In Houston, tackling the problems of super-utilizers took unprecedented planning among typically disjointed city and county agencies, hospitals and nonprofits.

Tackling Patients’ Social Problems Can Cut Health Costs

KFF Health News, January 23, 2017

In Houston, tackling the problems of super-utilizers took unprecedented planning among typically disjointed city and county agencies, hospitals and nonprofits. Now, many hospitals and the fire department pool their data.

This article first appeared January 23, 2017 on Kaiser Health News.

By Sarah Varney

HOUSTON — Donning a protective gown, rubber gloves and a face mask, Dayna Gurley looks like she's heading into surgery. But Gurley is a medical social worker charged with figuring out why her client, a man who uses more health care services than almost anyone else in Houston, has been in three different hospitals in the last month.

The patient, who asked not to be identified, has chronic massive ulcers, AIDS and auditory hallucinations. He rents a cot in another person's home but is more often homeless, with no family to help him.

"It's almost like self-sabotage," Gurley said about her many attempts to steady her client's life. "We get really close to an important doctor's appointment or getting him connected with stable housing, and his impulsiveness gets in the way of that."

Patients like the Houston man are health care's so-called "super-utilizers"— people with complex problems who frequent emergency rooms for ailments more aptly handled by primary care doctors and social workers. They cost public and private insurers dearly — making up just five percent of the U.S. population, but accounting for 50 percent of health care spending.

As health care costs continue to rise, hospitals and doctors are trying to figure out how to find these patients and get to the root of their problems.

An effort to do just that started in New Jersey's poorest city, Camden, more than a decade ago. Inspired by the way police departments mapped crime data to detect "hot spots," family physician Dr. Jeffrey Brenner dug into ambulance records and emergency department data to show how high-cost patients were shuttling between city hospitals.

"In America, we're medicalizing social problems and we're criminalizing social problems, and we're wasting huge amounts of public resources," Brenner said. "We have the wrong tools to solve the wrong problem."

To steer patients away from expensive emergency care and push health systems to change the way they do business, the Affordable Care Act funds programs called Accountable Care Organizations. These are networks of hospitals, physicians and others who team up to improve care, lower costs and reap the savings.

Brenner's team at the Camden Coalition includes Latonya Oliver and Bill Nice, social workers who seek out patients like Peter Bowser in local neighborhoods. Bowser was once homeless and went to the emergency department nearly 30 times in one year.

But after Oliver and Nice helped get a permanent roof over his head, Bowser's trips to the ER all but stopped.

"I think you'd prefer to spend your time here than in the hospital any day of the week," Nice said to Bowser on a recent afternoon, gathered at the kitchen table in his tidy apartment.

This high touch, data-driven approach has yielded big savings. ER visits for the first group of patients dropped by 40 percent, cutting monthly hospital bills from $1.2 million dollars to $500,000.

Since then, Brenner has sought to spread the model around the country. One example is the Patient Care Intervention Center in Houston, a sprawling city desperate to aid its sickest and most isolated patients.

While the more than 100 hospitals here typically know their own super-utilizers, they had no way of knowing the top users across the entire city.

Tackling that problem took unprecedented planning among typically disjointed city and county agencies, hospitals and nonprofits. Now, many of the hospitals in Houston and the fire department pool their data and send it to Kallol Mahata, a former oil industry IT engineer with the patient care intervention center who combines it into one database.

Mahata and Dr. David Buck, the group's founder, help to identify patients at the top of the list—the outliers of the outliers.

Teams are dispatched to parks and neighborhoods to find the patients.

Firefighters and paramedics like Thomas Pierrel often know these residents from 911 calls. But this time, their mission is different: to encourage them to enroll in the volunteer program.

Inside one super-utilizer's threadbare home, Pierrel makes his pitch. "We go with you to your doctors, we make appointments, we find specialists. We try to maximize the resources that you have," he tells the prospective client.

The results of these intensive interventions can be stunning.

Timmy Williams was dying when Dayna Gurley found him.

He was holed up at home and reeling from untreated HIV that had progressed to AIDS. He couldn't take care of his young son and cycled through Houston's hospitals.

"When we first met Timmy, he was very hard to engage," Gurley recalled. "We knew that he probably was not taking any of his medication, and he was very skinny."

She arranged for a home aide to care for Williams seven days a week, got his apartment cleaned and the lights turned back on.

Now, Williams' HIV is undetectable and his health — and life — have been steadied.

In the two years since Houston's Patient Care Intervention Center has been up and running, costs for those in the program have gone down 83 percent and hospital visits by 70 percent.

But it can be difficult to keep these programs moving. Often insurance companies and government payers reap those savings, rather than hospitals. Buck and Dayna Gurley were once banned from a Houston hospital whose executives feared losing money if their high-cost patients stopped showing up.

"Nobody wants to take ownership of any of it," said Buck, his voice bristling with frustration. "The people just want ownership of what they have authority over, and that's really the issue: each of these areas are little fiefdoms."

Back in Camden, even Brenner is less optimistic than he once was. His office now overflows with pillows and kitchenware for clients the Camden Coalition is trying to place in housing. And he thinks homelessness and entrenched financial interests in health care are the biggest barriers.

"I think this is going to take a lot longer than I ever imagined," he said. "I think we're in a 20-year arc of recalibrating and rethinking what is health and what's health care? What's the purpose of our health care system? What are we trying to accomplish?"

But Brenner still believes these intensive efforts are the best way to help patients like Timmy Williams. He's now healthy enough to make his way around the city on his own, says Gurley, and her super-utilizer team did more than rescue him from his darkest days.

"I had to put it in my head that no one is going do it for me," he said. "I have to do it for myself. I have to step out and do it myself."

At home now with his son, his illness no longer gets in the way of being the father he wants to be.

But it's unclear how these efforts will be affected by a Trump administration, which along with congressional Republicans wants to repeal the health law.

This KHN story also ran on PBS NewsHour. PBS NewsHour producer Jason Kane contributed to this report.

One Foot Out the Door, Medicare Chief Launches His Own Twitter Barrage

One Foot Out the Door, Medicare Chief Launches His Own Twitter Barrage

KFF Health News, January 19, 2017

Andy Slavitt, outgoing head of the agency that runs CMS, is making a name for himself with a barrage of fiery Tweets in defense of the Affordable Care Act.

This article first appeared January 19, 2017 on Kaiser Health News.

By Rachel Bluth

Government bureaucrats are not often Twitter celebrities. But Andy Slavitt, current head of the agency that runs Medicare and Medicaid, is making a name for himself with a barrage of fiery Tweets in defense of the Affordable Care Act, breaking with the traditionally mute posture taken by federal employees.

As the Act — known as Obamacare — is coming under attack by the new Republican-controlled Congress and incoming Trump administration, Slavitt, acting administrator of the Centers for Medicare & Medicaid Services, isn't being shy online.

"Taking health care coverage away from people is easy. Creating coverage for people is hard. We did the hard," he tweeted on Dec. 15, and pinned to the top of his Twitter page.

Or this, on the day after Christmas: "A number of people tweeted me over the weekend that some people don't deserve health care but they apparently do. That's bull."

Slavitt, an infrequent Tweeter before the election, has sent out 3,200 Tweets since Dec. 6. He doesn't hide behind the usual "retweets are not endorsements," twitter bio, instead he now writes: "After Jan. 20, the mission is not over."

Slavitt acknowledges that his heightened enthusiasm for the medium has coincided with renewed interest in repealing the ACA, though he says he hasn't changed his tone, he's just getting more attention now. "The reason you're seeing a lot of things going viral is people are starting to realize what's at stake," he said in an interview.

He's openly mocked Republican efforts to replace the law, tweeting out a link to a cnbc.com story in January reporting that repeal would increase the federal deficit with a sarcastic caption:

Wait. Shouldn't changes make things better?
-Increasing the deficit
-And no $ for a replacement plan

Not better.https://t.co/Rj8M8aUKqd

— Andy Slavitt (@ASlavitt) January 4, 2017

He's been using his feed to solicit stories of Americans worried about losing their coverage. In one harrowing exchange in January, a woman from Arkansas tweeted at Slavitt, saying she would take her own life if she lost her insurance. "Hang in there please, there are many who will fight 4 your access 2 care. We will reach out to you directly. Copying CMS champ @AislingMCDL," he responded, referring to Aisling McDonough, the senior communications strategist for CMS.

While his approach often draws "sniggers from the communications team" at CMS, Slavitt said that, at the end of the day, his job is to communicate the needs of patients, and make the often robotic and inaccessible bureaucracy of the federal government into something more human and relatable.

"I leave my family every day during the week to come to Washington to do my job. The terms I agreed to were to speak my mind and do what I think is right," said Slavitt, who lives in Minnesota. "I'm not going to be right every time. If people want to criticize, I'm willing to take that."

Once he is replaced under the new administration, Slavitt wrote — in a Tweet — on Jan. 15:

More work to do after 1/29. I plan to keep working with all who are willing to make health care better.

It won't be limited to Twitter. https://t.co/eO8340xBs9

— Andy Slavitt (@ASlavitt) January 15, 2017

The next day he went further: "Flying in for my final Monday @CMS.gov w plenty of work to do still. Considering chaining myself to my desk but my wife says bad idea."

Being more controversial or opinionated is often the only way to cut through the noise of Twitter, according to Cliff Lampe, an associate professor of information at the University of Michigan who does research on social media. "Making emotional responses, rather than neutral, or even controversial ones will get you more attention in the marketplace," he said.

Lampe predicted that more officials, not fewer, will start to take Slavitt's approach to gaining the public's attention. After all, it worked for President-elect Donald Trump.

Asked about comparisons to the incoming President, @realDonaldTrump, Slavitt's rapid response: "He has more followers than I do. I'm very jealous. I'd love to have 19 million."

Federal officials this month warned 21 Medicare Advantage insurers with high rates of errors in their online network directories that they could face heavy fines or have to stop enrolling people if the problems are not fixed by Feb. 6.

21 Medicare Health Plans Warned To Fix Provider Directory Errors

KFF Health News, January 19, 2017

Federal officials this month warned 21 Medicare Advantage insurers with high rates of errors in their online network directories that they could face heavy fines or have to stop enrolling people if the problems are not fixed by Feb. 6.

This article first appeared January 18, 2017 on Kaiser Health News.

By Phil Galewitz and Susan Jaffe

Federal officials this month warned 21 Medicare Advantage insurers with high rates of errors in their online network directories that they could face heavy fines or have to stop enrolling people if the problems are not fixed by Feb. 6.

Among the plans that were cited are Blue Cross Blue Shield of Michigan, Highmark of Pennsylvania, SCAN Health Plan of California as well as some regional plans owned by national carriers such as UnitedHealthcare and Humana.

The action follows the government's first in-depth review of the accuracy of Medicare Advantage provider directories, which consumers and advocates have complained about for years. More than 17 million Americans, or nearly a third of Medicare beneficiaries, get coverage through private Medicare Advantage plans, which are an alternative to traditional Medicare.

The Centers for Medicare & Medicaid Services in October reported some of the results of the audit, but they had not released names or statistics from the individual plans.

"Because Medicare Advantage members rely on provider directories to locate an in-network provider, these inaccuracies pose a significant access-to-care barrier," Medicare officials wrote in a report released last week outlining the problems.

Unlike traditional Medicare, the private Medicare plans typically restrict beneficiaries to a network of doctors and hospitals.

Piedmont Community Health Plan, a small Medicare plan with about 5,200 members in southwest Virginia, had the highest rate of inaccuracies among the 54 insurers examined. Officials found errors in the listings of 87 of 108 doctors checked in Piedmont's directory, according to the report. Most of the errors involved providing the wrong locations for doctors and doctors who should not have been listed.

Piedmont officials did not return calls for comment.

Piedmont and two other plans with the highest error rates — a WellCare plan in Illinois and Emblem Health's ConnectiCare subsidiary — were required by Medicare to submit specific business plans detailing how they intend to address the issue.

The individual plans receiving warning letters cover more than 1.4 million beneficiaries. Most operate in numerous states, although CMS generally limited its review to a specific state or geographic area.

The federal review focused on reviewing primary care doctors, cardiologists, ophthalmologists and oncologists. It involved individual calls to check on the listings for 108 doctors in each health plan. "We encountered several instances where a call to a provider's office resulted in determining that the provider had been retired or deceased for a long period of time, sometimes years," the report said.

The CMS report found almost half of the 5,832 doctors listed had incorrect information, including wrong addresses and wrong phone numbers. Most health plans had inaccurate information for between 30 to 60 percent of their providers' offices, the report said. The report blamed the insurers for failing to do enough to keep their directories accurate. Members rely on the directories in both deciding whether to join a plan and then in searching for doctors to treat them.

"We saw a general lack of internal audit and testing of directory accuracy among many" Medicare Advantage organizations, the report said.

CMS' survey found the most error-prone listings involved doctors with multiple offices that did not serve health plan members at each location.

The health plans were sent the warning letters Jan. 6 and given 30 days to fix the mistakes or face possible fines or sanctions, which could include suspending marketing and enrollment. CMS officials said the report was not issued before the annual open enrollment period — which ended Dec. 7 — because of the need to allow the health plans to review the findings before the report was made public.

Medicare Advantage members have until Feb. 14 to disenroll and join traditional Medicare but after that they are locked into their plan for the rest of the year. Seniors may be able to request permission to change plans on a case-by-case basis by calling 800-MEDICARE.

Another 32 companies with less serious mistakes also received letters saying their directories did not comply with a rule that took effect last year requiring plans to contact doctors and other providers every three months and to update their online directories in "real time."

ConnectiCare spokeswoman Kimberly Kann acknowledged the difficulties. "Keeping these directories up-to-date is a two-way street and we are working with doctors and other medical professionals to continue providing quality service," she said.

WellCare spokeswoman Crystal Warwell Walker said the Tampa, Fla.-based company took the survey results seriously. "We modified our data gathering techniques and online reporting options to ensure that when more than one address is listed for a provider, that provider is practicing at that location on a routine basis and access to care is not compromised," she said.

CMS is continuing its investigation of provider directories this year and expects to examine all 300 companies by end of 2018.

See table on this page.

Large Employer Health Plans Could See Impacts From Obamacare Overhaul

KFF Health News, January 17, 2017

As tensions grow in Washington over the future of the health law, it is important to understand some of its effects on large-group plans.

This article first appeared January 17, 2017 on Kaiser Health News.

By Michelle Andrews

If you think that because you get health insurance through your job at a big company, you won't be affected if Republicans overhaul Obamacare, think again.  Several of the law's provisions apply to plans offered by large employers too (with some exceptions for plans that were in place before the law passed in March 2010).

It's not yet clear how President-elect Donald Trump and the congressional Republicans plan to revamp the federal health law. They have not agreed on a plan, and they do not have enough votes in the Senate to fully repeal the current statute. So they are planning to use a budgeting rule to disassemble part of the law, and that will limit what they can change. But they also may seek revisions in important regulations and guidance that have determined how the law is implemented.

Nonetheless, as the tensions grow in Washington over the future of the health law, it is important to understand some of its effects on large-group plans.

No Copays For Preventive Services
The health insurance offered by big companies is typically pretty comprehensive, the better to attract and keep good employees. But Obamacare broadened some coverage requirements. Under the law, insurers and employers have to cover many preventive services without charging people anything for them. The services that are required with no out-of-pocket payments include dozens of screenings and tests, including mammograms and colonoscopies, that are recommended by the U.S. Preventive Services Task Force; routine immunizations endorsed by the federal Centers for Disease Control and Prevention's Advisory Committee on Immunization Practices; and a range of services that are recommended specifically for children and for women by the federal Health Resources and Services Administration.

The change that affects the most people on an ongoing basis is likely the requirement that plans cover without cost sharing all methods of contraception approved by the Food and Drug Administration. (There are limited exceptions for religious employers.)

"In terms of sustained costs, birth control is probably the biggest," said Caroline Pearson, a senior vice president at Avalere Health.

No Annual Or Lifetime Limits On Coverage
Even the most generous plans often had lifetime maximum coverage limits of a few million dollars before the health law passed, and some plans also imposed annual coverage limits. The health law eliminated those dollar coverage limits.

Annual Cap On Out-Of-Pocket Payments For Covered Services
The health law set limits on how much people can be required to pay in deductibles, copayments or coinsurance every year for covered care they receive from providers in their network. In 2017, the limit is $7,150 for individuals and $14,300 for families.

"Many employers often had an out-of-pocket limit anyway, but this guarantees protection for people with high needs," said JoAnn Volk, a research professor at Georgetown University's Center on Health Insurance Reforms, who has written on this issue.

Adult Kids' Coverage Expanded
The law allowed workers to keep their children on their plans until they reach age 26, even if they're married, financially independent and live in another state. Republicans have said they may keep this popular provision in place if they dismantle the law.

Guaranteed External Appeal Rights
Consumers who disagree with a health plan's decision to deny benefits or payment for services can appeal the decision to an independent review panel.

The provision applies to all new health plans, including those offered by self-funded companies that pay their workers' claims directly and who were previously exempt from appeals requirements.

No Waiting Periods To Join A Plan
Employers used to be able to make new employees wait indefinitely before they were eligible for coverage under the company plan. No more. Now the waiting time for coverage can be no more than 90 days.

No Waiting Periods For Coverage Of Pre-Existing Conditions 
Prior to the ACA, employers could delay covering workers' chronic and other health conditions for up to a year after they became eligible for a plan. Under the ACA, that's no longer allowed. As a practical matter, though, coverage of pre-existing conditions was rarely an issue in large-group plans, say some health insurance experts.

"It was difficult administratively, and the law of large numbers" meant that one individual's health care costs didn't generally have a noticeable impact on the group, said Karen Pollitz, a senior fellow at the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

Repeal could reopen the door to that prohibited practice, however.

Standardized Plan Descriptions
The law requires all plans to provide a "summary of benefits and coverage" in a standard format that allows consumers to understand their coverage and make apples-to-apples plan comparisons. 

Basic Coverage Standards For Large-Group Plans
The health law isn't as prescriptive with large-group plans about the specific benefits that have to be offered. They aren't required to cover the 10 essential health benefits that individual and small-group plans have to include, for example. But the law does require that big companies offer plans that meet a "minimum-value" standard paying at least 60 percent of the cost of covered services, on average. Those that don't could face a fine.

Initially, the online calculator that the federal Department of Health and Human Services provided to help large employers gauge compliance with the minimum value standard gave the green light to plans that didn't cover hospitalization services or more than a few doctor visits a year. Now plans must provide at least that coverage to meet federal standards.

The result: Large employers generally no longer offer so-called "mini-med" policies with very skimpy benefits.

If the health law is repealed, that could change. In some industries with lower-wage workers and smaller profit margins, "they might begin to offer them again, and employees might demand it" to help make the premiums more affordable, said Steve Wojcik, vice president of public policy at the National Business Group on Health, a membership organization representing large employers.

Although the law strengthened coverage for people in large-group plans in several ways, consumer advocates have complained about shortcomings. It aimed to ensure that coverage is affordable by requiring that individuals be responsible for paying no more than 9.69 percent of their household income for individual employer coverage, for example.

If their insurance costs more than that, workers can shop for coverage on the marketplaces set up by the health law and be eligible for premium tax credits — if their income is less than 400 percent of the federal poverty level (about $47,000). But the standard does not take into consideration any additional costs for family coverage.

Consumer advocates also point to the wellness regulations as a problematic area of the law. The health law increased the financial incentives that employers can offer workers for participating in workplace wellness programs to 30 percent of the cost of individual coverage, up from 20 percent.

Such incentives can effectively coerce people into participating and sharing private medical information, critics charge, and unfairly penalize sick people.

"It potentially allows [plans] to discriminate against people with medical conditions, which the ACA is supposed to eliminate," said Linda Blumberg, a senior fellow at the Urban Institute's Health Policy Center.

Tom Price, MD

Trump's HHS Nominee Got A Sweetheart Deal From A Foreign Biotech Firm

KFF Health News, January 13, 2017

When tiny Australian biotech firm Innate Immunotherapeutics needed to raise money last summer, it didn't issue stock on the open market. Instead, it offered a sweetheart deal to "sophisticated U.S. investors," company documents show.

This article first appeared January 13, 2017 on Kaiser Health News.

By Jay Hancock and Rachel Bluth

When tiny Australian biotech firm Innate Immunotherapeutics needed to raise money last summer, it didn't issue stock on the open market. Instead, it offered a sweetheart deal to "sophisticated U.S. investors," company documents show.

It sold nearly $1 million in discounted shares to two American congressmen sitting on House committees with the potential power to advance the company's interests, according to company records and congressional filings. They paid 18 cents a share for a stake in a company that was rapidly escalating in value, rising to more than 90 cents as the company promoted an aggressive plan to sell to a major pharmaceutical company. Analysts said the stock price could go to $2.

One of the beneficiaries was Rep. Tom Price, a Georgia Republican poised to become secretary of the Department of Health and Human Services, which regulates pharmaceuticals. Price told HHS ethics officials Thursday that if appointed, he will divest himself of the Australian stock as well as stock in about 40 other companies that could pose conflicts. He said he would sell within 90 days of appointment and abstain from any decision-making about companies in which he or his family has had an interest.

He has already seen about a 400 percent paper gain in his investment in Innate Immuno, stock trading records show.

The other and more substantial August investor was Rep. Chris Collins, a Republican from upstate New York, who along with family members owns about 20 percent of the foreign company. A key supporter of the president-elect, Collins sits on a key health subcommittee.

The outlines of the stock deal, first reported by the Wall Street Journal, resurrected concerns about powerful public officials gaining investment opportunities unavailable to the public, including from companies whose profits might be influenced by political decisions.

A review of corporate documents raises a more unusual aspect of the deal. Innate Immuno is a foreign company which, in documents and presentations, is explicit about a business strategy targeting the U.S. market, where the amount that can be charged for a new drug is generally far higher than in other countries.

Innate Immuno has hinged its strategy on winning a preliminary green light for a new multiple sclerosis drug, known as MIS416, from the HHS's Food and Drug Administration. It says in its private placement offering documents that money raised in the U.S. will help it finance the FDA approval process, which can take years. Innate Immuno CEO Simon Wilkinson could not be reached for comment.

Price's financial disclosures show that he acquired his first small stake in Innate Immuno in January 2015, investing about $5,000. He made two more small purchases in the company that year, declaring a small loss on the stock in his 2015 financial disclosure.

His largest purchase was on Aug. 31, 2016, valued at between $50,000 and $100,000, his disclosures show.

Government ethics experts said this week that Price's stake in Innate Immuno as it tries to develop a blockbuster drug would clash with his public duties, making divestiture mandatory.

While ethics rules for Congress are relatively relaxed, "the minute you go to the executive branch, it's a lot stricter," said Richard Painter, a University of Minnesota law professor who was President George W. Bush's chief ethics lawyer.

"Dr. Price takes his obligation to uphold the public trust very seriously," said Phil Blando, a spokesman for the Trump transition. He has "complied fully with all applicable laws and ethics rules governing his personal finances."

Innate Immuno told investors it would seek "investigational new drug" status from the FDA, which could shorten the approval process. The FDA would not confirm this week whether the company has filed an application.

The drug is in a small clinical trial in New Zealand due to end in April. MS drugs are especially expensive for patients, costing $5,000 a month or more.

Positive trial results could set the stage for Innate Immuno's stock to reach $2, said Australian stock analysts. In that scenario, Price's investment of between $50,000 and $100,000 would be worth between $555,000 and $1.1 million. House financial disclosures require reporting of ranges of value but not specific amounts.

"You could easily picture a drug that is in the billions of dollars in revenues, but that's assuming the [trial] data is there," said David Blake, an analyst at Bioshares, a newsletter covering Australian life sciences stocks. "It's really got to deliver."

A physician who chairs the House Budget Committee, Price also sits on the House Ways and Means Committee and the Congressional Health Care Caucus. He has a history of contacting the FDA on behalf of industry campaign donors.

His ownership of Innate Immuno while serving in the House creates its own appearance of a conflict of interest, ethics authorities said.

"There is an appearance problem … to have members of Congress buying and selling stocks that are affected by the work of the committees they sit on," Painter said. "It could be perfectly legal, but it looks terrible and shows lack of judgment."

Price's Innate Immuno stake is one of more than 40 companies he identifies as potential conflicts with the HHS job, including stock in Pfizer, Eli Lilly and Bristol Myers Squibb.

Collins, who sits on Innate Immuno's board, has been a major shareholder in the company since 2011 and has gradually increased his family's holdings to about 20 percent, corporate documents show. His investment in the private placement last summer was worth $720,000, according to regulatory documents.

"Congressman Collins has followed all ethical guidelines related to his personal finances during his time in the House and will continue to do so," said spokesman Michael McAdams.

All told, including Price, Collins and other U.S. investors, the sale raised $1.8 million. In addition to funding the FDA approval process, the company said it would use the money to finance the clinical trial and develop potential manufacturing for the drug.

All U.S. investors in the August deal received a 12 percent discount to the stock's market price at the time, which is not unusual in private placements, said Stuart Glazebrook, a biotech analyst for Gordon Capital Research, a securities research company in Melbourne, Australia.

For small companies, private issues can be more efficient than selling new public shares, he said. Selling at less than the market price raises odds of attracting investors, he said.

"It's an incentive," he said. "It's like Amazon offering 20 percent off today only if you commit today."

Ethics rules for FDA officials are especially strict, said Joshua Sharfstein, a former agency deputy commissioner.

"For the agency's leaders, even holding onto a single share of stock in a regulated company is prohibited," he said.

A decade ago FDA Commissioner Lester Crawford resigned and pleaded guilty to two criminal misdemeanors after being charged with concealing stock ownership in food and drug companies the agency regulated.

Innate Immuno executives have talked openly about selling the company to one of a number of pharmaceutical company suitors if its clinical trial is successful. Many small pharmaceutical companies with hot drugs go that route, reaping shareholders millions in quick profits.

The larger company would have the deep pockets to invest in more clinical trials that might be needed to obtain regulatory approval, analysts said.

Christina Jewett contributed reporting.

Rural Hospitals Brace For Damage From Health Law's Repeal

KFF Health News, January 11, 2017

The incoming Trump administration hasn't released its health plan to replace Obamacare. But, experts say, it is likely to give the states less federal money for treating the poor.

This article first appeared January 11, 2017 on Kaiser Health News.

By Shefali Luthra

CONNELLSVILLE, Penn. – Judy Keller, 69, has always relied on Highlands Hospital for medical care, just as her parents did before her. When she walks through the halls, she recognizes faces from the community and even from her days working as a school teacher. The 64-bed facility, she says, is a mainstay of this rural Southwest Pennsylvania town.

"This hospital all my life has been here," said Keller, now retired. "[It] helps a lot of people who don't have adequate health care coverage — and I don't know what they would do without it." Aside from providing health care to a largely poor population, it provides hundreds of jobs in a town that locals say never recovered after industries such as coal mining and glass manufacturing disappeared.

But in the wake of this fall's presidential election, Highlands — like many other rural hospitals — will likely face new financial challenges that will intensify longstanding struggles, experts say. The Affordable Care Act, which President-elect Donald Trump has vowed to repeal, threw a number of life-savers to these vital but financially troubled centers. And its full repeal, without a comparable and viable replacement, could signal their death knell.

Highlands provides one window into how some of these shifts could reverberate in small towns across the country. And ironically, 64 percent of people here in Fayette County — one of the state's poorest — voted for Trump. Pennsylvania, which has the third largest rural population in the nation, played a pivotal role in his upset victory this fall.

"All these rural hospitals are operating on thin margins. The removal of any income source or coverage, or expansion of bad debt, is going to create significant financial hardship," said Alan Morgan, CEO of the National Rural Health Association.

Rural hospitals have long operated on the edge. In the past six years, more than 70 such facilities have closed, citing financial duress. Almost 700 more have been deemed at risk of following the same path. Meanwhile, the need for reliable health care remains pressing. Conditions such as heart and lung disease are widespread in rural areas. Addiction to the prescription painkillers known as opioids is acute. Nationally, the Medicaid expansion offered a bit of stability for some rural hospitals at risk of closure. Researchers say it disproportionately benefited such facilities — particularly here and other states with large rural populations, such as Illinois, Kentucky and Michigan.

In Pennsylvania, 625,000 people enrolled in the expanded Medicaid program. Close to 300,000 came from rural areas, said Andy Carter, president of the Hospital and Health System Association of Pennsylvania. As of October, about 42,700 of Fayette's residents had Medicaid, according to state data, an increase of about 8 percent from 39,460 in June 2015. (Pennsylvania's Medicaid expansion took effect in January of that year.) That's close to one-third of the county's population.

Despite that, Highlands CFO Andursky said he barely noticed the increase — the threat of closure is a "daily concern," he said. "It seems like you're taking two steps forward, three steps back," Andursky said. "It's not like I can look to five years out — because I have to worry about tomorrow. I can't worry about next year."

That pessimism can be heard throughout this town of about 7,600 residents. While the law was described as historic, many here do not perceive that it helped them. Like many other states, Pennsylvania re-branded their expanded offering of federal insurance program for the poor, fearing that "Medicaid" which is also often referred to as "Medical Assistance" would be off-putting; now it is called "Healthy PA."

Bryan McMullin, a 47-year-old who works in Connellsville's river-rafting business, got coverage last year but said good health care remains hard to come by. "In this area, nothing's changed in 40 years, no matter who is president," he explained from a barstool at a pub near the now-vacant glass factory.

Daniel Martin, a 28-year-old Highlands patient who also works in the rafting trade, said he uses his new coverage for his monthly blood medication. A Trump voter, he hadn't realized that coverage now could be in jeopardy.

And small towns like this tend to be far sicker than the norm. In Fayette, more than 1 in 10 people is estimated to have diabetes. Out of 67 counties in the state, Fayette ranks 66th for health outcomes and more than a third of its residents are obese. It's tied with northern Potter County for the second-highest teen birth rate in the state. Between 2014 and 2015, the county saw about 31 people overdose for every 100,000, according to an analysis by the federal Drug Enforcement Agency.

Plus, the hospital is Connellsville's second-largest single employer, after the school district. It contributes an estimated $15 million to the local economy, Andursky said. That's in a town where unemployment's already at 7.6 percent — up from last year and higher than the state and national averages.

"When I was a kid, everybody had a job, everybody had health care. Now, look at the statistics," said McMullin, one of the rafters.

There are other hospitals in the region.

Uniontown, about 15 miles away, is also in Fayette County. It has 175 beds — more than double Highlands — but no behavioral health services to treat problems like addiction. Frick, another small rural hospital about 12 miles away, technically serves neighboring Westmoreland County. For more serious conditions, and trauma care, university hospitals are about an hour away — in Pittsburgh on one end, and Morgantown, West Virginia, on the other. Patients in extremis often get stabilized at the local hospitals before transfer.

But rain and snow, combined with mountainous terrain and limited public transit, mean traveling even short distances poses hardship. "It is still challenging to have to travel even 20 miles to get your care," said Lisa Davis, director of Pennsylvania's Office of Rural Health and outreach associate professor of health policy and administration at Pennsylvania State University. "It could take you all day to get to a one-hour appointment."

In a medical emergency, getting care quickly can mean the difference between life and death

So far, the incoming Trump administration hasn't released its health plan to replace Obamacare. But, experts say, it is likely to give the states less federal money for treating the poor. It is unclear how rural hospitals will compensate for the financial benefits they are likely to lose — or how many more rural hospitals will fall.

"What they need to do is be sure to protect the government programs: Medicare and Medical Assistance," Andursky said. "We can't put them at risk."

The nonprofit California Integrated Data Exchange, launched by insurers Blue Shield of California and Anthem Inc. in 2014, intends to merge with the Inland Empire Health Information Exchange.

Merger May Revitalize California's Flagging Effort To Pool Medical Records

KFF Health News, January 11, 2017

The nonprofit California Integrated Data Exchange, launched by insurers Blue Shield of California and Anthem Inc. in 2014, intends to merge with the Inland Empire Health Information Exchange. Together, they would have insurance claims and medical records of 16.7 million people.

This article first appeared January 10, 2017 on Kaiser Health News.

By Chad Terhune

After a sluggish start, the Cal INDEX medical database has agreed to a merger that would create one of the largest repositories of patient records in the country.

The nonprofit California Integrated Data Exchange, launched by insurers Blue Shield of California and Anthem Inc. with much fanfare in 2014, announced Tuesday that it intends to merge with the Inland Empire Health Information Exchange. Together, they would have insurance claims and medical records of 16.7 million people.

Obama administration veteran Claudia Williams, 53, will take the helm as chief executive on Feb. 1.

San Francisco-based Cal INDEX is an ambitious initiative to give hospitals and doctors a single place to get patient information culled from medical records and insurance claims. State leaders and other supporters say giving an emergency room or a doctor the ability to instantly access a patient's medical history can improve the quality of care, reduce medical errors and cut wasteful spending.

Across the country, efforts at creating these digital databases or health information exchanges often have hit technical snags and industry turf battles. One of the most successful examples has been the Indiana Health Information Exchange, which holds records on more than 12 million people and participation by more than 100 hospitals and 12,000 medical practices.

The California database merger, which is subject to approvals from the state attorney general, is expected to close in the first quarter of 2017. The newly formed organization will be renamed later.

Williams served as senior adviser for health innovation and technology at the White House from 2012 until last week. Previously, from 2010 to 2012, she was director of health information exchange in the information technology office at the U.S. Department of Health and Human Services.

She helped oversee federal stimulus money for expanding electronic medical records and creating regional health information exchanges.

In an interview, Williams said she's eager to put her government experience into practice in California.

"I was looking at the best opportunity for me to make good on the promise of actually getting information moving to improve patient care," Williams said.

Access to real-time patient information has become critical as the U.S. health care system moves away from fee-for-service medicine and overhauls how care is delivered. A wide variety of payment reforms, such as creation of accountable care organizations and scrutiny of hospital readmissions, rely on hospitals and physicians knowing about all of the various care patients receive, whether it's in or outside their normal provider network.

Williams said she wants the California database to electronically alert primary care doctors every time one of their patients arrives in the emergency room so they can follow up appropriately.

"I have a lot of knowledge of what works and doesn't work," she said.

Williams is taking over an organization that thus far has fallen short of its hype. The involvement of Blue Shield and Anthem was designed to give Cal INDEX an early boost by providing records on millions of Californians who have insurance coverage through the two companies. At launch in 2014, the two insurers said they were investing $80 million in the project.

But several challenges soon emerged. Its first CEO, David Watson, lasted less than two years and left to work in the private sector. There were two interim CEOs in the meantime.

Also, as in other states, persuading additional health plans and medical providers to supply patient data and pay fees to access the information proved difficult because they're used to being competitors.

Cal INDEX holds data on 11.7 million people, and the Inland Empire health exchange — serving providers in 18 counties, including the Central Valley — will bring an additional 5 million patient records and 150 participating health care partners.

Last month, Cal INDEX got a shot in the arm when a big health system in Southern California, St. Joseph Hoag Health, announced it was joining the exchange.

Dr. Bradley Gilbert, chairman of the Inland Empire exchange and CEO of the Inland Empire Health Plan, said "this is a case of two is better than one. Each have different strengths that complement each other well."

Inland Empire Health Plan, which serves Riverside and San Bernardino counties, has contributed about $4 million to the health information exchange there since it was founded in 2009.

Dr. Farzad Mostashari, the former national coordinator for health IT in the Obama administration, hired Williams in Washington and said she excelled at running the federal grant program for health information exchanges.

He said some regional exchanges have tried to gain the endorsement of the state Medicaid program to increase participation among hospitals and other providers.

For now, the California Department of Health Care Services, which runs Medi-Cal, doesn't have a direct business relationship with Cal INDEX.

"The first challenge for [Williams] is getting the lay of the land and developing those relationships with health plans, Medicaid, doctor groups, public health," said Mostashari, now CEO of the health technology firm Aledade Inc.

Mark Savage, vice chair of the Cal INDEX board, said Williams was the ideal candidate for CEO.

"I'm also mindful of setting reasonable expectations, and it will take her some time to come in and build a combined company," he said.

Cal INDEX only shares patients' clinical data, not their financial information, with participating providers, hospitals and insurers. Users cannot sell any of the data, release it publicly, or use it to set provider rates.

For now, consumers can't review their own records in the database. There's an opt-out provision for consumers on the Cal INDEX website, which if selected would mean their information would not show up.

Savage said it's important that patients eventually gain access to their full medical records through this statewide organization, but he isn't sure when that would occur.

This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

Obamacare Boosted Community Health Centers’ Reach. Now What?

Obamacare Boosted Community Health Centers' Reach. Now What?

KFF Health News, January 10, 2017

The law, which extended health insurance to more than 20 million people, also provided new streams of revenue for community health centers.

This article first appeared January 9, 2017 on Kaiser Health News.

By Shefali Luthra

For the patients and the employees of Mary's Center, a community health center that serves Washington, D.C., and its Maryland suburbs, the 2010 health law had a big impact on business. The facility has always promised care to anyone who walks through its doors. But since Obamacare's implementation, the patient population and the quality of care they receive has changed.

"The first set of patients we saw — it was like, 'Wow, I can see a doctor for the first time. I can afford to go to the doctor,'" recalled Maria Gomez, the center's president. "There were patients that knew they had tumors, or knew they hadn't had a pap smear in a long, long time."

But it wasn't just access to care, Gomez added. The law, which extended health insurance to more than 20 million people, also provided new streams of revenue. Since Mary's Center was handling fewer uninsured patients, that financial security let it hire more specialists and operate more health education programs.

Similar stories played out at many of the nation's more than 1,400 federally-backed community health centers, according to two studies published today in Health Affairs. The research offers evidence that in states that embraced the health law, community health centers — which play a key role in providing health care to low-income people, often in medically underserved areas — further extended their reach. It also quantified the types of clinic visits and health services provided that resulted from the expansion.

These findings, though, also highlight the uncertainties some of these clinics face as the incoming Trump administration and the GOP Congress advance plans to repeal and replace Obamacare.

"I'd love to think we can think of policies that will reduce harm, and make things better," said Leighton Ku, director of the Center for Health Policy Research at George Washington University and an author on one of the studies. "But my crystal ball isn't that clear."

The two studies, which appear in the journal Health Affairs, use data from the federal Health Resources and Service Administration to examine Medicaid, the federal-state insurance plan for low-income people. Under the law, states could opt into an expanded version of the program that covered more people. GOP plans to undo the 2010 law would likely include erasing that option. Many Republicans also want to change Medicaid from its current open-ended, entitlement status into a block grant, which would send a set, lump sum of funding to states and allow them more flexibility to tailor the program to address local health needs, potentially spurring innovation and more efficiency.

"There may be things that can done in the delivery of care for community health centers, which ultimately is more valuable and effective than the traditional Medicaid program," said Tom Miller, a resident fellow at the American Enterprise Institute, a conservative think tank.

It's too soon to say, Miller argued, how health care funding will play out, how money could be used and who will benefit. But other advocates of the law — including many leaders of community health centers — say that current discussions leave strong potential for funding cuts that would limit their ability to provide care. The Health Affairs findings play into that concern.

Ku's paper, which used data from 2012 to 2015 to track visits to community health centers, compared how many patients visited the centers, their insurance, and whether they sought medical, dental or mental health care. In states that opted into the expansion, health centers saw more patient visits, lower rates of uninsured patients — a financial boon for clinics that typically operate on thin margins — and an increase in patients specifically seeking mental health care.

The second study examined data from 2011 to 2014 and found that, in states that expanded Medicaid, patients were more likely to receive asthma treatment when it was needed, have their body mass index assessed, get pap smears and keep their blood pressure relatively stable.

"Achieving better quality in [these areas] requires medications — access to prescription drugs," noted Amal Trivedi, an associate professor of health services, policy and practice at Brown University and an author on the second study.

Some clinic officials noted that these statistics illustrate tangible gains.

Community health centers in Michigan, which pursued the expansion, saw a double-digit increase in the percentage of Medicaid patients — from 44 percent to 54 percent — even as the overall number of patients served grew, noted Jen Anderson, a spokeswoman for the Michigan Primary Care Association, the trade group for the state's centers. More of those patients were diabetic or asthmatic, she added, and now able to get previously unaffordable medications.

Without that coverage, Trivedi speculated, the improvements health centers made in treating these and other conditions could be reversed.

The studies found that the centers, too, benefited from the expansion, which has allowed them to staff up to do provide mental health and other types of care.

In Pennsylvania, for instance, which has been hard hit by the opioid epidemic, more clinics have been able to develop specialized addiction treatment programs, said Cheri Rinehart, president of that state's health center association. Other clinics report that health law dollars have allowed them to hire case workers to follow up with patients to make sure they have stable housing and access to healthy food as well as transportation to doctors' appointments.

Those kinds of efforts will be much harder if Congress acts on its proposed repeal without a meaningful replacement, Gomez said.

"We'll have to cut services for everyone," she said.

At Mary's Center, she said, that would mean tamping down on dental care, cardiology or endocrinology to treat diabetes. The center would also likely downsize how many doctors and nurses it employs, making it harder to see as many patients in a timely manner.

These centers are often the only real option for care. If they can't provide a service, people will likely go without until it's an emergency, Pennsylvania's Rinehart noted.

Without the coverage expansion, community health centers "will have to re-evaluate all the services they're providing," Rinehart said. "Just like a body in crisis, you focus on the core, and lose many of the ancillary services that are critical."

New study raises the possibility that some women who believe their lives were saved by mammograms were actually harmed by cancer screenings that led to treatment they didn’t need, says Dr. Otis Brawley, chief medical officer of the American Cancer Society

1 in 3 Women With Breast Cancer Treated Unnecessarily

KFF Health News, January 10, 2017

New study raises the possibility that some women who believe their lives were saved by mammograms were actually harmed by cancer screenings that led to treatment they didn't need, says Dr. Otis Brawley, chief medical officer of the American Cancer Society.

This article first appeared January 9, 2017 on Kaiser Health News.

By Liz Szabo

One in three women with breast cancer detected by a mammogram is treated unnecessarily, because screening tests found tumors that are so slow-growing that they're essentially harmless, according to a Danish study published Monday in Annals of Internal Medicine, which has renewed debate over the value of early detection.

The study raises the uncomfortable possibility that some women who believe their lives were saved by mammograms were actually harmed by cancer screenings that led to surgery, radiation and even chemotherapy that they didn't need, said Dr. Otis Brawley, chief medical officer of the American Cancer Society, who wrote an accompanying editorial but was not involved in the study.

Researchers increasingly recognize that not all breast cancers pose the same risk, even if they look the same under a microscope, Brawley said. While some early tumors turn into deadly monsters, others stop growing or even shrink. But assuming that all small breast lesions have the potential to turn deadly is akin to "racial profiling," Brawley wrote in his editorial.

"By treating all the cancers that we see, we are clearly saving some lives" Brawley said in an interview. "But we're also 'curing' some women who don't need to be cured."

Although experts such as Brawley have long discussed the risks posed by "overdiagnosis," relatively few women who undergo cancer screenings are even aware of the debate.

The American College of Radiology, which strongly supports breast cancer screenings, acknowledges that mammograms lead some women to be treated unnecessarily, but said the problem is much less common than the new study suggests. Another study from Denmark – whose national health program keeps detailed records – estimated the overdiagnosis rates at only 2.3 percent.

"The amount of overdiagnosis really is small," said Dr. Debra Monticciolo, chair of the American College of Radiology's Commission on Breast Imaging. "Articles like this aren't very helpful," she said, because they leave women confused about how to be screened for breast cancer.

Yet treating women for cancer unnecessarily can endanger their health, said Fran Visco, president of the National Breast Cancer Coalition, an advocacy group. Radiation can damage the heart or even cause new cancers. Visco notes that breast cancer activist Carolina Hinestrosa, a vice president at the coalition, died at age 50 from soft-tissue sarcoma, a tumor caused by radiation used to treat an early breast cancer.

Women should understand these risks, Visco said. Instead, women often hear only about mammograms' benefits.

"Women have been inundated with the early detection message for decades," Visco said.

The risks of overdiagnosis and false positives, which can lead women with benign growths to undergo biopsies and other follow-up tests, have caused some experts to reevaluate breast cancer screenings. Although mammograms don't find all tumors, they reduce the risk of dying from breast cancer by 25 percent to 31 percent for women ages 40 to 69, according to the Agency for Healthcare Research and Quality, part of the Department of Health and Human Services.

Medical groups now offer differing advice on mammograms:

  • The American College of Radiology takes the most aggressive stance, recommending annual mammograms beginning at age 40. Tumors should be found when they're "smaller and easier to treat," Monticciolo said.
  • The U.S. Preventive Services Task Force, an independent expert panel that advises the federal government on health, provoked a firestorm of criticism in 2009 when it bucked that advice, recommending that women get mammograms every other year beginning at age 50. The group noted that breast cancer risk rises with age, so mammograms are more likely to discover cancer – as opposed to benign growths – after age 50.
  • The American Cancer Society also scaled back its screening advice in 2015, recommending women get annual mammograms from 45 to 54, followed by screenings every other year after that.

In the new study, Danish researchers estimated the rate of overdiagnosis by comparing the number of early-stage and advanced breast tumors before and after the country started offering mammograms. If screenings work as intended, the number of small, curable breast tumors should increase, while reducing the number of large cancers by about the same amount.

Although mammograms in Denmark detected a lot more breast cancers, these were mostly small, early-stage tumors, said study coauthor Dr. Karsten Jorgensen, a researcher at the Nordic Cochrane Center in Copenhagen, Denmark. The number of advanced cancers did not fall.

The debate about overdiagnosis illustrates the limits of medical technology, Brawley said.

Although researchers can estimate the statistical rate of overdiagnosis, doctors treating actual patients can't definitively tell which breast tumors need treatment and which might be safely ignored, Brawley said. So doctors tend to err on the side of caution and treat all breast cancers with surgery and, in many cases, radiation and chemotherapy.

An estimated 253,000 new cases of breast cancer will be diagnosed in U.S. women this year, with nearly 41,000 deaths, according to the American Cancer Society.

An additional 63,000 women will be diagnosed with ductal carcinoma in situ, also known as DCIS, which has some, but not all, of the typical traits of cancer. Although DCIS cells have changed to appear malignant under the microscope, they haven't invaded surrounding tissue.

The American Cancer Society defines DCIS as the earliest stage of breast cancer, and women with the condition typically undergo the same treatment given to women with early invasive cancers. Although DCIS isn't life-threatening, doctors recommend treating it to prevent it from becoming invasive.

Other experts note that DCIS carries such low risk that it should be considered merely a risk factor for cancer. Researchers are conducting studies to measure whether it's safe to scale back treatment of DCIS.

KHN's coverage related to aging & improving care of older adults is supported by The John A. Hartford Foundation.

Trump’s Health Secretary Nominee Sought Special Treatment for Industry Donors

Trump's Health Secretary Nominee Sought Special Treatment for Industry Donors

KFF Health News, January 9, 2017

Over the past decade, Tom Price has waded into issues related to specific drugs and medical devices, making 38 inquiries with the federal Food and Drug Administration, according to federal records.

This article first appeared January 9, 2017 on Kaiser Health News.

By Marisa Taylor and Christina Jewett

Rep. Tom Price, the physician and Georgia Republican tapped for the nation's leading health care job, has long criticized federal spending as excessive. Yet during his years in Congress, he's worked hard to keep federal dollars flowing to his most generous campaign donors.

Price has been a go-to congressman, a review of his records show, for medical special interests hotly sparring with regulators or facing budget cuts. Over the past decade, he has waded into issues related to specific drugs and medical devices, making 38 inquiries with the federal Food and Drug Administration, according to federal records obtained through the Freedom of Information Act. He questioned the FDA on his constituents' behalf about matters as minute as a device for fertility treatment and an ingredient in pain creams.

In other cases, he has gone to bat for companies whose executives and employees have generously contributed to his campaigns and political action committees.

"It looks like he's somebody who could throw the store open to a lot of niche special interests," said Ross Baker, a political science professor at Rutgers University who specializes in Congress. "These are things that fly under the radar. If you take a meat ax to Medicare, for example, everybody would know about it. But this kind of stuff is done in the dark of night."

Just a few weeks before Trump tapped Price to lead the Department of Health & Human Services in November, the congressman took the stage at an Atlanta conference for vendors who sell canes, hospital beds and power wheelchairs. Price was the star of the show — a conference with 5,000 attendees. He spoke to the gathered crowd about the Medicare cuts plaguing the industry and pledged to fight them. The leaders of the Medtrade conference honored Price with an award for his stalwart advocacy and convened a $100-per-person fundraiser in his honor.

Price, 62, a tea party Republican and orthopedic surgeon from the northern Atlanta suburbs, was elected to Congress in 2004 after four terms in the Georgia state Legislature. A third-generation physician, he has said he entered politics on a quest to limit government meddling in health care. He has won significant campaign support over the years from drug firms and physician groups.

Records obtained through a public records request show that Price has taken an interest in his constituents' struggles with the FDA. He hand-signed a letter of concern over the availability of heart valves used in pediatric surgeries in 2005. Four years later, he urged review of a local company's sperm-analysis device. He dubbed the company a "pillar of the community" and said it should be exempted from a clinical trial that would be "impossible to pass." Earlier this year, his staffer pressed the FDA on behalf of a constituent trying to getcapsaicin palmitate, a hot-pepper ingredient similar to one available over the counter — on a list of approved products for specialized pain creams.

Letter to FDA (p. 8)
Rep. Tom Price has been a go-to congressman for medical special interests hotly sparring with regulators or facing budget cuts.
View entire document on DocumentCloud
 
 
Untitled Annotation (p. 11)
Records obtained through a public records request show that Price hand-signed letters on behalf of his constituents' struggles with the FDA.
View entire document on DocumentCloud
 

A staunch opponent to President Barack Obama's Affordable Care Act, or Obamacare, which he says destroys "the sacred doctor-patient relationship," Price has offered several plans, including the Empowering Patients First Act, to repeal and replace the president's health reforms. He favors instead offering patients health savings accounts which they may tap to pay for coverage and care, and tax credits to help people buy health insurance on their own.

Price's office did not respond to interview requests or to detailed written questions about his relationships with contributors or his legislative record. His confirmation hearing could come before President-elect Trump's inauguration on Jan. 20, and Senate Minority Leader Chuck Schumer has said Price is among the top targets for Democrats — and whose nomination they are trying to derail. The Office of Government Ethics will review Price's financial disclosure report, which contains information about his assets, income and other personal financial information and then advise the Senate Finance Committee on whether Price needs to take steps to avoid conflicts of interest.

In recent weeks, Price has come under criticism for his stock trading in drug companies, including an Australian firm that plans to seek U.S. approval for a promising drug.

Phil Blando, a Trump transition spokesman, said Price has complied with the law and ethics rules. Blando said that Price "takes his obligation to uphold the public trust very seriously" and, if confirmed by the Senate, will work with ethics officials to "ensure his continued compliance and transparency."

Champion of Medical Equipment
When thousands gathered at the Medtrade meeting to learn about the latest home medical equipment in the fall, Price pledged to help them.

The industry has battled widespread changes in government payment mandated by Congress in 2003 and implemented by the Obama administration. The reforms came after a decade of Justice Department prosecutions that targeted fraudsters who bought wheelchairs at wholesale prices, allegedly gave them to seniors who didn't need or want them and billed Medicare at a premium.

The most recent reforms have included budget cuts and a competitive bidding program meant to limit medical supply profitability, including the wheelchairs. Providers of home medical equipment have ranked as key Price backers, contributing $52,600 to his campaign since 2013, according to a Kaiser Health News analysis of federal contributions.

Despite his longtime stance as a budget hawk, Price has sided with industry leaders who say the cuts harm rural medical suppliers who face higher costs delivering equipment. Price said in a press release that the cuts jeopardize seniors' access to life-saving medical equipment, including scooters and oxygen tanks. "Georgia's seniors ought to have access to quality health care," Price said in a statement in May.

Price introduced a bill that month to delay cuts in Medicare spending for durable medical equipment, like hospital beds and motorized wheelchairs. The bill passed the House in July but died in the Senate.

Medical equipment industry leaders credit Price with helping reverse or delay some cuts through the recently signed 21st Century Cures Act, according to the blog of the Iowa-based VGM Group, which describes itself as "the nation's premier purchasing organization" and a "silent partner" to thousands of independent providers of home medical equipment. The company and its executives have contributed more than $17,000 to Price. One leader aired his gratitude to the congressman in another blog post calling the delay of the cuts a "red letter day" for durable medical equipment suppliers.

Price has also helped protect companies that provide home health aides and nursing care to homebound seniors — a lucrative industry that prosecutors have identified as prone to fraud. Alarmed by a Medicare plan to review such claims prior to payment, industry leaders turned to Price and another congressman for help, according to the Partnership for Quality Home Healthcare, which lauded both men for listening to their concerns.

Home health companies also contributed more than $24,000 to Price from 2013 to earlier this year.

Criticizing the cost-saving plan as overly broad and impeding patients' access to care, in September, Price introduced a bill that would delay the claim-review project a year. The bill, cosponsored by Rep. Jim McGovern (D-Mass.), stalled in a subcommittee in October.

Support for Traveling Doctors
In Congress, Price has been a vocal critic of America's medical malpractice system — a bugaboo for many surgeons but also for a company based in his district that has provided reliable campaign donations. That firm, Jackson Healthcare, staffs hospitals and practices with temporary doctors, called locum tenens.

One of Price's largest PAC contributors is Richard L. Jackson, the company's chairman and CEO. The two spoke together in 2009 at a forum aimed at limiting malpractice lawsuits. Both men have asserted doctors' attempts to avoid such lawsuits have led to costly and excessive medical care. In a 2010 interview, Jackson mentioned that he had discussed "defensive medicine" with Price, and other Congress members. Price, for his part, has referenced Jackson Healthcare's study on the high cost of such health care.

The malpractice issue has had particular relevance to the locum tenens industry and to Jackson's company in particular. It has faced multiple lawsuits over the alleged misdeeds of temporary doctors, including care of patients in Veterans Affairs and Indian Health Service hospitals.

Price has repeatedly introduced legislation to curtail malpractice cases and, on another front, to protect the tax status of traveling doctor companies. In September he introduced the House version of a bill that would help change the IRS code to classify travelling doctors as contractors, not employees, so that the company providing them wouldn't be legally vulnerable for taxes in distant states. A Senate version was introduced earlier by Georgia Republican Sen. Johnny Isakson. The bills died in committee last year.

Jackson and his son, Shane, the company's president, have supported Price with donations to his campaign and joint fundraising committee, which contributes to Republican campaigns. Since 2011, Jackson and his son, have contributed at least $43,000 to Price's campaign or a joint fundraising committee with $35,000 arriving last January.

A spokeswoman for Jackson said Price's bill would not have affected his company since, in practice, it already regarded its doctors as contractors, as did the government.

But Sean Ebner, president of another major traveling doctor company, said the measure would have eliminated the possibility of a surprise tax bill.

"The designation of who's an independent contractor can change state by state," Ebner, who heads Staff Care, said in an interview. "[The bill] removes ambiguity, which would be positive."

Influence with the FDA
If confirmed as HHS secretary, Price would oversee many of the rules and regulations and bottlenecks that regularly draw howls from the medical industry. He would also have authority over the FDA, which regulates pharmaceuticals. The agency may soon have purview over a company that Price has personally invested in.

The Australian firm Innate Immunotherapeutics reported in an annual report that it plans to bring its key Multiple Sclerosis drug to the FDA for approval. Several months ago, Price purchased between $50,000 and $100,000 worth of stock in the company, according to a routine financial disclosure required of Congress members.

The FDA is also currently mulling another regulatory issue that could make or break the company of a top contributor. Parker H. "Pete" Petit, along with his family has contributed $35,900 to Price's campaign and leadership PAC since 2010. Petit also was finance chair for Trump in Georgia and, with his family, contributed $125,000 to the president-elect's PAC.

Petit is the CEO of MiMedx, a Georgia biotech firm in Price's district, which has contested a decision from the FDA on some products to aid wound healing.

In August 2013, the FDA concluded in a letter that the products, which consist of discarded placentas and amniotic fluid, should be regulated since their manufacturing constituted manipulating human tissue. The FDA letter sent MiMedx stock tumbling and spurred a securities lawsuit filed in federal court in Georgia. The case accused MiMedx of misleading investors by downplaying the gravity of the FDA's scrutiny. A nearly $3 million settlement was reached in April.

Petit has acknowledged seeking congressional help on the issue, without being specific. The FDA said it couldn't comment on the matter. MiMedx did not return calls.

Elizabeth Lucas contributed to this report.

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