The practice of charging a copay that is higher than the full cost of a drug is called a 'clawback' because the middlemen that handle drug claims for insurance companies essentially 'claw back' the extra dollars from the pharmacy.
As a health economist, Karen Van Nuys had heard that it’s sometimes cheaper to pay cash at the pharmacy counter than to put down your insurance card and pay a copay.
So one day, she asked her pharmacist how much her prescription would cost if she didn’t use her health coverage and paid cash.
“And sure enough, it was [several dollars] below my copay,” Van Nuys said.
Van Nuys and her colleagues at the University of Southern California Schaeffer Center for Health Policy & Economics decided to launch a first-of-its-kind study to see how often this happens. They found that customers overpaid for their prescriptions 23 percent of the time, with an average overpayment of $7.69 on those transactions.
The USC study, released Tuesday, analyzed the prices that 1.6 million people paid for 9.5 million prescriptions in the first half of 2013, based on data from Optum Clinformatics, an organization that sells anonymized claims data for analysis, and National Average Retail Price (NARP) data, which contained drug prices paid by insurers and was based on a national survey of pharmacists.
It showed that the overpayments totaled $135 million during that six-month period.
The practice of charging a copay that is higher than the full cost of a drug is called a “clawback” because the middlemen that handle drug claims for insurance companies essentially “claw back” the extra dollars from the pharmacy. (The middlemen, known as pharmacy benefit managers, include Express Scripts, CVS Caremark and OptumRx. Express Scripts and CVS Caremark say they don’t use clawbacks. OptumRx declined immediately to comment.)
Here’s how it works: After taking your insurance card, your pharmacist says you owe a $10 copay, which you pay, assuming that the drug costs more than $10 and your insurance is covering the rest. But unbeknownst to you, the drug actually cost only $7, and the PBM claws back the extra $3. Had you paid out-of-pocket, you would have gotten a better deal.
Until Van Nuys and her colleagues went digging, no one knew how common the practice was.
“Clearly this is going on [at a] much higher frequency than most people imagine,” said Geoffrey Joyce, who directs health policy at the center and was a coauthor on the study. “You’re penalizing people for having insurance.”
The findings cover only a small portion of the population over a short time span, so they might not be perfectly reflective of what’s going on nationally, Joyce said. But they debunk the perception that clawbacks are rare.
Steve Hoffart, who owns Magnolia Pharmacy, an independent compounding and retail pharmacy in Magnolia, Texas, said clawbacks are still happening — even though Texas legislators passed a law to prohibit them. Hoffart said he collects and sends $1,100 or $1,200 a month in clawbacks to the PBMs.
The National Community Pharmacists Association, of which Hoffart is a member, said the new research “is illustrative of just one of many ways that PBMs’ lack of transparency disadvantages pharmacy patients. … If you want to reduce prescription drug costs, policymakers must demand greater transparency from PBMs.”
The trade group for the PBMs, the Pharmaceutical Care Management Association, said that overall the PBMs bring down the total cost of prescription drugs, lowering costs for patients and insurers.
“We support the patient paying the lowest price available at the pharmacy counter,” the group said in a statement.
The USC researchers found that brand-name drugs had the highest clawbacks — an average overpayment of $13.46 per prescription. Clawbacks on generic drugs were $7.32, on average. The drug with the most frequent clawbacks was zolpidem tartrate — generic Ambien, a drug used to treat insomnia.
Although the research team was able to obtain copay data, it didn’t have data on what the PBMs paid for the drugs, said Van Nuys, the lead study author and executive director of the Schaeffer Center’s life sciences innovation project. As a stand-in, the reserachers used the National Average Retail Price data, which existed for a short period in 2013. They included clawbacks only of $2 or more.
Sometimes, the clawbacks are stunning. The day before Hoffart testified in favor of Texas’s new anti-clawback law, a patient was charged a $42.60 copay for a generic version of simvastatin, a statin drug. The patient could have paid $18.59 out-of-pocket, and the clawback was $39.64, Hoffart said, adding that the clawback made him lose money on the transaction.
Patients often aren’t told they could pay less without using insurance unless they ask.
“If they don’t ask, they’re not going to get the information they need,” Hoffart noted.
But even then, some insurance plans prohibit pharmacists from telling patients due to gag clauses. Six states have prohibited the gag clauses and 20 more are considering similar legislation, according to the National Conference of State Legislatures.
BAKERSFIELD, Calif. — The police report is all David Cole Lang’s family has to describe his last moments on Earth.
Fifty pages of officer narratives and witness interviews filled with grisly detail, it lacks any explanation for his death. Ten months later, Lang’s widow, Monique, says she still has no clue as to why the 33-year-old combat veteran and father who struggled with opioid addiction ended up fatally shot by a doctor whom — as far as Monique knew — he hadn’t seen in over a year.
“I didn’t understand why he was there,” she said. “I still don’t.”
On that April evening last year, according to interviews in the report, Lang yelled and cussed at the addiction and pain treatment doctor, Edwin Zong, in his office, and leapt across a desk to punch him repeatedly. Hearing the doctor scream for help, the last patient waiting to see Zong that day ran to open the door. He told police he found Lang standing over Zong, curled in a fetal position on the floor, his face covered in blood and “the fear of a child in his eyes.”
“Hey!” the patient yelled.
When Lang turned toward the doorway, Zong told police, the doctor opened a desk drawer and grabbed a handgun. He fired three or four times. One bullet tore through the blood vessels in Lang’s neck. He staggered outside, collapsed in a parking lot and died.
Local authorities concluded that Zong had acted in self-defense, and he faced no charges. In an email to Kaiser Health News, the doctor declined a request for an interview but said he believes he was targeted for robbery. “I was lucky I wasn’t killed,” he wrote. “Treating addiction is a very tough job, many doctors won’t do it.”
The tragedy that played out in Zong’s office speaks to a dangerous trend: In many parts of the United States, the number of people addicted to opioids far exceeds the capacity of doctors willing and authorized to treat them. That is particularly true when it comes to professionals like Zong who dispense Suboxone or Subutex, both formulations of buprenorphine — widely considered the optimal addiction treatment because it all but erases opioid withdrawal symptoms without creating a significant high.
With tens of thousands of Americans dying annually from opioid overdoses, the Food and Drug Administration recently signaled that it is open to expanding the number of drugs available to ease withdrawal and reduce cravings, but access to prescribers remains a problem even for the drugs that already exist.
One reason for the shortage of providers is that doctors must take eight hours of training to prescribe the medication and apply for a waiver from the federal Drug Enforcement Administration, because the medicine is itself an opiate. Few doctors are willing to check all those boxes and take on the sometimes difficult patients who seek the drug.
Patients addicted to heroin or prescription opioids like oxycodone or fentanyl suffer severe withdrawal — sweats, tremors, anxiety — and are often desperate for medication-based treatment to wean them from the drugs or at least quell their symptoms. For the cash-strapped patients, the cheaper the better.
Doctors who accept these patients, whether motivated by profit or compassion, can become overwhelmed, seeing far more than their offices can handle, opening the door to chaos and lawlessness. More problematic is that some clinics, like Zong’s, offer a mix of services — treatment for both opiate addiction and pain. Patients being prescribed potentially dangerous narcotics are mixed in the waiting area with those struggling to kick addiction.
Several years ago in Vermont, which pioneered buprenorphine treatment, some small practices rapidly swelled to 600 or 700 patients each, said Dr. Richard Rawson, an experienced addiction researcher at the University of Vermont. Doctors sometimes prescribed more than their authorized limit, failed to test patients for drug abuse and — wittingly or not — fostered illegal sales, Rawson said.
“We know that when you have those types of practices where you bring large numbers of addicted individuals together it produces a mess,” he said. “People are selling drugs in the parking lot and all kinds of wacky stuff like that.”
Inevitably, some patients relapse. Some become angry if they don’t get what they came for. A solo practitioner like Zong — who by many accounts had few employees, a tendency to work late on his own and a high cash intake — faces security risks.
Zong was concerned enough to stow a gun in his desk drawer. “I keep a gun in my office for self-protection,” he said in his email.
Long Lines, Short Appointments
In California, demand for buprenorphine has only grown with the opioid epidemic and recent changes to Medi-Cal, the state’s Medicaid program, which have made it easier and quicker for low-income people to get the drug. The program was expanded under the Affordable Care Act to cover more adults (3.8 million) and more drug treatment.
In addition, beginning in June 2015, doctors were no longer required to get prior approval from the Medicaid program each time they prescribed buprenorphine.
Within seven months, claims jumped 100 percent, according to the state.
Zong, an osteopathic physician who had trained in internal medicine in New York, opened his Bakersfield practice in 2007. Situated next to a marijuana dispensary, it was a one-stop shop for pain management, addiction treatment and acupuncture. Though Zong’s medical training didn’t focus on those areas, he had the necessary DEA waiver to prescribe buprenorphine by 2010, records show.
Zong had a reputation for writing scripts, cheap and fast, according to numerous interviews with former patients, drug treatment professionals and pharmacy employees in the area. Lines of sometimes-agitated patients stretched from the waiting room into the parking lot, the street and the dirt lot across the road, patients and neighbors said.
If the wait was lengthy, the appointments weren’t, the patients said.
“When I walked in the first time,” said Brian Adams, a former patient, “[Zong] said, ‘What’s going on?’ I said, I’m a heroin addict. I need help. He said ‘OK, I’ll write you a prescription for Suboxone.’”
No intake. No drug testing. No counseling. “I was in and out in five minutes,” Adams said.
The price for the visit ranged from $80 to $100 cash to secure the medicine, patients said — far cheaper than anywhere nearby.
Federal regulators say buprenorphine should be “part of a comprehensive treatment plan that includes counseling and participation in social support programs.”
There was an option like that within a few miles of Zong’s office: Aegis Treatment Centers, which runs opioid treatment clinics closely regulated by the government. The clinics required services including intake, urine testing and counseling for opioid treatment.
From a hard-up patient’s perspective, Aegis had another downside: It had not yet been approved to accept Medi-Cal for buprenorphine, which was dispensed on-site as take-home pills. The range of services and medication costs nearly $700 for those without insurance, although a limited number of discounts are available to the poor.
Zong’s Medi-Cal patients had it easier: Their freshly issued scripts were covered at local pharmacies.
Anger And Suspicion
Zong had good reasons to be concerned about security. He’d had a handful of break-ins at the clinic, his vehicle and home — one recently, according to the police report.
At some point, he became licensed to carry and conceal a firearm. Adams said he once saw him pull it out when Adams got confrontational.
Angry that Zong wouldn’t prescribe him an anti-anxiety medication, “I stood up and was like ‘Man, [expletive] you,’” Adams said. Zong pulled out his gun and placed it on the table in front of him, Adams said, and he quickly sat back down.
Patients and pharmacists said Zong sometimes did add addictive anti-anxiety drugs like Xanax to buprenorphine prescriptions for people presumably seeking to escape addiction. Besides creating the potential for further drug abuse, the combination can be deadly, experts say.
Records of Medi-Cal claims obtained by Kaiser Health News show that, in addition to treating patients with buprenorphine, Zong prescribed significant amounts of highly addictive opioids, including oxycodone and hydrocodone, as well as habit-forming anti-anxiety medications. They do not show what combinations of drugs were offered each patient.
Staffers at three pharmacies in the area said they were concerned about peculiarities in Zong’s prescriptions or drug-seeking behavior among his patients.
Myron Chang, a pharmacist at the Walgreens at H Street and Planz Road in Bakersfield, said Zong’s prescriptions “were suspicious.” Staffers noticed odd quantities of pills prescribed — 43, 46, he said. Usually, doctors call for 30 or 60 to match a daily dose for a 30-day month, Chang said.
Chang added that Zong’s scripts sometimes included a potentially dangerous cocktail of sleeping pills, narcotics and anti-anxiety medications. He showed a reporter one of Zong’s 2013 prescriptions for Subutex and Xanax.
“We just stopped taking his scripts,” Chang said.
Not The Same Man
After the killing, police found a ski mask, a black hoodie and a recently used meth pipe in Lang’s car, according to their report. Witnesses reported to police that Lang came into the offices saying “something about money” or that he was “waiting on his money.”
Court records show he had pleaded no contest for misdemeanor burglary in 2014 and served three days in jail.
Lang’s family is skeptical that Lang was trying to rob Zong. They acknowledge, however, that he was not the man he used to be.
When Monique met Cole, as he was called, she was still in high school. He was an outgoing and funny 19-year-old, with beautiful green eyes and a sharp wit. In short order, they married and he shipped out to Iraq. Then came two more tours, in Iraq and Afghanistan. One explosion, then another, nearly killed him.
When he came home to his wife and baby daughter, he “was a lot different, especially around family functions,” said Monique Lang. He wouldn’t want to go, and if he did, he was quiet and remote. “I was like, ‘This isn’t you. What is going on?’ He never would say.”
In 2009, after Monique discovered money missing from the couple’s bank account, her husband came clean: He was hooked on opioids. From then on, it was a roller coaster of pills, heroin and rehab. In the middle of it all, they had a son, now 4.
Lang’s family said the former Marine was in constant pain, physically and mentally. He had a severe back injury. He screamed in his sleep. His daughter, now 10, would sleep on the couch downstairs, to escape the sound.
He secretly wrote suicide notes to his wife and kids.
Zong told reporters the day after the shooting that he did not remember seeing Lang before. But the family told police he was seen on occasion between 2012 and 2015, according to their report, and that he received Suboxone for opioid addiction.
In an interview, Monique Lang said she once accompanied Cole to an appointment. She didn’t like the atmosphere, she said, and didn’t understand how taking a medication with no other services would help her husband.
But that was history — or so the family thought. By last April, they believed Lang was sober, getting the support he needed at Aegis.
Another Clinic ‘Overwhelmed’
Zong told police he performed one final task on his clinic’s last day, with Cole Lang dying outside on the asphalt and squad cars en route: He wiped the blood from his battered face and agreed to write his remaining patient a prescription.
Although Zong — who also goes by the name Yon Yarn — remains licensed to practice with an unblemished osteopathic board record, he says he will not reopen his practice.
His departure created chaos as desperate people dependent on his prescriptions struggled to get help elsewhere.
“We were overwhelmed,” said Javier Moreno, regional clinic manager at Aegis. “We probably fielded a hundred, 200 calls from patients who were panicking — ‘I’m worried about relapse.’ ‘I don’t know what to do.’ ‘My prescription is expiring.’”
Even months after Cole Lang’s death, neighbors said patients still showed up at Zong’s door, with the scrawled “Closed” sign on it, hoping to find that the doctor was in.
ZANESVILLE, Ohio — Brianna Foster, 23, lives minutes away from Genesis Hospital, the main source of health care and the only hospital with maternity services in southeastern Ohio’s rural Muskingum County.
Proximity proved potentially lifesaving last fall when Foster, pregnant with her second child, Holden, felt contractions at 31 weeks — about seven weeks too soon. Genesis was equipped to handle the situation — giving Foster medication and an injection to stave off delivery. After his birth four weeks later – still about a month early, at 5 pounds 12 ounces — Holden was sent to the hospital’s special care nursery for monitoring.
Mother and son went home after a few days. “He was pretty small — but he’s picking up weight fast,” said Foster of Holden, now almost 4 months old.
Medicaid, the federal-state health insurance program for low-income people — including Foster, who most recently worked as a preschool teacher’s aide — is responsible for much of her good fortune.
Started in 1965, the program today is part of the financial bedrock of rural hospitals like Genesis. As treatments have become increasingly sophisticated — and expensive — health care has become inextricably linked to Medicaid in rural areas, which are often home to lower-income and more medically needy people.
Kaiser Health News is examining how the U.S. has evolved into a “Medicaid Nation,” where millions of Americans rely on the program, directly and indirectly, often unknowingly.
Medicaid covers nearly 24 percent of rural, nonelderly residents and offers some financial stability to rural facilities by reducing uncompensated care costs at hospitals that would otherwise be in dire straits. In some cases, it enables them to provide costly but vital services, such as high-risk maternity care.
Medicaid pays the tab for close to 45 percent of all U.S. births annually, and about 51 percent of rural births, according to research. In Ohio, Medicaid pays for about 52 percent of births, according to 2016 state data, the most recent available.
But efforts to control Medicaid costs are consistently high on Republicans’ to-do list. The Trump administration has encouraged states to introduce work requirements and other changes to Medicaid — changes that would almost certainly reduce the number of people it covers and the money rural hospitals receive. Ohio lawmakers have recently signaled they intend to require that Medicaid enrollees also be employed.
Matthew Perry, Genesis’ CEO, who identifies as conservative and finds plenty of fault in Obamacare, is concerned about high government spending. But he acknowledges that cuts to Medicaid would be deeply problematic for his hospital, affecting what services it can afford to provide. Perry keeps a map in his office to track local options for medical care, and the next-closest OB ward is an hour away in Columbus. What happens, hypothetically, if you take Genesis Hospital off the map?
“That’s a huge problem,” he said.
Squeezed Hospitals, Cutting Costs
Like many rural hospitals Genesis is this area’s health care hub, the access point for primary care as well as mental health care, routine surgeries and other medical needs.
It is also central to the local economy.
Here in Zanesville, population 25,000, it seems as if almost everybody knows someone employed by the hospital.
Main Street is quiet — a stretch of scattered restaurants and pubs, county buildings and churches. Ten minutes away, across the river, Genesis anchors a stretch that would otherwise claim little more than fast-food chains, used car dealerships and cellphone shops.
This hospital, the flagship of a larger Ohio health system, is the product of a 2015 merger of two older town hospitals: Bethesda and Good Samaritan. Its 300 beds are the main source of health care across six counties — a quarter million people — and it delivers 1,500 babies per year.
Ask a woman in town where she would plan to deliver, and the answer is practically a given: Genesis, of course. Locals say it’s hard to conceive of a reality in which the hospital didn’t deliver babies.
In recent years, it’s also doubled down on other services, like cancer care, neurosurgery and open-heart surgery — which experts say can cushion a rural hospital’s bottom line, even if need isn’t as great.
Still, hospitals like Genesis often struggle with tight budgets and regular debates about whether cash flow can continue to support certain types of services. Rural hospitals have seen a sharp decline in the past decade. Nationally, 80 have closed since 2010 and the trend is expected to continue.
“When rural hospitals are squeezed, they have to look at what fixed costs they can shed,” said Katy Kozhimannil, an associate professor at the University of Minnesota School of Public Health, who studies obstetrics access. “The fixed costs of providing obstetrics services are very clear, and very distinct.”
Obstetrics requires pricey specialists, expensive malpractice insurance and, in the 21st century, the capacity to deal with extreme preemies and high-risk deliveries. At the same time, Medicaid reimburses hospitals less for this service— often below the cost of the care — than any other insurance program, making it a balance-sheet loss.
Already, about 45 percent of rural communities do not have a hospital with dedicated maternity care. From 2004 to 2014, almost 1 in 10 rural counties lost their hospital-based obstetrics programs, suggests research published last fall.
In Ohio, nine rural hospitals have dropped obstetrics since 2007 — including one that closed. The state currently has 73 small and rural hospitals in operation.
“We’ve seen a slow erosion of obstetrics in rural areas,” said Michael Topchik, national leader of the Chartis Center for Rural Health, an analytics and consulting firm. “And I’m afraid that further [Medicaid] cuts would exacerbate that trend.”
That scenario is part of the reason why rural health advocates have fiercely criticized GOP efforts at the federal and state level to cut Medicaid or to eliminate the Affordable Care Act’s option for states to expand eligibility for the program.
Research suggests that states’ expansion of Medicaid eligibility led to greater financial stability for rural hospitals. Also, more generous Medicaid coverage increases the odds that rural areas have any kind of obstetrics program.
Potential cutbacks offer a complicated calculation in this conservative town, with practical considerations bumping into politics.
“Things like trauma and obstetrics and behavioral medicine … they’ve got to be subsidized by other, more profitable things,” said Perry, the hospital CEO. “You can’t repeal the laws of economics.”
Still, Muskingum County backed Donald Trump over Hillary Clinton by more than 2-to-1. Its most recent congressional representative, Republican Pat Tiberi, was a vocal Obamacare critic who, until an early retirement this past January, consistently voted to repeal the ACA and pushed efforts to reduce Medicaid’s size and scope.
A Public Health Concern
When pregnant women are geographically farther from health care, they and their babies are more likely to have poor outcomes, like lower birth weights, research suggests.
Foster said that if she had to travel to Columbus, she likely would not have made as many prenatal appointments. Each visit means scrounging up gas money and finding someone to watch her older son for at least three hours.
“It’s obvious that better prenatal care means better outcomes,” said Bijan Goodarzi, an OB-GYN at Muskingum Valley Health Center, a Genesis affiliate about a five-minute drive from the hospital.
And without an operational delivery unit, hospitals are unlikely to keep on staff obstetricians who are experienced in complicated births, experts said.
Keeping rural maternity services open with Medicaid funding also engages new mothers with the local health system in regions with high rates of chronic illness, drug addiction and smoking. The national opioid epidemic is acute in this corner of Ohio.
“What we see is someone who comes in with no teeth, or all rotted teeth or can’t eat. And she’s not complaining about dental work. She’s here worried about her pregnancy,” Goodarzi said.
Even as Obamacare repeal appears on pause, Medicaid remains vulnerable. In Ohio, many state lawmakers are pushing a cap on the state’s expanded Medicaid program — a controversial move that would almost certainly squeeze hospital revenue. Nationally, Republican leaders are weighing cuts to Medicaid, Medicare and other safety-net programs.
“If you pull too many of those foundational blocks out of the system that support the safety net … it can crumble,” said Perry, who worries about the effect of such cuts. “People can assume something’s always going to be there, when in reality, that assumption is not always true.”
As President Donald Trump and congressional Republicans tirelessly try to dismantle the Affordable Care Act, a number of states are scrambling to enact laws that safeguard its central provisions.
The GOP tax plan approved by Congress in the last days of 2017 repealed the ACA penalty for people who fail to carry health insurance, a provision called the “individual mandate.” On Jan. 30, in Trump’s first State of the Union address, he claimed victory in killing off this part of the health law, saying Obamacare was effectively dead without it.
But before that federal action kicks in next year, some states are enacting measures to preserve the effects of the mandate by creating their own versions of it.
Maryland is on the cutting edge with legislation moving through both chambers of the Statehouse.
“We’ve been just struggling since Trump became president with how to protect the ACA in our state,” said Vincent DeMarco, president of the Maryland Citizens’ Health Initiative, a nonprofit organization that has been instrumental in pushing the measure.
Creating an individual mandate is just one way that states — generally blue states where Democrats control the legislature — seek to ensure what many lawmakers view as key advances made by the ACA don’t disappear.
They’re looking to one another as test cases to see how state-level legislation can either buttress or alter the ACA, according to Trish Riley, the executive director of the National Academy for State Health Policy.
“One state will try one approach, others will try it,” Riley said. “It’s an experiment, and an important one.”
Time is short, since most states have limited legislative calendars and are fast approaching the deadlines for insurers to file their 2019 rate plans.
Passing and implementing these kinds of measures will be tough, said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. But “I think there’s still a window of opportunity for states to do something and have an impact on 2019 premiums,” she said.
Maryland’s Take On The Individual Mandate
Maryland’s effort began last April when the state legislature created the Maryland Health Insurance Coverage Protection Commission “both in response to and in anticipation of efforts at the federal level to repeal and replace the ACA,” according to a report by the state’s legislative services department and the commission itself.
The commission, chartered for three years, is charged with studying how federal action could affect the state’s health insurance market and Medicaid program and offering recommendations to mitigate any negative impacts. The panel began meeting months before the Maryland General Assembly started its 90-day session in January.
Based on the commission’s initial recommendations, Sen. Brian Feldman and House Del. Joseline Peña-Melnyk introduced the Protect Maryland Health Care Act of 2018, which lays out a framework for preserving an individual mandate in the state.
The federal individual mandate was put in place to make sure that younger, healthier people joined the insurance risk pool, helping to stabilize the market. The idea is that those relatively healthy customers help cover the insurers’ costs for sicker customers’ care, which keeps premium costs manageable for everyone.
The Congressional Budget Office estimated that 13 million people nationwide would become uninsured without the individual mandate. Some will choose to go without insurance or will not be able to find an affordable plan. Insurers could opt to leave local markets because they could not make money covering only sick patients.
Feldman said insurers and health care experts testified before the commission that Maryland’s insurance exchange would collapse in 2019 if the state didn’t act.
“Because of uncertainty at the federal level, it’s going to be up to states in this arena to pick up the slack and to enact legislation that responds to that uncertainty,” he said.
The federal mandate imposed a tax penalty on people who could afford to but chose not to buy insurance, depositing the money in a general Treasury fund.
In Maryland, the penalty fee will effectively be used, according to advocates, as a “down payment” on an insurance policy.
Beginning in 2020, if someone indicates on their taxes that they’re uninsured, the state would use the fine, plus any tax credits from the federal government, to buy an insurance plan for them.
Maryland would match its residents only with plans that cost nothing more than the fine plus the federal subsidy. So, if such a plan isn’t available in a person’s area, the state will hold on to the money in an interest-bearing account until the next open enrollment season. Then, the person has another chance to buy insurance. If at this time they don’t purchase a plan, the state will deposit the money into an insurance stabilization fund.
Politics And Policy On The Ground
Maryland is fertile ground for such health care experiments. The ACA remains popular within the state. Polling commissioned by DeMarco’s group puts the law’s support at 62 percent.
In addition, about 52 percent of Marylanders favored a state-based individual mandate, to make up for the federal provision that was repealed.
Democrats control the general assembly, but Gov. Larry Hogan, a Republican, has not offered a specific position on the issue — rather, he alluded to health reform efforts in his State of the State address. “Let’s develop bipartisan solutions to stabilize [health insurance] rates,” he said.
Ed Haislmaier, a senior research fellow at the Heritage Foundation, expressed skepticism about whether this approach will make a difference. The people who are targeted, he argued, are younger, healthier and generally lower-income. They don’t have insurance because they don’t want it, he suggested.
Jason Levitis, a senior fellow at Yale Law School’s Solomon Center for Health Law and Policy who has been instrumental in helping states craft their own versions of the individual mandate, warned that Maryland’s approach could face administrative challenges.
States that follow an approach more closely modeled after the federal mandate, he said, will have an easier time implementing it because regulators have already had five years of experience enforcing it.
Still, Levitis praised the Maryland plan: “There’s something attractive about the idea there, that you put this money … towards coverage.”
And a sampling of state proposals highlight a common theme.
“All the mandate efforts are based on the federal one,” Levitis said. “The variations are what you put on top, [how states] individually keep track of the money people pay and use it for health care services.”
He pointed to Connecticut as an example. It has two bills pending in its legislature — one that closely mirrors the federal mandate, but with slightly lower fines, and another in which the fines would be deposited into health savings accounts for the individuals.
In New Jersey, a Senate panel advanced a two-bill approach this week that would collect a fee from residents who opt against buying health insurance. These fines would then be used to help pay the health care claims of people who are catastrophically ill.
In the District of Columbia, a health care working group recommended an individual mandate nearly identical to the federal one. The plan would require City Council and congressional approval to become law.
Washington state has convened a group to study how to enforce a mandate, and no legislation has been introduced yet in California.
Meanwhile, Maryland officials also hope to learn from the experiences of other states.
For instance, lawmakers in Maryland are considering the creation of a state-based, basic, low-cost health plan as well as a fund to help insurers cope with the burden of very high-cost patients.
These efforts also come from the work of the commission.
Stan Dorn, a senior fellow with the pro-Obamacare group Families USA, said Maryland “had the foresight to see threats coming and to try to be proactive about it.”
Michael Callahan, an outgoing 43-year-old carpenter, landed in a Los Angeles County jail last September because of what he said were “bad decisions and selling drugs.”
He had uncontrolled diabetes and high blood pressure when he arrived, but his health was the last thing on his mind. Consumed by a meth addiction, he hadn’t taken his medications for months. “When I got here, I was a wreck,” said Callahan, who is stocky and covered in tattoos. “My legs were so swollen that if I bumped them they would break open.”
By January, however, his diabetes was improving and his blood pressure had dropped. Now, he takes his medications daily and sees a doctor every two months. Even as he counts the days until his release this summer, Callahan knows he is getting much-needed medical care. “I’m where I need to be, not where I want to be,” he said.
Callahan’s situation is counterintuitive: He may end up leaving jail healthier than when he arrived. Officials at the Los Angeles County Department of Health Services hope to see more cases like his as they embark on an ambitious effort to improve health care for jail inmates. Their project follows decades of complaints, lawsuits and reports of poor medical and mental health care at the Los Angeles County jails, which together house about 18,000 inmates on any given day.
The county’s overhaul is designed to raise the quality of health care behind bars and better equip inmates to manage their health after they are released. But the challenges are enormous — the population is disproportionately sick, and the jails weren’t designed to be medical facilities.
The innovative effort at one of the nation’s biggest jail systems is based on a logical premise: Inmates don’t stay in jail for long — the average stay is just 60 days — so it’s a crucial opportunity to diagnose and begin treating their diseases.
“People are there for just a blip in time, days, weeks, months … and they’re returning back to the community,” said Mark Ghaly, director of community health for the county Department of Health Services. “What happens in the jail matters.”
The county health agency took over medical care in the jails from the Los Angeles County Sheriff’s Department in 2015 and started revamping the system in earnest last year.
The main health clinic at the Men’s Central Jail in downtown Los Angeles is located just inside a large metal gate. Inmates there and at all the county’s jails can get a wide variety of medical and behavioral care. “It’s a giant health system and it’s complex,” said Margarita Pereyda, chief medical officer of correctional health services for L.A. County. “We are a hybrid between a hospital and an ER and an outpatient kind of environment.”
Part of the plan is to make clinics inside the jails more like ones on the outside. That means assigning inmates to primary care doctors to manage their chronic diseases and getting them appointments and medications quickly. It also means expanding treatment for mental health and substance abuse and referring those who need advanced medical or behavioral care to specialists who work for the county.
It’s a monumental job: Nearly half of all inmates have at least one chronic disease, including about 450 who have HIV and 900 with diabetes. About two-thirds of inmates are addicted to drugs or alcohol, and about a quarter have serious mental illnesses.
“Very few people have chronic illness under good control,” Ghaly said. “The jails have largely become treatment facilities.”
To improve inmates’ access to care, county officials launched a physician recruitment effort this month. They released a series of online videos featuring medical providers with the slogan “Mission Possible.” As an incentive, they are offering to pay up to $120,000 in medical school debt for each of the new hires who need it. That strategy has been used to lure doctors to low-income communities around the United States.
Esther Lim, who directs the jails project at the American Civil Liberties Union of Southern California, said she is optimistic care will improve, but she still hears daily from inmates about delays in appointments and medications. And, she said, people are still dying inside the L.A. County jails — an average of 25 each year, according to the health department.
“It’s an indication that there is something wrong, that the delivery of medical care is still poor,” Lim said. Overcrowding can result in inmates’ health being neglected and deteriorating over time, she said. County health officials acknowledge the situation is not going to change overnight. The county is “making some great headway,” but “there are some things that you can change more quickly than others,” said Ed Matzen, clinical nursing director for the jails.
Lello Tesema, a primary care physician and director of population health for the county jails, said many of her patients have gone without care on the outside for a long time. As soon as she gets a new patient, Tesema takes a medical and personal history. Then she creates a plan with the patient, knowing she has only a limited amount of time to implement it.
The jails have largely become treatment facilities.
One early morning in January, Tesema examined Callahan, the carpenter, on an exam table in a room just off a busy corridor around the corner from his dorm-style cell. She said the swelling in his legs had diminished and his blood-sugar level was looking good. “We’re moving in the right direction,” she told him. On the way back to his bunk, Callahan stopped at a window to pick up a pill for his diabetes.
Tesema said she worries about the health of her patients after they get out of jail even though they leave with a referral to a county clinic and 30 days’ worth of medication — up from three days in the past. “Often I see patients come back and a lot of the successes that happened while they were here end up diminishing after they leave,” she said.
Tesema and other medical providers in the jail must manage the inherent tension between safety and medical care. Sometimes, doctors have to see patients in their cells or treat them when they are handcuffed, Tesema said.
Jason Wolak, a captain in the medical services bureau of the Sheriff’s Department, said deputies are making an effort to get more inmates to medical appointments. “We’re the Uber for medical,” he said. He added that the department needs more staff, especially for transporting inmates to outside specialists or to the county-run hospitals.
Since patients also are going to court, attending classes or meeting with their lawyers, scheduling medical visits can be a challenge, Ghaly said. “There’s a high no-show rate to appointments.”
Pereyda said the new system for providing care at the jails depends on current doctors changing their mindset — things as simple as calling people “patients” rather than “inmates.”
“We can figure out the logistics and we can figure out the resources, but shifting the way people think and act is going to be our biggest challenge,” she said. Hiring doctors who believe in the mission of health care behind bars will help, she added.
Among some inmates, attitudes about their own health are already beginning to shift.
Callahan said he’s determined to stay sober and continue monitoring his health when he gets out. “I’m 43 years old and that’s not the age to be screwing around with diabetes,” he said.
YUBA CITY, Calif. — When Landon Morris was diagnosed with hemophilia shortly after birth, his mother, Jessica Morris, was devastated. “It was like having your dreams — all the dreams you imagined for your child — just kind of disappear,” she recalled.
Hemophilia, a rare bleeding disorder caused by a gene mutation that prevents blood from clotting properly, is typically passed from mother to son. Morris’ grandfather had it, and she remembered hearing how painful it was. “It was almost like he was bubble-wrapped,” she said. “He was coddled, because his mom didn’t want him to get hurt.”
But Landon’s life turned out much different than she expected.
“He’s wild. He’s probably sometimes the roughest of them all,” she said, as she watched the 6-year-old race around a park. “He leads a totally normal life. He plays T-ball. He’ll start soccer in the fall. He runs and jumps and wrestles with his brothers.”
That’s due almost entirely to his medication — the kind that wasn’t available in his grandfather’s day. For the Morris family, this type of drug — broadly known as clotting factor — is a miracle, helping Landon’s blood clot normally. And its cost is almost entirely covered by his father’s federal employee health plan.
But for the health care system, such drugs are enormously expensive, among the priciest in the nation. Medications to treat hemophilia cost an average of more than $270,000 annually per patient, according to a 2015 Express Scripts report. If complications arise, that annual price tag can soar above $1 million. The U.S. hemophilia drug market, which serves about 20,000 patients, is worth $4.6 billion a year, according to the investment research firm AllianceBernstein.
Examining the stubbornly high cost of these medications opens a window into why some prescription drugs the United States — especially those for rare diseases — have stratospheric prices. The short answer: Competition doesn’t do its traditional job of tamping down costs.
Vying For Patients
The market for hemophilia medicines in the United States is flooded with 28 different drugs, with another 21 drugs in development. Because blood factor drugs are biological products — in this case, a protein — there are no cheaper copies, called biosimilars,available. Not only do prices rise steadily as each new product comes on the market, demand is growing — and pushing costs upward — as more and more clotting factor is used to prevent bleeding episodes, not just to treat them.
Yet competition has not brought prices down in the way someone “operating at the level of undergrad Econ 101 would expect,” said Jerry Avorn, a professor at Harvard Medical School who studies prescription drug costs.
The problem is that companies have no incentive to lower prices. Patients generally don’t push back because insurers pay the bulk of the cost. And insurers tend not to object because the market for the drugs — expensive as they are — is small and the patients are especially vulnerable.
For drug companies, Avorn said, “it’s a magical formula: Lifesaving drug, child at risk of bleeding to death — it kind of casts anybody who looks at costs into the role of some evil Scrooge-like person.”
“The insurers don’t want to end up on the front page of the newspaper saying Little Timmy bled to death because his drug wasn’t covered,” he said.
Also, because prices are high across the hemophilia market, no drug company wants to be the one to blink first. “They don’t want to get a price war started and end up at a super low price point,” said Edmund Pezalla, a consultant to pharmaceutical companies and former executive at Aetna.
So, these drugmakers compete not on price but clinical benefits — such as how long the drugs’ effects last — and through intensive marketing. The pool of potential customers is so valuable that companies often vie directly for individual patients.
Manufacturers, as well as specialty pharmacies that sell the drugs, hire patients and parents as recruiters and advisers, hold dinners and holiday parties, offer scholarships to patients and even run summer camps for children with the disease. The Morris family regularly receives such invitations.
Dr. Jonathan Ducore, a pediatric hematologist-oncologist at the University of California-Davis Hemophilia Treatment Center in Sacramento, said some of his patients are persuaded by drug company presentations to switch medications. ”But the real differences between the drugs are limited,” he said.
Ducore said he tells patients if he thinks they are being misled by drugmakers about what a product will do. “But even though the tactics may seem a little smarmy, if it's the patient’s choice, you have to go with it,” said Ducore, who has been Landon’s doctor since the boy was born.
The first clotting factor products, which came onto the market in the mid-1960s, were derived from human blood plasma, with thousands of donations combined to create one batch. This proved disastrous in the 1980s, when donors unwittingly spread HIV into the blood supply. An estimated 4,000 people with hemophilia — about 40 percent of the patient population in the U.S. — died from AIDS as a result.
In the 1990s, manufacturers introduced a product that did not carry the disease risk of plasma-based drugs — made by cloning human clotting proteins in animal cells. Companies charged a premium for this ever-more-popular “recombinant factor.”
Recombinant factor is difficult and delicate to make, said Steve Garger, a development scientist at Bayer, which produces two popular factor products at its Berkeley, Calif., plant — including Landon Morris’ drug, Kogenate.
Inside a concrete building on the campus, kidney cells from baby hamsters are grown in stainless-steel vessels called bioreactors, and the clotting factor they produce is then purified in steel tanks kept in cold rooms. Working at full capacity, this factory produces less than a pound of clotting factor each year — but when diluted with other ingredients, it’s enough to treat thousands of patients in 80 countries.
The investment in manufacturing and marketing is only part of the reason for the high cost of the drugs, said Kevin O’Leary, vice president of pricing and contracting at Bayer. Bayer does not simply add up the costs, slap on a profit margin and come up with the price, O’Leary explained.
Instead, he said, the company begins by talking to insurers, doctors and patients to get a sense of what value its products bring to the market, especially compared to drugs already available. Bayer then sets a price based on both its investment and the product’s perceived worth. In the end, he said, “we're charging a price that's competitive with the other factor products on the market.”
Bayer’s annual sales from its hemophilia drugs were 1.166 billion euros in 2016. That’s the equivalent of about $1.45 billion in the U.S.
Pushing Back On Costs
In Europe, hemophilia drugs cost less than half what they cost in the U.S. That’s because payers — usually governments — request bids and pick products based on cost and quality.
Without pushback from insurers in the U.S., “the price of any drug in the U.S. is whatever the market will bear as seen by the manufacturer,” said Avorn of Harvard.
Recently, a few insurance companies have quietly started to push back on costs. Bayer’s O’Leary said several insurers have approached the company and demanded rebates in exchange for offering the drug to their customers. O’Leary would not discuss the details because he said the contracts are confidential.
State Medicaid programs, which provide health insurance to low-income Americans and cover about half of hemophilia patients, already receive significant rebates from hemophilia drug manufacturers.
Michelle Rice, a senior vice president at the National Hemophilia Foundation, said she has been working with several insurers to help them manage costs safely. “We understand the need to control costs, but they can’t impede access to the product a patient needs,” she said.
It is not yet clear whether such efforts will work, let alone spread.
Sitting at a picnic bench at a park, Jessica Morris pages through Landon’s insurance documents. Over the past year, his care cost over $120,000. She wonders sometimes what would happen if they lost their coverage.
“How much would you be willing to pay to have your child lead a normal life?” she said. “I don't think that there's anything we wouldn't pay or sacrifice for him.”
It’s a problem she prays they’ll never have to face.
A few years ago, Renea Molden's doctors told her they wanted to take her off her opioid pills. It did not sound like good idea to her.
"I was mad, I'll be honest. I was mad. I was frustrated," said Molden, 40, of Kansas City, Mo. She struggles with fibromyalgia, bulging discs and degenerative disc disease. Her doctors were concerned about her potentially taking hydrocodone for the rest of her life, but to her, the three pills she took each day seemed to be the only way she could make it through work, go shopping or even fix dinner.
"It felt like they were taking a part of my life away from me," she said.
For many people with chronic pain, opioids can seem like the difference between a full life or one lived in agony. Over the past few decades, they have become go-to drugs for acute pain, but Dr. Erin Krebs, with the Minneapolis Veterans Affairs Health Care System and the University of Minnesota, said research about the effectiveness of opioids for chronic pain was lacking. Even though millions of people take the drugs for long periods of time, there is little evidence to support that use.
"The studies that we had out there were short-term studies and mostly compared opioids to placebo medications," Krebs said. "From those studies, we knew that opioids can improve pain a little bit more than a placebo, or sugar pill, in the short term, but that's all we knew."
But that's changing. Krebs is the lead author of a new study that looks at the effectiveness of opioids for treating chronic pain over 12 months published Tuesday in the Journal of the American Medical Association.
The study involved 240 veterans with chronic back pain or osteoarthritis of the knee or hip who had pain that was ongoing and intense. Half were treated with opioids and half with non-opioid medications — either common over-the-counter drugs like acetaminophen or naproxen, or prescription drugs like topical lidocaine or meloxicam. Doctors and patients knew what group they were in, said Krebs, and that was deliberate because people's expectations can influence how they feel.
Dr. Muhammed Farhan favors nonopioid approaches to treating pain, including mind-body methods like meditation and yoga. (Alex Smith/KCUR)
"We found at the beginning of the study that patients who were enrolled really thought that opioids were far more effective than non-opioid medications," she said.
But after as little as six months, the non-opioid group reported their pain was slightly less severe than the opioid group's collective assessment. By the end of the year, Krebs said, "there was really no difference between the groups in terms of pain interference with activities. And over time, the non-opioid group had less pain intensity, and the opioid group had more side effects," such as constipation, fatigue and nausea.
The study didn't explore why, but Krebs has a theory: opioid tolerance.
"Within a few weeks or months of taking an opioid on a daily basis, your body gets used to that level of opioid, and you need more and more to get the same level of effect," she said.
Opioids, of course, also carry the risk of dependence, addiction and overdose. Coming off of opioids gives patients who have developed a dependence flu-like symptoms that can last for days or weeks.
"This study adds the long-term evidence that shows that opioids really don't have any advantages in terms of pain relief that might outweigh the known harms that they cause," she said. "The bottom line for people who have chronic back pain or arthritis pain is just that you shouldn't start opioids."
But what about patients like Molden who had already been using opioids for a long time? Dr. Muhammed Farhan, medical director of the University of Missouri-Kansas City's multidisciplinary pain management program, said diplomatic conversations with patients like Molden are part of his daily routine. Farhan also is the medical director of the University Health Pain Management Clinic at Truman Medical Centers, which doesn't prescribe opioids.
He said he meets patients every day with problems like back pain who've reached the end of the line with the drugs.
"Most of the time what I see is that they are taking high doses of opioids and that they are in bed all the time or sleeping and still in pain," he said.
Farhan said he starts by helping them adjust to the idea that they cannot eliminate pain entirely. He said this expectation can be especially dangerous for people who rely on increasing doses of opioids.
"Our idea of being completely pain-free can lead us to a place when they end up with more pain, no improvement in their quality of life after being on high doses of opioid medications, which can be harmful to the point that they may die," Farhan said.
He said he tries to help his patients taper off opioids slowly and use alternative drugs and therapies.
Krebs agrees with this approach. "Medications have some role, but they really shouldn't be the primary way we are treating chronic pain," she said. "For osteoarthritis pain, the strongly recommended treatments are exercise treatments," she said, and it's important to maintain a healthy weight. "The same thing goes for back pain," she said, where experts recommend exercise, rehabilitation treatments, yoga and cognitive therapies, among others.
Renea Molden said it's been hard to leave hydrocodone behind, but she's working at it.
"I know if I can just get through that day — there's good days and there's bad days, and you just kind of have to make it through the bad days," she said.
But even on the worst days, Molden feels good that she's facing her pain without opioids.
Brigham Health in Boston is one of a slowly growing number of health systems that encourage selected acutely ill emergency department patients who are stable and don't need intensive, round-the-clock care to opt for hospital-level care at home.
Phyllis Petruzzelli spent the week before Christmas struggling to breathe. When she went to the emergency department on Dec. 26, the doctor at Brigham and Women’s Faulkner Hospital near her home in Boston’s Jamaica Plain neighborhood said she had pneumonia and needed hospitalization. Then the doctor proposed something that made Petruzzelli nervous. Instead of being admitted to the hospital, she could go back home and let the hospital come to her.
As a “hospital-at-home” patient, Petruzzelli, 71 this week, learned doctors and nurses would come to her home twice a day and perform any needed tests or bloodwork.
A wireless patch a little bigger than her index finger would be affixed to her skin to track her vital signs and send a steady stream of data to the hospital. If she had any questions, she could talk face-to-face via video chat anytime with a nurse or doctor at the hospital.
Hospitals are germy and noisy places, putting acutely ill, frail patients at risk for infection, sleeplessness and delirium, among other problems. “Your resistance is low,” the doctor told her. “If you come to the hospital, you don’t know what might happen. You’re a perfect candidate for this.”
So Petruzzelli agreed. That afternoon, she arrived home in a hospital vehicle. A doctor and nurse were waiting at the front door. She settled on the couch in the living room, with her husband, Augie, and dog, Max, nearby. The doctor and nurse checked her IV, attached the monitoring patch to her chest and left.
When Dr. David Levine arrived the next morning, he asked why she’d been walking around during the night. Far from feeling uncomfortable that her nocturnal trips to the bathroom were being monitored, “I felt very safe and secure,” Petruzzelli said. “What if I fell while my husband was out getting me food? They’d know.”
After three uneventful days, she was “discharged” from her home hospital stay, and the equipment removed from her home. “I’d do it again in a heartbeat,” Petruzzelli said.
Brigham Health in Boston is one of a slowly growing number of health systems that encourage selected acutely ill emergency department patients who are stable and don’t need intensive, round-the-clock care to opt for hospital-level care at home.
In the couple of years since Brigham and Women’s Hospital started testing this type of care, hospital staff who were initially skeptical have generally embraced it, said Levine.
“They very quickly realize that this is really what patients want, and it’s really good care,” he said.
This approach is quite common in Australia, England and Canada but it’s faced an uphill battle in the United States.
A key obstacle, clinicians and policy analysts agree, is getting health insurers, whose systems aren’t generally set up to cover hospital care provided in the home, to pay for it.
At Brigham Health, the hospital can charge an insurer for a physician house call, but the remainder of the hospital-at-home services are covered by grants and funding from Partners HealthCare’s Center for Population Health, which is affiliated with Brigham Health, said Levine.
Health insurers don’t have a position on hospital-at-home programs, said Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, an industry trade group.
“Overall, health insurance providers are committed to ensuring patients have access to care they need, and there are Medicare Advantage plans that do cover this type of at-home care,” Donaldson said in a statement.
Levine, a clinician-investigator at Brigham and Women’s Hospital and an instructor at Harvard Medical School, was the lead author of a study published last month that reported the results of a small, randomized, controlled trial comparing the health care use, experience and costs of Brigham patients who either received hospital-level care at home or in the hospital in 2016.
The 20 patients analyzed in the trial had one of several conditions, including infection, heart failure, chronic obstructive pulmonary disease or asthma. The trial found that while there were no adverse events in the home-care patients, their treatment costs were significantly lower, about half that of patients treated in the hospital.
Why? For starters, labor costs for at-home patients are lower than for patients in a hospital, where staff must be on hand 24/7. Home-care patients also had fewer lab tests and visits from specialists.
The study found that both groups of patients were about equally satisfied with their care, but the home-care group was more physically active.
Brigham Health is conducting further randomized controlled trials to test the at-home model for a broader range of diagnoses.
Dr. Bruce Leff began exploring the hospital-at-home concept more than 20 years ago, conducting early studies at Veterans Affairs medical centers and Medicare Advantage plans that found fewer patient complications, better outcomes and lower costs in home-care patients.
Caregivers reported less stress, Leff’s research found. For caregivers, traveling to an unfamiliar hospital, finding and paying for parking and trying to time bedside meetings with clinical staff, all the while worried about a loved one’s health, is wearing, experts note.
Hospitals, accustomed to the traditional “heads-and-beds” model that emphasizes filling hospital beds in a brick-and-mortar facility have been slow to embrace change, however.
There are practical hurdles, too.
“It’s still easier to get Chinese food delivered in New York City than to get oxygen delivered at home,” said Leff, a professor of medicine and director of Johns Hopkins Medical School’s Center for Transformative Geriatric Research.
Since Mount Sinai’s seven-hospital system launched its Hospital-at-Home program in New York City in 2014, more than 700 patients have chosen home over hospital care. Patients can be referred to the program from selected emergency departments as well as some Mount Sinai primary care practices and urgent care centers. And they have fared well on a number of measures.
The average length of stay for acute care was 5.3 days in the hospital versus 3.1 days of treatment for home-care patients, while 30-day readmission rates for home-based patients were about half of those in the hospital: 7.8 percent versus 16.3 percent for the two-year period ending December 2016.
Begun with a three-year, $9.6 million grant from the federal Center for Medicare & Medicaid Innovation in 2014, Mount Sinai’s program initially focused on Medicare patients with six conditions, including congestive heart failure, pneumonia and diabetes. Since then, the program has expanded to include dozens of conditions, including asthma, high blood pressure and serious infections like cellulitis, and is now available to some privately insured and Medicaid patients.
The health system has also partnered with Contessa Health, a company with expertise in home care, to negotiate contracts with insurers to pay for hospital-at-home services.
Among other things, insurers are worried about the slippery slope of what it means to be hospitalized, said Dr. Linda DeCherrie, clinical director of the mobile acute care team at Mount Sinai Health System.
“[Insurers] don’t want to be paying for an admission if this patient really wouldn’t have been hospitalized in the first place,” DeCherrie said.
Arkansas follows Indiana and Kentucky this year in winning CMSí approval for the work requirement. Arkansas plans to start the new requirement affecting adults under age 50 by June, making it the first to do so.
The Trump administration on Monday approved Arkansas’ request for a Medicaid work requirement but deferred a decision on the state’s request to roll back its Medicaid expansion that has added 300,000 adults to the program.
Arkansas had sought to reduce the number of people eligible for Medicaid by allowing only those with incomes below the federal poverty level, or about $12,140 for an individual, to qualify. For the past four years, Arkansas Medicaid covered everyone with incomes under 138 percent of the poverty level, or about $16,750. The new policy would have cut the number of people eligible for Medicaid in the state by about 60,000 people.
Seema Verma, administrator of the Centers for Medicare & Medicaid Services, who announced the decision, has said her goal as head of the program was to grant states more flexibility in running their Medicaid programs than they’ve had before.
Arkansas follows Indiana and Kentucky this year in winning CMS’ approval for the work requirement. Arkansas plans to start the new requirement affecting adults under age 50 by June, making it the first to do so.
Verma recused herself on CMS’ decisions involving Indiana and Kentucky because she used to consult with those state Medicaid agencies before joining the Trump administration in 2017. As a health care consultant, she also worked with Arkansas. But Verma decided to personally approve the Arkansas waiver on Monday and flew to Little Rock, Ark., to make the announcement with Republican Gov. Asa Hutchinson.
CMS officials did not respond to questions about why she did not recuse herself again.
But a top Senate Democrat lambasted Verma’s decision.
“She pledged during her confirmation to recuse herself from working on many states’ Medicaid waivers to avoid conflicts of interest, including Arkansas, Sen. Ron Wyden (D-Ore.) said in a statement. “The Trump Administration has simply made a mockery of the HHS ethics process.”
It is unclear why she deferred deciding on Arkansas request to scale back its Medicaid decision. Deferring a decision on rolling back expansion could be a way of rejecting the application but in a less politically harsh way. Arkansas was one of the few Southern states to expand Medicaid under the ACA, a decision that brought hundreds of millions of federal dollars into the state.
Nine other states have requests pending with CMS to enact a Medicaid work requirement.
In Arkansas, enrollees who don’t work or volunteer at least 80 hours a month could lose coverage as early as September. The work requirement exempts many people such as those with opioid addiction and parents with dependent children.
Verma said the work requirement “is about helping people rise out of poverty to achieve the American dream.”
But advocates for the poor blasted the move, noting most Medicaid enrollees already work, go to school or are taking care of sick relatives.
“The Trump administration’s approval of Arkansas’ harsh work requirement in Medicaid will likely set back the state’s considerable progress under the Affordable Care Act in increasing coverage and improving access to care, health and financial stability for low-income Arkansans,” said Judith Solomon, vice president for health policy at the left-leaning Center on Budget and Policy Priorities.
Arkansas officials said they need the work requirement because without it many enrollees won’t seek out work or job training. Since January 2017, fewer than 5 percent of Medicaid enrollees who were referred to the state Department of Workforce Services to help with job training followed through and accessed services.
Opioids were on the White House agenda Thursday — President Trump convened a summit with members of his administration about the crisis. And Congress authorized funds for the opioid crisis in its recent budget deal— but those dollars aren't flowing yet, and states say they are struggling to meet the need for treatment.
The Oklahoma agency in charge of substance abuse has been told by the state's legislature to cut more than $2 million from this fiscal year's budget.
"Treatment dollars are scarce," said Randy Tate, president of the Oklahoma Behavioral Health Association, which represents addiction treatment providers.
It's like dominoes, Tate said. When you cut funding for treatment, other safety net programs feel the strain.
"Any cuts to our overall contract," he said, "really diminish our ability to provide the case management necessary to advocate for homes, food, shelter, clothing, primary health care and all the other things that someone needs to really be successful at tackling their addiction."
In just three years, Oklahoma's agency in charge of funding opioid treatment has seen more than $27 million dollars chipped away from its budget — thanks to legislative gridlock, slashed state taxes and a drop in oil prices (with the additional loss in state tax revenue that resulted).
Jeff Dismukes, a spokesman for Oklahoma's Department of Mental Health and Substance Abuse Services, says the already lean agency has few cost-cutting options left.
"We always cut first to administration," he said, "but there's a point where you just can't cut anymore."
The agency may end up putting off payments to treatment providers until July — the next fiscal year. Tate says that could be devastating.
"Very thinly financed, small rural providers are probably at risk of going out of business entirely — up to and including rural hospitals," he said.
Getting treatment providers to open up shop in rural areas is really hard, even in good times, and more financial uncertainty could make that problem worse. In the meantime, according to an Oklahoma state commission's opioid report,just 10 percent of Oklahomans who need addiction treatment are getting it.
That statistic is similar in Colorado. And as 2018 began, Colorado's escalating opioid crisis got worse, when the state's largest drug and alcohol treatment provider, Arapahoe House, shut its doors.
The facility provided recovery treatment to 5,000 people a year. Denise Vincioni, who directs another treatment center, the Denver Recovery Group, says other facilities have scrambled to pick up the patients.
Most of Arapahoe's clients were on Medicaid. Autumn Haggard-Wolfe, a two-time Arapahoe House client who is now in recovery, worries the facility's closing will have dire consequences, especially for people who need inpatient care, as she did.
"I feel like the only other option right now in therapy would be jail for people," she said, "and people die in there from withdrawing."
Arapahoe House's CEO blamed its closure on the high cost of care and poor government reimbursement for services.
The mother of Colorado state lawmaker Brittany Pettersen struggled with addiction, and was treated at Arapahoe House. Pettersen says treatment centers rely on a crazy quilt of funding sources and are chronically underfunded — often leaving people with no treatment options.
"We have a huge gap in Colorado," Pettersen said, "and that was before Arapahoe House closed."
She is pushing legislation in the state to increase funding for treatment. But to get tens of millions of dollars in federal matching funds, Colorado lawmakers need to approve at least $34 million a year in new state spending.
That price tag may simply be too high for some lawmakers. But either way, she added, "It's going to take a lot to climb out of where we are."
Colorado did get new federal funds to fight the opioid crisis through the 21st Century Cures Act, passed in December of 2016, but it was just $7.8 million a year for two years — divvied up among a long list of programs.