The proposal calls for manufacturers to include the wholesale acquisition cost for drugs in television advertisements.
Direct-to-consumer television ads for prescription drugs would be required to include list price information under a proposed rule released Monday afternoon by the Trump administration.
The proposal, which Health and Human Services Secretary Alex Azar announced during a speech at the National Academy of Medicine's Annual President's Forum, calls for manufacturers to post the wholesale acquisition cost (WAC) for drugs covered by Medicare or Medicaid.
"For too long, drug pricing has been like no other market," Azar said. "Prices are completely opaque in the industry that makes it a point of claiming their list prices are often meaningless. But that second part is not really true."
Despite the complexities of drug pricing rebates and discounts, the list price is a useful starting point that empowers consumers to make informed decisions about their own healthcare, Azar said.
But the purported utility of this information is one of the main sticking points for those who contend the proposal won't work.
"Simply disclosing a drug's list price in advertisements would be misleading because list prices don't account for rebates and negotiated discounts provided to pharmacy benefits managers and other players in the complex supply chain," Lindsay Bealor Greenleaf, director at ADVI Health, told HealthLeaders. "Adding to the confusion is that patients' out-of-pocket costs will vary depending on the benefit design of an individual's health plan."
Industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA) has pushed back against the proposed requirement, arguing that publicizing list prices would cause confusion and could inappropriately lead consumers to refrain from getting the medication they need.
PhRMA sought to preempt Azar's speech with an announcement of its own Monday morning, outlining new voluntary principles to increase price transparency in TV ads without government intervention. Azar was quick with a retort, saying the Trump administration would not be relying on voluntary action.
"We will not wait for an industry with so many conflicting and perverse incentives to reform itself," Azar added during his speech Monday afternoon.
PhRMA sought also to portray this debate as one with potential First Amendment implications. But legal scholars suggested that argument is a stretch.
"Industry could challenge the proposal as unconstitutional compelled commercial speech, but it is doubtful that such a challenge would be successful," Ameet Sarpatwari, JD, PhD, an instructor in medicine at Harvard Medical School, told Politico. "A strong argument exists that list prices are factual, uncontroversial information, in which case HHS would need only to show that the disclosure requirement is rationally related to legitimate government interest."
The proposal would apply if a drug's list price is more than $35 for a month's supply, according to a fact sheet released by the Centers for Medicare & Medicaid Services. List prices for the top 10 most-commonly advertised drugs range from $535 to $11,000 per month (or the usual course of therapy), according to the CMS fact sheet.
The proposal drew praise from a number of industry stakeholders, including the Campaign for Sustainable Rx Pricing (CSRxP), of which the American Hospital Association is a founding member.
"Consumers have the right to know how much medicines cost, and providing drug pricing in advertisements will do just that. We must build off this and accelerate efforts to ensure affordable drug prices for American patients," CSRxP said in a statement calling the proposal "real progress."
America's Health Insurance Plans (AHIP) President and CEO Matt Eyles similarly commended the Trump administration's move.
"There are three ways to meaningfully reduce drug prices: increase competition, increase visibility into manufacturer pricing practices, and focus on true value for patients and consumers," Eyles said. "Giving consumers pricing information in drug advertising will empower them to have more informed conversations with their doctor about the best approach to improve their health and manage their medical conditions."
The HHS secretary called PhRMA's voluntary action 'a small step in the right direction' but vowed to carry the Trump administration's to completion.
Health and Human Services Secretary Alex Azar could soon unveil a plan to impose new pricing transparency requirements on direct-to-consumer pharmaceutical advertising.
Azar is scheduled to deliver what HHS spokespeople are describing as a major policy address Monday afternoon during the National Academy of Medicine's Annual President's Forum. This comes after Politico reported Friday that the Trump administration plans to announce a proposalthis week to require drug companies to publish their list prices in consumer ads.
Industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA) said earlier this year that imposing such a requirement would not help patients and could cause problems. Mere hours before Azar's speech, the group released an announcement Monday morning outlining a "new approach" to TV ads among PhRMA members.
Revisions to PhRMA's voluntary principles pertaining to direct-to-consumer TV ads adopted earlier this month include a new guiding principle: "All [direct-to-consumer] television advertising that identifies a medicine by name should include direction as to where patients can find information about the cost of the medicine, such as a company-developed website, including the list price and average, estimated, or typical patient out-of-pocket costs, or other context about the potential cost of the medicine."
PhRMA President and CEO Stephen J. Ubl said in a statement that group members heard calls from the White House and Congress to make drug pricing more transparent "and our members are voluntarily stepping up to the plate."
That action may be insufficient, however, in Azar's eyes.
"Our vision for a new, more transparent drug-pricing system does not rely on voluntary action," Azar said in a statement released shortly before noon Monday. "The drug industry remains resistant to providing real transparency around their prices, including the sky-high list prices that many patients pay."
Azar—whose ties, and possible loyalties, to the pharmaceutical industry as a former Eli Lilly executive were scrutinized during his confirmation process last year—called PhRMA's voluntary action "a small step in the right direction."
But, he added, "we will go further and continue to implement the President's blueprint to delivery new transparency and put American patients first."
"CMS appreciates the pharmaceutical industry’s action to increase transparency, but additional steps are required to ensure that patients have all of the information they need when they are learning about a medication," Verma said.
Eli Lilly Chairman and CEO David A. Ricks—who served 2009-2012 as president of Lilly USA before Azar served 2012-2017 in that post—voiced his support for PhRMA's move in a blog post Monday.
"Through new research, we know that the information patients care most about is how much they need to pay out of pocket, along with other context about their cost of their medicine," Ricks wrote. "Our commitment will leverage the power of [direct-to-consumer] advertising to help patients find the information they want and need."
The new voluntary PhRMA guidelines take effect in April, but members will begin changing their direct-to-consumer ads in the coming months, the trade group said.
About the proposal to require drug list prices in TV ads, PhRMA said it is concerned that list price information is insufficient and could dissuade patients from seeking the care they need.
"List prices are not a good indicator of what a patient will pay at the pharmacy counter and do not reflect the substantial discounts and rebates negotiated by insurers and pharmacy benefit managers," PhRMA said. "In addition, any such requirement would raise significant legal issues, including First Amendment concerns."
Editor's note: This story has been updated to include statements from Seema Verma and David Ricks.
As direct-to-employer contracts gain steam between providers and large companies, should health systems be trying out direct primary care on their own workforce?
Direct contracting between major employers and health systems can lead to savings, but it also opens providers up to financial risk—which may be untenable for those seeking a safer bet.
While many direct contracts have shown positive results, others have fallen short of expectations for at least one party. Providence St. Joseph Health, for example, last year ended a fairly prominent partnership it built three years earlier with Boeing around the system's debut direct-to-employer accountable care organization product.
Boeing was the first employer to contract with the ACO, Providence-Swedish Health Alliance, which had sought to deliver affordable quality care to the airplane maker's Seattle-area employees. Boeing still sees value in direct contracting for employee healthcare services, but Providence St. Joseph Health confirms that the system determined the arrangement was simply not financially sustainable.
Striking the right balance so a direct-to-employer contract works well and is mutually beneficial for both provider and employer can be tricky. But what if the provider and employer are one and the same? What if a hospital or health system chases the promise of value-based care by providing services directly to its own employees as it might for a third-party workforce?
The basic idea may be familiar, but it's finding fresh applications as health leaders look for ways to guide their organizations safely into the future of healthcare delivery.
Starting With Primary Care
One place where the well-worn idea has resulted in a small operation with big potential is the busy intersection of West Center Road and 132nd Street in Omaha, Nebraska, where there's a nearby CHI Health Clinic sandwiched between a fabric store, diner, and barber shop in a cluster of strip malls surrounded by residential neighborhoods.
That's the spot where CHI Health, the Catholic Health Initiatives (CHI) division for Nebraska and southwest Iowa, last year launched its first direct primary care (DPC) model with one salaried doctor and one advanced practice registered nurse who care primarily for the health system's own employees. The model borrows a playbook from independent physicians who pine for the good old days when patients knew their doctors personally and doctors didn't feel like cogs in a machine.
The DPC model frees primary care physicians to take a needs-driven approach to their patient interactions rather than being driven by a reimbursement model, says CHI Health CEO Cliff Robertson, MD, MBA, who also serves as CHI's senior vice president of divisional operations.
There are no bills to insurance, no insurance claims to be processed, just a monthly subscription paid directly to the practice by the patient or the patient's employer. That means there's no incentive to force patients into the office for an unnecessary face-to-face visit in person, when a webcam, phone call, or email exchange would do, says Robertson.
The DPC model removes the physician-patient relationship from the "toxicity" of fee-for-service reimbursement and establishes an environment more suitable for value-based care, Robertson tells HealthLeaders.
"I was a primary care doc. I know what it's like to have to be efficient and productive and to see patients quickly because the only way I can generate revenue to cover my overhead and then ultimately pay me something was to be very efficient with those clinic visits," Robertson adds, describing the DPC model as a beautifully simple solution.
"When you remove the primary care patient and the primary care physician from a fee-for-service transactional model, you really open a door to a delivery model of primary care that is the way primary care should be," he says. "I personally think this is the future of primary care."
Early Results Promising
Counting employees and their families, CHI Health has about 20,000 beneficiaries on its employee health plans. Most of them take advantage of the more traditional PPO product, but a small number—about 1,130 during the first quarter of 2018—have opted into the DPC model. Preliminary results suggest it is working to both limit costs and improve patient satisfaction.
The employees who select the DPC model keep more of their paychecks and have zero deductibles and copays for primary care services, Robertson says.
"The benefits were designed to create the appropriate incentive to use primary care and to reflect the expected total cost of care savings demonstrated in these models," he adds.
When a beneficiary in the DPC model needs higher-acuity care, he or she can access the same coverage, with the same deductible for specialty services and hospital use, as their peers with PPO coverage. But early results suggest DPC participants use these more-expensive options less.
First-quarter facility and specialist claims were about $387 per member per month, according to numbers released by CHI Health. That's 20% less than the $488 PMPM facility and specialist claims recorded for PPO beneficiaries during the same time period. These raw claims data have not been risk-adjusted, but CHI Health does not expect the DPC population to be significantly healthier than the PPO population, given the plan design.
CHI Health Clinic's DPC model has outperformed traditional primary care settings in terms of patient satisfaction, too, as evidenced by Clinician and Group Consumer Assessment of Healthcare Providers and Systems (CGCAHPS) survey results, says Matt Hazen, CHI Health division director for service excellence, corporate, and retail.
The DPC clinic scored at or above the 90th percentile in 10 of the 13 CGCAHPS survey questions for January through June this year, Hazen notes. The clinic scored at the 94th percentile overall, while the entire CHI organization scored at the 64th percentile.
As both the employer sponsoring the health plan and the provider delivering care, CHI Health can access potential quality-improvement and cost-cutting benefits on both sides of the equation. What's more, CHI Health now has a proof-of-concept and staging platform on which to build direct-to-employer contracts with other companies or offer DPC services to the general public, says Pamela Ballou-Nelson, RN, CMPE, MA, MSPH, PhD, an MGMA principal consultant and former clinical quality director for Adventist Health Network in Chicago.
"If you're a health system, that's often the best way to do it: experiment with your own employees first," Ballou-Nelson says.
While it has become increasingly common for large non-healthcare employers to have on-site or near-site health clinics run by traditional providers, there are indications that the way these primary care centers operate could be poised to shift, possibly with a nudge from outside disruptors.
Apple, for example, has opted to branch out, reportedly staffing its own AC Wellness clinic to offer concierge health and wellness services to its employees in the Bay Area, rather than contracting with a hospital, health system, or a standalone DPC company.
Considering the online retail giant's track record and its stated objective to disrupt the healthcare industry, it's reasonable to wonder whether Amazon might try to scale up its clinic model if it finds success experimenting on its own employees first.
All of this comes as the Centers for Medicare & Medicaid Services mulls what to do with information collected earlier this year on the prospect of experimenting with what CMS called "direct provider contracting" between payers and primary care or multispecialty groups.
Bits of Advice
The trial-and-error slog is, of course, not new to healthcare providers. Hospitals and health systems have for generations experimented with a variety of tactics and varying degrees of success. These interrelated value-based devices and concepts include not only DPC models and ACOs but also basic principles of Patient-Centered Medical Home, Physician-Hospital Organizations, narrow networks, capitation, and others, Ballou-Nelson says.
Although there's no way to guarantee success in any of these endeavors, there's one thing you simply won't survive without, she adds: data analytics.
"You have to be able to have good data to succeed in this kind of business," Ballou-Nelson says. "You're just not going to make it if you can't collect the data from all of the participants in the plan and to have that information available, so you can analyze it and know where to go."
"We're good at collecting data in healthcare, but we're not so good at analyzing it yet," she adds.
Establishing a direct care relationship with a pool of employees gives providers access to patient data without a third-party health plan's filter getting in the way. Think of these bits and bytes of information as the building blocks for your next steps. How you refine and implement the next iteration of your strategic vision hinges on your ability to interpret what the data are saying about what does or doesn't work, Ballou-Nelson says.
Concierge and Other Concerns
Those who would criticize what CHI Health Clinic is doing are likely to cite concerns that DPC is generally too similar to concierge service. Despite acknowledging a filament of similarity, Robertson says the two should not be confused.
"Traditionally, concierge practices have charged a retainer for some additional services but would still bill insurance for visits that were delivered," he says.
That both concierge and DPC practices achieve greater levels of access and extended office visits by limiting the number of patients in a practice's panel, however, is enough for some critics to reject them both as ineffectual to solve the U.S. healthcare delivery system's problems.
"I think every patient would like the kind of care that DPC promises. I know I would," says Carolyn Engelhard, MPA, associate professor of public health sciences and public policy at the University of Virginia in Charlottesville.
"I would love to know that I could email my physician or text him or her, that I could get same-day appointments, that I could have 30-minute appointments or 45-minute appointments. I think this is the way every patient wants to be cared for; unfortunately, our healthcare reimbursement system doesn't reward that," Engelhard adds.
DPC Frontier, a website founded by Phil Eskew, DO, JD, MBA, a steering committee member for the Direct Primary Care Coalition, has mapped nearly 900 DPC practices across 48 states and the District of Columbia, including several DPC sites established by Strada Healthcare in Omaha. The details vary significantly from practice to practice, but many of these DPCs operate independently from full-spectrum health systems.
Such local initiatives are, argues Engelhard, more likely to further fragment the care continuum than they are to solve national problems.
"By having DPC as a cottage industry and a carve-out from a larger healthcare system, you're actually sort of, in my view, going backwards," Engelhard says, likening DPC's vision of primary care to the nostalgic manner in which a solitary physician might be depicted in a Norman Rockwell painting.
"I would like to think that the leaders in our healthcare systems around this country are part of the solution nationally and not just trying to focus in on their little part of the world," she says, "because they're never going to be able to change the big picture of it unless we get our hands around some of these larger issues that are national in scope."
Those big-picture priorities should include offering incentives for careers in primary care, grappling with excessive waste and fragmentation, and figuring out how to make healthcare generally more affordable, Engelhard adds.
But proponents of DPC contend the model actually helps to accomplish at least some of the preferred priorities Engelhard identifies.
Defending, Promoting
Self-described DPC "zealot" Christopher Larson, DO, founder and CEO of the DPC practice Euphora Health, based in Austin, Texas, says many of those who criticize the DPC model are academics who fail to distinguish it from concierge care.
"I don't know that those arguments are thought out with an intimate knowledge of direct primary care that a direct primary care doctor would have," says Larson.
With regard to concerns that DPC's smaller panels could reduce patient access to care, Larson has two responses. First, if DPC can reduce physician burnout and make primary care generally more enjoyable for providers, then it will make a career in primary care more attractive to physicians, perhaps increasing the number of practicing physicians enough to offset the smaller panels. Second, while DPC panel sizes will always need to be smaller than their general primary care counterparts, the panels may not need to be as small as some assume, thanks to technology.
Larson's practice in Austin has contracts with two large employers: one is 160 miles away in Houston, and the other is 370 miles away in Lubbock. That's possible because Euphora Health offers "virtual DPC." Larson travels to each site a couple of times per year and cares for patients remotely in between.
Larson, a member of the American College of Osteopathic Family Physicians (ACOFP), is one of the many independent physicians who have ventured out on their own to experiment with direct primary care, many of them opting out of Medicare entirely.
These independent doctors who swap DPC advice during summits hosted by ACOFP may seem quite a bit different from the executives steering the nation's largest health systems. But leaders at CHI Health and elsewhere see something worth emulating.
"We know that other small employers have begun to see the power of this model for their employees, and personally, I think it will continue to grow as a preferred option for primary care," Robertson says.
There's just one CHI Health Clinic offering DPC today. But a second clinic in Omaha will transition to the DPC model in January. And the system could add as many as two or three more sites within the next five years, Robertson says.
If the model proves itself to be scalable and preliminary results hold steady, then DPC could offer not only a better way to do primary care but also a sturdy foundation for further experimentation, offering risk-averse health systems an avenue to explore direct-to-employer relationships.
A former primary care doctor who's now a health system CEO says physician leaders need to get comfortable with the industry's increasing reliance on APCs, such as PAs and NPs.
If you could start from scratch and build the U.S. healthcare delivery system in a vacuum, assigning tasks to team members with the goal of maximizing efficiency and effectiveness, would you have an orthopedic surgeon spend his or her entire day seeing patients with back pain that doesn't require surgery?
"It wouldn't make sense," says CHI Health CEO Cliff Robertson, MD, MBA.
The same is true for primary care practices, which is why physicians and physician leaders need to get comfortable with the industry's increasing reliance on advanced practice clinicians (APC), such as physician assistants and nurse practitioners, Robertson says.
"We have to be realistic that a primary care physician with a team of other clinical experts—other APCs, pharmacists, therapists—actually can work together to provide care for a larger population probably more efficiently than any of us can do on our own," he says.
While hospital-owned primary care practices with a higher ratio of nonphysician providers report greater expenses, they also report higher revenue after operating cost than their peers that have fewer nonphysician providers, regardless of specialty, according to MGMA's 2018 cost and revenue report.
"Think of it this way: We can't afford as a country, as an industry, … to have highly trained surgeons that spend their days not operating. That's an inefficient use of resources," says Robertson. "We can't afford to have medical specialists directly caring for patients that really could have been appropriately cared for by a primary care physician like me."
It's a simple principle, he says: "All clinicians must operate at the top of their license."
Actually delivering that type of practice model is the hard part.
Healthcare providers along Florida's panhandle were reeling Thursday and Friday in the wake of a storm that left 11 dead across four states.
Two hospitals in Panama City, Florida, were forced to evacuate about 330 patients after Hurricane Michael inflicted roof, water, and structural damage on their facilities.
Bay Medical Center Sacred Heart announcedThursday morning that the deadly storm had caused a section of the roof on the hospital's materials management building to collapse, leaving care teams without the supplies they would need to provide longer-term care.
The evacuation of about 200 patients, which included 39 intensive care unit patients, was expected to be completed by Saturday morning. Patients were being taken to Ascension hospitals in Pensacola, Jacksonville, and Mobile, Alabama. State officials, the Florida Hospital Association, HCA Healthcare, and others assisted.
A report by The New York Timesdescribed the scene at Bay Medical Center Sacred Heart as "a tumultuous mess" on Thursday morning, with broken windows, damaged buildings, and debris-strewn streets: "Doctors, nurses and staff members wandered outside, some crying, some looking for cell service."
In a statement, CEO Scott Campbell thanked the hospital's staff for their commitment to patients riding out the storm.
"Our staff and physicians have demonstrated extraordinary dedication throughout this crisis, providing exemplary care for our patients," he said. "This has been a truly noble effort and we are deeply grateful for their sacrifice."
Eleven deaths have been attributed to the storm, including four in Florida, one in Georgia, one in North Carolina, and five in Virginia, as NBC News reported.
A high-ranking Republican senator has asked federal antitrust regulators to review such contracts and offer insight to lawmakers.
Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, asked the Federal Trade Commission to conduct a formal review of contracts between health insurers and hospitals, citing concerns that the often-opaque agreements could be harming consumers by undermining competition.
Grassley made the request Wednesday in a letter to FTC Chairman Joseph Simons, quoting directly from a September reportby The Wall Street Journal's Anna Wilde Matthews.
"Dominant hospital systems use an array of secret contract terms to protect their turf and block efforts to curb health-care costs," Wilde Matthews reported. "As part of these deals, hospitals can demand insurers include them in every plan and discourage use of less-expensive rivals. Other terms allow hospitals to mask prices from consumers, limit audits of claims, add extra fees and block efforts to exclude health-care providers based on quality or cost."
The report named several prominent providers, including Johns Hopkins Medicine, OhioHealth, Aurora Health Care, and HCA Healthcare, as having contracts with provisions that restrict how insurers can design their plans.
"If true, these practices undermine Congress's efforts to lower the cost of, and increase access to, health care for millions across the country," Grassley wrote in his letter.
"The last thing American patients and consumers need at this time is a health care system that permits or encourages anticompetitive agreements that hinder access to lower cost care," he wrote.
"It is critical for Congress to understand the FTC's perspective on these issues, including whether contractual provisions—like those highlighted in recent reports—impact the cost of health care in the United States and whether consolidation in the marketplace magnifies the impact of such provisions," Grassley added.
The data on second-lowest-cost silver plans for next year come two weeks after HHS Secretary Alex Azar praised President Trump for halting premium hikes, despite critics' contentions to the contrary.
Celebrating the news as "especially gratifying," Centers for Medicare & Medicaid Services Administrator Seema Verma released data Thursday morning showing that premiums for health plans on the federally facilitated exchange will drop next year for the first time since the Affordable Care Act took effect.
After years of double-digit increases, the average premium for second-lowest-cost silver plans will drop 1.5%, from $412 in 2018 to $406 in 2019, according to preliminary CMS data on the 39 states that use the federal ACA exchange. The final data are slated for release next month.
During a call with reporters, Verma said the ACA is still a broken piece of legislation that Congress should replace. Even so, President Donald Trump and his administration deserve credit for bringing these premiums down despite the less-than-ideal circumstances, she said, rejecting claims from critics who have argued Trump's team has been sabotaging the ACA since Inauguration Day.
"Despite predictions that our actions would increase rates and destabilize the markets, the opposite has happened," Verma said in a statement. "The drop in benchmark plan premiums for plan year 2019 and the increased choices for Americans seeking insurance on the exchanges is proof positive that our actions are working."
"While we are encouraged by this progress, we aren't satisfied," she added. "Even with this reduction, average rates are still too high. If we are going to truly offer affordable, high quality healthcare, ultimately the law needs to change."
The release of 2019 premium data comes two weeks after Health and Human Services Secretary Alex Azar said benchmark ACA premiums would drop 2% next year. Azar heaped praise on Trump for the good news, but critics noted that rates are flattening out for 2019 after a significant jump for 2018 in response to the Trump administration's healthcare policymaking.
The 1.5% decrease follows last year's 36.9% increase, which was significantly higher than the 25.4% increase heading into 2017, according to the CMS data released Thursday.
Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation, said last month that insurers on the exchange "overshot" their premium increases last year, which explains both their high profit margins at present and the average decrease for next year. That being said, although the Trump administration has taken steps to undermine the ACA, some of the administration's actions have promoted stability, Levitt added Thursday.
Beyond premiums, though, Verma noted also that fewer insurers are dropping out of the exchanges, and some are returning. Most counties on the federal exchange, 56%, had only one issuer this year, but that figure will drop to 39% next year. There were 10 states with only one insurer this year, but that number will drop to four in 2019.
Clarification: The story has been updated to note that the data released Thursday are still preliminary. Final data are set to be released next month, according to a CMS official.
Federal antitrust regulators made the planned sale of Aetna's Part D business to WellCare a condition of the CVS-Aetna deal.
Aetna's plan to sell its Medicare Part D business to WellCare Health Plans has satisfied federal regulators, who signed off on Aetna's planned megamerger with CVS Health.
The Department of Justice announced Wednesday that it will allow the $69 billion CVS-Aetna deal to proceed if the sale to WellCare is completed.
"Today's settlement resolves competition concerns posed by this transaction and preserves competition in the sale of Medicare Part D prescription drug plans for individuals," Assistant Attorney General Makan Delrahim of the DOJ's Antitrust Division said in a statement.
"The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the healthcare services that American consumers can obtain," Delrahim added.
The DOJ and five state attorneys general—from California, Florida, Hawaii, Mississippi, and Washington—filed a federal lawsuit Wednesday to block the merger, simultaneously proposing a settlement to resolve the matter. The settlement must be approved by a judge before it can take effect, the DOJ said.
Regulators had been concerned that combining the CVS Medicare Part D plans with Aetna's could reduce competition and result in higher prices, worse customer service, and a dampened drive for innovation across 22 states, the DOJ said.
"From the closing statement [in the lawsuit], we see that the DOJ identified a horizontal overlap and identified a means to resolve it," Andrea Agathoklis Murino, partner and co-chair of Goodwin's antitrust and competition law practice in Washington, D.C., told HealthLeaders in an email. "The identity of the buyer is crucial to DOJ's comfort that competition will be maintained and potentially even enhanced in the overlap area. I would imagine that DOJ's comfort with WellCare was among the deciding factors tipping their decision to accept the settlement and allow the rest of the transaction to proceed."
George Slover, senior policy counsel for the advocacy group Consumers Union, which opposed the deal, said this merger posed anticompetitive questions to an unprecedented degree.
"The combination of CVS and Aetna creates an enormous market force that we haven't seen before, straddling more market sectors and creating new and potentially far-reaching profit-maximizing incentives to undermine competition," Slover said in a statement.
The conditional approval comes just shy of a month after the DOJ signed off on a $52 billion deal between Cigna and Express Scripts.
Brian Marcotte, CEO of the National Business Group on Health, told The New York Times that the companies "are feeling pressure to do something different or it will be done to them."
CVS Health President and CEO Larry J. Merlo called Wednesday's announcement "an important step" toward the two companies' goals.
"We are pleased to have reached an agreement with the DOJ that maintains the strategic benefits and value creation potential of our combination with Aetna," Merlo said in a statement. "We are now working to complete the remaining state reviews."
Merlo said the merger will allow CVS and Aetna to combine their technology, data, and analytics to serve patients in new and more-holistic ways.
Hospitals had opposed the measure, arguing that they do not 'dump patients.'
A bill signed into law late last month by California Gov. Jerry Brown imposes new rules on hospitals discharging homeless patients.
The measure, which the California Hospital Association (CHA) opposed, was motivated by a number of news stories about hospitals releasing poor patients onto the streets without ensuring their safety.
A cancer patient released from UC Davis Medical Center after a double mastectomy, for example, was discharged from the hospital to a shelter that didn't have enough room for her, so she slept in a car for weeks on end, as The Sacramento Bee reported.
Similar stories have been reported across California and the rest of the country. A hospital in Baltimore, for example, was cited for sending a patient with mental illness to a bus stop last January in a hospital gown. (Maryland state senators responded by passing a patient bill of rights, but the measure faced resistance in the House of Delegates, as The Baltimore Sun reported.)
Under the new California law, which takes full effect in July, hospitals in the state will have to write discharge planning policies for homeless patients and coordinate with social service agencies in the area. Before releasing a homeless patient, the hospitals must verify that the patient was fed, clothed, and given appropriate medication. Such discharges may take place only during the daytime, and local ordinances may impose even stricter requirements.
This provision allowing more-stringent local ordinances is the main sticking point that remains for hospitals, CHA Vice President of Rural Health Care and Governance Peggy Wheeler told the Bee, adding that healthcare organizations generally do their best to keep homeless people safe in situations complicated by their health conditions and limited social services.
"Our hospitals don't dump patients," Wheeler told the Bee. "Sometimes, patients elope from the hospital in their gowns and with their wristbands. They're not prisoners. We attempt to get people into shelters, but sometimes they refuse, or there are simply no beds."
Although there are no penalties prescribed by the law, facilities found to violate it could run into trouble with state and federal regulators.
All sites now use the same, integrated electronic health record and revenue cycle management systems.
The final Mayo Clinic sites to migrate to an Epic-based electronic health record (EHR) system finally made the jump over the weekend, bringing the Rochester, Minnesota–based nonprofit's systemwide rollout to a close.
Wrapping up the years-long process—which is part of a broader technology upgrade projected to cost $1.5 billion—marks "a historic milestone" that brings about 52,000 employees across 90 hospitals and clinics onto the same system, the organization said.
While the final cost of the Epic installation has not been disclosed, it's clearly a significant investment that Mayo leaders expect to pay dividends.
"We envision even greater collaboration among experts in delivering the patient care, research, and education that are hallmarks of Mayo," said Richard Gray, MD, co-chair of the initiative, in a statement.
Beyond providing access to health records in a single system, the rollout means that patients will be able to check in electronically and receive one consolidated billing statement for all Mayo sites, the organization said.
The news comes as Epic and its biggest rival, Cerner, compete for market share in a sector poised for consolidation. Providers, meanwhile, are scraping funds together for expensive EHR projects like the one Mayo just completed. For some smaller systems, the financial pressure has proven too much, with EHR installations being blamed as contributing factors in executive resignations and hospital bankruptcies.
Mayo's rollout plan anticipated some headaches and took steps to mitigate them, as MPR Newsreported last May, when the new system went live in Rochester. The Epic system had already been rolled out to Mayo Clinic Health System facilities in Wisconsin and Minnesota last year. The final sites to be added last weekend were in Florida and Arizona.