Federal judges approved settlements in two separate False Claims Act cases brought against the pharmacy chain.
Walgreens Boots Alliance has agreed to pay more than $269 million to settle allegations it took advantage of Medicare and Medicaid, the U.S. Department of Justice said Tuesday.
The sum covers settlements in two separate cases filed under seal against the pharmacy chain by whistleblowers under the False Claims Act. Two federal judges signed off on the settlements earlier this month.
In the first case, Walgreens was accused of systematically dispensing more insulin pens than patients needed. For 12 years, from 2006 through 2017, the pharmacy chain's electronic management system prevented pharmacists from giving patients less than one full box of five pens, and whenever that five-pen transaction exceeded the federal government's reimbursable limit, Walgreens submitted reimbursement claims denying that the limit had been exceeded, the DOJ alleged. Walgreens agreed to pay more than $209 million to resolve those claims.
In the second case, Walgreens was accused of overcharging Medicaid. For a decade, from 2008 through 2017, the chain failed to disclose the discounted prices being offered on drugs through its Prescription Savings Club program, the DOJ alleged. Walgreens agreed to pay $60 million to resolve those claims.
"Walgreens engaged in practices that undermined the integrity of the Medicare and Medicaid programs, compromised patient care, and wasted taxpayer dollars," Scott J. Lampert, special agent in charge for the Health and Human Services Office of Inspector General, said in a DOJ statement.
Although the DOJ statementclaims Walgreens "admitted and accepted responsibility for" conduct prosecutors had alleged in their complaints, Walgreens said it had "admitted no wrongdoing" and declined to elaborate, as Bloomberg's Chris Dolmetsch and Robert Langreth reported.
The settlements come as policymakers look for ways to tamp down drug costs and Walgreens faces competitive pressure from CVS Health's recent Aetna acquisition.
After a lengthy debate, the Trump administration agreed to exempt most Native Americans from the new policy, set to take effect next year.
Arizona has permission from the federal government to begin imposing work requirements next year on certain Medicaid beneficiaries in the state, but most Native Americans will be exempt, the Centers for Medicare & Medicaid Services announced Friday.
Arizona's waiver is the eighth of its kind, signaling that the Trump administration intends to continue pushing forward with Medicaid work requirements despite pending legal challenges in other states. This is the first waiver to exempt members of federally recognized tribes, resolving a major sticking point with Arizona's application.
State officials had asked CMS to exempt all Native Americans from the new requirement, but Trump administration lawyers said doing so would constitute illegal preferential treatment on the basis of race. The tribes contended, however, that the administration's position contradicted longstanding legal principlesand Supreme Court precedent, as Politico reported.
"There were a lot of complex legal issues here," CMS Administrator Seema Verma told Politico's Rachana Pradhan. "I think that we were able to find a middle ground."
Arizona's work requirements apply to beneficiaries ages 19-49 and require at least 80 hours per month of approved community engagement activities, such as employment, education, community service, or job-search activity. Exemptions will be given to beneficiaries deemed medically frail, those who are actively receiving treatment for substance abuse disorders, those who are pregnant or have given birth within the past two months, and those in other circumstances outlined in the waiver.
Although each state's Medicaid work requirements waiver is different, Arizona's comes after similar programs were approved in Kentucky, Arkansas, Maine, New Hampshire, Wisconsin, Michigan, and Indiana. (The Kaiser Family Foundation has a handy tracker that compares key program attributes across the states.)
Kentucky's work requirements hit a major speed bump last summer, when a federal judge blocked their approval as arbitrary and capricious. After soliciting further comments on the proposal, the feds reapproved Kentucky's waiver last November.
Arkansas is facing a similar legal challenge over its Medicaid work requirements as well, with critics arguing the policy being peddled by the Trump administration is designed to cull the Medicaid rolls.
Democrats alarmed by elements of the administration's proposed 2020 Payment Notice for ACA marketplace plans.
Federal officials are considering whether to halt "silver-loading," but the potential change won't come this year or next.
In its proposed 2020 payment notice for the Affordable Care Act released Thursday, the Centers for Medicare & Medicaid Services asked for public input on whether and how it should end the controversial pricing tactic for plans on the ACA exchanges for 2021.
Health insurers resorted to silver-loading after the Trump administration ended cost-sharing reduction (CSR) payments in 2017, prompting insurers to hike premiums in 2018. Because the ACA calculates tax credits based on silver plans, many insurers raised prices on these popular middle-tier plans alone. That resulted in bigger tax credits that protected many consumers while costing taxpayers more.
The CMS proposal argues the administration's options have been limited by lawmakers' inaction.
"Silver loading is the result of Congress not appropriating funds to pay CSRs, with the result being an increase to the premiums of benchmark plans used to calculate premium tax credits, and the federal deficit," the proposal states.
"The Administration supports a legislative solution that would appropriate CSR payments and end silver loading," it adds. "In the absence of Congressional action, we seek comment on ways in which [Health and Human Services] might address silver loading, for potential action in future rulemaking applicable not sooner than plan year 2021."
CMS Administrator Seema Verma and HHS Secretary Alex Azar have each said in the past that they worry about silver-loading and will consider blocking it. Democratic state attorneys general who sued the Trump administration over the halted CSR payments had cited silver-loading concerns in their suit, which was dismissed last year.
Andy Slavitt, a former acting CMS administrator during the Obama administration, said halting silver-loading would be just another bullet point in the lengthy list of ways Trump administration officials have sought to sabotage the ACA.
"Getting rid of silver loading is a sure fire path to raising premiums by a lot and pricing people out of health care," Slavitt wrote in a tweet. "Why get rid of it? Because it was created in direct response to Trump trying to shock the market in 2017 by eliminating subsidies and increasing premiums."
Slavitt similarly criticized the proposal's request for information about potentially ending automatic reenrollment, urging the public to comment on the proposal.
While lawmakers should change the law itself, states should take up the slack and push for 'alternatives to the ACA,' Verma argued.
In an op-ed published this week in The Washington Times, the head of the Centers for Medicare & Medicaid Services again called upon states to sidestep the Affordable Care Act by taking advantage of new flexibility from the Trump administration.
CMS Administrator Seema Verma touted the four "waiver concepts" she unveiled last November to give states a rough outline of how they might bypass the Obama-era law, arguing that Congress should change the ACA because it hasn't lived up to its proponents' promises.
"Absent any additional changes to federal law, it's up to the states to chart a new path," Verma wrote in the opinion piece. "Through State Relief and Empowerment Waivers, states now have the opportunity to advance alternatives to the ACA."
The four waiver concepts are based on a revised guidance document CMS released in October to give states greater flexibility under the ACA's Section 1332 waivers. Some have questioned the legality of that revised guidance since it avoided formal notice-and-comment rulemaking.
Christen Linke Young, a fellow with the USC-Brooking Schaeffer Initiative for Health Policy, wrote that the lack of rulemaking means the policy change is likely invalid.
An 'internal, political squabble over funding' is no reason to put off reviewing the megamerger, the judge wrote, with a literal exclamation point.
In light of the partial government shutdown, the U.S. Department of Justice Antitrust Division said in a court filing last week that its attorneys lack the resources they need to continue reviewing the nearly $70 billion merger between CVS Health and Aetna.
The federal judge overseeing the review, however, isn't having it.
Seizing on the DOJ's statement that government attorneys would have to stop working until funding is restored, "unless otherwise ordered by the Court," U.S. District Judge Richard J. Leon in the D.C. District Court specifically ordered the DOJ to keep working, despite the lapse in funding.
Leon interpreted the DOJ's filing as a request for an indefinite stay, writing in an orderlate last week that such a delay would undermine the DOJ-authorized CVS-Aetna deal.
"If the merger will bring the benefits and efficiencies to the healthcare system the Government claims it will, staying it because of this unfortunate funding impasse would be unwarranted and could have far-reaching consequences in markets that affect consumers' health and well-being," Leon wrote.
"In short," he added, "the Government's internal, political squabble over funding is NO reason to postpone the congressionally mandated evaluation of the Government's proposal to remedy the antitrust concerns allegedly raised by the merger's consummation !"
Before the shutdown, the DOJ had said it would respond by early February to public comments about the megamerger. In its filing last week, the DOJ said it would give the court an updated timeline after funding is restored. That didn't fly with Leon.
"I expect the Government attorneys working on this case to roll up their sleeves, respond to the public's concerns about the CVS-Aetna merger, and file the comments received from members of the public and the Government's response to those comments with this Court by the 15th of February," he wrote.
The case could result in hospitals receiving billions of dollars in additional money from the federal government.
Hospitals that serve a lot of low-income patients should pay attention this week to the U.S. Supreme Court, where oral arguments are set to begin Tuesday in a dispute over the formula used to calculate Disproportionate Share Hospital (DSH) payments.
What's at stake? In short, some $3-4 billion in Medicare funding, according to Health and Human Services.
HHS Secretary Alex Azar asked last April that the Supreme Court review an appellate ruling that found HHS violated the Medicare Act by changing the DSH reimbursement formula without going through a formal notice-and-comment rulemaking process. The justices agreed last Septemberto take up the case.
Although the formula tweak in question occurred under the Obama administration, Azar has stood by his predecessors' position, arguing that the formal process wasn't legally necessary.
Unworkable Requirement?
Beyond the $3-4 billion implicated in this dispute, the case could have broader consequences that could "substantially undermine effective administration of the Medicare program" if the justices adopt the legal rationale presented by the hospitals involved, U.S. Solicitor General Noel J. Francisco wrote on Azar's behalf in a brief last week.
If the Centers for Medicare & Medicaid Services was required to conduct notice-and-comment rulemaking in this case, then the same requirement could be applied unreasonably to other routine and non-binding CMS actions, stymying the agency's ability to operate such a large and complex program, Francisco argued.
The nine hospitals that are party to the case, led by Allina Health Services, argued in a brief last month, however, that the question at hand is "a unique circumstance," so the impact "would be extremely limited" if the Supreme Court were to affirm the D.C. Circuit Court's decision.
The AHA amicus brief said the government's concerns about workability are "overblown."
"Not all CMS policies need go through notice and comment; just those, like the determination here, that substantively alter how providers are paid," the brief states.
2 Justices Sitting Out
Only seven of the nine justices are expected to participate in Tuesday's arguments.
Justice Brett Kavanaugh, the court's newest member, recused himself last October shortly after his contentious confirmation. His recusal was expected since he, as a D.C. Circuit Court judge in 2017, authored the appellate decisionat issue in this case.
Justice Ruth Bader Ginsburg—the oldest and second-most-senior member of the Supreme Court—is expected to work from home this week, reviewing case documents and transcripts as she recovers from cancer-related surgery, as NBC News and others reported.
The new rules give even nonreligious employers the ability to claim a moral objection to offering coverage for contraceptives.
A federal judge in Pennsylvania issued a nationwide injunction Monday blocking two new rules by the Trump administration that widen exceptions to the Affordable Care Act's birth control mandate.
The rules, which took effect Monday, gave employers greater latitude to decline to cover contraception on moral or religious grounds. But the rules were already blocked in 13 states and the District of Columbia after a federal judge in California issued a limited injunction Sunday.
While the Obama administration had narrow accommodations for religious objections to the ACA's birth control mandate, the Trump administration widened those circumstances in which employers could claim an exemption, giving even nonreligious employers the option to claim a moral objection.
The administration said the change is expected to affect no more than about 200 employers and coverage for about 6,400 women (with a maximum of 127,000 women impacted), according to a fact sheetaccompanying the rules.
Judge Wendy Beetlestone in the Eastern District of Pennsylvania acknowledged in her ruling that there has been a lot of talk lately about the propriety of District Court judges issuing nationwide injunctions.
"While a nation-wide injunction may prove overbroad, there is no more geographically limited injunction that protects the States from potential harm," Beetlestone wrote.
The states in this case, Pennsylvania and New Jersey, argue that promulgation of the two new rules violated the Administrative Procedure Act, Title VII of the Civil Rights Act, the Fifth Amendment's Equal Protection Clause, and the First Amendment's Establishment Clause.
The change, long sought by Republicans through failed legislative efforts, could make a big difference for states who take advantage of the opportunity. But critics question the plan's legality.
While details of the plan remain unclear, the Centers for Medicare & Medicaid Services has reportedly been drafting guidelines in recent weeks to authorize block grants through existing Medicaid waiver authorities.
Since the 1980s, conservatives have promoted Medicaid block grants, which would give states spending caps and greater flexibility in managing their own programs. In 2017, Republicans sought unsuccessfully to write the idea into law during their failed attempt to repeal and replace the Affordable Care Act.
Proponents argue that states are better-equipped to spend money prudently with less federal stipulation. But liberals and patient advocates have said Medicaid block grants would ultimately boot beneficiaries from coverage. Considering how touchy the topic has been in the past, the Trump administration has been tweaking its plan quietly for weeks, as Politico's Rachana Pradhan and Dan Diamond reported Friday, citing three unnamed Trump administration sources.
The Wall Street Journal's Stephanie Armour reported Friday that CMS has been considering the policy since last summer, citing an unspecified number of people familiar with preliminary policy discussions. Armour described the waivers as potentially authorizing states to "remodel their Medicaid programs to more closely resemble block grant proposals."
Legality Likely to Be Questioned
News of the idea drew a sharp rebuke from some policy groups and Democrats in Congress, who suggested a legal challenge would be in order.
"Hell no," said Sen. Bob Casey, D-Pennsylvania, in a tweet responding Friday evening to Politico's report. "If the Administration tries to decimate Medicaid through executive action after its scheme was rejected by Congress and the American people, I will fight it with everything I have."
Some conservative experts, too, have suggested the plan may run into a legal wall in the Medicaid statute.
"There's no direct provision of authority to waive the way that the federal government pays the states," the American Enterprise Institute's Joe Antos told Politico. "However, that doesn’t mean that you can't try to have some of the effects that people that like block grants would like to see, in terms of encouraging states to be more prudent with the ways they spend the money."
Without commenting directly on the administration's plan, a CMS spokesperson touted the basic idea in statements to Politico and the Journal.
"We believe strongly in the important role that states play in fostering innovation in program design and financing," the spokespersonsaid. "We also believe that only when states are held accountable to a defined budget—can the federal government finally end our practice of micromanaging every administrative process."
At the urging of the Trump administration, an appellate judge put legal wrangling over the Obama-era law's constitutionality on hold until the partial government shutdown ends.
The appeals process to review a ruling that declared the entire Affordable Care Act invalid will have to wait until attorneys for the federal government have funding to proceed.
Fifth Circuit Court Judge Leslie H. Southwick issued a stay in the case Friday, granting a request filed earlier in the week by the U.S. Department of Justice.
The pause comes three weeks into a partial government shutdown that's poised to become this weekend the longest in U.S. history, as President Donald Trump insists that Congress authorize $5.7 billion for a wall along the U.S. border with Mexico and Democrats refuse to do so.
Both the plaintiffs and federal defendants agreed that a stay would be appropriate. But the California-led coalition of Democratic state attorneys general challenging the lower court's decision and the U.S. House of Representatives—which, newly under Democratic control, is seeking to intervene in the case to defend the ACA—opposed the stay request.
The CMS administrator called on other hospitals to do more than required by guidelines that took effect this month.
Three health systems that have voluntarily taken steps to promote price transparency for their patients received kudos Thursday from the head of the Centers for Medicare & Medicaid Services.
During a press call, CMS Administrator Seema Verma named the three systems—UCHealth in Colorado, Mayo Clinic in Minnesota, and University of Utah Health—as exemplars, urging other hospitals to similarly go above and beyond the requirements laid out in revised price-transparency guidelines that took effect this month.
Every hospital in the U.S. is now required to publish a standard list of prices online in a machine-readable format. Even when hospitals publish their chargemasters as required, however, patients may have a tough time finding them, and they are likely to struggle in deciphering the document's medical jargon, acronyms, and atomized list of codes.
That's not to say the new policy isn't working. By requiring the data to be machine-readable, CMS opened a door for problem-solvers to help aggregate and interpret the information to empower consumer decision-making, Verma said.
"Our initiative was really a first step," she said, adding that provider organizations and third parties alike can and should build upon that foundation.
UCHealth
UCHealth launched its own custom solution last year that offers individualized price estimates through a patient portal and mobile app for five of its 10 hospitals (with more locations to be added at the end of this quarter).
The platform considers an individual patient's health plan to calculate an estimated price breakdown with expected out-of-pocket costs for more than 150 services, UCHealth spokesperson Dan Weaver tells HealthLeaders. For patients with follow-up questions or inquiries about prices for services not on the list, UCHealth complemented its digital platform with a dedicated hotline.
The project has been in development about 18 months, since UCHealth President and CEO Elizabeth B. Concordia pushed to make cost estimates easier and more accurate in response to consumer demand, Weaver says.
"As high-deductible insurance plans have become more common over the last decade, we've seen more and more patients asking providers for these estimates," he adds.
Since its soft-launch late last summer, the UCHealth platform has been updated with patient-friendly language to replace the ICD-10 codes, acronyms, and abbreviations that make the raw chargemaster incomprehensible to most consumers, Weaver says. The platform has been processing about 400 estimates per week.
U of U Health
University of Utah Health similarly devised an online out-of-pocket cost estimator. There are currently fewer than 100 procedures on the platform, but the system plans to add more at the end of this month, says Kathy Delis, administrative director for revenue cycle support services.
A chargemaster alone isn't terribly useful to patients, Delis said. The price of a colonoscopy, for example, may be listed at $1,500 on a chargemaster, but that doesn't include related expenses, such as room costs, physician fees, lab work, medicine, and supplies—which is why University of Utah Health grouped those procedure-related expenses together to offer a more meaningful estimate. Follow-up questions are directed to a hotline.
Delis said the platform, which has been in the works for several years, was motivated by the organization's culture of transparency and a desire to be prepared if asked (or required) to provide out-of-pocket cost estimates.
Mayo Clinic
Mayo Clinic Chief Financial Officer Dennis Dahlen says the chargemaster disclosure requirement is one way to boost transparency, though patients need more information to be empowered as consumers.
"Cost and price information should be based on information that allows patients to meaningfully differentiate among providers in choosing the care that is best for themselves and their families," Dahlen says in a statement emailed to HealthLeaders. "Cost information therefore must be presented in the context of quality and outcomes for patients to make choices that best meet their personal goals."
Mayo Clinic has operated an online cost estimator for about four years, a spokesperson says.
There are currently no penalties for hospitals that fail to comply with the requirement to publish their chargemasters, but CMS is considering feedback on a request for information that could lead to tweaks and teeth in future iterations of the policy.
But providers shouldn't sit on their hands, Verma said.
"Hospitals don't have to wait for us to go further in helping their patients understand what care will cost," she said.
Editor's note: This story was updated Friday to include commentary from University of Utah Health.
