Built into the Senate ACA replacement bill are loopholes for states to bypass those protections and erode coverage for preexisting conditions. That could lead to perverse situations in which insurers are required to cover chronically ill people but not the diseases they suffer from.

This article first appeared June 22, 2017 on Kaiser Health News.

By Jay Hancock and Rachel Bluth

Senate Republicans praised the Affordable Care Act replacement bill they presented Thursday as preserving coverage for people with cancer, mental illness and other chronic illness.

But the legislation may do no such thing, according to health law experts who have read it closely.

Built into the bill are loopholes for states to bypass those protections and erode coverage for preexisting conditions. That could lead to perverse situations in which insurers are required to cover chronically ill people but not the diseases they suffer from.

Depending on what states do, plans sold to individuals might exclude coverage for prescription drugs, mental health, addiction and other expensive benefits, lawyers said. Maternity coverage might also be dropped.

Somebody with cancer might be able to buy insurance but find it doesn’t cover expensive chemotherapy. A plan might pay for opioids to control pain but not recovery if a patient became addicted. People planning families might find it hard to get childbirth coverage.

“The protection your insurance provides could depend a lot on where you live,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. In some states, “over time, [patients with chronic illness] might find it increasingly difficult to find insurance companies that will offer plans that cover their needs.”

The Senate provisions aren’t expected to affect job-based health plans or Medicare for seniors. It would mainly affect the kind of insurance sold to individuals through the Affordable Care Act’s online exchanges, which cover about 10 million people.

Obamacare overhauls in both the House and Senate would also limit spending on Medicaid for low-income people, which analysts say would cause coverage losses for millions.

The Senate legislation, expected to be voted on next week, follows a widely criticized House bill that would also overhaul the Affordable Care Act, in its case giving states the option of denying coverage or raising premiums for those with preexisting illness.

On Thursday Republican Senators touted their bill as avoiding those features.

“I feel comfortable that no one is going to be denied coverage because they’ve been sick before,” said Sen. Lindsey Graham (R-S.C.) The bill “doesn’t change [protections for] preexisting illnesses, which is good,” he said.

Not explicitly. But it still gives insurers a potential way to shrink coverage for the chronically ill, albeit less obviously, said health law scholars.

“There’s nothing in the Senate bill that specifically would allow withdrawal of coverage for a person with a preexisting condition,” said Timothy Jost, emeritus law professor at Washington and Lee University in Virginia and an expert on health reform. “What it does do is allow states to get waivers” allowing exceptions to rules requiring comprehensive coverage, he said.

The Affordable Care Act required carriers to offer “essential health benefits” covering a wide range of services including hospitalization, maternity, prescription drugs and mental health.

Both the Republican House bill and the Senate bill would let states change that rule. Under those measures, states could set their own standards that might not be as generous, allowing insurers to exclude benefits for those with preexisting illness.

After Qliance, a pioneering practice shut five clinics this month, some question whether direct primary care can succeed.

This article first appeared June 20, 2017 on Kaiser Health News.

By Michelle Andrews

In recent years, a small but growing number of practices embraced a buffet approach to primary care, offering patients unlimited services for a modest flat fee instead of billing them a la carte for every office visit and test. But after a pioneering practice shut its doors earlier this month, some question whether “direct primary care,” as it’s called, can succeed.

Many doctors and patients say they like the arrangement. Direct primary care practices typically don’t accept insurance, which frees physicians from treatment preapprovals and claims paperwork. They say that allows them more time and energy for their patients. Patients can consult with their doctor or a nurse practitioner as often they need to, typically for around $100 a month. (Some employers buy the service for their workers.) Patients need to carry a regular insurance plan for hospitalization, specialists and other services. In the long run, the result should be better patient health and lower health care costs overall.

But some health care experts are concerned that the set-up encourages the “worried well” to get more care than they need. They describe unlimited primary care as a blunt instrument that doesn’t necessarily improve the odds that patients will get evidence-based services that improve their health. Others argue it’s important to find a way to provide cost-effective primary care within the health insurance context, not outside it.

Although only a sliver of practices do direct primary care, the number is on the rise, said Shawn Martin, a senior vice president at the American Academy of Family Physicians. He puts the figure at about 3 percent.

Seattle-based Qliance, founded in 2007, was an early leader in this type of care. With startup funding from high-profile investors Jeff Bezos and Michael Dell, by 2015 the company was serving 35,000 patients at several clinics in the Seattle area, including individuals, workers at companies like Expedia and Comcast and Medicaid patients through a contract with the state’s Medicaid insurer. The company said medical claims for Qliance patients were 20 percent lower than those of other patients because Qliance members went to the emergency room less often, were hospitalized less frequently and saw fewer specialists, among other things.

By early 2017, though, Qliance was faltering. The company had lost some large employer clients, and its patient base had shrunk to 13,000. On June 15, it closed five of its clinics. Dr. Erika Bliss, the company’s CEO, said that in general the market is reluctant to pay what it takes for primary care to flourish, and in some cases payers were resistant to rewarding the company, even when Qliance exceeded targets on quality and savings. She will continue to operate one site that provides occupational health for Seattle firefighters.

“The bottom line is it’s not for free,” she said. “You can’t do this for $25 [per person] per month. If we start doing it for $50 to $100 per month then we can start doing serious primary care.”

The closure took January Gens by surprise. A Qliance patient for a couple of years, Gens, 45, had worked with her primary care doctor there to manage crippling pain from endometriosis. The $79 monthly fee was worth every penny, she thought. She had been able to reduce the dosage of some of her medications and was awaiting a referral to start physical therapy when she learned that Qliance was shutting down. Now she’s not sure what she’ll do.

“I had felt very lucky to have found Qliance, to know I had a doctor and could always be seen when needed without causing more damage to the family budget,” Gens said. “Now it’s just gone.”

Patients who have chronic conditions that need ongoing management may benefit from direct primary care, said Dr. A. Mark Fendrick, an internist who directs the University of Michigan’s Center for Value-Based Insurance Design.

But for people who are generally healthy and without symptoms that need to be diagnosed, “unlimited primary care is no guarantee that the services that are provided will improve the health of those people,” he said.

As an example, Fendrick noted that the annual checkup, one of the most popular primary care services, isn’t clinically helpful for most people, according to the Choosing Wisely initiative, a program of the ABIM Foundation that identifies overused and unnecessary medical services.

An examination of research related to direct primary care practices found that they charged patients an average $77.38 per month. “Concierge” medical practices are similar to direct primary care, but their monthly fees are typically higher — averaging $182.76 — and they generally bill insurers for their services, the study found. However, the study, published in the November-December 2015 issue of the Journal of the American Board of Family Medicine, concluded that there was a paucity of data related to the quality of care provided by these practices.

Some analysts say that while they’re sympathetic to doctors’ frustration with large numbers of patients, insurance companies’ intrusion into patient care and billing hassles, the answer isn’t to turn their backs on insurance.

“I think absolutely this type of care could be done inside insurance, but it means we have to learn how to pay within the system for the things that doctors should be doing and are doing in direct primary care,” said Robert Berenson, a fellow at the Urban Institute.

As things stand now, the direct-care model can create difficulties for some patients. Take the situation where someone goes to his direct primary care provider for an earache, but antibiotics don’t work and he needs to be referred to an ear, nose and throat specialist. That patient, who likely has a high-deductible plan to provide non-primary care services, will probably be on the hook financially for the entire cost of care provided by the specialist rather than insurance paying a share.

Qliance’s Bliss scoffs at the idea that patients may get stuck paying more out-of-pocket if they have direct primary care. Most people these days have high-deductible health plans, she said. “The reality is that unless you have Medicaid, you are on the hook no matter what.”

Offering unlimited primary care inside the insurance system is no guarantee of success in any case. One such experiment, a subsidiary of UnitedHealthcare called Harken Health with clinics in the Chicago and Atlanta areas, announced it will shut down at the end of the year.

The company confirmed that it would phase out membership at the end of the year but didn’t respond to a request for further comment.

Senior administrative officials met Friday to discuss an executive order on the cost of pharmaceuticals, a roundtable informed by Trump’s "Drug Pricing and Innovation Working Group."

This article first appeared June 16, 2017 on Kaiser Health News.

By Emily Kopp

President Donald Trump repeatedly talks tough about reining in the pharmaceutical industry, but his administration’s efforts to lower drug prices are shrouded in secrecy.

Senior administrative officials met Friday to discuss an executive order on the cost of pharmaceuticals, a roundtable informed by Trump’s “Drug Pricing and Innovation Working Group.” Kaiser Health News examined documents that shed light on the workings of this working group.

The documents reveal behind-the-scenes discussions influenced by the pharmaceutical industry. Joe Grogan, associate director of health programs for the Office of Management and Budget (OMB), has led the group. Until March, Grogan served as a lobbyist for Gilead Sciences, the pharmaceutical company that priced its hepatitis C drugs at $1,000 per pill.

To solve the crisis of high drug prices, the group discussed strengthening the monopoly rights of pharmaceuticals overseas, ending discounts for low-income hospitals and accelerating drug approvals by the Food and Drug Administration. The White House declined to comment on the working group.

The group initially met May 4 in the Eisenhower Executive Office Building and has since met every two weeks. In addition to OMB, the working group includes officials from the White House National Economic Council, Domestic Policy Council, Health and Human Services, the FDA, the Federal Trade Commission, the Department of Commerce, the Office of the U.S. Trade Representative and the Department of Justice.

According to the documents — the latest of which is dated June 1— the working group focused on the following “principles” and “talking points”:

1. Extending the patent life of drugs in foreign markets to “provide for protection and enforcement of intellectual property rights.” This will ensure “that American consumers do not unfairly subsidize research and development for people throughout the globe.”

Extending monopoly protections for drugs overseas has been one of the pharmaceutical industry’s top priorities since the Trans-Pacific Partnership was defeated last year.

That policy would push up global drug prices, according to Médecins Sans Frontières.

2. Promoting competition in the U.S. drug market — both by “modernizing our regulatory and reimbursement systems” and limiting “barrier to entry, including the cost of research and development,” according to the documents.

The working group also discussed two broad policy ideas that have been championed by the pharmaceutical industry, according to sources familiar with the process:

3. Value-based pricing, when pharmaceutical companies keep the list prices of drugs unchanged but offer rebates if patients don’t improve. It’s unclear who would audit the effectiveness of the drugs, what criteria they would use to evaluate them and who would receive the rebates. Grogan invited Robert Shapiro — an adviser for Gilead and former secretary of Commerce under President Bill Clinton — to brief the working group on value-based pricing on May 18. Shapiro is the chairman and co-founder of Sonecon LLC, a Washington, D.C., firm that consulted with Gilead, Amgen and PhRMA, according to his curriculum vitae.

4. Grogan and Shapiro also discussed issuing 10-year U.S. Treasury bonds to drug manufacturers to pay for expensive, hepatitis C drugs like Sovaldi and Harvoni under Medicare and Medicaid, to avoid rationing drugs to the sickest patients. The 2015 Senate investigation, for example, found that though Medicaid spent more than $1 billion on Sovaldi, just 2.4 percent of Medicaid patients with hepatitis C were treated.

After the working group’s first meeting on May 4, Grogan distributed detailed policy recommendations on expediting generic drug approvals, creating a new tax credit “of up to 50 percent” for investments in generic drug manufacturing, distribution and research and development. The documents also propose scaling back the 340B program, which requires drug manufacturers to provide some medicines at a discount to hospitals that treat low-income patients.

Most of these policies would not ease patient costs, and at least one would increase prices, say experts who reviewed the documents at the request of Kaiser Health News.

“This six-page document contains the kind of solutions to the cost-of-drugs problem that you would get if you gathered together all the executives of pharma and asked them ‘What sort of token gestures can we do?’ ” said Vinay Prasad, a professor of medicine at Oregon Health and Sciences University who studies the costs of cancer drugs.

The pharma-friendly recommendations appear to clash with earlier press reports indicating that OMB Director Mick Mulvaney was considering requiring drugmakers to pay rebates to Medicare patients, a measure the pharmaceutical lobby fiercely opposes.

Brand-name drug prices — which account for 72 percent of drug spending — go untouched in the handouts, said Fiona Scott Morton, a Yale economics professor and former attorney with the Justice Department’s antitrust division.

“The changes to generic markets to promote competition look helpful, but there need to be some more ideas to create more competition for branded drugs or consumers aren’t really going to notice this,” Scott Morton said.

Some of the text in the document is cribbed directly from policy papers published by the pharmaceutical industry’s powerful lobby — Pharmaceutical Research and Manufacturers Association (PhRMA).

Under the subtitle, “Encourage Use of 21st Century Tools for Drug Evaluation, Review and Approval,” one handout proposes the FDA use less rigorous clinical trial standards to speed drug approvals.

The handout cites a PhRMA paper from March 2016 that includes an identical subtitle, “Encourage Use of 21st Century Tools for Drug Evaluation, Review and Approval,” and recommends the FDA implement less rigorous clinical trial standards.

These recommendations would not lower drug prices, experts say.

Such measures “would be like a firefighter spraying gasoline on your burning garage,” Prasad said.

Another section — which recommends giving the FDA more discretion to evaluate generic copies of complex drugs — closely resembles a National Law Review article written by two lobbyists in the pharmaceutical division of Foley & Lardner, whose clients include generic drugmakers.

The handouts further recommend allowing drugmakers to supply data and off-label information to insurers and pharmacy benefit managers during the clinical trial period, before they secure FDA approval.

That’s a “terrible idea,” said Jerry Avorn, a professor at Harvard Medical School and the chief of the Division of Pharmacoepidemiology and Pharmacoeconomics at Brigham and Women’s Hospital. “That’s why we have the whole approval process, to determine what’s actually true,” he said.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Patients with private insurance who are diagnosed with opioid dependency or abuse may get different medical services depending on where they live.

This article first appeared June 12, 2017 on Kaiser Health News.

By Julie Appleby

Location, location, location. That mantra may apply even when it comes to how opioid addiction is treated.

Specifically, patients with private insurance who are diagnosed with opioid dependency or abuse may get different medical services depending on where they live, a white paper to be released in the upcoming week by a national databank indicates.

Medical responses to opioid-related diagnoses appear to differ among the five states examined by Fair Health, a nonprofit that provides cost information to the health industry and consumers. To draw that conclusion, researchers analyzed the health insurance billing codes associated with those diagnoses.

In California, for example, patients most commonly receive outpatient services, such as counseling, and also drug tests, which can include screening for narcotic use. Illinois’ top two services were 15-minute doctor-office visits and injections of naltrexone, a drug used to prevent relapse in patients who were dependent on opioids. By contrast, methadone, an opioid medication used to reduce withdrawal symptoms for patients trying to quit narcotics, was New York’s most common medical billed to an opioid-related diagnosis. All five of the most common procedures listed on bills in Texas were drug-screening tests — some of which were the same test codes as those on California’s list. But the Lone Star State also included a few that were not, including urinalysis, which checks for improper drug use.

Why those differences exist is harder to tease out, based on the data from Fair Health, which examines claims data from insurers representing more than 150 million Americans who have job-based insurance or buy it on their own. (Information identifying patients was removed.) The data do not include claims from government programs, such as Medicare or Medicaid.

The variation among the states may “reflect general attitudes, access to the health system and the services most readily available,” said Robin Gelburd, president of Fair Health.

Surprisingly, the study found that the largest percentage of medical coverage claims related to opioid abuse and dependence diagnoses nationally come from older patients — those ages 51 to 60.

This patient age group accounted for 32 percent of the services billed in rural areas and 25 percent in urban areas from 2007 to 2016. By contrast, 19- to 22-year-olds with those same diagnoses accounted for 10 percent of billed services in urban areas and just 2 percent in rural areas.

“This debunks the myth that the opioid crisis only affects young people,” said Andrew Kolodny, who directs the Opioid Policy Research collaborative at Brandeis University in Massachusetts, who did not work on the report.

Older patients can run into dependence problems when they get long-term opioid treatment for chronic pain, he said. With younger patients, he added, doctors are less likely to continue to prescribe opioids, leading some young people to turn to street drugs instead, like heroin.

Kolodny suggested that the Fair Health data may indicate that physicians are “increasingly getting the message that these opioids are not appropriate for chronic pain” and not continuing to write prescriptions indefinitely. That, in turn, he said, “could mean more older people are ending up in addiction treatment.”

As to the differences Fair Health found in the five most common services billed, Kolodny said drawing conclusions about the cause of the variation is difficult from the data provided.

Still, California’s reliance on outpatient services and drug tests among its top five procedure codes may reflect the large number of treatment centers in the state, noted Fair Health’s Gelburd, while New York insurers may rely on methadone more than other states because it has long been a common treatment in the state’s Medicaid program.

The analysis is the latest series from Fair Health, which last year released a report showing a 3,000 percent increase in the volume of insurance claims related to opioid dependence diagnoses from 2007 to 2014.

A second study put a dollar figure on the cost to insurers: From 2011 to 2015, insurers’ payments to hospitals, laboratories, treatment centers and other medical providers for patients with opioid-related diagnoses grew from $32 million to $446 million.

The new report shows the five most common, as well as the five most expensive, procedures related to opioid abuse or dependency diagnoses that insurers paid for in 2016 in five states: California, New York, Illinois, Texas and Pennsylvania, chosen because they include the country’s five most populous cities.

It’s not clear why all the top five billing codes in Texas related to laboratory tests for drugs. Perhaps treatment programs there rely heavily on screening patients for the use of legal and illicit drugs. Out-of-state drug screens processed by labs based in Texas could account for some of the billing.

Gelburd said the data may prompt more debate on “the most appropriate protocols with drug testing.”

In Texas and elsewhere, she said, experts may want to weigh in on whether the percentage of drug testing indicates that such screenings are “being done too frequently or not enough,” and whether medical services for addiction treatment “are focusing too heavily on screening and detection or coupling that screening with intensive therapies.”