ST. LOUIS — In many ways, Essence Group Holdings Corp. is a homegrown health care success story.
Founded locally, it has grown into a broader company backed by a major Silicon Valley investor. Essence now boasts Medicare Advantage plans for seniors with some 60,000 members in Missouri and across the Mississippi River in Illinois. It ranks among the city's top 35 privately held companies, according to the St. Louis Business Journal. And market research firm PitchBook Data values the company at over $1.64 billion.
But a recent audit by the federal Health and Human Services inspector general, along with a whistleblower lawsuit, have put the St. Louis health care standout under scrutiny. Medicare officials also are conducting a separate audit of Essence.
The same growth and use of big data that attracted venture capital cash are getting a renewed look from government officials who estimate that Medicare Advantage plans nationwide overcharge taxpayers nearly $10 billion annually.
The April audit of Essence — the first in a series of upcoming audits scrutinizing some Medicare Advantage plans across the United States — revealed that the St. Louis company could not substantiate fees for dozens of patients diagnosed with stroke or depression.
The government pays privately run insurance plans like Essence using a formula called a "risk score" that is designed to pay higher rates for sicker clients and less for patients who are in good health.
"There's great temptation to push the envelope on risk scores without the supporting documentation in the medical files, especially for depressive disorders," said former Sen. Claire McCaskill, a Missouri Democrat who now works as a political analyst. While in office, McCaskill in 2015 called for an investigation into overbilling practices by insurers running Medicare Advantage plans.
In the Essence audit of 218 cases, HHS found dozens of instances in which the health plan reported patients had an acute stroke — meaning the patients had strokes that year — when they actually had suffered strokes only in past years. HHS also discovered that Essence had charged Medicare for major depressive disorder diagnoses for several enrollees, but that the doctors had not recommended a treatment plan, indicating the patients likely had a less severe form of depression. In five cases, HHS couldn't find any medical records to support payments for a diagnosis of acute stroke or major depressive disorder diagnoses.
Essence denied wrongdoing but agreed to refund $158,904 that Medicare paid for those patients who were reviewed in the audit and committed to correcting any other errors.
Medicare Advantage: The Next Silicon Valley Frontier
Essence is part of the Medicare Advantage boom — such plans now treat more than 22.6 million U.S. seniors, about 1 in 3 people on Medicare. And with that growth, the money has followed — top investors, including Google, have poured more than $1 billion dollars into health care companies that have Medicare Advantage aspirations.
Essence's medical technology arm, Lumeris, which helps power its Medicare Advantage plans, is key to those ambitions. And last year Lumeris received a commitment of $266 million over the next 10 years from Cerner, a leading electronic medical records firm. Cerner declined to comment for this story on its investment.
Essence, and companies like it, are venture capital darlings because they draw deeply on data mining by entities such as Lumeris to hone health care delivery and cut costs.
But Essence now finds itself in the middle of a national reckoning with the government, which is attempting to reduce overbilling by the Medicare Advantage industry that it says costs taxpayers up to $10 billion a year. Previous efforts to claw back such overpayments have been delayed by an onslaught of lobbying efforts by private insurers.
More Overcharging Alleged In Lawsuit
The Missouri whistleblower suitalleges Essence, Lumeris and its local partner, Lester E. Cox Medical Centers, used data-mining software to identify patients for an "enhanced encounter" that jacked up the patients' risk scores to boost Medicare payments. The suit was unsealed in January after being filed in 2017 by Branson, Mo., family doctor Charles Rasmussen.
In his lawsuit, Rasmussen said he worked for Cox from 2013 through August 2017 and treated more than 2,000 patients there. He and his lawyers declined to comment on the case.
After a training session on "enhanced" coding practices, one doctor wrote to Cox officials in an email that was quoted in the suit. The doctor said the Essence team had used the case of an 86-year-old patient that the doctor described as "pretty healthy for looking sick on paper" as an example of a potential coding "opportunity." The doctor wrote that the man's care likely cost less than $2,000 a year, but Essence's "enhanced" coding techniques could "capture around $11,000 from Medicare."
The lawsuit alleges: "Because of this fraud, hundreds of millions of taxpayers' dollars have been siphoned from the United States."
The case is pending in federal court in Springfield, Mo. On July 15, a judge denied Essence and Cox's joint motion to dismiss the case.
Essence and Lumeris denied the whistleblower's allegations in a statement to Kaiser Health News. Lumeris spokesman Marcus Gordon said the allegations were "wholly without merit." In the emailed statement, he said the companies would "continue to vigorously defend against these baseless claims," adding that its programs "result in higher quality care and better health outcomes for our members."
In a written statement, Cox Media Relations Manager Kaitlyn McConnell said the company had reviewed the allegations. "We adamantly deny them, and believe we are fully compliant with the law."
McConnell added: "As always, patients are our top priority, and we will continue to focus on providing quality and compassionate health care to the communities we serve."
St. Louis Roots, Ambition For Beyond
Essence grew in 2007 after St. Louis physician and software designer Dr. Thomas Doerr and his venture capitalist brother, John Doerr, an early backer of Amazon and Google, invested in the company.
Good national press followed, much of it noting the company's commitment to developing innovative medical software to improve patient care and cut costs. Neither of the Doerr brothers would comment for this article.
In December 2015, Medicare awarded Essence a5-star rating, a coveted indicator of high-quality medical care.
That helped make the plans popular for customers in Missouri, said Stacey Childs, the regional liaison for CLAIM, the state's health insurance assistance program. She credited its A+ ranking with the Better Business Bureau and high star rankings year after year for helping create a swell of excitement when Essence expanded to the Springfield area of Missouri in 2015.
And its Lumeris-powered technology is growing nationally, including partnerships with Stanford Health Carein California and medical groups in Florida and Louisiana. It also has been deployed to other regions, bolstered by Cerner's investment for a joint program managing Medicare Advantage plans called the "Maestro Advantage," according to the partnership's website.
Coding Questions
But Rasmussen, the Missouri whistleblower, alleges that Lumeris software played a role in overcharging Medicare.
The lawsuit alleges physicians were encouraged to examine high-risk patients the medical software identified for "Enhanced Encounter" appointments — even sending recommendations for some patients who were in hospice — to re-evaluate their risk scores.
Physicians were paid $100 to examine patients for each of those encounters, according to the suit. On its website,Lumeris has saidthose appointments create "new cash flows to enhance physician incentives and increase the level of physician engagement."
In a statement to KHN, Taylor Griffin, a spokesman for Essence, said: "We compensate physicians for the substantial extra time and effort to meet with our members and gather information essential to delivering better care. It is a program designed around capturing the health status of the member and not on capturing codes."
At least one Essence-affiliated doctor has questioned the ethics of the initiative, according to court documents. "All I have heard about since we signed on with Essence is about coding to get paid more," the unidentified doctor alleged in an email to Cox officials. "This is doing little to enhance these patients' care."
For the North Carolina Cherokee, self-governance has meant adopting an integrated care model that not only improves patients' health, but also is tailor-made for the needs of the tribe.
This article was first published on Monday, July 22, 2019 in Kaiser Health News.
CHEROKEE, N.C. — Light pours through large windows and glass ceilings of the Cherokee Indian Hospital onto a fireplace, a waterfall and murals. Rattlesnake Mountain, which the Cherokee elders say holds ancient healing powers, is visible from most angles. The hospital's motto — "Ni hi tsa tse li" or "It belongs to you" — is written in Cherokee syllabary on the wall at the main entrance.
"It doesn't look like a hospital, and it doesn't feel like a hospital," Kristy Nations said on a recent visit to pick up medications at the pharmacy. "It actually feels good to be here."
Profits from the tribe's casino have helped the 12,000 members of the Eastern Band of Cherokee Indians opt out of the troubled U.S. government-run Indian Health Service. They are part of an expanding experiment in decentralization, in which about 20% of federally recognized tribes in Oklahoma, California, Arizona and elsewhere have been granted permission to take full control of their health care.
For the North Carolina Cherokee, self-governance has meant adopting an integrated care model designed by Alaska Natives to deliver care that not only improves patients' health, but also is tailor-made for the needs of the tribe. It has meant the opening of a 20-bed state-of-the-art facility in 2015 and the construction of an 18-bed mental health clinic scheduled to open in October 2020.
The hospital is a "medical home for our people," said Casey Cooper, the hospital's CEO who is a member of the tribe.
Half of the Indian Health Service budget is now managed by Indian tribes to various degrees. But while full control has worked out well for tribes with resources like the Eastern Cherokee, they are one of just a few bright spots in an otherwise dire medical landscape. It remains to be seen how widely this model can be applied.
"Not all tribal communities have access to the economic opportunities that we have," Cooper said. "Some tribes are in these desolate, remote locations where there are no natural resources or economic development opportunities. I get that."
Self-Governing To Change The Narrative
The U.S is legally obligated to offer health services to all members of the 573 federally recognized tribes. Yet the federal Indian Health Service, which currently provides direct care to about 2.2 million out of the nation's estimated 3.7 million American Indians and Alaska Natives, is chronically underfunded. The current IHS budget is about $5.4 billion, yet the National Indian Health Board estimates the total level of need to be nearly $37 billion.
American Indians are more than twice as likely to get diabetes and six times as likely to get tuberculosis than the average U.S. population. Mental illness, and especially substance abuse, runs high in Indian Country. Native Americans are more likely to commit suicide than any other ethnic or racial group.
Health disparities are particularly harsh in the Northern Plains region. In the Dakotas, average life expectancy among American Indians is 20 years less than among white Americans.
"You do not have to cross an ocean to find Third World health conditions," said Dr. Donald Warne, a professor of public health at the University of North Dakota and an Oglala Lakota tribesman. "You can find them right here, in the heartland of the United States."
One particularly grim example is the Rosebud Indian Reservation in South Dakota. In 2015, the Centers for Medicare & Medicaid Services found safety violations at the local IHS hospital so severe that they shut down the emergency room for six months. During this time, at least five patients died en route to other hospitals located sometimes 100 or more miles away. Since then, the situation has only slightly improved.
"The Indian Health Service respects tribal sovereignty and is committed to tribal self-governance," said IHS spokesman Joshua Barnett. "IHS recognizes that tribal leaders and members are in the best position to understand the health care needs and priorities of their communities."
Self-governance also allows tribes to be eligible for Medicare, Medicaid, private-sector health insurance, partnerships with larger health systems and even federal grants that are designed for underserved communities — all which can be limited for the IHS.
"Generally speaking, tribally operated health care systems tend to run more efficiently, more effectively and with higher quality of care than IHS-managed systems," said Warne.
Money Makes A Difference
The Cherokee Indian Hospital is lucky to be supported by a tribe that's economically thriving due to gambling revenues, according to Cooper. The Qualla Boundary is home to Harrah's Cherokee Casino Resort. It's a unique situation, said Indian health expert Warne, as most reservation casinos don't make huge profits.
The hospital's annual budget has grown from $20 million to over $80 million within the past 17 years. The largest sources are third-party reimbursements, mostly from Medicaid and Medicare, at $27.4 million, followed by IHS contributions and tribal funding.
In 2012, the hospital decided to implement a new, patient-centered approach called the Nuka System of Care, created by the Southcentral Foundation, a nonprofit health provider owned and led by Alaska Natives. A Cherokee delegation visited a Nuka program to see how it could be tailored to their culture and health needs.
"An integrated approach is more consistent with traditional healing," Warne said. Since "we don't separate our physical, mental, spiritual and emotional health the way we do in modern specialized health care."
At Cherokee Indian Hospital, patients are assigned a team, which typically includes a primary care physician or a family nurse practitioner as well as a nutritionist, a pharmacist and a behavioral health specialist.
Rebuilding their health care prompted the need for the new hospital. Gambling revenue covered most of the costs for the $82 million facility. "The old building was outdated and inefficient," said Cooper, "a constant reminder of the paternalistically provided Indian Health Service."
The new hospital's main concourse — called Riverwalk — tells stories from Cherokee legend through graphics of a winding river, fish and turtles inlaid in the terrazzo floor. Signs are written in English and Cherokee. A literal translation of the emergency room sign is "Get better in a hurry," and the dental suite is "the place that gives you a big smile."
Patients can receive dialysis, acupuncture, massage therapy and chiropractic care. The ambulance bay, surgical suite and in-patient unit are located out of patients' view to reduce anxiety and stress.
"The building really is one big strategic tool," Cooper said.
Nations, the patient visiting recently, remembers the old days when she and her family, many of them dealing with diabetes and some on dialysis, used to wait for hours in the former hospital, a dark space dubbed "the bunker."
The 46-year-old said that she'd typically see different providers every visit. "And every time I would have to tell my story over and over and over." Now, she feels somewhat accountable to her care team — and more motivated to make and keep appointments.
"Back then, if my provider had wanted me to see a nutritionist, for example, I would have probably said, 'Whatever,' and forgotten about it," she said.
"We're trying to build a relationship with our patients," said Richard Bunio, the Cherokee Indian Hospital's clinical director who is Canadian and married to a tribe member. He noted that Native Americans generally have suffered a lot of historical trauma, leading to deeply rooted mistrust of mainstream medicine.
By quality measures, including the widely used Healthcare Effectiveness Data and Information Set, the hospital has recently performed in the top quartile for blood pressure control, blood sugar control and several cancer screenings. Also, Cooper added that in the past four years the diabetes rate in the community has leveled.
Could It Work Everywhere?
It is uncertain if self-governance would work for tribes such as the Rosebud Sioux or the Oglala Lakota on the Pine Ridge Indian Reservation, where geographic isolation, poverty and a lack of resources make new health care investments difficult.
"It's a huge challenge, but it's possible," said Warne, adding that philanthropy or partnerships with an academic health system might help finance such projects.
Not too long ago, tribal officials from South Dakota visited the Cherokee Indian Hospital. Despite their geographic and socioeconomic challenges, Cooper said, he believes self-determination is essential for their future. "Self-determination works. Self-determination is the right thing. And self-determination is the catalyst to restoring the health of our communities."
Yet many of the South Dakota tribal leaders remain skeptical. They are concerned that self-determination would let the federal government off the hook from its responsibility to provide health services.
Therefore, the Rosebud Sioux took a different route. Instead of just parting ways with the IHS, they sued the federal government for violating treaties. The case is pending in court.
The headlines about presidential candidate Joe Biden's new health care plan called it "a nod to the past" and "Affordable Care Act 2.0." That mostly refers to the fact that the former vice president has specifically repudiated many of his Democratic rivals' calls for a "Medicare for All" system and instead sought to build his plan on the ACA's framework.
Sen. Bernie Sanders, one of Biden's opponents in the primary race and the key proponent of the Medicare for All option, has criticized Biden's proposal, complaining that it is just "tinkering around the edges" of a broken health care system.
Still, the proposal put forward by Biden last week is much more ambitious than Obamacare — and, despite its incremental label, would make some very controversial changes. "I would call it radically incremental," said Chris Jennings, a political health strategist who worked for Presidents Bill Clinton and Barack Obama and who has consulted with several of the current Democratic candidates.
Republicans who object to other candidates' Medicare for All plans find Biden's alternative just as displeasing.
"No matter how much Biden wants to draw distinctions between his proposals and single payer, his plan looks suspiciously like "SandersCare Lite," wroteformer congressional aide and conservative commentator Chris Jacobs.
Biden's plan is built on expanding the ACA to reduce costs for patients and consumers, similar to what Hillary Clinton campaigned on in 2016. It would do things Democrats have called for repeatedly since the ACA was passed. Among them is a provision to that would "uncap" federal help to pay for health insurance premiums — assistance that is now available only to those with incomes below 400% of the poverty level, or about $50,000 for an individual. Under Biden's plan, no one would be required to pay more than 8.5% of their income toward health insurance premiums. The plan also proposes to make coverage more affordable to use by effectively lowering deductibles and copayments.
But it includes several proposals that Congress has failed repeatedly to enact, including some that were part of the original debate over the ACA. It also has some initiatives that are so expansive, it is hard to imagine them passing Congress — even if Democrats sweep the presidency and both chambers of Congress in 2020.
Here are some of the more controversial pieces of the Biden health plan:
Public Option
Although many of the Democratic presidential candidates have expressed varying degrees of support for a Medicare for All plan, nearly all have also endorsed creating a government-sponsored health plan, known colloquially as a "public option," that would be available to people why buy their own health insurance. In other words, it would apply to those who don't get insurance through their job or qualify for other government programs, like Medicare or Medicaid.
A public option was included in the version of the ACA that passed the House in 2009. But it could not muster the 60 votes needed to pass the Senate over GOP objections — even though the Democrats had 60 votes at the time.
Biden's public option, however, would be available to many more people than the 20 million or so in the current individual insurance market. According to the document put out by the campaign, it would be available to those who don't like or can't afford their employer insurance, and to small businesses.
Most controversial, though, is that the 2.5 million people ineligible for either Medicaid or private insurance subsidies because their states have chosen not to expand Medicaid would be automatically enrolled in the new public option, at no cost to them or the states where they live. Also included automatically in the public option would be another 2 million people with low incomes who currently are eligible for ACA coverage subsidies but would also be eligible for expanded Medicaid.
That part of Biden's proposal has prompted charges that the 14 states that have so far chosen not to expand Medicaid would save money compared with those that have expanded, because expansion states have to pay 10% of the cost of that new population.
Jennings, the Democratic health strategist, argued that's unavoidable because it's the population that needs coverage most. "If you're not going to have everyone get a plan right away, you need to make sure those who are most vulnerable do," he said.
Abortion
The Biden plan calls for eliminating the "Hyde Amendment," an annual rider to the spending bill for the Department of Health and Human Services that forbids the use of federal funds to pay for abortions. Biden recently ran into some difficulty when his position on Hyde was unclear.
But the plan also calls for federal abortion funding. "[T]he public option will cover contraception and a woman's constitutional right to choose," said the document.
In 2010, the Affordable Care Act very nearly failed to become law after an intraparty fight between Democrats who supported and opposed abortion funding. Abortion opponents wanted firm guarantees in permanent law that no federal funds would ever be used for abortion; abortion-rights supporters called that a deal breaker. Eventually,a shaky compromise was reached.
And while it is true that there are now far fewer Democrats who oppose abortion in Congress than there were in 2010, the idea of even a Democratic-controlled Congress voting for federal abortion funding seems far-fetched. The current Democratic-led House has declined even to include a repeal of the Hyde Amendment in this year's HHS spending bill, because it could not get through the GOP-controlled Senate or get signed by President Donald Trump.
Undocumented Immigrants
When Obama said in a speech to Congress in September 2009 that people not in the U.S. legally would be ineligible for federal help purchasing insurance, it prompted the infamous "You lie!" shout from Rep. Joe Wilson (R-S.C.).
Today, all the Democratic candidates say they would provide coverage to undocumented residents. There is no mention of them specifically in the plan posted on Biden's website, although a campaign official told Politico that undocumented people would be able to purchase plans on the health insurance exchanges but would not qualify for subsidies.
Still, in his speech unveiling the plan at an AARP-sponsored candidate forum in Iowa, Biden did not address this issue of immigrants' health care. He said only that his plan would expand funding for community health centers, which serve patients regardless of ability to pay or immigration status, and that people here without legal authority would be able to obtain coverage in emergencies, which is already law.
When Michael Howard arrived for a checkup with his lung specialist, he was worried about how his body would cope with the heat and humidity of a Boston summer.
"I lived in Florida for 14 years, and I moved back because the humidity was just too much," Howard told pulmonologist Dr. Mary Rice as he settled into an exam room chair at a Beth Israel Deaconess HealthCare clinic.
Howard, 57, has chronic obstructive pulmonary disease (COPD), a progressive lung disease that can be exacerbated by heat and humidity. Even inside a comfortable, climate-controlled room, his oxygen levels worried Rice.
Howard reluctantly agreed to try using portable oxygen, resigned to wearing the clear plastic tubes looped over his ears and inserted into his nostrils. He assured Rice he has an air conditioner and will stay inside on extremely hot days. The doctor and patient agreed that Howard should take his walks in the evenings to be sure he gets enough exercise without overheating.
Then Howard turned to Rice with a question she didn't encounter in medical school: "Can I ask you: Last summer, why was it so hot?"
Rice, who studies air pollution, was ready.
"The overall trend of the hotter summers that we're seeing [is] due to climate change," Rice said.
In June, the American Medical Association, American Academy of Pediatrics and American Heart Association were among a long list of medical and public health groups that issued a call to action asking the U.S. government, business and leaders to recognize climate change as a health emergency.
The World Health Organization calls climate change "the greatest health challenge of the 21st century," and a dozen U.S.medical societies urge action to limit global warming.
Some medical societies provide patients with information that explains the related health risks. But none have guidelines on how providers should talk to patients about climate change.
There is no concrete list of "do's" — as in wear a seat belt, use sunscreen and get exercise — or "don'ts" — as in don't smoke, don't drink too much and don't text while driving ― that doctors can talk about with patients.
Climate change is different, said Rice, because an individual patient can't prevent it. So Rice focuses on steps her patients can take to cope with the consequences of heat waves, such as more potent pollen and a longer allergy season.
That was Mary Heafy's main complaint. The 64-year-old has asthma that is worse during the allergy season. During her appointment with Rice, Heafy wanted to know why her eyes and nose were running and her chest feels tight for longer periods every year.
"It feels like once [the allergy season] starts in the springtime, it doesn't end until there's a killing frost," Heafy told Rice.
"Yes," Rice nodded, "because of global warming, the plants are flowering earlier in the spring. After hot summers, the trees are releasing more pollen the following season."
So Heafy may need stronger medicines and more air filters, her doctor said, and may spend more days wearing a mask — although the effort of breathing through a mask is hard on her lungs as well.
As she and the doctor finalized a prescription plan, Heafy observed that "physicians talk about things like smoking, but I don't know that every physician talks about the environmental impact."
Why do so few doctors talk about the impact of the environment on health? Besides a lack of guidelines, doctors say, they don't have time during a 15- to 20-minute visit to broach something as complicated as climate change.
And the topic can be controversial: While a recent Pew Research Center poll found that 59% of Americans think climate change affects their local community "a great deal or some," only 31% say it affects them personally, and views vary widely by political party.
We contacted energy-industry trade groups to ask what role — if any — medical providers should have in the climate change conversation, but neither the American Petroleum Institute nor the American Fuel & Petrochemical Manufacturers returned calls or email requests for comment.
Some doctors say they worry about challenging a patient's beliefs on the sometimes fraught topic, according to Dr. Nitin Damle, a past president of the American College of Physicians.
"It's a difficult conversation to have," said Damle, who practices internal medicine in Wakefield, R.I.
Damle said he "takes the temperature" of patients, with some general questions about the environment or the weather, before deciding if he'll suggest that climate change is affecting their health.
Dr. Gaurab Basu, a primary care physician at Cambridge Health Alliance, said he's ready if patients want to talk about climate change, but he doesn't bring it up. He first must make sure patients feel safe in the exam room, he said, and raising a controversial political issue might erode that feeling.
"I have to be honest about the science and the threat that is there, and it is quite alarming," Basu said.
One environmental group isn't waiting for doctors and nurses to figure out how to talk to patients about climate change.
Molly Rauch, the public health policy director with Moms Clean Air Force, a project of the Environmental Defense Fund, urges the group's more than 1 million members to ask doctors and nurses for guidance. For example: When should parents keep children indoors because the outdoor air is too dirty?
"This isn't too scary for us to hear about," Rauch said. "We are hungry for information about this. We want to know."
Mark Rubinstein, MD, a pediatrician and formerly a leading researcher with UC San Francisco's Center for Tobacco Control Research and Education, took up the post of executive medical officer at Juul last week.
Juul Labs, the nation's leading manufacturer of e-cigarettes, has hired as its medical director a prominent University of California researcher known for his work on the dangers nicotine poses for the adolescent brain.
The company said the hire will support its efforts to stem a teen vaping craze the Food and Drug Administration has labeled an epidemic. But critics see a cynical tactic taken straight from the Big Tobacco playbook.
Dr. Mark Rubinstein, a pediatrician and formerly a leading researcher with UC San Francisco's Center for Tobacco Control Research and Education, took up the post of executive medical officer at Juul last week, a move first reported by Politico. Rubinstein has done signature research on teen addiction and how nicotine, which is present in high levels in e-cigarettes, affects adolescents. He has spoken openly of the potential risks of vaping for children.
In a statement, Juul said Rubinstein would oversee research on underage use of vapor products, guide the company's youth prevention programs and policy positions, and help form links with the public health community. The company declined to make Rubinstein available for an interview. It says the move is part of its effort to reduce teen vaping while it continues to provide an alternative to smoking for adults.
Colleagues of Rubinstein, however, said they were disturbed by the move and skeptical of Juul's motivations. At the heart of their concerns is whether Juul is willing to lose the giant base of teen users who have helped fuel the company's meteoric rise and hefty market share.
Stanford University professor Bonnie Halpern-Felsher, who researches teen vaping and writes curriculum on teen prevention, helped train Rubinstein at UCSF. She said she was both incensed and disappointed when she heard about his move.
"Even if you believe in harm reduction," she said, "to go work for a tobacco company … to me goes against everything that anybody doing control should believe in." She said she is particularly concerned that a specialist on the effects of nicotine in adolescents has gone to work for the industry. Last year, Altria, one of the world's largest cigarette makers, bought 35% of Juul for $12.8 billion.
Stanton Glantz, director of the Center for Tobacco Control Research and Education, concurred, saying he was "shocked and depressed" by Rubinstein's decision to leave UCSF for Juul. He sees Juul's early social media campaigns as evidence the company has intentionally marketed to teens. Research supports this claim, though the company denies it and has shut down its Facebook and Instagram presence.
Not everyone shares their skepticism. Dr. Neal Benowitz, a UCSF professor who has studied addiction and smoking cessation for decades, frequently published with Rubinstein. He said he is hopeful that e-cigarettes can help people quit smoking and wants them to remain on the market while more research is done. He was shocked by the job change but said that if anyone can help figure out strategies to reduce youth vaping, it's Rubinstein.
Rubinstein's hire comes as Juul works to gather evidence to submit to the FDA that its devices offer more public benefit than risk. If it fails to convince the agency, Juul could be prohibited from selling most of its products.
Under the Trump administration, the FDA, which has oversight of all tobacco products, originally gave e-cigarette manufacturers until 2022 to file applications for approval for their devices, but a federal judge recently advanced the deadline to 2020. Juul has been wooing prominent researchers in the lead-up to the deadline, but with limited success amid concerns about the company's goals.
"Part of Juul's strategy is to create credibility and buy influence by hiring everybody who would take their money. We shouldn't be fooled: Juul created the youth e-cigarette epidemic and refuses to take responsibility for it," said Vince Willmore, spokesman for the Campaign for Tobacco-Free Kids
Some believe it will be a tall order for the companies to show that e-cigarettes are a net benefit, given what is known about the risks of teen vaping and how few studies there have been on their long-term efficacy to help people quit smoking. Others see the FDA's relatively lenient approach to the industry so far as a sign it may take a more favorable view of the products.
The FDA last year labeled teen vaping an "epidemic," noting federal survey data showed nearly 1 in 5 high school students had tried vaping in 2018. While not as harmful as older tobacco products, e-cigarettes contain high doses of nicotine and a variety of carcinogenic chemicals, according to Rubinstein's research. When it comes to vaping, Juul is by far the biggest seller in the U.S., capturing an estimated 70% of the e-cigarette market.
Anti-tobacco activists contend Juul increasingly is drawing on the tactics of tobacco companies to push back against regulation of its products. They point to a recent Juul campaign to overturn restrictions on e-cigarettes and flavored tobacco in San Francisco, where the company is based.
Last month, a Juul-backed ballot proposal gathered enough signatures to make the city's November ballot. The bill's supporters claim it would strengthen regulations around adolescent access to tobacco products, while ensuring the devices are available to those who want to quit smoking. Opponents,including the city's former attorney, say the measure would take away local control and peel back existing bans on flavored tobacco products and the sale of e-cigarettes until they are approved by the FDA.
"To us, Juul is Big Tobacco 2.0," said John Schachter of the Campaign for Tobacco-Free Kids, asserting the company is using deceptive legislation to maintain the sale of its products.
Benowitz of UCSF disagreed with the comparison, saying he sees a big difference between Juul, whose products show legitimate potential to help people addicted to cigarettes, and the tobacco companies that predate it.
One question at the core of the concerns over Rubinstein's move is whether research and prevention should come from within the industry. An internal research program is problematic, said David Michaels, a professor at George Washington University who has studied corporate attacks on the science underpinning environmental protection. "I understand why scientists are concerned about a program like this, and I think they should be," he said.
E-cigarette manufacturers, not taxpayers, should fund research of their products, Michaels said, but the research must be completely independent of the company. Tobacco companies have long used scientists to manufacture uncertainty and defend products that have harmed public health, he said, and the research they produce in-house will always be called into question.
By all accounts the woman, in her late 60s, appeared to have severe dementia. She was largely incoherent. Her short-term memory was terrible. She couldn't focus on questions that medical professionals asked her.
But Dr. Malaz Boustani, a professor of aging research at Indiana University School of Medicine, suspected something else might be going on. The patient was taking Benadryl for seasonal allergies, another antihistamine for itching, Seroquel (an antipsychotic medication) for mood fluctuations, as well as medications for urinary incontinence and gastrointestinal upset.
To various degrees, each of these drugs blocks an important chemical messenger in the brain, acetylcholine. Boustani thought the cumulative impact might be causing the woman's cognitive difficulties.
He was right. Over six months, Boustani and a pharmacist took the patient off those medications and substituted alternative treatments. Miraculously, she appeared to recover completely. Her initial score on the Mini-Mental State Exam had been 11 of 30 — signifying severe dementia — and it shot up to 28, in the normal range.
An estimated 1 in 4 older adults take anticholinergic drugs — a wide-ranging class of medications used to treat allergies, insomnia, leaky bladders, diarrhea, dizziness, motion sickness, asthma, Parkinson's disease, chronic obstructive pulmonary disease and various psychiatric disorders.
Older adults are highly susceptible to negative responses to these medications. Since 2012, anticholinergics have been featured prominently on the American Geriatrics Society Beers Criteria list of medications that are potentially inappropriate for seniors.
"The drugs that I'm most worried about in my clinic, when I need to think about what might be contributing to older patients' memory loss or cognitive changes, are the anticholinergics," said Dr. Rosemary Laird, a geriatrician and medical director of the Maturing Minds Clinic at AdventHealth in Winter Park, Fla.
The Basics
Anticholinergic medications target acetylcholine, an important chemical messenger in the parasympathetic nervous system that dilates blood vessels and regulates muscle contractions, bodily secretions and heart rate, among other functions. In the brain, acetylcholine plays a key role in attention, concentration, and memory formation and consolidation.
Some medications have strong anticholinergic properties, others less so. Among prescription medicines with strong effects are antidepressants such as imipramine (brand name Trofanil), antihistamines such as hydroxyzine (Vistaril and Atarax), antipsychotics such as clozapine (Clozaril and FazaClo), antispasmodics such as dicyclomine (Bentyl) and drugs for urinary incontinence such as tolterodine (Detrol).
In addition to prescription medications, many common over-the-counter drugs have anticholinergic properties, including antihistamines such as Benadryl and Chlor-Trimeton and sleep aids such as Tylenol PM, Aleve PM and Nytol.
Common side effects include dizziness, confusion, drowsiness, disorientation, agitation, blurry vision, dry mouth, constipation, difficulty urinating and delirium, a sudden and acute change in consciousness.
Unfortunately, "physicians often attribute anticholinergic symptoms in elderly people to aging or age-related illness rather than the effects of drugs," according to a research review by physicians at the Medical University of South Carolina and in Britain.
Seniors are more susceptible to adverse effects from these medications for several reasons: Their brains process acetylcholine less efficiently. The medications are more likely to cross the blood-brain barrier. And their bodies take longer to break down these drugs.
Long-Term Effects
In the late 1970s, researchers discovered that deficits in an enzyme that synthesizes acetylcholine were present in the brains of people with Alzheimer's disease. "That put geriatricians and neurologists on alert, and the word went out: Don't put older adults, especially those with cognitive dysfunction, on drugs with acetylcholine-blocking effects," said Dr. Steven DeKosky, deputy director of the McKnight Brain Institute at the University of Florida.
Still, experts thought that the effects of anticholinergics were short-term and that if older patients stopped taking them, "that's it — everything goes back to normal," Boustani said.
Concerns mounted in the mid-2000s when researchers picked up signals that anticholinergic drugs could have a long-term effect, possibly leading to the death of brain neurons and the accumulation of plaques and tangles associated with neurodegeneration.
Since then several studies have noted an association between anticholinergics and a heightened risk of dementia. In late June, this risk was highlighted in a new report in JAMA Internal Medicine that examined more than 284,000 adults age 55 and older in Britain between 2004 and 2016.
The study found that more than half of these subjects had been prescribed at least one of 56 anticholinergic drugs. (Multiple prescriptions of these drugs were common as well.) People who took a daily dose of a strong anticholinergic for three years had a 49% increased risk of dementia. Effects were most pronounced for people who took anticholinergic antidepressants, antipsychotics, antiepileptic drugs and bladder control medications.
These findings don't constitute proof that anticholinergic drugs cause dementia; they show only an association. But based on this study and earlier research, Boustani said, it now appears older adults who take strong anticholinergic medications for one to three years are vulnerable to long-term side effects.
Preventing Harm
Attention is now turning to how best to wean older adults off anticholinergics, and whether doing so might improve cognition or prevent dementia.
Researchers at Indiana University's School of Medicine hope to answer these questions in two new studies, starting this fall, supported by $6.8 million in funding from the National Institute on Aging.
One will enroll 344 older adults who are taking anticholinergics and whose cognition is mildly impaired. A pharmacist will work with these patients and their physicians to take them off the medications, and patients' cognition will be assessed every six months for two years.
The goal is to see whether patients' brains "get better," said Noll Campbell, a research scientist at Indiana University's Regenstrief Institute and an assistant professor at Purdue University's College of Pharmacy. If so, that would constitute evidence that anticholinergic drugs cause cognitive decline.
The second trial, involving 700 older adults, will examine whether an app that educates seniors about potential harms associated with anticholinergic medications and assigns a personalized risk score for dementia induces people to initiate conversations with physicians about getting off these drugs.
Moving patients off anticholinergic drugs requires "slow tapering down of medications" over three to six months, at a minimum, according to Nagham Ailabouni, a geriatric pharmacist at the University of Washington School of Pharmacy. In most cases, good treatment alternatives are available.
Advice For Older Adults
Seniors concerned about taking anticholinergic drugs "need to approach their primary care physician and talk about the risks versus the benefits of taking these medications," said Shellina Scheiner, an assistant professor and clinical geriatric pharmacist at the University of Minnesota.
Don't try stopping cold turkey or on your own. "People can become dependent on these drugs and experience withdrawal side effects such as agitation, dizziness, confusion and jitteriness," Ailabouni said. "This can be managed, but you need to work with a medical provider."
Also, "don't make the assumption that if [a] drug is available over the counter that it's automatically safe for your brain," Boustani said. In general, he advises older adults to ask physicians about how all the medications they're taking could affect their brain.
Finally, doctors should "not give anticholinergic medications to people with any type of dementia," DeKosky said. "This will not only interfere with their memory but is likely to make them confused and interfere with their functioning."
We're eager to hear from readers about questions you'd like answered, problems you've been having with your care and advice you need in dealing with the health care system. Visit khn.org/columnists to submit your requests or tips.
When doctors told Frances Faulkenburg she had sleep apnea, she was more than ready for relief from her tired-all-the-time existence. She used to fall asleep at red lights while behind the wheel. At night, she'd wake up gasping for air, heart pounding. Her husband told her she snored.
But Faulkenburg, 47, couldn't tolerate the CPAP machine her doctor prescribed.
Health care — and how much it costs — is scary. But you're not alone with this stuff, and knowledge is power. "An Arm and a Leg" is a podcast about these issues, and its second season is co-produced by KHN.
"I just could not get used to the face mask covering both my nose and mouth," said Faulkenburg, who lives in Oviedo, Fla.
"It was claustrophobic."
CPAP, or continuous positive airway pressure, is often one of the first solutions doctors suggest for sleep apnea. With this disorder, a person's breathing stops and starts so frequently during the night that it can lead to or exacerbate health problems. The National Sleep Foundation estimates that more than 18 million American adults have sleep apnea.
A CPAP machine blows a stream of air into the back of the throat to let people breathe easier. It prevents muscles in the back of the throat from narrowing, which can constrict the airway, causing snoring or disturbed sleep.
Yet Faulkenburg quit using her CPAP and went back to feeling sleepy and tired all the time.
Many people have a negative reaction to the machines and are tempted to do the same. The big whoosh of air in your throat. The restrictive mask on your face. It can be a lot to adjust to. Studies suggest that from one-third to more than 50% of patients either stop using their CPAP machine or never bother to fill their prescription. They quit for a variety of reasons, but mostly because the device can be cumbersome and uncomfortable. Sometimes, they quit because of confusing or stringent health insurance restrictions.
But the health effects of untreated sleep apnea can be serious. People struggle with anxiety, tiredness and low productivity. There's even an increased risk of high blood pressure, heart attack and stroke.
Mary Mertens, a respiratory therapist at the Cleveland Clinic, helps patients work through problems with their CPAP machine. Patients often complain that the volume of air the machine puts out feels too intense.
Bottom of Form
"Think about it as sticking your head out of a car window with your mouth open at 60 mph versus 25 mph," said Mertens. "The high pressure can be very overwhelming."
So Mertens' team goes to people's homes to help troubleshoot problems. That includes explaining sleep apnea and how a CPAP can help.
"Picture the air passage at the back of their throat like a garden hose with no water in it. The hose collapses down," said Mertens. That's what happens when a person with sleep apnea is sleeping.
"When we put a CPAP on somebody, it's like turning the water on for the garden hose," she said. "The hose then pops open and stays open."
At the Cleveland Clinic, about 70% of patients in the Respiratory Home Care program keep using their CPAP, Mertens said.
Follow-up is key. Mertens' team checks in with patients during the first three to five days, again between 30 and 45 days and again between 60 and 90 days.
Faulkenburg, the patient in Florida, first tried a CPAP 15 years ago but never checked back with her pulmonologist when she was struggling. And, she said, the physician never contacted her. Then several people in her social circle died in their sleep — all of them right around her age. Those stories shook Faulkenburg, and she decided to try her CPAP again.
"I got a mask that covered just my nose, which let my mouth stay closed. That ended up being the whole issue," she said. "I sleep so good, I can't sleep without my CPAP now."
Dr. Indira Gurubhagavatula, a sleep medicine physician at the University of Pennsylvania Health System, said the look of the device alone can be alarming.
"One of the first things that I hear is that the thing itself is intimidating — they see the tubing and mask and it's blowing air in their face — they have real concerns: 'Am I actually going to sleep better with that thing?'
"It is a big ask to go to bed with this thing strapped to their faces," she said.
Gurubhagavatula said people who feel claustrophobic should wear their CPAP mask during the day while reading or watching TV. That can help the nerve endings in the face get used to the mask.
"It's just like breaking in new shoes or new jeans," said Gurubhagavatula. "Once it's broken in, it's less of an issue."
Pulmonologist James Rowley, a sleep medicine physician at Detroit Medical Center, said the air pressure from the CPAP can cause a runny nose, nasal congestion or dry mouth. He said he can help by adjusting humidity settings on the machine or prescribing an antihistamine.
Medicare and private insurance companies require patients to use their CPAP very consistently — often at least four hours every night and for 70% of nights each month. Sometimes the usage is monitored.
Patients who don't comply may end up paying out-of-pocket. That's the topic of this week's episode of the podcast "An Arm and a Leg." Kaiser Health News co-produces the podcast.
Prices vary, but a fully equipped machine typically costs from $500 to $3,000, with the national average around $850. After that initial investment, masks, hoses and filters need to be replaced two or three times a year. And users have the ongoing cost of maintenance supplies — wipes and brushes to keep the machine parts clean.
Gurubhagavatula said she has patients whose machines have been taken away because they couldn't follow the insurance company rules.
"They may have child care or elder responsibilities that makes their sleep disrupted. Or they sleep in chunks of time because they work certain shifts," she said. "The rule is arbitrary because using the machine, even if part time, is beneficial."
Nate Wymer, 44, said his machine is lying around his home somewhere in Holly Springs, N.C., but he hasn't seen it in years.
"When I had the mask on I had to think about breathing out of my nose," said Wymer. "That's not something I normally do. After a couple of nights, I just couldn't do it."
"My doctor never really followed up from what I can remember, so I back-burnered it," said Wymer. "But, if you get in front of somebody, actually talk to them and make sure everything is going OK, that would have been nice."
Last week's announcement of a Trump administration overhaul of kidney care in the U.S. has reanimated an effort by federal lawmakers and kidney care advocates to extend drug coverage.
This article was first published on Wednesday, July 19, 2019 inKaiser Health News.
On Wednesday, Alexis Conell will mark seven years since she received the kidney transplant that saved her life, but the 53-year-old Chicago woman isn't exactly celebrating.
Although the federal government paid most of the costs for her 2012 transplant, a long-standing Medicare policy halted coverage three years later for the drugs that keep her body from rejecting the organ.
So when Conell lost her job suddenly last September, she also lost her health insurance — and her ability to afford the 16 daily medications she needs to survive.
"I was terrified," she said. "All you're thinking is, 'I don't want to lose my kidney.'"
For nearly a half-century, Medicare has covered patients, regardless of age, who have end-stage renal disease, including paying the costs of kidney transplants and related care, which run about $100,000 per patient.
But coverage ends after 36 months for those younger than 65 who don't otherwise qualify for the program — and that includes payment for the vital immunosuppressive drugs that cost thousands per patient each month.
Last week's announcement of a Trump administration overhaul of kidney care in the U.S. has reanimated an effort by federal lawmakers and kidney care advocates to extend drug coverage.
"After a transplant, patients should not have to worry about whether they can afford the treatment needed to keep their transplanted kidney," Rep. Ron Kind (D-Wis.) said in a statement.
For years, Kind has been among a bipartisan coalition in Congress championing legislation targeting kidney immunosuppressive drugs — to no avail.
The sticking point was price. A 2009 estimate by the Congressional Budget Office pegged the cost at $400 million over 10 years if the government were to extend lifetime drug coverage to those patients.
Two recent federal projections show that Medicare could actually save money — between $73.4 million and $120 million over a decade — by expanding payment for anti-rejection medications to help decrease the need for patients to get additional transplants or dialysis. Depending on financing, savings could reach $300 million in that period, suggested an estimate by the Centers for Medicare & Medicaid Services.
Armed with this data, a bipartisan coalition led by Kind and Rep. Michael Burgess (R-Texas), a physician, is expected to introduce legislation by August that would narrowly extend Medicare's Part B program to provide drug coverage for kidney transplant patients who have no other option.
"We must ensure patients have access to immunosuppressant coverage to ensure the success of their transplant, which will keep costs down by decreasing the need for a re-transplant or further dialysis," said Kind.
Sens. Richard Durbin (D-Ill.) and Bill Cassidy (R-La.) are poised to introduce their own legislation, sources told KHN on background.
The efforts in Congress will hinge on whether the CBO agrees that paying for the medication would save the government money, advocates said. Even the new estimates by CMS suggest that changing the program would increase costs initially, with savings apparent only after a decade.
Dr. Emily Blumberg, president of the American Society of Transplantation, said there appears to be high-level support for change now. In championing the overhaul of U.S. kidney care policy, Health and Human Services Secretary Alex Azar has cited a personal tie, noting that his father suffered from kidney failure and received a transplant in 2014.
More than 56,000 Americans with functioning kidney transplants don't have Medicare coverage, according to data from the U.S. Renal Data System. About two-thirds pay for their medications through private insurance, Medicaid or other government programs, experts said.
But about one-third of those patients may have no other source of drug coverage, which can lead to missed doses, jeopardizing their new kidneys. A 2010 study found that nearly 70% of U.S. kidney transplant programs reported deaths or organ losses directly related to the high cost of anti-rejection drugs.
If Medicare drug coverage had been extended in 2015, it would have averted at least 375 kidney transplant failures that year alone, the latest analysis showed.
When transplants fail, patients can die — or they must return to dialysis — paid for by Medicare at a cost of about $90,000 per year, with a poor prognosis.
"It's a no-brainer that you should do this both from a moral and ethical and, now it sounds like, cost perspective," said Dr. Robert Gaston, a nephrologist at the University of Alabama-Birmingham who co-authored a call for coverage in an Institute of Medicine report two decades ago.
Conell battled end-stage renal disease for years before receiving her kidney transplant. When she lost her job abruptly last fall, she had to cancel scheduled medical appointments and lab tests.
She drained her savings, then nearly ran out of medication before she found a pharmaceutical firm program that provides the drugs she needs at a deep discount.
"If I had to pay full price for them, it would easily be $3,000 or more per month," Conell said.
When her unemployment benefits ended in April, Conell qualified for Medicaid, which covers her drugs for now. The stress has been unrelenting, said Conell, who spent a day last week in the emergency room with dangerously high blood pressure.
"I was trying to look for a job, worried about paying my bills. Ultimately, I'm worried about losing my kidney," she said, adding that the long-delayed legislation could solve the problem. "I think they should pass it, like, yesterday."
Officials have known for years that some Medicare Advantage plans overcharge for treating serious medical conditions they cannot prove their patients have.
This article was first published on Tuesday, July 16, 2019 in Kaiser Health News.
Health insurers that treat millions of seniors have overcharged Medicare by nearly $30 billion the past three yearsalone, but federal officials say they are moving ahead with long-delayed plans to recoup at least part of the money.
Officials have known for years that some Medicare Advantage plans overbill the government by exaggerating how sick their patients are or by charging Medicare for treating serious medical conditions they cannot prove their patients have.
Getting refunds from the health plans has proved daunting, however. Officials with the Centers for Medicare & Medicaid Services repeatedly have postponed, or backed off, efforts to crack down on billing abuses and mistakes by the increasingly popular Medicare Advantage health plans offered by private health insurers under contract with Medicare. Today, such plans treat over 22 million seniors, more than 1 in 3 people on Medicare.
Now CMS is trying again, proposing a series of enhanced audits tailored to claw back $1 billion in Medicare Advantage overpayments by 2020 — just a tenth of what it estimates the plans overcharge the government in a given year.
At the same time, the Department of Health and Human Services Inspector General's Office has launched a separate nationwide round of Medicare Advantage audits.
As in past years, such scrutiny faces an onslaught of criticism from the insurance industry, which argues the CMS audits especially are technically unsound and unfair and could jeopardize medical services for seniors.
America's Health Insurance Plans, an industry trade group, blasted the CMS audit design when details emerged last fall, calling it "fatally flawed."
Insurer Cigna Corp. warned in a May financial filing: "If adopted in its current form, [the audits] could have a detrimental impact" on all Medicare Advantage plans and "affect the ability of plans to deliver high quality care."
But former Sen. Claire McCaskill, a Missouri Democrat who now works as a political analyst, said officials must move past powerful lobbying efforts to hold health insurers accountable and demand refunds for "inappropriate" billings.
"There's a lot of things that could cause Medicare to go broke. This would be one of the contributing factors," she said. "Ten billion dollars a year is real money."
Catching Overbilling With A Wider Net
In the overpayment dispute, health plans want CMS to scale back — if not kill off — an enhanced audit tool that, for the first time, could force insurers to cough up millions in improper payments they've received.
For over a decade, audits have been little more than an irritant to insurers because most plans go years without being chosen for review and often pay only a few hundred thousand dollars in refunds as a consequence. When auditors uncover errors in the medical records of patients they paid the companies to treat, CMS has simply required a rebate for those patients for just the year audited — relatively small sums for plans with thousands of members.
The latest CMS proposal would raise those stakes enormously by extrapolating error rates found in a random sample of 200 patients to the plan's full membership — a technique expected to trigger many multimillion-dollar penalties. Though controversial, extrapolation is common in medical fraud investigations — except for investigations into Medicare Advantage. Since 2007, the industry has successfully challenged the extrapolation method and, as a result, largely avoided accountability for pervasive billing errors.
"The public has a substantial interest in the recoupment of millions of dollars of public money improperly paid to health insurers," CMS wrote in a Federal Register notice late last year announcing its renewed attempt at using extrapolation.
Penalties In Limbo
In a written response to questions posed by Kaiser Health News, CMS officials said the agency has already conducted 90 of those enhanced audits for payments made in 2011, 2012 and 2013 — and expects to collect $650 million in extrapolated penalties as a result.
Though that figure reflects only a minute percentage of actual losses to taxpayers from overpayments, it would be a huge escalation for CMS. Previous Medicare Advantage audits have recouped a total of about $14 million, far less than it cost to conduct them, federal records show.
Though CMS has disclosed the namesof the health plans in the crossfire, it has not yet told them how much each owes, officials said. CMS declined to say when, or if, they would make the results public.
This year, CMS is starting audits for 2014 and 2015, 30 per year, targeting about 5% of the 600 plans annually.
This spring, CMS announced it would extend until the end of August the audit proposal's public comment period, which was supposed to end in April. That could be a signal the agency might be looking more closely at industry objections.
Healthcare industry consultant Jessica Smith said CMS might be taking additional time to make sure the audit protocol can pass muster. "Once they have their ducks in a row, CMS will come back hard at the health plans. There is so much money tied to this."
But Sean Creighton, a former senior CMS official who now advises the industry for healthcare consultant Avalere Health, said payment error rates have been dropping because many health plans "are trying as hard as they can to become compliant."
Still, audits are continuing to find mistakes. The first HHS inspector general audit, released in late April, found that Missouri-based Essence Healthcare Inc. had failed to justify fees for dozens of patients it had treated for strokes or depression. Essence denied any wrongdoing but agreed it should refund $158,904 in overcharges for those patients and ferret out any other errors.
Essence also faces a pending whistleblower suit filed by Charles Rasmussen, a Branson, Mo., doctor who alleges the health plan illegally boosted profits by overstating the severity of patients' medical conditions. Essence has called the allegations "wholly without merit" and "baseless."
Essence started as a St. Louis physician group, then grew into a broader holding company backed by prominent Silicon Valley venture capitalist John Doerr with his brother, St. Louis doctor and software designer Thomas Doerr, in 2007. Neither would comment on the allegations.
How We Got Here
CMS uses a billing formula called a "risk score" to pay for each Medicare Advantage member. The formula pays higher rates for sicker patients than for people in good health.
Congress approved risk scoring in 2003 to ensure health plans did not shy away from taking sick patients who could incur higher-than-usual costs from hospitals and other medical facilities. But some insurers quickly found ways to boost risk scores — and their revenues.
In 2007, after several years of running Medicare Advantage as what one CMS official dubbed an "honor system," the agency launched "Risk Adjustment Data Validation," or RADV, audits. The idea was to cut down on undeserved payments that cost CMS nearly $30 billion over the past three years.
The audits of 37 health plans revealed that on average auditors could confirm just 60% of the more than 20,000 medical conditions CMS had paid the plans to treat.
Extra payments to plans that had claimed some of its diabetic patients had complications, such as eye or kidney problems, were reduced or invalidated in nearly half the cases. The overpayments exceeded $10,000 a year for more than 150 patients, though health plans disputed some of the findings.
But CMS kept the findings under wraps until the Center for Public Integrity, an investigative journalism group, suedthe agency under the Freedom of Information Act to make them public.
Despite the alarming results, CMS conducted no audits for payments made during 2008, 2009 and 2010 as they faced industry backlash over CMS' authority to conduct them, and the threat of extrapolated repayments. Some inside the agency also worried that health plans would abandon the Medicare Advantage program if CMS pressed them too hard, records released through the FOIA lawsuit show.
CMS officials resumed the audits for 2011 and expected to finish them and assess penalties by the end of 2016. That has yet to happen amid the continuing protests from the industry. Insurers want CMS to adjust downward any extrapolated penalties to account for coding errors that exist in standard Medicare. CMS stands behind its method — at least for now.
At a minimum, argues AHIP, the health insurers association, CMS should back off extrapolation for the 90 audits for 2011-13 and apply it for 2014 and onward. Should CMS agree, it would write off more than half a billion dollars that could be recovered for the U.S. Treasury.
Three years ago, Corey Walsh, who was in a relationship with a man who was HIV-positive, got a prescription for Truvada, a drug approved by the Food and Drug Administration to prevent infection with the virus that causes AIDS.
Walsh, then 23, was covered by his parents' health insurance policy, which picked up the cost of the drug. But the price tag for the quarterly lab tests and doctor visits he needed as part of the prevention regimen cost him roughly $400, more than he could afford.
"I went back to my physician and said, 'I can't take this anymore because all these ancillary services aren't covered,'" Walsh recalled. He ended up joining a clinical trial that covered all his costs.
Walsh's experience with high out-of-pocket costs, whether for medication or related services, is common, advocates say. Last month, the U.S. Preventive Services Task Force recommended that clinicians offer prescription pre-exposure prophylaxis, or PrEP, to people at high risk of contracting HIV. The decision by the independent group of experts means that starting in 2021 most health plans are required to cover drugs that are recommended to prevent HIV, and patients can't be charged anything out-of-pocket for the medication.
But the recommendation doesn't apply to the other clinical and lab services people need if they're on PrEP, according to task force officials.
In addition to the ancillary charges, other roadblocks persist for people who need PrEP from getting it.
"Eliminating cost sharing will undoubtedly expand access to individuals for whom affordability has been a significant barrier," said Amy Killelea, senior director of health systems integration at NASTAD, an organization representing public health officials nationwide. "However, scaling up access to PrEP to individuals who need it most — including young, gay, black and Latino men — will require addressing other major systemic and structural challenges, such as stigma and provider awareness and willingness to prescribe PrEP to their patients."
President Donald Trump has emphasized the need for more efforts to fight the HIV epidemic. In his State of the Union address in February, the president vowed to eliminate HIV transmission by 2030.
Currently, Truvada for PrEP, made by Gilead, is the only drug approved to prevent HIV. The once-a-day pill is at least 90% effective in some high-risk groups, including men who have sex with men as well as heterosexual men and women who have sex with HIV-positive partners, and 70% effective in people who inject illicit drugs.
Gilead estimated that 200,000 people now receive Truvada. The Centers for Disease Control and Prevention estimated that in 2015 there were 1.1 million people in the United States who could benefit from PrEP.
With a monthly price tag approaching $2,000, many private health plans have put the drug in a specialty drug tier with high copayments or coinsurance. Those payments will disappear when the task force recommendations take effect in 2021.
Truvada is generally covered in state Medicaid programs, as is the required clinical and lab work. But in the southern part of the country, where many states have not expanded Medicaid under the Affordable Care Act and HIV infection rates are high, there may be less access to the medication and other services.
Gilead offers a medication assistance program for uninsured people and a copay assistance program for those with private coverage that can fill gaps.
Gilead has submitted another HIV drug, Descovy, for FDA approval for PrEP, and a generic version of Truvada is expected next year.
It's unclear how these options might affect people's access to and ability to afford PrEP.
"Often it takes more than one generic for the price of a drug to drop," said Jennifer Kates, a senior vice president at the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)
The new preventive coverage requirement may lead to private insurers or Medicaid programs trying to limit access by imposing prior authorization requirements, some advocates worry. Insurers might, for example, require doctors to show that the patient is HIV-negative and meets the risk criteria before approving the prescription. That can have serious repercussions.
"Anytime there's a delay at the pharmacy or on the provider's end, patients will give up," said John Peller, president and CEO of the AIDS Foundation of Chicago.