Texans Can Appeal Surprise Medical Bills, But The Process Can Be Draining

KFF Health News, February 13, 2019

The Texas Department of Insurance's mediation program can intervene when Texans complain about an unexpected bill. Historically, the state program had many restrictions that left few consumers eligible for help. But the Texas Legislature expanded it in 2017.

This article was published February 13, 2019, by Kaiser Health News.

By Ashley Lopez, KUT

In Texas, a growing number of patients are turning to a little-known state mediation program to deal with unexpected hospital bills.

The bills in question often arrive in patients' mailboxes with shocking balances that run into the tens or even hundreds of thousands of dollars.

When patients, through no fault of their own, are treated outside their insurers' network of hospitals, the result can be a surprise bill. Other times, insurers won't agree to pay what the hospital charges, and the patient is on the hook for the balance.

The Texas Department of Insurance's mediation program can intervene when Texans complain about an unexpected bill — often after an emergency in which a patient is rushed for treatment at an out-of-network hospital.

Historically, the state program had many restrictions that left few consumers eligible for help. But the Texas Legislature expanded it in 2017.

Since then, more patients have been filing complaints. In 2014, the department was asked to mediate 686 medical bills. During the 2018 fiscal year, however, it received 4,445 bills, more than double the 2,063 bills received in 2017.

Even after the changes, the mediation program could be a lot more robust and is likely addressing only a fraction of these problematic bills, consumer advocates say.

The Road To A Surprise Medical Bill

Brad Buckingham had to deal with a surprise medical bill after a bicycle accident in 2016.

Buckingham sent his bill to Kaiser Health News and NPR's "Bill of the Month" portal last year.

The Austin, Texas, dentist said he was on a ride with friends in December 2016 when he crossed train tracks at an angle to avoid a pileup. His wheel slipped out from under him, and he landed hard on his left hip.

"All I could do was scream," he said. "I couldn't even make words."

His friends called an ambulance, and Buckingham was taken to the nearest hospital: St. David's South Austin Medical Center.

"I specifically remember I gave them my health insurance information in the ambulance," he said. "And they put me in the ER, and from the ER they took my insurance information again."

Buckingham had insurance through Baylor Scott & White Health, which he bought through the Affordable Care Act marketplace. St. David's was out of his plan's network, but no one told him that — at first.

Buckingham had broken his hip, and doctors took him into surgery the same day.

"They held me in the hospital for three days just for recovery and never told me I was out of network until the time of my discharge," he said.

A few weeks later, Buckingham got a bill that said he owed $71,543.

The total bill eventually came to $75,346. Baylor Scott & White, which left the ACA marketplace the following year, paid only $3,812.

Buckingham thought it was a mistake, he said. He called the hospital and the insurer to sort it out. But after weeks of inquiring about it, there was no resolution.

Both the hospital and insurer insisted payment was his responsibility.

"I'm sitting there thinking to myself that there is no way — there is no way — this is right," he said.

Baylor Scott & White said it couldn't discuss Buckingham's bill "due to confidentiality requirements."

After Buckingham gave St. David’s permission to discuss his case with the media, the hospital released a statement saying his bill was actually the amount he owed from his deductible and coinsurance — not a balance bill.

The hospital also said the bill was so large because of his "high deductible plan."

Those plans "may be attractive to some people because they cost less, though they place more financial responsibility on the patient," the statement from St. David's said.

Buckingham said his policy had a deductible of $5,000 for in-network care and $10,000 for out-of-network care. He still doesn't know how his bill got to be so high, he said.

Buckingham didn't know about the state's mediation program. But even if he had known, he wasn't eligible for the program at the time. His bike accident and the billing dispute with the hospital happened months before the Texas Legislature decided to expand the pool of eligible patients. So he hired his own lawyer to help him negotiate with the hospital.

Buckingham now owes a couple of thousand dollars to St. David's, he said, but he remains frustrated by the experience.

"You know, whenever I tell my story to anybody, they kind of agree — like, 'Oh my gosh, this is ridiculous,'" he said. "But then when you talk to the people that have any control over it, it's the exact opposite. It's: 'You owe it; we don't.'"

‘A Total Roll Of The Dice'

A surprise bill can happen to anyone who makes an urgent trip to the nearest emergency room.

"It's a total roll of the dice," said Stacey Pogue, a senior policy analyst with the Center for Public Policy Priorities in Austin. She has been looking into balance billing for years. "The medical emergency that's going to send you to the hospital where you could get a surprise bill — is that emergency room going to be in or out of network?"

Pogue said the Texas Department of Insurance's mediation process forces an insurance company and the hospital or medical provider to negotiate a fair price for services. Ninety percent of the time those negotiations happen over the phone, she said.

There are two big reasons the number of bills sent for mediation more than doubled from 2017 to 2018, Pogue said.

"One is just increased awareness," she said. "There is constant media attention now to surprise medical bills because the stories are so shocking, right? We see them covered more, so people are more aware that when they get one, they could do something about it."

The second reason is that, in 2017, the Texas Legislature opened the mediation program up to more people, including teachers.

Can’t Wish It Away

Stacey Shapiro, a first-grade teacher in Austin, also received a surprise bill from St. David's South Austin Medical Center after she landed in the emergency room last March.

The marathon runner said she woke up one Saturday for an early run and wasn’t feeling well.

"All of a sudden the whole room started spinning. … I started sweating, sweating like buckets," she said. "It was terrible, and then all I remember is that my ears started popping, my vision got blurred and then the next thing I knew, I had passed out."

Shapiro’s boyfriend heard her hit the bathroom floor. He found her passed out, with her eyes open and hardly breathing. He took her to St. David's because it was the closest hospital.

Shapiro was taken care of in a few hours, she said. Hospital staff gave her fluids and anti-nausea medication. Doctors found she had a dramatic change in her blood pressure that was likely due to a spell of hypoglycemia, or low blood sugar.

Two months later, a bill for $6,720 came in the mail.

Like many teachers in Austin, Shapiro gets her health insurance from Aetna.

In a statement, the insurer said Austin school district employees are supposed to use the Seton Accountable Care Organization network, comprising several Catholic hospitals in the area. The parent company for St. David's, the for-profit hospital chain HCA, doesn't participate in that network.

"Unfortunately, HCA is not currently accepting payments through Aetna's [contracted payment] program, which provides set payment fees for non-participating providers. This has resulted in Ms. Shapiro being balance billed for her emergency room visit," Aetna wrote in a statement.

Shapiro said she had heard of other Austin Independent School District employees dealing with high hospital bills. In fact, Shapiro reached out to radio station KUT after hearing the story of Drew Calver, an Austin high school teacher who was balance-billed for nearly $109,000 by St. David's after a heart attack. Calver's story was part of Kaiser Health News and NPR's "Bill of the Month" series last year.

In her case, Shapiro said, Aetna told her not to pay what the hospital was charging her. She was told to pay only her deductible ($1,275), which she did right away, she said. But St. David's kept sending her bills for the remaining balance, which was more than $5,000.

"I guess I just thought that it was going to go away," Shapiro said.

But it didn't. For a public school teacher, $5,000 would have been a huge blow to her budget, she said.

Shapiro applied for financial assistance, but St. David's told her she didn’t qualify. She felt out of options, she said — until a friend told her about the state's mediation program.

After she contacted the program, a state mediator set up a scheduled call with Aetna and St. David's. But before it took place, a KUT reporter asked St. David's for a comment on the situation. Shortly afterward, Shapiro said, St. David's told her she no longer owed anything.

St. David's later told KUT that Shapiro had "already satisfied her financial obligation." It also denied that she was balance-billed to begin with.

Shapiro called the whole experience exhausting. "It's just very frustrating because this has been very time-consuming," she said.

More Work To Do

Pogue, of the Center for Public Policy Priorities, has been arguing that the state needs to find more ways to get involved. The current mediation process is pretty good, she said, but not enough people know it's an option.

"Because first, the instructions for how to do it are on your medical bill and your explanation of benefits — the most indecipherable documents you are going to get," she said.

And even if people understand they have a right to mediation, they might get scared off by the concept and think they need a lawyer, Pogue added.

When people do use the program, though, it tends to work by saving patients money.

In fiscal year 2018, the initial complaints amounted to $9.7 million worth of medical bills, according to the state insurance agency. After mediation, the final charges had been negotiated down to $1.3 million.

Mediation is helpful, Pogue said, but it still puts a big burden on the patient, who may be confused. "Why didn't this happen in the first place?" she said. "How come I had to, while recovering from an emergency, decipher medical bills, fill out paperwork with the state department of insurance, jump through all these hoops, when all that needed to happen was a phone call?"

The ideal solution to surprise medical bills would remove consumers from this confusing web altogether, she said.

States like New York, California and Florida have systems that make things easier for consumers, Pogue said, and Texas should, too.

In 2015, New York became the first state to pass a law aimed at protecting patients from surprise medical bills from out-of-network hospitals. Its Emergency Medical Services and Surprise Bills Law holds consumers harmless if they are treated by an out-of-network doctor at a participating hospital, among other things.

In 2016, Florida lawmakers passed legislation protecting consumers from receiving surprise medical bills "from doctors and hospitals that don't have a contract with the patient's insurance plan," the Miami Herald reported.

And in 2017, California passed a law shielding patients from balance billing. The law kicks in if someone visits an in-network provider, including a hospital, imaging center or lab. Under the law, patients would be responsible only for their in-network share of the cost, even if they’re seen by an out-of-network provider.

In the meantime, Pogue said, more Texans should take advantage of what’s already in place in the state.

The number of people who seek mediation is "tiny compared to the number of people who get surprise bills," she said, "so there is a ton of work to be done."

This story is part of a partnership that includes KUT, NPR and Kaiser Health News.

Ashley Lopez, KUT: alopez@kut.org, @‪AshLopezRa‪dio

Vaccine Storage Too Often Fails To Meet Standards

KFF Health News, February 12, 2019

Experts say most providers are vigilant in properly storing their vaccines, but a recent spate of problems related to improper storage and packaging has led to concerns that the vaccines administered are less than effective.

This article was published February 12, 2019, by Kaiser Health News.

By Carmen Heredia Rodriguez

By correcting one potential error, the Ventura County (Calif.) Health Care Agency accidentally made another — and jeopardized vaccines given to thousands of people in the process.

In October 2017, county health officials, concerned that vaccines were getting too warm while being transported to clinics, changed their protocol. But a routine audit in November found that the ice packs they were using may have frozen some of the medicines and lowered their effectiveness. The agency then offered to reimmunize everyone who had received a vaccine that was delivered in faulty packaging.

"There's no way to tell whether or not they were ineffective," said Jason Arimura, director of pharmacy services for Ventura County Medical Center. Out of an abundance of caution, "we just notified everyone."

The number of patients affected: 23,000.

Ventura County is far from the only case of vaccines feared to be ineffective reaching patients. In the past 13 months alone, 117 children received possibly compromised vaccines against polio, meningococcal disease and the human papillomavirus at an Indian Health Service clinic in Oklahoma City because of improper refrigeration. Similar issues with temperature control prompted a health clinic in Indianapolis to send letters offering to revaccinate 1,600 people last January, according to local news reports.

Last week, Kentucky officials announced that potentially ineffective and contaminated vaccines were administered at multiple businesses across Kentucky, Ohio and Indiana. The statement did not disclose how many people were affected.

The federal government sets standards on the storage of vaccines. However, not all healthcare providers are accountable under those guidelines.

The Vaccines for Children (VFC) program, which offers these drugs at no cost for kids from low-income families, requires clinics, doctors and other providers to undergo annual audits and use top-grade equipment, such as continuous temperature-monitoring devices. It also requires that problems be reported to federal authorities.

More than 44,000 doctors participate in the program and provide vaccines to 90% of the children in the country, according to the Centers for Disease Control and Prevention.

But medical facilities outside of the program — like many pharmacies and internists with private practices who are treating adults or children not in the VFC program — have no comparable federal oversight. In fact, storing vaccines and reporting cases of patients receiving ineffective drugs is largely up to their discretion. The vaccines involved in the Ventura County recall were not part of the Vaccines for Children program.

Experts said most hospitals, clinics and doctors are vigilant in properly storing their vaccines. And research suggests that compromised vaccines given to patients are not harmful.

L.J Tan, chief strategy officer for the nonprofit vaccination advocacy group Immunization Action Coalition, said the nation's vaccine stock is likely one of "the safest in the world."

But improperly handling these medications means wasting expensive drugs, and using compromised vaccines "could create a pocket of underimmunized individuals," said Dr. Julie Boom, a pediatrician and director of the immunization project at Texas Children’s Hospital. "And we don't want that to happen."

In Ventura County, the temperature problems affected vaccines for flu, tetanus, diphtheria, whooping cough and hepatitis B. County health officials told patients who had received tuberculosis testing and some who had received penicillin to treat syphilis that their medicines also may have been compromised.

Through January, approximately 1,200 have come back to be revaccinated, Arimura said. Revaccinating all 23,000 people would cost $1.3 million, he added.

Vaccines are extremely sensitive to temperature fluctuations. In some cases, exposing a vaccine to the wrong environment once can effectively kill live viruses and harm proteins in the vaccines, said Tan. Generally, temperature problems occur during transportation of medicines.

Without proper monitoring, it is nearly impossible to tell whether vaccines have been exposed to extreme temperatures, said Boom.

A 2012 report by the inspector general at the Department of Health and Human Services found that, in a two-week period, three-quarters of the 45 healthcare providers who were sampled — all of which participated in the Vaccines for Children program — exposed their vaccines to improper temperatures for at least five cumulative hours.

A separate study by researchers at the federal Centers for Disease Control and Prevention published in 2015 found that 23% of the vaccination errors reported to the federal surveillance system from 2000 to 2013 involved improper storage or the use of expired vaccines.

Since these reports, the CDC put in place additional requirements for the children’s program, including recording the minimum and maximum temperature of the vaccine storage unit daily.

Dr. Paul Hunter, associate professor of family medicine and community health at the University of Wisconsin, said the federal oversight is "very good."

"In the big picture, they do it very consistently," he said.

For doctors and clinics outside the federal surveillance system, financial concerns often force them to take special care with vaccines and similar medicines. One vaccine dose can cost hundreds of dollars.

Sanford Health, a South Dakota-based health care system with operations across the Midwest, is working to make the federal requirements the standard for vaccines among its health care providers. The system started Vax Champ, a six-month training program for nurses to learn how to store and handle vaccines. The program requires participants to periodically take photos of their vaccine stocks and send in a list of all their inventory for review.

Funding for the program came from the vaccine manufacturer Sanofi Pasteur.

Andrea Polkinghorn, immunization strategy leader for Sanford Health, said vaccine storage systems vary widely among providers. Purchasing pharmaceutical-grade storage equipment is costly, she said, and providers are in different phases of the upgrade.

"But when you compare that to the projected loss of vaccines," Polkinghorn said, "the end is worth the means."

Carmen Heredia Rodriguez: CarmenH@kff.org, @ByCHRodriguez

False Lead: Senator's Offer to Help Patient Import Cheap Insulin Goes Nowhere

KFF Health News, February 11, 2019

Sen. Mike Enzi said he knew of a foundation that would import insulin for patients, but it doesn’t appear to exist.

This article was published February 11, 2019, by Kaiser Health News.

By Jay Hancock

It sounded like an answer to prayers for millions with diabetes struggling to pay soaring prices for insulin.

At a congressional hearing last month, Sen. Mike Enzi said an adviser had found "a foundation to import insulin for a number of people at lower cost." The Wyoming Republican told the mother of a young man with Type 1 diabetes that his adviser "worked through a foundation so that it would be legal, and I will share that with you."

Such a group could link patients to safe medicines while saving them hundreds or thousands of dollars a year. But it doesn't appear to exist, leaving patients with diabetes to either pay sky-high U.S. prices or try to import cheap insulin on their own, which is technically illegal.

Enzi spokesman Max D'Onofrio said he was unable to identify the group. And neither the American Diabetes Association nor the Campaign for Personal Prescription Importation is aware of a foundation like the one Enzi described, officials at those groups said.

"I have no idea what Sen. Enzi was talking about, but I'd like to know," said Gabriel Levitt, president of PharmacyChecker.com, which helps patients compare medicine prices and connect with foreign pharmacies.

Enzi spoke at a Jan. 29 hearing on drug prices held by the Senate finance committee. He was addressing Kathy Sego, whose son had skipped insulin doses to save the family money and was profiled by Kaiser Health News in 2017.

Sego said she wants more information but never heard back from Enzi’s office. "I have not heard of ANY foundation which helps people with insulin," she said via email.

"Sen. Enzi talks to a number of informal advisers, constituents and stakeholders who are concerned about healthcare costs, including drug prices, and he was referring to an anecdotal conversation he had," D'Onofrio said. Insulin list prices have risen as much as threefold in the past decade and patients can pay hundreds of dollars per month even with insurance.

While insulin makers Sanofi, Eli Lilly and Novo Nordisk often rebate a portion of those increases back to insurance companies and pharmacy benefit managers, patients' share of the cost is often based on the list price. Uninsured patients have to pay everything themselves.

Insulin brands sold in the United States can be bought for less than half as much in Canada and Mexico, prompting unknown numbers of people to drive across the border or order insulin by mail.

Unauthorized importation of prescription medicine is technically illegal, but the Food and Drug Administration allows "entry of shipments when the quantity and purpose are clearly for personal use," according to agency rules.

Insulin needs to be refrigerated, but some Canadian pharmacies will mail it in cold packs to the United States, patients report.

Just over a year ago, FDA criminal investigation agents searched stores in Florida that help consumers order many kinds of drugs from Canada and elsewhere. That suggests that a foundation importing insulin in bulk might be subject to the same kind of scrutiny.

For Enzi's part, he "continues to have concerns that importing prescription drugs from other countries will not solve the problem of rising drug prices," said his spokesman, D’Onofrio. "He hopes Congress takes real action this year to lower healthcare costs."

Jay Hancock: jhancock@kff.org, @JayHancock1

Shrinking Medicaid Rolls In Missouri And Tennessee Raise Flag On Vetting Process

KFF Health News, February 8, 2019

State officials credit low unemployment with a drop in the Medicaid rolls, but patient advocates note that many who've lost Medicaid coverage are children. They blame an arduous re-emrollment process has eligible people 'falling through the cracks.'

This article was published February 8, 2019, by Kaiser Health News.

By Phil Galewitz, Kaiser Health News                                     

Tangunikia Ward, a single mom of two who has been unemployed for the past couple of years, was shocked when her St. Louis family was kicked off Missouri's Medicaid program without warning last fall.

She found out only when taking her son, Mario, 10, to a doctor to be treated for ringworm.

When Ward, 29, tried to contact the state to get reinstated, she said it took several weeks just to have her calls returned. Then she waited again for the state to mail her a long form to fill out attesting to her income and family size, showing that she was still eligible for the state-federal health insurance program for the poor.

Mario, who is in third grade, missed much of school in December because Ward could not afford a doctor visit without Medicaid. His school would not let him return without a doctor's note saying he was no longer infected.

In January, with the help of lawyers from Legal Services of Eastern Missouri, she was able to get back on Medicaid, take her son to a doctor and return him to school. "It was a real struggle as it seemed like everyone was giving me the runaround," Ward said. "I am upset because my son was out of school, and that pushed him behind."

Ward and her children are among tens of thousands of Medicaid enrollees who were dropped by Missouri and Tennessee last year as both states stepped up efforts to verify members' eligibility.

Last year, Medicaid enrollment there declined far faster than in other states, and most of those losing coverage are children, according to state data.

State health officials say several factors, including the improved economy, are behind last year's drop of 7% in Missouri and 9% in Tennessee.

But advocates for the poor think the states' efforts to weed out residents who are improperly enrolled, or the difficulty of re-enrolling, has led to people being forced off the rolls. For example, Tennessee sent packets to enrollees that could be as long as 47 pages to verify their re-enrollment. In Missouri, people faced hours-long waits on the state's phone lines to get help in enrolling.

Medicaid enrollment nationally was down about 1.5% from January to October last year, the latest enrollment data available from the Centers for Medicare & Medicaid Services.

Herb Kuhn, president and chief executive of the Missouri Hospital Association, said the state's efforts to verify Medicaid eligibility could be tied to an increase in the number of people without coverage that hospitals are seeing.

"When we see over 50,000 children come off the Medicaid rolls, it raises some questions about whether the state is doing its verifications appropriately," he said. "Those who are truly entitled to the service should get to keep it."

In 2018, Missouri Medicaid began automating its verification system for the state-federal insurance program for the poor. People who were identified as ineligible, for income or other reasons, were sent a letter asking them to provide updated documentation. Those who did not respond or could not prove their eligibility were dropped.

The state does not know how many letters it sent or how many people responded, said Rebecca Woelfel, spokeswoman for the Missouri Department of Social Services, which oversees Medicaid. She said Missouri Medicaid enrollees were given 10 days to respond.

Woelfel cited the new eligibility system, the improved economy and Congress rescinding the federal tax penalty for people who lack insurance as factors behind the decline in enrollment.

Missouri’s unemployment rate dropped from 3.7% in January 2018 to 3.1% in December as the number of unemployed people fell by about 17,000.

Missouri Medicaid had almost 906,000 people enrolled as of December, down from more than 977,000 in January 2018, according to state data. About two-thirds of those enrolled are children or pregnant women.

Timothy McBride, a health economist at Washington University in St. Louis who heads a Missouri Medicaid advisory board, said the state's eligibility system has made it too difficult for people to stay enrolled. Since low-income people move or may be homeless, their mailing addresses may be inaccurate. Plus, many don't read their mail or may not understand what was required to stay enrolled, he added.

"I worry some people are still eligible but just did not respond, and the next time they need healthcare they will show up with their Medicaid card and find out they are not covered," McBride said.

Tennessee’s Medicaid enrollment fell from 1.48 million in January 2018 to 1.35 million in December, according to state data. Tennessee Medicaid spokeswoman Kelly Gunderson credits a healthy job market. The state's unemployment rate was relatively stable last year at under 4%.

"Tennessee is experiencing a state economy that continues to increase at what appears to be near-historic rates, which is positively impacting Tennesseans' lives and, in some cases, decreasing their need to access health insurance through the state's Medicaid program and the Children's Health Insurance Program," she said.

She added that the state has a "robust appeals process" for anyone who was found ineligible by the state's reverification system.

The Tennessee Justice Center, an advocacy group, has worked with hundreds of families in the past year trying to restore their Medicaid coverage. The verification process will make "Medicaid rolls smaller and saves money, and that's a poor way for the state to measure success," said Michele Johnson, executive director of the nonprofit group. "But it's penny-wise and pound-foolish" because it leads to people showing up at emergency rooms without coverage — and hospitals have to pass on those costs to everyone else.

After rapid growth since 2014, when the Affordable Care Act expanded health insurance coverage to millions of Americans, Medicaid enrollment nationally started to fall, declining from 74 million in January 2018 to about 73 million in October, according to the latest enrollment data released by CMS.

Missouri and Tennessee are among 17 states that have not expanded Medicaid under the ACA. But many of those non-expansion states nevertheless saw enrollment grow, because as people tried to sign up for insurance on the ACA exchanges, those meeting state criteria were routed to Medicaid.

McBride, the health economist, said the steep drop is especially disconcerting because most of those affected are children. Because children are eligible for Medicaid or CHIP with family incomes as high as 300% of the federal poverty level, or $77,250 for a family of four, he said, it's unlikely a parent's change in job would be enough for a child to lose eligibility.

Missouri's 70,000-person drop in enrollment, he noted, marks the biggest single-year reduction since 2006, when the state instituted tighter eligibility levels for certain groups.

Legal Services of Eastern Missouri, which advocates for low-income residents, estimates that nearly 57,000 of those dropped from the Medicaid rolls were children, a decline that is nine times the national average.

Joe Pierle, chief executive officer of the Missouri Primary Care Association, a trade group representing community health centers, said he doesn't think the state is doing anything "underhanded or nefarious." Nevertheless, he's not sure Medicaid officials did enough to reach out to people before dropping them.

"I suspect some people are falling through the cracks," he said.

Phil Galewitz: pgalewitz@kff.org, @philgalewitz

Trump Administration Salutes Parade of Generic Drug Approvals, but Hundreds Aren't for Sale

KFF Health News, February 7, 2019

The FDA has approved more than 1,600 generic drug applications since January 2017 — about a third more than it did in the last two years of the Obama administration. But more than 700, or about 43%, of those generics still weren't on the market as of early January.

This article was published February 7, 2019, by Kaiser Health News.

By Sydney Lupkin and Jay Hancock

The Trump administration has been trumpeting a huge increase in FDA generic drug approvals the past two years, the result of its actions to streamline a cumbersome process and combat anti-competitive practices. But nearly half of those newly approved drugs aren’t being sold in the United States, Kaiser Health News has found, meaning that many patients are deriving little practical benefit from the administration’s efforts.

The administration’s aggressive push to approve more generics is designed to spur more competition with expensive brand-name drugs, and drive prices lower, President Donald Trump noted at a White House event last month. The Food and Drug Administration has approved more than 1,600 generic drug applications since January 2017 — about a third more than it did in the last two years of the Obama administration.

But more than 700, or about 43%, of those generics still weren't on the market as of early January, a KHN data analysis of FDA and drug list price records shows. Even more noteworthy: 36% of generics that would be the first to compete against a branded drug are not yet for sale. That means thousands or even millions of patients have no option beyond buying branded drugs that can cost thousands of dollars per month.

"That’s shockingly high," said former congressman Henry Waxman, who co-sponsored the 1984 law that paved the way for the generic approval process as we know it today. He said he'd like to know more, but suspects anti-competitive behavior is at least partly to blame and that revisions to the so-called Hatch-Waxman Act might be needed.

The approved generics that haven't made it to American medicine cabinets include generic versions of expensive medicines like the blood thinner Brilinta and HIV medication Truvada. They also include six different generic versions of Nitropress, a heart failure drug, whose price spiked 310% in 2015.

Experts say a variety of factors are to blame. Generics sellers have fought for years against patent litigation and other delay tactics that protect brand-name drugs from competition. In recent years, vast industry consolidation has reduced the ranks of companies willing to purchase and distribute generics. And, in some cases, makers of generics obtain approvals and ultimately make a business decision to sit on them.

"It's a real problem because we're not getting all the expected competition," FDA Commissioner Scott Gottlieb said in an interview, adding that it will be difficult to solve because it has so many causes. It takes five generics on the market to drive prices down to 33% of the original brand-name price, according to an FDA analysis.

Without generics to lower drug costs, branded manufacturers can continue to increase their prices, at a rate of roughly 10% a year, said Scott Knoer, chief pharmacy officer at the Cleveland Clinic. "It makes healthcare costs go up across the board."

Even if hospital patients don't directly see high drug prices in their bills, the higher costs get passed to insurers, who pass them on as higher premiums, Knoer said. They also get passed to taxpayers, who pay for drugs covered by Medicare and Medicaid.

Consolidation on multiple tiers of the drug supply chain have changed the face of the generic drug market, warping supply and demand.

In some cases, key pharmaceutical ingredients are unavailable or a manufacturer doesn't have the capacity to launch a product because it's having difficulty meeting demand for existing products.

Manufacturing consolidation has dramatically reduced the production of injectable drugs, which are typically administered in a doctor's office. This may be why 157 injectable generics that were approved in the past two years haven't been brought to market.

Erin Fox, a pharmacist at the University of Utah who tracks drug shortages, said the KHN analysis of stalled generics "highlights that companies often have a lot of products 'on the books' but aren't really making them." A few generics on the list — like dextrose 10% injection, to treat patients with low blood sugar — would have been helpful to combat shortages the past few years. "This comes up with shortages a lot — it looks like there are more suppliers than there really are," Fox said.

A lot can change between the time a drugmaker files a generic application with the FDA and the time it's approved.

Some drugmakers that applied for generic approval years ago switched their attention to more profitable products. Novartis, for instance, recently sold a generics division run by Sandoz so Sandoz could focus on other drugs, including biosimilars, which compete with expensive biologic drugs made from living organisms.

"Some of these [generic] drug applications have been sitting six, seven, eight years," said Robert Pollock, a former acting deputy director of the FDA's Office of Generic Drugs who now works for Lachman Consultants. By the time it's approved, a generic can fall out of favor because patients taking the branded version reported new side effects, or because a more effective branded drug was approved.

For some generic manufacturers, there's money to be made by waiting. Brand-name drugmakers will pay them to keep their products off the market as part of a tactic sometimes called "pay for delay." The Federal Trade Commission estimates that such deals cost consumers and taxpayers $3.5 billion a year.

The number of these potentially anti-competitive settlements decreased from fiscal 2014 to fiscal 2015, according to the latest FTC report. Still, Gottlieb said he hopes to crack down on such tactics. The first generic to take on a branded drug is granted 180 days of exclusivity before the second and third generics can be approved, giving those products a clear advantage.

"We don't like that companies are able to just park [a generic for] 180 days while they cut a deal not to come to market," Gottlieb said, adding that with help from Congress he hopes to force companies to forfeit exclusivity if they don't launch on time.

In some cases, Gottlieb said, generic drugmakers wait until they've stockpiled a number of newly approved generics and have landed a contract with a purchaser before bringing their medicines to market.

These bundled contracts are secretive, so not much is known about them, but it means companies are filing generic applications just for the option of introducing generics, said health care economist Rena Conti, an associate professor at Boston University. They'll wait until the most strategic time to launch, which could be after the competition shakes out, leaving them as "the last man standing," Conti said. Then they can launch and hike the price.

To be sure, the FDA under Gottlieb's leadership has taken steps to increase generic competition, from shaming brand-name drugmakers for blocking generics to publishing documents to help manufacturers win approval more easily. But approval doesn't necessarily spur competition.

"We used to say it was all about getting in — once you got approval from the FDA, then you could go to market," said Chip Davis, CEO of the Association for Accessible Medicines, the trade group for makers of generic drugs. The biggest challenges his members face is that there aren't enough companies purchasing drugs, Davis said. Consolidation has led to three large buying groups covering 90 percent of the market, according to a Drug Channels Institute report. So, if you’re the fourth or fifth generic, you may have no one left to sell to.

Yet another barrier relates to how drug middlemen select the drugs they'll cover under industry formularies, which determine what products insurance plans will cover. In some cases, middlemen known as "pharmacy benefit managers" have made it clear they don’t have room on their formularies for another generic. Or they do, but they give branded drugs preferential treatment with lower copays, hurting the generic's market share.

Barriers to entry are lower under Gottlieb's FDA than they’ve been in years past, Conti said, and regulations can help foster competition. But, she said, "they can only do so much."

Methodology

To identify approved drugs that have not reached the market, KHN used the FDA’s Orange Book database — as of Jan. 2 — to identify drug applications approved in 2017 or 2018. We then searched the FDA’s online National Drug Code directory for billing codes for the drugs associated with each application as of the same date. To account for a possible lag, we supplemented this list with a more complete billing code directory that we obtained via a Freedom of Information Act request. It includes codes with expected future launch dates that don’t appear in the online version.

According to experts, a billing code doesn"t necessarily mean a drug is on the market. However, every drug on the market needs a list price for reimbursement. We provided a list of application numbers and billing codes to information technology firm Connecture, which then told us whether each one was active, inactive or had no list price as of Jan. 17.

If an application had at least one billing code with a list price attached, we counted it as on the market, even if other billing codes did not have list prices.

Sometimes, a single generic application can have multiple approval dates. If one of these approval dates occurred in the past two years, we included it in our analysis.

To determine whether a drug was a first generic, KHN used the FDA’s 2017 and 2018 lists of first generics as of Jan 2.

Sydney Lupkin: slupkin@kff.org, @slupkin

Jay Hancock: jhancock@kff.org, @JayHancock1

Trump Highlights Health Agenda with Vow to Lower 'Unfair' Drug Prices

KFF Health News, February 6, 2019

The president laid out a series of health-related goals, including some that even Democrats indicated could be areas of bipartisan negotiation or compromise.

This article was published February 6, 2019, by Kaiser Health News.

By Julie Rovner

It was not the centerpiece, but health was a persistent theme in President Donald Trump's State of the Union address at the Capitol on Tuesday night.

Although the administration has focused more on issues of trade, taxes and immigration, the president laid out a series of health-related goals, including some that even Democrats indicated could be areas of bipartisan negotiation or compromise. Trump vowed to take on prescription drug prices, pursue an end to the HIV epidemic and boost funding for childhood cancers.

He also took a victory lap for goals promoted by his administration that had been accomplished. "We eliminated the very unpopular Obamacare individual mandate penalty," he said, referring to the requirement in the Affordable Care Act that most people must have health insurance or pay a fine. It was eliminated as part of the 2017 GOP tax bill, despite backlash from critics that it could undercut Obamacare, after many failed attempts by Republicans to repeal the law.

And Trump noted congressional passage of a "right to try" bill that was supposed to make it easier for terminally ill patients to gain access to experimental medications, but so far few patients have been able to make the law work for them.

The most likely ground for bipartisanship will be the issue of drug prices, where Democrats are as eager as the president to do something to rein in prices that are spiraling upward.

"It is unacceptable that Americans pay vastly more than people in other countries for the exact same drugs, often made in the exact same place. This is wrong, this is unfair, and together we will stop it. We will stop it fast," he said. "I am asking the Congress to pass legislation that finally takes on the problem of global freeloading and delivers fairness and price transparency for American patients."

Democrats are cautiously optimistic on the drug price front. "I really am hopeful about making strides on prescription drug legislation this year on a bipartisan basis," Wendell Primus, top health aide to House Speaker Nancy Pelosi, said at a conference for health policy researchers hours before the speech.

But not all of Trump’s claims Tuesday about his efforts on drug pricing stand up to close scrutiny. He proclaimed that "in 2018 drug prices experienced their single-largest decline in 46 years." The drug-price portion of the consumer price index (CPI) declined slightly last year for the first time since 1972, but prices for many individual drugs are still rising sharply.

Factors beyond the administration's actions appear to have played the biggest role in the overall slowdown. Drug price increases have slowed largely because patents have expired on expensive, blockbuster drugs and several years have passed since the introduction of expensive medicines to treat hepatitis C, according to independent analysts.

But even as consumer drug prices have moderated, drug spending per hospital admission soared 19% from 2015 to 2017, a study sponsored by hospital trade groups found last month. That includes anesthesia drugs, chemotherapy infusions and other medicines that are not counted in the CPI.

Some well-placed Republicans praised the drug price effort. "I expect deep-pocketed interests to oppose anything and everything to protect the status quo," said Sen. Chuck Grassley (R-Iowa), chairman of the powerful Senate Finance Committee. "But the moment is ripe for action and Americans expect us to work together to get the job done."

News organizations including Kaiser Health News have reported on dozens of cases of surprise hospital bills, unaffordable costs for life-sustaining drugs and other health-expense shocks for patients. Shereese Hickson, whose experience with a $123,000 bill for multiple sclerosis drugs was covered by KHN and National Public Radio, was watching the speech.

"I'm glad he mentioned it," she said of Trump's promise to bring transparency and competition to pharmaceutical prices. "But I would like to see if it really will come true. If you do that — that's going against the drug companies. They'll be losing money and they're not going to let that happen."

Paul Davis — a retired doctor from Findlay, Ohio, whose family's experience with a $17,850 bill for a simple urine test was detailed in a KHN-NPR "Bill of the Month" feature last year and who met with Trump about surprise billing last month — said he was disappointed Trump did not go into further detail about his health care proposals.

"He didn't say anything," he said.

Davis said he would have liked to have heard more about the administration's recently announced plan to eliminate drug rebates negotiated by middlemen in the Medicare drug program, as well as the recently implemented policy requiring hospitals to list their prices online.

"If he wanted to use the podium to talk about the wonderful things that he's done, that's one of the things he's gotten accomplished," Davis said.

In their official responses to the speech, Democrats were more combative. "In this great nation, Americans are skipping blood pressure pills, forced to choose between buying medicine or paying rent," said Stacey Abrams, former Georgia House minority leader and a rising star in the national Democratic Party. "Maternal mortality rates show that mothers, especially black mothers, risk death to give birth. And in 14 states, including my home state where a majority want it, our leaders refuse to expand Medicaid, which could save rural hospitals, economies and lives."

California Attorney General Xavier Becerra, who gave the Spanish-language Democratic response, reminded viewers that while the Trump administration is seeking to have the Affordable Care Act overturned in court, Democrats would provide "medical care for your family that no politician can take away from you."

In another outreach to Democrats, Trump vowed that his budget "will ask Democrats and Republicans to make the needed commitment to eliminate the HIV epidemic in the United States within 10 years. Together, we will defeat AIDS in America," he said.

Groups that have been fighting HIV praised the promise.

"While we might have policy differences with the president and his administration, this initiative, if properly implemented and resourced, can go down in history as one of the most significant achievements of his presidency," said Michael Ruppal, executive director of The AIDS Institute.

Trump also promised that his budget, which has been delayed by the recent government shutdown, will seek new funding to expand research into cures and treatments for childhood cancer.

He said he will seek "$500 million over the next 10 years to fund this critical lifesaving research." The National Institutes of Health has long been a bipartisan favorite in Congress, although Trump in his first budget did seek cuts in NIH funding.

The one area in which bipartisanship will clearly not prevail is that of abortion. Trump reiterated a promise he made to anti-abortion groups as a candidate in 2016 and pushed for a federal bill to ban abortions after 20 weeks of pregnancy.

"Let us reaffirm a fundamental truth: All children — born and unborn — are made in the holy image of God," he said.

Senate Republicans voted on such a bill in 2018; it failed to advance by a large margin. The bill still lacks the votes in the Senate, and the House now has a majority that supports abortion rights.

Abortion opponents praised the president’s comments. "Once again, President Trump has proved he is our nation's most pro-life president ever and he is keeping his promise to the voters who fueled his victory," said Marjorie Dannenfelser of the Susan B. Anthony List.

Abortion-rights supporters, meanwhile, chastised Trump’s comments.

"Shame on the president for using the State of the Union to vilify people who have abortions and the providers who care for them," said Megan Donovan of the Guttmacher Institute. "Make no mistake: This is part of a larger agenda to eliminate access to abortion altogether."

Staff writers Jay Hancock, Emmarie Huetteman and Ana B. Ibarra contributed to this report.

Julie Rovner: jrovner@kff.org, @jrovner

For California Attorney General Xavier Becerra, Resistance Is Personal

KFF Health News, February 4, 2019

Becerra will take the national stage Tuesday when he gives the Spanish-language rebuttal to the president's State of the Union address. It will be far from his first time challenging President Trump's agenda.

This article was published February 4, 2019, by Kaiser Health News.

By Samantha Young, Kaiser Health News

When President Donald Trump demands a border wall or threatens to deport young unauthorized immigrants, one of the loudest opposition voices comes from the son of Mexican immigrants—who also happens to be California's top lawyer.

Democrat Xavier Becerra, the state's first Latino attorney general, is not only one of Trump's biggest critics, he is an unrelenting adversary in court, striking at Republican efforts to overturn federal rules not just on immigration, but on health care, birth control, climate change and more.

On Tuesday, Becerra, 61, will take the national stage when he gives the Spanish-language rebuttal to the president's State of the Union address. He has challenged the Trump agenda before.

Becerra has taken the Trump administration to court 45 times since former Gov. Jerry Brown appointed him to the job in 2017. In November, voters overwhelmingly gave him a four-year term, validating his decision to leave Congress after 24 years.

Becerra, whose wife is a doctor, is leading a coalition of 20 states and the District of Columbia in defending the Affordable Care Act against a Texas lawsuit that could determine the fate of the law—and with it, health coverage for millions of Americans. And he won a nationwide court injunction last year that blocked the Trump administration’s decision to end the Deferred Action for Childhood Arrivals (DACA) program, which allows qualified young people who were brought into the U.S. illegally as children to obtain temporary work permits.

When news reports last month revealed that Trump was considering diverting emergency disaster relief funds from California, Florida and Texas during the partial federal government shutdown, Becerra condemned the president on Twitter for poaching funds for a "reckless & lawless" border wall.

Related: California AG Blocks Sale of 2 Santa Clara Hospitals

Related: Judge Blocks Final Rule on Birth Control Coverage

The fights are ones that Becerra describes as personal. He talked to California Healthline’s Samantha Young about his role—and how his upbringing influences his legal decisions.

The following interview has been edited for length and clarity.

Q: You were a veteran member of Congress in a leadership role. Why did you take this job?

November 2016 hits. We have the election. All the things that I cared about were going to be placed in jeopardy by this new president.

I found myself thinking I probably could make a bigger difference as the attorney general for the entire state of California, defending everything I fought to erect, than as a minority member in the House of Representatives trying to make my point, but always losing.

I made a calculation. I think I made the right choice.

Q: You have sued the Trump administration 45 times on education, immigration, health care, birth control access, climate change and more. What's the one case you really wanted to win?

I'll give you two.

First, the Affordable Care Act, knowing how much it has been a game changer for families. I would never have believed that I’d be leading the effort to protect the entire Affordable Care Act as an attorney general for one of 50 states. But here I am.

The second one is the DACA litigation, because as the son of immigrants, I watched my parents struggle and saw the things they had to live through. I believe these DACA recipients are going to be some of the greatest leaders America has and it's because they had to go through so much like my parents did. So, it's very personal.

Q: Do you remember your parents' economic struggles as a child?

I thought I was middle class growing up as a kid. It really wasn't until I was driving with my mom to start my first day at Stanford University, driving through Palo Alto, that I realized I'm not middle class.

We always had decent food to eat. I never got a pair of Converse. I never had a pair of Levi's jeans. Never had that kind of stuff, but I always had clothes. It didn’t dawn on me that we were much different than other folks.

Q: How does your upbringing influence your decisions as attorney general?

Everything I do is informed by what I grew up with. I defend immigrants with a passion because I saw immigrants every day of my life. And I know how hard they work. I never saw a day where my dad didn't work.

My mom came here when she was 18 from Guadalajara, when she married my dad. Didn't know English. Learned it. She could always find a job, and when she learned English it became easier. But she could never go very high because she never went to college.

So, when someone wants to knock an immigrant, you're knocking my dad and my mom.

Q: You believe everyone should have access to health care. Was there ever a period in your life when you didn't have health insurance?

I don't ever recall a time when I didn't. That's why I'm such a big defender of unions. My dad was a construction worker. My dad got to the sixth grade. As difficult as it is for someone with a sixth-grade education to get a decent job, and while being a manual laborer and working construction doesn't make you a millionaire, if you work for a union it gets you basic benefits.

I knew what it meant to have health insurance, especially on the day my mom ended up having a miscarriage. She was hemorrhaging at home and she had to be rushed to the hospital. There was no hesitation.

We knew we could go to the doctor—and everybody should know that. For me, health care is a right. I've been a single-payer advocate all my life.

Q: Why do you think it's important to build coalitions with other states when challenging the Trump administration?

Lifting something by yourself is very difficult. When you get a team to do it, it just clicks so much easier. Maybe it's because I went through Congress more years in the minority than the majority, where you realize what it takes to actually cobble together a coalition to get something done. Or, maybe it's just that when you've been in a minority all your life, the son of immigrants with very little, you know it takes a team effort.

I got through Stanford knowing my family didn't have a lot of money, so I had to work, take out student loans and receive help from the government. It was a combination of a lot of things.

Q: What's your response to critics who say state attorneys general are "militarizing" their office to overturn policies your party can't block in Congress?

Which of the cases should we not have filed? The one to defend the Affordable Care Act, or the one to prevent women from losing access to birth control, or is it the one to allow DACA Dreamers to be deported, or is it the one to make sure that we are defending against a crazy border wall, or is it the one that should allow predatory for-profit colleges to continue to avoid having to provide relief to students who were defrauded?

We're not doing this because we're trying to attack the federal government or because we've got it out for this particular president. How would we explain to the people who would have been unprotected why we just watched, why we just spectated?

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Ads for Short-Term Plans Lacking ACA Protections Swamped Consumers' Online Searches

KFF Health News, January 31, 2019

Researchers looked at marketing of short-term plans, which don’t have to meet most ACA provisions. Regardless of the search term used, companies promoting or selling only these kinds of plans dominated the results.

This article first appeared January 31, 2019 on Kaiser Health News.

By Steven Findlay

Consumers shopping for insurance online last fall — using search terms such as "Obamacare plans," "ACA enroll" and "cheap health insurance" — were most often directed to websites that promote individual health plans that didn't meet consumer protections of the Affordable Care Act, according to a new study.

They also failed to get adequate information about those plans' limitations, according to the analysis by researchers at Georgetown University's Center on Health Insurance Reforms.

The study, provided to Kaiser Health News ahead of its publication online, probed online marketing practices in eight states.

"It was disturbing, but not unexpected, to find such a high proportion of misleading ads and come-ons," said Sabrina Corlette, the lead author. "That raises the risk that consumers could be duped into buying health insurance that they think offers comprehensive and secure coverage, but does not."

The study focused primarily on the marketing of short-term plans, which don’t have to meet most ACA provisions, such as the requirement to cover preexisting conditions. The researchers found that regardless of the search term used, companies promoting or selling only these kinds of plans dominated the results.

Insurance regulators from each of the states told Corlette's team that tracking the marketing and sales of short-term plans is challenging, as is educating consumers about the risks of limited coverage.

Michael Conway, Colorado's interim insurance commissioner, told Kaiser Health News in an interview that he has a "high level of concern" that the marketing tactics the study found could have drawn unsuspecting consumers into selections that do not meet their needs.

"We are on alert for complaints," Conway said. "If we have to strengthen our regulations on marketing, we will."

Eric Cioppa, Maine's insurance superintendent, said that his office has no evidence that consumers unknowingly purchased short-term plans based on misleading online marketing.

"We’ll respond accordingly and aggressively if we find that took place," Cioppa said.

But Corlette said the findings provide early evidence that after regulatory changes by the Trump administration, some insurers are aggressively marketing short-term plans as a replacement for traditional health insurance, without fully informing consumers of the limits of the skimpier coverage.

That could warrant stronger federal and state oversight, she said.

The study, funded by the Robert Wood Johnson Foundation, looked at online marketing in Colorado, Florida, Idaho, Maine, Minnesota, Missouri, Texas and Virginia. Those states were selected to reflect diverse geography and regulatory approaches, according to the researchers. Of the eight, Colorado and Minnesota require short-term plans to adhere to a shorter contract duration than required by federal law.

Changes In Short-Term Plan Rules

The ACA bars insurers from denying coverage to people who have health problems or charging them higher premiums. The law also mandates a minimum set of health benefits and requires plans to cap enrollees' out-of-pocket expenses.

By comparison, short-term plans can deny coverage to applicants who have a preexisting condition and often exclude or limit coverage of maternity care, mental health treatment and prescription drugs.

As a result, short-term plans cost significantly less — typically about half to a third of an ACA plan if the deductible is the same. They are sold outside the ACA exchanges. And people who buy them don’t qualify for the government’s premium subsidies.

These plans are not new. They predate the ACA and allow people to buy coverage between jobs, for example.

The Obama administration put a 90-day limit on such coverage in 2017 because of concerns that the less-expensive plans would attract younger and healthier people. Losing such customers could undermine the stability of the ACA marketplaces because they would be left with older and sicker enrollees.

Beginning this year, however, the Trump administration lengthened the potential duration of short-term plans to 364 days and allowed customers to renew the plans.

Seema Verma, the administrator of the Centers for Medicare & Medicaid Services that oversees the ACA insurance exchanges, said those changes offer more affordable coverage that can be "a lifeline to people priced out of the ACA market."

"These plans are different, and consumers do need to know what they are purchasing, which is why we now require more robust warnings about the limits of these plans than before," she said. "Fundamentally, we believe in giving consumers more options and leaving it up to them to decide what is right for them and their families."

The study evaluated online ads in the weeks just before and during the latest open enrollment for ACA coverage, which in most states began Nov. 1 and ended Dec. 15. The researchers analyzed 256 search results and 65 websites and interviewed state regulators in all eight states.

They found that Google searches were most often topped by paid "lead-generating" websites. Such sites don't sell insurance but ask shoppers for contact and demographic information. Insurers and brokers can buy that information and contact prospective customers. Or, call centers affiliated with the lead-generating sites phone consumers and direct them to a seller.

The researchers also created a profile of a 29-year-old consumer seeking insurance who was in good health and with an income of $20,000 so she was eligible for premium subsidies for ACA-compliant coverage. They entered this consumer’s information into several lead-generating websites and fielded six phone pitches from brokers selling short-term and other non-ACA plans.

Among their findings:

  • During ACA open enrollment, only 19% of the searches using the common search terms yielded sites offering solely ACA-compliant plans. Before open enrollment, the return was less than 1%.
     
  • Lead-generating sites promoting short-term plans or other non-ACA compliant insurance products were the most common search result in every state, representing more than half of all search results before and during open enrollment.
     
  • The six brokers who encouraged the purchase of coverage over the phone provided minimal plan information. Most refused to provide written materials or discontinued the call when asked for such materials.
     
  • State officials lack full information about which insurers are marketing short-term plans to their residents, with one official calling it "one of our biggest blind spots." Most said they plan to start monitoring the insurers' practices more closely this year.

'Necessary Niche'

An estimated 600,000 to 750,000 people bought short-term plans in 2017. The Trump administration projected last year that about 200,000 ACA customers would switch to this coverage in 2019 due to its rule change. A second government forecast predicted that the new policy would boost short-term coverage enrollment to about 2 million people by 2022.

Insurers who specialize in short-term plans vigorously defend them.

"This is a small and necessary niche in the [individual insurance] marketplace," said Jeff Smedsrud, CEO of Pivot Health, based in Scottsdale, Ariz., and one of the firms whose website the study analyzed. "If people need temporary coverage, we are there for them. We don't want people who qualify for a government subsidy to buy our short-term plans. They should get coverage under the ACA."

Shaun Greene, head of business operations at AgileHealthInsurance.com, said short-term plans offer a more affordable option to people who don't qualify for a government subsidy under the ACA.

But Matthew Fiedler, a health insurance specialist at the Brookings Institution who was not affiliated with the study, said the longer-duration short-term plans may befuddle some customers. The study, he said, "strongly suggests that some consumers are going to be confused and end up with plans that cover less than they expected."

Congress Wades Into Emotional Debate Over High-Cost Prescription Drugs

KFF Health News, January 30, 2019

In a blow to the pharmaceutical industry, Republicans and Democrats in Congress, and President Donald Trump, appeared to be largely unified in their determination to address skyrocketing drug costs.

This article first appeared January 30, 2019 on Kaiser Health News.

By Emmarie Huetteman and Rachel Bluth

Senators railed against pharmaceutical executives Tuesday for declining to testify before Congress about out-of-control drug prices, as lawmakers on both sides of the U.S. Capitol kicked off investigations sure to rattle one of the nation's most powerful industries.

Sen. Chuck Grassley of Iowa, the Republican chairman of the Senate Committee on Finance, signaled he could compel drugmakers to appear before the committee, saying he was "extremely disappointed" that only two companies have agreed to testify at a later date.

"We will extend the opportunity again in the future, but we will be more insistent the next time," Grassley said.

And in a blow to the pharmaceutical industry, Sen. Ron Wyden of Oregon, the committee's top Democrat, agreed with Grassley, suggesting the parties are largely united in their determination to address skyrocketing drug costs.

"Nobody is going away, and even if it means using our power to compel the drug company CEOs to show up, they will come before this committee," Wyden said.

While Congress has examined rising drug costs before, the issue has benefited from the attention of President Donald Trump, who has vowed to address the problem. The Trump administration has floated a handful of possible solutions, including a proposal to tie the price Medicare pays for some drugs to the prices paid for the same drugs overseas.

Across the Capitol on Tuesday, the House Committee on Oversight and Reform also held the first hearing in its own "sweeping" investigation into drug prices. Rep. Elijah Cummings, the Maryland Democrat who took control of the committee this month, recently wrote to 12 drug companies demanding information about their pricing practices.

Cummings has made it clear that he is interested in working with the Trump administration on drug prices. Cummings met with Trump in 2017, weeks after Trump was sworn in as president, to discuss how the parties could work together. Two weeks ago, Cummings discussed the issue with Health and Human Services Secretary Alex Azar.

Tuesday, one Republican lawmaker close to Trump, Rep. Mark Meadows of North Carolina, said he had spoken with Trump and agreed to pass along a message to Cummings: "On this particular subject, not only is he serious, but he's serious about working in a bipartisan way to lower prescription prices," Meadows said.

Cummings asked Meadows to tell Trump "we are willing, ready and able to work with him to get it done."

Lawmakers heard heart-wrenching testimony Tuesday from two mothers about the impact of rising costs on their insulin-dependent children. Antroinette Worsham described how her daughter, a college student with Type 1 diabetes, began rationing her insulin because she couldn't afford it — and how her son later found her dead in her bed.

Now, Worsham told the House committee, she worries about her younger daughter, who also has diabetes. "I fear the same is going to happen to her," Worsham said. 

On the Senate side, Kathy Sego — whose son with Type 1 diabetes was profiled by Kaiser Health News in 2017 — had a message for absent drug companies. "I don't know how any person would be OK with knowing that their medication is priced so high you have to make a decision between life or death," she said. "That should never be a decision a person needs to make."

It remains to be seen how drugmakers might react to mounting political scrutiny.

Both Grassley and Cummings have the power to subpoena witnesses — such as drug company executives — to appear before Congress, though Grassley told reporters afterward that he was not yet prepared to invoke that option.

Grassley said several drug companies had declined to testify publicly, offering a variety of excuses. One company, for instance, argued their testimony would "create a language-barrier problem." Unmoved, Grassley remarked that he "thought we all spoke English."

Wyden expressed his frustration with drug companies by comparing them to a more traditional villain, the tobacco companies.

"Even the Big Tobacco CEOs were willing to come to Congress and testify, and they made a product that kills people," he said. "They all lied to me, but at least they showed up. The drugmakers won’t even do that much."

While lawmakers noted that both hearings were only the first of many, an early consensus emerged that something must be done about drug rebates, which provide discounts to middlemen in the supply chain but often push patients toward pricier brand-name drugs.

Senators also targeted drug discount coupons, which lower the price for patients at the cash register but don't address the larger struggle between manufacturers and insurance companies.

"We know who's winning. It's the people who print the coupons," said Peter Bach, director of the Center for Health Policy and Outcomes at the Memorial Sloan Kettering Cancer Center. "Patients are entirely caught in the middle."

The long political reach of the drug industry was on display Tuesday, though, suggesting it could be an uphill battle to hold pharmaceutical companies accountable. Drugmakers' political action committees give millions of dollars to the campaigns of hundreds of members of Congress.

"he Project on Government Oversight, a nonpartisan watchdog group, noted even some of the experts who testified Tuesday have benefited from drugmaker cash. The Pharmaceutical Research and Manufacturers of America, which lobbies on behalf of drugmakers, has given millions to the advocacy arm of the American Action Forum — a conservative-leaning organization whose president, Douglas Holtz-Eakin, testified before senators.

Bach has also received money from pharmaceutical companies directly, the watchdog group said. Bach said he was paid for giving speeches.

Another potential obstacle: House Republicans on Tuesday showed little interest in cooperating with the investigation, with some arguing that there were bigger fish to fry in the nation’s healthcare system.

Rep. Jim Jordan of Ohio, the House committee's top Republican, opened by enumerating several failings of the Affordable Care Act, noting Democrats are "eager to blame the private sector."

"The problem is not that the free market has failed us," Jordan said. "It's that government interventions in the market have distorted incentives, creating barriers to competition and left things in a mess."

Correction: This story was updated Wednesday afternoon to correct the name of the organization for which Douglas Holtz-Eakin serves as president. It is the American Action Forum, not the American Action Network.

Community Hospitals Link Arms with Prestigious Facilities to Raise Their Profiles

KFF Health News, January 29, 2019

These agreements, which can involve different levels of clinical integration, typically grant community hospitals access to experts and specialized services at the larger hospitals while allowing them to remain independently owned and operated.

This article first appeared January 29, 2019 on Kaiser Health News.

By Sandra G. Boodman

After seven years of a vigorous fight, Jim Hart worried he was running out of options.

Diagnosed with prostate cancer at age 60, Hart had undergone virtually every treatment — surgery, radiation and hormones — to eradicate it. But a blood test showed that his level of prostate-specific antigen, which should have been undetectable, kept rising ominously. And doctors couldn't determine where the residual cancer was lurking.

"I didn't like the sound of that," said Hart, a retired international oil specialist for the federal government. "I wanted it gone," he added, especially after learning that he had inherited the BRCA2 gene, making him vulnerable to other cancers.

So when Andrew Joel, Hart’s longtime urologist at Virginia Hospital Center in Arlington, mentioned the hospital's membership in the Mayo Clinic Care Network and suggested consulting specialists at the Rochester, Minn., hospital for a second opinion, Hart enthusiastically agreed.

A Mayo immunologist told Joel about a new PET scan, not then available in the Washington area, that can detect tiny cancer hot spots. Hart flew to Mayo for the scan, which found cancer cells in one lymph node in his pelvis. He underwent chemotherapy at Virginia Hospital Center and five weeks of radiation at the Mayo Clinic. Since September 2016, there has been no detectable cancer.

"This collaboration was sort of a magic process," Hart said. "I feel very fortunate."

'Benefit By Association'

Hart's experience showcases the promise of a much-touted but little understood collaboration in health care: alliances between community hospitals and some of the nation’s biggest and most respected institutions.

For prospective patients, it can be hard to assess what these relationships actually mean — and whether they matter.

Leah Binder, president and chief executive of the Leapfrog Group, a Washington-based patient safety organization that grades hospitals based on data involving medical errors and best practices, cautions that affiliation with a famous name is not a guarantee of quality.

"Brand names don't always signify the highest quality of care," she said. "And hospitals are really complicated places."

Affiliation agreements are "essentially benefit by association," said Gerard Anderson, a professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. "In some cases it's purely branding and in other cases it's a deep association."

A key question is "how often does the community hospital interact with the flagship hospital? If it's once a week, that's one thing. If it's almost never, that's another,” Anderson said.

Feeling 'Plugged In'

To expand their reach, flagship hospitals including Mayo, the Cleveland Clinic and Houston's MD Anderson Cancer Center have signed affiliation agreements with smaller hospitals around the country. These agreements, which can involve different levels of clinical integration, typically grant community hospitals access to experts and specialized services at the larger hospitals while allowing them to remain independently owned and operated. For community hospitals, a primary goal of the brand-name affiliation is stemming the loss of patients to local competitors.

In return, large hospitals receive new sources of patients for clinical trials and for the highly specialized services that distinguish these "destination medicine" sites. Affiliations also boost their name recognition — all without having to establish a physical presence.

In some cases, large hospital systems opt for a different approach, largely involving acquisition. Johns Hopkins acquired Sibley Memorial and Suburban hospitals in the Washington, D.C., area, along with All Children's Hospital in St. Petersburg, Fla. The latter was re-christened Johns Hopkins All Children's Hospital in 2016.

New York's Memorial Sloan Kettering Cancer Center has embraced a hybrid strategy. It operates a ring of facilities surrounding Manhattan and has forged alliances with three partners in Connecticut, Pennsylvania and Florida.

"Every one of these models is different," said Ben Umansky, managing director for research at the Advisory Board, a Washington-based consulting firm.

Local hospitals, he said, particularly those operating "in the shadows of giants," may be better able to retain patients "by getting a name brand on their door. … There is a sense that they are plugged in." (Virginia Hospital Center, for example, competes with Hopkins, MedStar Washington Hospital Center, which has an alliance with the Cleveland Clinic, and the Northern Virginia-based Inova system.)

Doctors can obtain speedy second opinions for their patients and streamline visits for those with complex or unusual medical needs, processes that can be daunting and difficult without connections.

Dr. Michael Kupferman, senior vice president of the MD Anderson Cancer Network, said it seeks to "elevate the quality of cancer care" by forming partnerships with "high-quality [hospitals] to keep patients at home and provide the imprimatur of MD Anderson."

Virginia Hospital Center's association with Mayo is "not just a branding affiliation, it's a deep clinical affiliation," said Dr. Jeffrey DiLisi, senior vice president and chief medical officer at the Arlington facility.

Despite extensive marketing, many patients seem unaware of the linkage. "We still think a lot about 'How do we communicate this?'" DiLisi said.

Although affiliation agreements differ, many involve payment of an annual fee by smaller hospitals. Officials at Mayo and MD Anderson declined to reveal the amount, as did executives at several affiliates. Contracts with Mayo must be renewed annually, while some with MD Anderson exceed five years.

Acceptance is preceded by site visits and vetting of the community hospitals' staff and operations. Strict guidelines control use of the flagship name.

"It is not the Mayo Clinic," said Dr. David Hayes, medical director of the Mayo Clinic Care Network, which was launched in 2011. "It is a Mayo clinic affiliate."

Of the 250 U.S. hospitals or health systems that have expressed serious interest in joining Mayo’s network, 34 have become members.

For patients considering a hospital that has such an affiliation, Binder advises checking ratings from a variety of sources, among them Leapfrog, Medicare and Consumer Reports, and not just relying on reputation.

"In theory, it can be very helpful," Binder said of such alliances. "The problem is that theory and reality don't always come together in healthcare."

Case in point: Hopkins' All Children’s has been besieged by recent reports of catastrophic surgical injuries and errors and a spike in deaths among pediatric heart patients since Hopkins took over. Hopkins' chief executive has apologized, more than a half-dozen top executives resigned and Hopkins recently hired a former federal prosecutor to conduct a review of what went wrong.

"For me and my family, I always look at the data," Binder said. "Nothing else matters if you're not taken care of in a hospital, or you have the best surgeon in the world and die from an infection."

Cancer During Pregnancy

Bryan Mills, chief executive of Community Health Network, was unhappy with his oncology service. Specialists at the Indianapolis-area hospitals he headed were competing against each other and patients were being ill-served. So Mills cold-called MD Anderson and, in 2012, Community joined its network.

"We needed something we could rally around," Mills said.

"This is really not about a competitive advantage to me, but about providing optimal care," said Mills, whose network competes with three other systems including one run by the University of Indiana, which operates a National Cancer Institute-designated center.

"One hundred percent of the work we do is audited by MD Anderson," Mills said. "We can get second opinions almost instantly."

Mills said he believes that the affiliation, which is prominently displayed on Community’s website, has attracted patients. In 2012, he said, Community treated about 2,000 cancer patients. In 2018, the number was 5,000.

Among them is Kamaljit "Kelly" Kaur. Shortly before Christmas 2015 the Greenwood, Ind., licensed practical nurse was diagnosed with inflammatory breast cancer, a rare and aggressive form of the disease usually discovered at an advanced stage. At the time, Kaur was 35 and five months pregnant with her third child.

Kaur said that her Indiana doctors conferred with MD Anderson oncologists and used "their guidelines to treat me. I felt comforted by that, like it was the right choice for me." Her biggest concern, she said, was the health of her baby.

During the final months of her pregnancy, Kaur received weekly chemotherapy. Her son was born healthy and at full term in February 2016. She then underwent a bilateral mastectomy, followed by more chemo and radiation. Kaur said she has been cancer-free since January 2017, when she finished treatment. The collaboration, she said, "helped me get through this."

Kaur's Indiana oncologist, Dr. Anuj Agarwala, said he thought the MD Anderson involvement was helpful, because it reassured Kaur and him by concurring with his recommendations. He said he presented his treatment plan to specialists in Houston and "they didn't change anything."

Overall, he said, "it really doesn't affect what I do very much. We are following national guidelines and not giving off-the-wall treatment."

Initially, Agarwala said, some Community oncologists bristled at having their charts audited by Houston specialists, a resistance, he said, that has diminished.

The affiliation has strengthened safety measures involving the administration of chemotherapy and has made the informed consent process more rigorous, Agarwala said, to the benefit of patients. "Overall it has been a valuable relationship."

"The population I work with don't have the resources to get care outside of their hometown," he added, "and feel more confident with the input of a world-class institution."

So did Dr. James Ouellette, a cancer surgeon with Premier Health in Dayton, Ohio, which joined the MD Anderson network in 2016.

In November 2018, Ouellette removed a huge and rare malignant tumor from Joanne Dotson’s abdomen during a four-hour surgery. The solitary fibrous tumor was in a dicey location: It had grown so large it was displacing Dotson’s liver and compressing her vena cava, a major vein that carries blood to the heart.

Dotson, 70, said she had never heard of MD Anderson until her doctors mentioned it.

The affiliation, she said, did not affect her choice of hospital or surgeon, in whom she had confidence.

"I wasn't even worried," she said. "His hands are God's hands," she said, referring to Ouellette.

Her surgeon felt differently.

"While I was very glad Mrs. Dotson wasn't worried, I was, with a big surgery like that," Ouellette said. Before the operation, Ouellette said he conferred with an MD Anderson surgeon, radiation oncologist and medical oncologist about how best to treat the grapefruit-size growth. As a result of those discussions, Ouellette said, he altered the initial treatment plan.

Getting A Vibe

Virginia Hospital Center officials say that only a handful of the approximately 170 patients, the vast majority with cancer diagnoses, who annually receive second opinions from Mayo wind up getting treatment there. Most of those who do, DiLisi said, received care unavailable at his hospital.

"The patients [that affiliates] send us are more complex patients," said Mayo's Hayes. "We have a broad and deep bench of specialists."

Even so, it's often doctors who suggest a second opinion, not patients who request one. Joel said he mentions the option to those urology patients from whom he gets "a vibe" that they might be interested.

DiLisi said that the affiliation can save patients time and money.

"We get them as good a second opinion as they would get at Hopkins," DiLisi said, without incurring the costs and additional testing involved. "And they don't have to drive to Baltimore."

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