & Co., among others — eliminate the hepatitis C virus over 90 percent of the time, a cure rate almost double that of earlier therapies. The latest entrant in this market, Gilead Sciences' Epclusa, received approval from the Food and Drug Administration last week.

But with a sticker price of $54,600 to $94,500 for an average 12-week course of treatment, dozens of states balked at the budgetary implications and provided the medication for only the sickest patients.

Private insurers followed suit in their group and individual plans, but many have been reversing those policies recently, also under the threat of lawsuits. Anthem Blue Cross and Blue Shield plans in 14 states quietly began authorizing treatment to people "in all stages of fibrosis" (liver scarring) in December, the company confirmed in an email. Previously, medication had been limited to hepatitis C patients with severe fibrosis or cirrhosis.

UnitedHealthcare enacted the same policy nationwide on Jan. 1, according to an email from the firm. After a March legal settlement with New York's attorney general in New York, seven commercial insurers there are extending hepatitis C treatments to people who haven't yet developed serious liver disease.

Meanwhile, in March, after Congress appropriated extra funds, the Department of Veterans Affairs said it would treat anyone in its health system with hepatitis C, regardless of the stage of illness — a move that could extend therapy to nearly 130,000 veterans.

Medicare embraced a similar policy after acknowledging that medical guidelines recommended that all hepatitis C patients receive care, with a few exceptions.

Easing Access To Therapy

Although up-front costs of covering more people with hepatitis C could be enormous, significant savings are possible longer-term, as transmission of infections is reduced and complications such as liver failure, cancer, and kidney disease are avoided.

"I'm so happy: having this chance to get healthy is amazing," said Vickie Goldstein, 57, of Delray Beach, Florida, who's had hepatitis C since 2003 and is now taking Viekira Pak. Her Medicaid managed care plan earlier had refused access on the grounds that she wasn't sick enough.

Goldstein's experience figured prominently in the legal case in Florida. The state's Medicaid program settled after the National Health Law Program and local advocates presented a demand letter.

Settlement talks are also underway in Indiana, where the American Civil Liberties Union filed a class action lawsuit. And Pennsylvania's Medicaid program is considering whether to adopt new standards after its Pharmacy and Therapeutics Committee recommended in May that all patients with hepatitis C receive treatment. Connecticut adopted new policies expanding access to the medications last year.

Medical Necessity Is Key

Nationally, at least 3.5 million people are believed to have hepatitis C, although half of them don't know it.  Three-quarters are baby boomers who likely became infected from contaminated blood (the blood supply wasn't tested for this virus until 1992), injection drug use, or sex. About 1 million are thought to be covered by Medicaid, a joint state-federal program for the poor.

By law, Medicaid and Medicare are required to cover medically necessary treatments; they can't exclude an entire class of medications that are proven effective for cost considerations alone.  Commercial insurers also typically agree to provide all medically necessary care.

There is widespread agreement in the medical community that new hepatitis C therapies meet this standard.  Their benefits apply even to people who haven't yet developed serious liver disease, according to guidelines from the American Association for the Study of Liver Disease and the Infectious Diseases Society of America.

"I've never encountered a colleague who's questioned the wisdom of treating everyone," said Dr. John Scott, director of the liver clinic at Seattle's Harborview Medical Center and a member of the committee that drafted the guidelines.

Last November, the Centers for Medicare & Medicaid Services issued a bulletin attempting to clarify the legal situation. A drug for a specific disease may be denied only if "the excluded drug does not have a significant, clinically meaningful therapeutic advantage in terms of safety, effectiveness, or clinical outcomes," it wrote.

The price of medications should fall as new therapies come on the market, increasing competition, CMS noted.  Gilead Sciences has said average discounts are about 46 percent off the sticker price, but discounts may be even greater, bringing the cost of drugs down to $30,000 or even lower, according to Kevin Costello, director of litigation at Harvard Law School's Center for Health Law & Policy Innovation.

States are trying to use their bargaining power to force concessions.  Massachusetts succeeded in doing so last week, when Gilead and Bristol-Myers Squibb agreed to provide deeper discounts, responding to the attorney general's threat of a lawsuit. The extent of rebates was not disclosed.  But lower prices for the medications will mean that more patients will have access, Attorney General Maura Healey said.

CMS Acting Administrator Andy Slavitt took the occasion to take issue with the high price of hepatitis C drugs and urge "manufacturers and pharmacy benefit managers to continue to find innovative ways to make them more affordable to state Medicaid programs and the beneficiaries they serve."

Costello's center was a key player in the lawsuits in Washington state and Delaware and plans to bring similar actions elsewhere. "A 50 state solution is what we're looking for," he said.

Having lost in court, Washington Medicaid officials are now trying to figure out how many patients may come forward and how much the state can expect to pay for hepatitis C drugs.

Anthony Slack, 63, is a former drug addict who's disabled by degenerative arthritis and was diagnosed with hepatitis C in 1998. He is on a waiting list for treatment at the Harborview Hepatitis and Liver Clinic in Seattle.

"They said my liver wasn't scarred enough and I wasn't sick enough to get the medications," Slack said in a phone interview. "I appealed it and still they turned me down. … I ain't going to give up:  This is my life we're talking about."

A priority will be providing therapy to people, like Slack, who have filed appeals, said Amy Blondin, a spokeswoman for the Washington State Healthcare Authority.

"The clinic said I should be hearing from them soon, and that made me feel real good," Slack said.  "I'm trying to keep hope alive."

 

GA, CA Hospitals Sue Blue Cross Plan for Sending ER Reimbursements To Patients

KFF Health News, June 30, 2016

That’s costing the hospitals money since patients don’t always turn over the funds, according to the lawsuits, filed by Polk Medical Center in northwest Georgia and Martin Luther King, Jr. Community Hospital in Los Angeles.

This article first appeared June 30 2016 on the Kaiser Health News website.

By Andy Miller, Georgia Health News

Blue Cross and Blue Shield of Georgia faces separate lawsuits accusing it of sending reimbursement money for emergency room care directly to patients — and not to the hospital because it isn't part of the insurer's network.

That's costing the hospitals money since patients don't always turn over the funds, according to the lawsuits, filed by Polk Medical Center in northwest Georgia and Martin Luther King, Jr. Community Hospital in Los Angeles — 2,000 miles apart. Each suit also says some patients have sought to profit from receiving the direct payments for their ER care.

By sending money directly to patients, Polk Medical Center says the insurer forces the hospital to find ways to collect it. Even though patients are obligated to pay the facility the amount sent to them by Blue Cross, in some cases they have spent the money, according to the lawsuit.

The Polk lawsuit said that Blue Cross, in its new payment process, was pursuing "retaliation'' for the Cedartown, Ga., hospital's not agreeing to "unreasonable and unfair" terms in order to be part of the insurer's network. Hospital officials said the payment shift has hurt the hospital financially.

"Blue Cross insures a significant number of individuals in Polk County,'' said Tommy Manning, the attorney for the Floyd Medical Center system, of which Polk Medical Center is a part.

Manning said that Blue Cross has sent ER payments to patients for several months.

And he said he was unaware of the Los Angeles lawsuit prior to the filing of the Polk complaint.

The lawsuit from Martin Luther King, Jr. Community Hospital alleges that "most of the MLK patients who receive checks from [Blue Cross of Georgia] are unaccustomed to receiving payments in such large amounts. Some of these patients do not know that they are required to endorse those checks over to MLK. Other patients know that they should endorse those checks over to MLK but instead use such funds to pay for their personal expenses. When MLK attempts to collect the amounts from these patients, the money is often spent."

In the case of patient "B.G.,'' the suit alleges that the patient went to the MLK emergency room 11 times between Oct. 19 and March 27 for various ailments, including complaints of chest or back pain. Blue Cross of Georgia paid the patient a total of more than $70,000 for these visits to MLK, according to the lawsuit.

The lawsuit said the practice overall has caused MLK to suffer damages in excess of $350,000.

Blue Cross declined comment on the lawsuits, citing pending litigation.

Patients are protected under federal law when seeking care in hospital emergency rooms. Under the Emergency Medical Treatment and Labor Act (EMTALA), they must at least be stabilized and treated, regardless of their insurance status or ability to pay.

Manning said this month that he's not aware of any other insurer in Georgia paying the patient instead of the hospital.

At least one other major hospital that is not part of the suits has reported difficulty in getting payments from Blue Cross when it was out of the insurer's network. Officials at Grady Memorial Hospital in Atlanta said that when it was out of Blue Cross' network for the four months ending in March 2015, the insurer sent reimbursement payments to some patients and not to Grady.

Daron Tooch, a Los Angeles attorney representing MLK Hospital, said other Blue Cross plans in the United States use similar tactics. The Los Angeles patients worked for a company that has Blue Cross of Georgia coverage, he said. MLK is out of network for the Blue Cross plans in California.

"This is not unique to MLK,'' said Tooch. "This happens to all out-of-network providers for Blue Cross of Georgia."

Going after the patients for payment instead of the health plan simply hasn't worked, attorneys for MLK said. The patients "are typically unable or unwilling to pay MLK for the medical services received," according to the suit.

Manning agreed. "We will continue to pursue collection with patients, but filing numerous lawsuits would not be fruitful, particularly given that Blue Cross Blue Shield is the party ultimately at fault," he said.

Asked about the Blue Cross of Georgia payment strategy, the national Blue Cross Blue Shield Association, through a spokesman, declined comment. Clare Krusing, a spokeswoman for America's Health Insurance Plans, a trade group, said that those types of reimbursement arrangements would vary by plan and by contract. She added that she did not have details on other plans that may do the same.

Paying patients directly is an insurer tool used more commonly in the West, "particularly when non-network facilities are unwilling to negotiate reimbursement related to out-of-network service,'' said Janet Guptill of the Tatum firm, which provides interim chief financial officers and other executives to health care organizations.

"The insurer takes the position that the provider claim is a private pay issue between the provider and the patient, so the facility has the responsibility to collect the payment from the patient,'' Guptill said.

Guptill said that when a hospital isn't in network, its charges for ER and other care tend to be higher than the charges from facilities in the insurer's network.

For insurers, paying patients directly is "a clever and probably effective tactic,'' said Chris Kane, a consultant with DHG Healthcare. The hospital, he said, may already be dealing with other collection challenges, including those involving high-deductible health plans.

A hospital attempting to collect the money may end up alienating the patient and thereby discouraging future visits, Kane said.

And patients pocketing the money is another problem, he added. "It's more troubling if a patient views this as a source of cash.''

HHS Proposes to Streamline Medicare Appeals Process

KFF Health News, June 29, 2016

If there were not a single additional appeal filed and no changes were made to the system, it would take 11 years to eliminate the current backlog, the chief law judge of the Office of Medicare Hearings and Appeals estimates.

This article first appeared June 29, 2016 on the Kaiser Health News website.

By Susan Jaffe

The Department of Health and Human Services Tuesday proposed key changes in the Medicare appeals process to help reduce the backlog of more than 700,000 cases.

The measures "will help us get a leg up on this problem," said Nancy Griswold, chief law judge of the Office of Medicare Hearings and Appeals.

If there was not a single additional appeal filed and no changes in the system, it would take 11 years to eliminate the backlog, Griswold said in an interview.

Her office has faced increased criticism from health care providers and beneficiary advocates lately for its inability to speed up appeals and reduce the backlog. The latest critique came earlier this month in an investigation from the Government Accountability Office.

This latest effort still falls short of what is needed, said Tom Nickels, executive vice president at the American Hospital Association. "We are deeply disappointed that HHS has not made more progress in addressing the delays despite the more than two years since the delays began," he said.

The new proposals, as well as increased funding requests, are expected to eliminate the backlog by 2021 by streamlining the decision-making process and reducing the number of cases that go to the third level of appeals, where many cases linger waiting for a hearing and then a decision from an administrative law judge. From the day of the hearing, it currently takes an average of slightly more than two years for a decision in appeals from hospitals, nursing homes, medical device suppliers and other health care providers.

Among the proposed changes:

  • Designate some decisions from the Medicare Appeals Council, the last of four stages of appeals, as precedents that decision-makers at lower levels would have to follow. That could eliminate redundant appeals and resolve inconsistencies in interpretation of Medicare policies.
  • Allow senior attorneys to handle some of the procedural matters that come before the administrative law judges, such as dismissing a request for a hearing after the appellant has withdrawn the request, Griswold said.
  • Revise how the minimum amount necessary to lodge an appeal is determined. Under current rules, an appeal must involve payment of at least $150, based on the amount the provider charged. HHS is proposing to use Medicare's allowed amount instead, which tends to be lower, and that could reduce the number of claims that could be appealed.
  • Eliminate some steps in the appeals process to simplify the system.

Although advocates have sought changes to speed up the appeal process, Alice Bers, an attorney at the Center for Medicare Advocacy, was skeptical about some of the proposals. The effort to set up a system of precedents, she said, "could restrict coverage for needed items and benefits for seniors that they are entitled to by law."

And the change in calculating the minimal amounts "could make it harder for beneficiaries to reach that threshold," said Bers. It might not sound like a lot of money, Bers said, "but for an elderly woman living on Social Security that's several meals or co-pays for medicine."

The proposals do not address what hospital representatives say is a key cause of increasing appeals, independent audit contractors who can reject payments to hospitals. The American Hospital Association contends that those contractors unnecessarily cut off many payments and that hospitals frequently win the appeals.

According to the GAO study, audit-related appeals decided at the administrative law judge stage — the third level of appeals — increased 37-fold from 2010 through 2014, compared to only 1.5 times for appeals of other kinds of claims.

But Griswold said that currently only about a third of the pending cases at this stage involved recovery audit contractors, after settlements were reached with appellants who agreed to accept partial payment. As a result of these agreements, 4,245 cases from just 16 appellants were withdrawn from the system as of May 12, according to government statistics.

Griswold also said Medicare will continue to process beneficiary appeals before those from hospitals, doctors and other health care providers. The practice began in 2014.

The proposed changes will be posted on the Federal Register website and open to comments through Aug. 29.

Minnesota’s Largest Health Insurer To Drop Individual Plans

KFF Health News, June 27, 2016

The Blues reported a loss of $265 million on insurance operations from individual market plans in 2015. The insurer said claims for medical care far exceeded premium revenue for those plans.

This article first appeared June 27, 2016 on the Kaiser Health News website.

By Mark Zdechlik, Minnesota Public Radio

Blue Cross and Blue Shield of Minnesota will retreat from the sale of health plans to individuals and families in the state starting next year. The insurer, Minnesota's largest, said extraordinary financial losses drove the decision.

"Based on current medical claim trends, Blue Cross is projecting a total loss of more than $500 million in the individual [health plan] segment over three years," the insurer said in an emailed statement.

The Blues reported a loss of $265 million on insurance operations from individual market plans in 2015. The insurer said claims for medical care far exceeded premium revenue for those plans.

 "The individual market remains in transition and we look forward to working toward a more stable path with policy leaders here in Minnesota and at the national level," the company stated. "Shifts and changes in health plan participation and market segments have contributed to a volatile individual market, where costs and prices have been escalating at unprecedented levels."

The decision will have far-reaching implications.

Blue Cross Blue Shield says the change will affect about "103,000 Minnesotans [who] have purchased Blue Cross coverage on their own, through an agent or broker, or on MNsure," the state's insurance exchange.

"We understand and regret the difficulty we know this causes for some of our members," the insurer wrote. "We will be notifying all of our members individually and work with them to assess and transition to alternative coverage options in 2017."

Cynthia Cox of the Kaiser Family Foundation, who analyzes individual health insurance markets around the country, says what the Blues are doing in Minnesota is similar to a walk back by UnitedHealth Group, the nation's largest health insurance company. (KHN is an editorially independent program of the Kaiser Family Foundation.)

"Right now what it seems like is that insurance companies are really trying to reset their strategy," Cox said. "So they may be pulling out selectively in certain markets to reevaluate their strategy and participation in the exchanges."

She said the individual markets just aren't turning out as expected. "The hope was that these markets would encourage exchange competition and [get] more insurers to come in. … I don't know if we're at a point where it's completely worrisome, but I think it does raise some red flags in pointing out that insurance companies need to be able to make a profit or at least cover their costs."

In response to the development in Minnesota, Gov. Mark Dayton, a Democrat, highlighted gains in enrolling more Minnesotans in health insurance plans since the implementation of the Affordable Care Act. But he also acknowledged the insurer's departure reflects the instability in the market for individual and family coverage.

"This creates a serious and unintended challenge for the individual market: the Minnesotans who seek coverage there tend to have greater, more expensive health care needs than the general population," said Dayton. "Blue Cross Blue Shield's decision to leave the individual market is symptomatic of conditions in the national health insurance marketplace.

University of Minnesota health economist Roger Feldman called the Blues' departure a major blow to Minnesota's already troubled individual market. "What this says about the individual market is that it is very unstable and it has been disrupted by a number of events, and we still don't know whether it will recover or not from those disruptions," he said.

Feldman said lawmakers would be wise to pay attention to the unstable individual markets and to shore them up with a carrot and stick approach.

"To get people to sign up in the exchange we need one or both of those," he said. "The stick could be to raise the penalties on people who don't buy insurance, and the carrot could be to increase the subsidies for people that do. I think that's the only way that we're going to get a decent mix of risks to buy into that exchange."

Although the main Blue Cross Blue Shield unit is leaving Minnesota's individual market, its much smaller subsidiary, Blue Plus, will continue to offer plans on the individual market, according to the company statement. Blue Plus, has only about 13,000 members according to his message.

Kaiser's Cox says that's typical and leaves insurers a re-entrance option.

MNsure spokesman Shane Delaney said about 20,000 Minnesotans purchased Blue Cross and Blue Shield of Minnesota plans through MNsure. He said the vast majority of them qualified for tax credits to help pay premiums. Delaney said all of the Blue Cross and Blue Shield customers losing their coverage next year should look for other options on MNsure, the only place eligible applicants can secure federal tax credits.

Saving Lives And Saving Money

KFF Health News, June 23, 2016

As health care costs continue to rise, attention has turned to a tiny number of super-utilizers. A program that started in California has taken a different approach to treating these high-cost patients: Over the past two years, it has tracked them, healed them and saved a ton of money.

This story first appeared June 23, 2016 on the Kaiser Health News website.

By David Gorn

Don Meade doesn't like hospitals, but he uses them. In just one year, he made 62 trips to the emergency room. He rattles off the names of local hospitals in Orange and Los Angeles counties like they're a handful of pills.

"St. Joseph's in Orange, [Saddleback Memorial in] Laguna Hills," he says. "The best one for me around here is PIH in Whittier."

At 52, Meade has chronic heart disease and other serious ailments, and he is recovering from a longtime addiction to crack cocaine. Today, he lives with his dog Scrappy in a small apartment in Fullerton.

Beyond making a trip to the ER pretty much every week of the year, Meade has had innumerable X-rays, scans, tests and hospital admissions — all of it on the taxpayers' and hospitals' dime, since he is a beneficiary of Medi-Cal, the state and federal program for the poor.

"The doctors and a few nurses knew me [by name], and I told them I should get some stock in the hospital because I was there so much," he muses.

As health care costs continue to rise, attention has turned to a tiny number of expensive patients like Meade, called super-utilizers. A program that started in Orange County has taken a different approach to treating Meade and other high-cost patients: Over the past two years, it has tracked them, healed them and saved a ton of money along the way.

Meade received more than a million dollars worth of care in each of the two years before he entered the program, according to Paul Leon, CEO of the Illumination Foundation, a homeless health services group based in Irvine. Leon's foundation runs the program, known as Chronic Care Plus, which has stabilized Meade and found him housing.

"It's crazy," said Maria Raven, an associate professor at the University of California, San Francisco who specializes in frequent-user policy. "This small group of people makes quite an impact on the health care system, and on the finances of the health care system."

In Medi-Cal, the state's health insurance program for the poor, frequent health care users representing just 1 percent of the patient population account for about one-fourth of health care spending, according to Kenneth Kizer, MD at the Institute for Population Health Improvement at UC Davis.

That's why health professionals across California have started targeting this problem group.

In a small, busy room at a recuperative care center in Santa Fe Springs, just up Highway 5 from Disneyland, the Chronic Care Plus program's lead nurse, John Simmons, directs treatment for a select group of homeless frequent users.

Simmons says the big secret about these health care frequent fliers is that they're not necessarily the sickest patients — they're often just homeless, with substance abuse or mental health issues, and they routinely end up in the emergency room.

"It was them relying on the ER for everything," Simmons said. "They got a common cold, they'd want to run to the ER."

To break the cycle, Simmons conducts what is known as intensive care coordination. He helps the 37 participants, including Don Meade, find housing, get off drugs, get access to services, and make appointments with primary care doctors.

Meade, an Army veteran, was living outside the Santa Ana Civic Center for years before he found housing through the Illumination Foundation's Chronic Care Plus program. The program identifies homeless patients being discharged from hospitals and helps place them in apartments. (Heidi de Marco/KHN)

The Illumination Foundation launched the program with the goal of breaking the vicious cycle into which these patients had fallen, then following them over a two-year period. Getting consistent care and support for that length of time, Simmons says, can change their lives for good.

"The beauty of the program was, we took those people and got them self-sufficient," Simmons said, "and you notice their health [go] on an upward trend."

The program saved $14 million in health care spending for just those 37 people over two years, compared with the two years prior to the launch of the program.

That doesn't count the savings attained by using fewer police and emergency transportation services, Simmons said.

Saving so much money with so few participants is an open invitation to expand the program, said Pat Brydges, an administrator at St. Joseph's Hospital, which helped fund the program.

"There are homeless people in every city in every state," Brydges said. "There's no reason why this wouldn't work across the nation."

The program is consistent with St. Joseph's mission to help all people, and the cost savings is an extra perk, she said.

She pauses briefly to contemplate how much money would be saved if this tiny pilot program went national.

"Wow, I don't even know if I could count that much," Brydges said. "But if we can do $14 million in this one area alone, it's amazing what we could do across the nation."

Back in his Fullerton apartment, Meade said he now sees a primary care doctor instead of going to the emergency room. He still has ongoing heart and health problems.

Donald Meade plays with his puppy Scrappy in his apartment patio. "If I lost this apartment, I would give Scrappy to my neighbors … I wouldn't want him to be stressed out living in the streets." (Heidi de Marco/KHN)

Being followed by program coordinators over such a long time has really made a difference in his life, Meade said.

"A lot of the stress leaves after you're in your own home, but if you're out in the street you're worried so much all the time," he said.

Getting off the street is one thing, Meade said, but the staying off it is another. It's not just that he has his own doctor now, and better health. He has a new life, he said.

The Illumination Foundation plans to release data at the end of June on its first two years.

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