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Updated: 5 hours 21 min ago

Medicare Advantage Plans Cleared To Go Beyond Medical Coverage — Even Groceries

April 03, 2018

Air conditioners for people with asthma, healthy groceries, rides to medical appointments and home-delivered meals may be among the new benefits added to Medicare Advantage coverage when new federal rules take effect next year.

On Monday, the Centers for Medicare & Medicaid Services (CMS) expanded how it defines the “primarily health-related” benefits that insurers are allowed to include in their Medicare Advantage policies. And insurers would include these extras on top of providing the benefits traditional Medicare offers.

“Medicare Advantage beneficiaries will have more supplemental benefits making it easier for them to lead healthier, more independent lives,” said CMS Administrator Seema Verma.

Of the 61 million people enrolled in Medicare last year, 20 million have opted for Medicare Advantage, a privately run alternative to the traditional government program. Advantage plans limit members to a network of providers. Similar restrictions may apply to the new benefits.

Many Medicare Advantage plans already offer some health benefits not covered by traditional Medicare, such as eyeglasses, hearing aids, dental care and gym memberships. But the new rules, which the industry sought, will expand that significantly to items and services that may not be directly considered medical treatment.

CMS said the insurers will be permitted to provide care and devices that prevent or treat illness or injuries, compensate for physical impairments, address the psychological effects of illness or injuries, or reduce emergency medical care.

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Although insurers are still in the early stages of designing their 2019 policies, some companies have ideas about what they might include. In addition to transportation to doctors’ offices or better food options, some health insurance experts said additional benefits could include simple modifications in beneficiaries’ homes, such as installing grab bars in the bathroom, or aides to help with daily activities, including dressing, eating and other personal care needs.

“This will allow us to build off the existing benefits that we already have in place that are focused more on prevention of avoidable injuries or exacerbation of existing health conditions,” said Alicia Kelley, director of Medicare sales for Capital District Physicians’ Health Plan, a nonprofit serving 43,000 members in 24 upstate New York counties.

Even though a physician’s order or prescription is not necessary, the new benefits must be “medically appropriate” and recommended by a licensed health care provider, according to the new rules.

Many beneficiaries have been attracted to Medicare Advantage because of its extra benefits and the limit on out-of-pocket expenses. However, CMS also cautioned that new supplemental benefits should not be items provided as an inducement to enroll.

The new rules “set the stage to continue to innovate and provide choice,” said Cathryn Donaldson, of America’s Health Insurance Plans, a trade group.

“CMS is catching up with the rest of the world in terms of its understanding of how we keep people healthy and well and living longer and independently, and those are all positive steps,” said Ceci Connolly, chief executive officer of the Alliance of Community Health Plans, which represents nonprofit health insurance plans. Some offer non-emergency medical transportation, low-cost hearing aids, a mobile dental clinic and a “grocery on wheels,” to make shopping more convenient, she said.

UnitedHealthcare, the largest health insurer in the U.S., also welcomes the opportunity to expand benefits, said Matt Burns, a company spokesman. “Medicare benefits should not be one-size-fits-all, and continued rate stability and greater benefit design flexibility enable health plans to provide a more personalized health care experience,” he said.

But patient advocates including David Lipschutz. senior policy attorney at the Center for Medicare Advocacy, are concerned about those who may be left behind. “It’s great for the people in Medicare Advantage plans, but what about the majority of the people who are in traditional Medicare?” he asked. “As we tip the scales more in favor of Medicare Advantage, it’s to the detriment of people in traditional Medicare.”

The details of the 2019 Medicare Advantage benefit packages must first be approved by CMS and will be released in the fall, when the annual open enrollment begins. It’s very likely that all new benefits will not be available to all beneficiaries since there is “tremendous variation across the country” in what plans offer, said Gretchen Jacobson, associate director of the Kaiser Family Foundation’s Program on Medicare Policy. (Kaiser Health News is an editorially independent program of the foundation.)    

This is one of several vans that provides door-to-door service for seniors and adults with disabilities going to medical appointments and programs at the Institute on Aging in San Francisco. (Credit: Susan Jaffe)

Addressing a patient’s health and social needs outside the doctor’s exam room isn’t a new concept. The Institute on Aging, for example, is a California nonprofit that offers health, social, and psychological services for seniors and adults with disabilities. It has helped people in San Francisco and Southern California move from nursing homes to their own homes and provides a variety of services to make their new lives easier, from kitchen supplies to wheelchair ramps.

“By taking a more integrated approach to address people’s social and health needs, we have seen up to a 30 percent savings in health care costs compared to the costs of the same individuals before they joined our program,” said Dustin Harper, the institute’s vice president for strategic partnerships. The agency serves 20,000 Californians a year, including former nursing home residents, who qualify for Medicare or Medicaid, the federal-state health insurance program for low-income people, or both.

In addition to next year’s changes in supplemental benefits, CMS also noted that a new federal law allows Medicare Advantage plans to offer benefits that are not primarily health-related for Medicare Advantage members with chronic illnesses. The law and the agency’s changes are complementary, CMS officials said. They promised additional guidance  in the coming months to help plans differentiate between the two.

Don’t Get Tripped Up By The IRS Tweak To Health Savings Accounts

April 03, 2018

It’s tax time, and this week I answered questions from readers about the penalty for not having health insurance as well as changes to health savings accounts. I also discuss health insurance coverage options for a reader’s parents who are immigrants and green card holders.

Q: I heard that health savings account rules would be loosened under the new spending bill passed by Congress last month. Did that happen?

No. In fact, the standards have become slightly tighter this year.

In recent years, members of Congress from both parties have supported expanding eligibility for health savings accounts and how the money in them can be spent, among other things. To date, though, those proposals haven’t become law.

Health savings accounts, which are linked to high-deductible health plans, continue to multiply. In 2017, there were 22 million accounts totaling more than $45 billion in assets, an increase of 11 percent in the number of accounts over the previous year, according to Devenir, a firm that offers advice on HSA investments.

Money deposited in HSAs is tax-deductible, grows tax-free and can be used without owing tax to pay for medical expenses. Advocates promote the plans as a way to help consumers play a larger role in controlling their health spending and say that the tax advantages help people afford care.

The Internal Revenue Service announced last month that the maximum amount individuals with family coverage could contribute to their health savings accounts would actually be reduced slightly from their previously announced limit for 2018. The maximum contribution for people with individual coverage in 2018 remains $3,450.

The $50 family coverage contribution reduction, from $6,900 to $6,850, is pretty small change. It happened because the federal government altered the way it calculates inflation adjustments to the contribution limits.

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But ignoring the new limit could create headaches for people who have already made the maximum HSA contribution for the year based on the $6,900 figure, said Roy Ramthun, president of HSA Consulting Services. If you don’t ask the bank that handles your HSA to return the $50 plus any earnings that have accrued before the next tax season, your taxable income will be off by that amount, plus you’ll be on the hook for a 6 percent penalty for exceeding the maximum contribution allowed.

That’s not going to amount to a lot of money, but there’s more than financial pain to consider, Ramthun said. “Do you really want to give the IRS a reason to come find you?”

Q: I didn’t have health insurance for one month last year, in January 2017. Do I owe a penalty for not having health insurance when I file my taxes this spring?

If you were uninsured for only one month in 2017, you won’t owe a penalty. People can be uninsured for up to three consecutive months during the year without triggering a tax penalty for not having coverage, said Tara Straw, a senior policy analyst at the Center on Budget and Policy Priorities.

This year, for the first time, the Internal Revenue Service won’t accept electronically filed tax returns unless filers report whether they had health insurance all year, were exempt from the requirement or will pay a penalty for not having had coverage. Tax refunds that are due with paper returns that don’t have this information may be delayed, according to the IRS.

In your case, you’ll file Form 8965 with your tax return to report a short-term coverage gap and claim an exemption from the coverage requirement. Your employer — or your insurer, if you purchased coverage on your own — will send a form to the IRS stating that you were covered for the other 11 months, Straw said.

Those penalties — $695 or 2.5 percent of your household income, whichever is greater — are also in force for 2018 coverage. But starting next year, you won’t owe a penalty no matter how long you may be uninsured. The tax reform law eliminated the penalty for not having health insurance in 2019.

Q: What health insurance options are available for my parents, who are seniors who worked in India and are now retired in the United States with green cards? 

Depending on their situation, people like your parents who are legally entitled to reside permanently in the United States have a number of options.

From your description, it’s unclear whether they live on their own or with you. If you claim them as dependents on your taxes, you might consider adding them to your own health insurance plan, said Shelby Gonzales, a senior policy analyst at the Center on Budget and Policy Priorities.

Assuming your parents haven’t worked for at least 10 years in the United States, they’re probably not eligible for premium-free hospitalization coverage under Medicare, the federal health insurance program for people age 65 and older, Gonzales said. If they’ve lived in the States for at least five years and their income and other resources meet state eligibility guidelines, however, they could qualify for Medicaid, the federal-state program for low-income people.

If they don’t qualify for either government health program, they could consider buying a health insurance plan on the state marketplace or through a broker.

If they buy a marketplace plan, they could be eligible for premium subsidies if their income is less than 400 percent of the federal poverty level (about $66,000 for a couple in 2018), said Gabrielle Lessard, a senior policy attorney at the National Immigration Law Center.

Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column.

Medicaid Minus Stigma: In Indian Country, It’s Part Of The Fabric Of Life

April 02, 2018

This KHN special series examines the reach and the role of Medicaid, the federal-state program that began as a medical program for the poor but now provides a wide variety of services for a large swath of America.

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GALLUP, N.M. — On a crisp sunny day, Tyson Toledo, a precocious 5-year-old boy, hobbled into a private health clinic to have his infected foot examined.

Pediatrician Gayle Harrison told his mother to continue to apply antibiotic ointment and reminded them to come back if the swelling and redness worsened.

The appointment at Rehoboth McKinley Christian Health Care Services’ outpatient center comes at no charge for the Toledo family, who live 30 miles away on the Navajo Nation Reservation. That’s because Tyson is covered by Medicaid, the state-federal health insurance program for the poor.

New Mexico leads all other states in Medicaid enrollment, with 43 percent of its residents on the program. That’s partly because the state has a large Native American population, living in communities historically riven with poverty. The numbers offer an eye-popping snapshot of the promotion of Medicaid expansion since 2013: Nearly a third of the 900,000 New Mexico beneficiaries joined as part of the Affordable Care Act’s option to expand Medicaid.

This story also ran on CNN Money. This story can be republished for free (details). Kaiser Health News is examining Medicaid’s role in the U.S. as the health care program comes under renewed fire from Republicans who generally want to put the brakes on the program, even as many Democrats credit the expansion with reducing the number of uninsured Americans to historic lows. Conservatives view the costs as prohibitive for state and federal budgets.

Nina Owcharenko, a senior research fellow in health policy with the conservative Heritage Foundation, said the enrollment boost is “not a positive story.” While the high enrollment underscores the pervasive poverty in New Mexico, it also signals surging costs for taxpayers, she said.

“I am growing more concerned about the cost of shifting Medicaid dollars to the federal government and without a budget cap on the program. … That is a dangerous fiscal course for the country,” she said.

“This is a problem that needs to be fixed. … We need to find a way that is more rational and more fiscally sustainable,” said Owcharenko, who was a top Health and Human Services official in 2016.

Tyson Toledo and his mother, Stephanie Ranger, sit outside Rehoboth McKinley Christian Health Care Services’ outpatient center in Gallup, N.M., in October 2017. (Heidi de Marco/KHN)

In Gallup, a city of about 23,000 people, Medicaid is as much a part of the fabric as Native American-crafted jewelry and green chile sauce. Recipients include the waitress at the downtown bar, the clerk at a loan store and the maid at the hotel.

And multigenerational families are common in Gallup and surrounding McKinley County. Tyson’s mother, grandmother, aunt and uncle also are enrolled in Medicaid.

Fifty-two percent of the county’s residents have coverage through the program. That’s the highest rate among U.S. counties with at least 65,000 people, according to a KHN analysis of Census data.

Tyson Toledo, his mother and grandmother are all are on Medicaid. Multigeneration Medicaid families are common in McKinley County, N.M., where 52 percent of residents are on Medicaid, the highest rate among U.S. counties. (Heidi de Marco/KHN)

“Pretty much everybody is on Medicaid here,” said Libby Garcia, 36, who lives in a trailer overlooking downtown Gallup.

Garcia, who works as a custodian at a local Head Start agency, quit a second job cleaning businesses because that extra income would put her over the eligibility level for coverage. She can’t afford private insurance, and Medicaid gives her free care at a community health center and insulin and other medicines for her diabetes without out-of-pocket costs, she said.

McKinley, where more than 40 percent of the population lives below the federal poverty level ($12,140 for an individual), is the nation’s only county of at least 65,000 people in which more than half the population is on Medicaid. Nationwide, about 23 percent of Americans are enrolled, with more than 16 million people added since the expansion.

In McKinley County, many residents see Medicaid as vital. There’s no stigma around it, and enrollees and providers speak positively about it.

“Pretty much everybody is on Medicaid here,” Libby Garcia says of her mobile home community in Gallup, N.M. Garcia, who lives in a trailer overlooking downtown Gallup says she had to quit her second job because she would make too much to qualify for Medicaid. The federal-state program for low-income people enables her to get free care at a nearby community health center and afford insulin and other diabetes medication. (Heidi de Marco/KHN)

The heavy concentration of Medicaid in this high-altitude desert is a result of two factors: the high poverty rate and the Indian Health Service’s relentless work to enroll patients in the program.

Large swaths of McKinley County lie within the Navajo Nation, the largest Indian reservation in the United States. Nearly 80 percent of McKinley County’s 75,000 residents are Native American.

Medicaid enrollees in Gallup say the coverage has opened up new opportunities for them to get more timely care, especially surgery and mental health services. It has been vital in combating high rates of obesity, teen birth, suicide and diabetes, according to local health officials.

Outside a local Dollar Tree store, Linda James, 55, who sells jewelry she makes, said Medicaid paid for her son’s braces and her teenage daughter’s drug rehabilitation. “It’s a lifesaver for us,” she said, noting it helps her get quicker care than waiting at Indian Health facilities.

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‘Safety Net’ For Indian Health Service

For the Gallup Indian Medical Center — the main Indian Health Service facility in the area — Medicaid has stoked the local budget and eased overcrowding. When patients on Medicaid are treated there, the center is reimbursed by the program. That money supplements the Indian Health Service’s annual federal grant, which is set by Congress.

Last year, Medicaid funding made up 34 percent of the center’s $207 million budget. Among all U.S. hospitals, Medicaid provided only 18.5 percent of revenue. “Medicaid has become the safety net for the Indian Health Service,” said John Ratmeyer, deputy chief of pediatrics at the Gallup Indian Medical Center. “It’s providing an extra pod of money to pay for services not within our hospital system.”

Medicaid this year is projected to add more than $800 million to Indian Health Service hospital funding, supplementing the $4.8 billion in annual federal appropriation.

The medical center in Gallup looks like a relic of the 1960s, with fading-blue exterior walls, sandstone-colored outpatient trailers, cramped nursing stations and hard plastic seats in its emergency room waiting area. The hospital doesn’t have an MRI machine or any designated private patient rooms.

Native Americans can receive free care at Indian Health Service hospitals and its clinics, such as this facility in Gallup, N.M. (Heidi de Marco/KHN)

“One of our biggest challenges is just maintaining the building,” said Dr. Kevin Gaines, acting deputy clinical director at the hospital. The extra money coming from patients covered by Medicaid are helping the center pay for a badly needed $13 million modernization of its ER and urgent care unit, he said.

Another problem is a shortage of nurses and doctors, which leads to long wait times for patients — three or four months for primary care appointments or for dental services or eyeglasses. Some patients seeking specialized care need to go 140 miles to Albuquerque, a hardship for many Native Americans, some of whom don’t have access to cars or money for such transportation. But Medicaid will cover some non-emergency transportation for medical appointments.

State Feels The Pinch

The county has a host of medical challenges related to its economic problems. According to a 2016 report sponsored by Rehoboth McKinley, the county’s suicide rate for ages 10 and up is twice the U.S. average, alcohol-related deaths are nearly four times higher than the national rate, and teen birth rates are three times the U.S. average. Average life expectancy in McKinley is 74 years, four years less than the typical U.S. life span.

Without Medicaid covering doctor visits and substance abuse treatment, the situation would likely be worse, said Larry Curley, director of program development for Rehoboth McKinley.

This kind of care doesn’t come cheap. The federal government paid the full cost of the expansion through 2016, but now New Mexico and other states have to pick up a 5 percent share. To deal with rising costs, the state in 2017 began cutting the fees it pays hospitals, doctors and other providers.

Asked about her Medicaid health plan while at a popular doughnut shop, Corrine Rosales, 60, of Gallup, said it’s invaluable for her and her two young nieces, Mya and Destiny. Medicaid pays for her diabetes medications and helped Mya get treated for attention-deficit disorder.

“I don’t know what we would do without it,” she said.

California Sues Sutter Health, Alleging Excessive Pricing

March 30, 2018

California’s attorney general announced a lawsuit Friday against Sutter Health, alleging the hospital giant engaged in anticompetitive conduct that drove up prices for patients and employers in the state.

The lawsuit marked a bold move by state Attorney General Xavier Becerra against the dominant health care system in Northern California as concerns mount nationally about consolidation among hospitals, insurers and other industry middlemen.

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“It’s time to hold health care corporations accountable,” Becerra said at a news conference Friday. “We seek to stop Sutter from continuing this illegal conduct.”

Sutter, which owns 24 hospitals, reported net income of $893 million last year on $12.4 billion in revenue.

In a statement Friday, Sutter said it had not yet seen the state’s complaint and couldn’t comment on specific claims.

Overall, Sutter said, “healthy competition and choice exists across Northern California” for consumers seeking medical care, and that its charges for an inpatient stay are lower than what other nearby hospitals charge.

“Sutter Health is proud to save patients, government payers and health plans hundreds of millions of dollars each year by providing more efficient and integrated care,” the statement said.

This high-profile legal fight will attract attention from employers and policymakers across the country amid growing alarm about the financial implications of industry consolidation. Large health systems are gaining market clout and the ability to raise prices by acquiring more hospitals, outpatient surgery centers and physicians’ offices.

Martin Gaynor, a health care economist at Carnegie Mellon University, said California’s lawsuit may portend more litigation at the state level.

“There are a number of markets in the U.S. that are dominated by one very large, powerful health system,” Gaynor said. “It could be that we’re going to see a new level of activity by state antitrust enforcers looking at competition in their own backyards.”

The complaints about Sutter’s high prices and market power have persisted for years.

A 2016 study found that hospital prices at Sutter and Dignity Health, the two biggest hospital chains in California, were 25 percent higher than at other hospitals around the state. Researchers at the University of Southern California said the giant health systems used their market power to drive up prices — making the average patient admission at both chains nearly $4,000 more expensive.

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This week, researchers at University of California-Berkeley issued a report that examined the consolidation of the hospital, physician and health insurance markets in California from 2010 to 2016. The authors said 44 of California’s 58 counties had “highly concentrated” hospital markets.

The problem is worse in Northern California, and the report said prices for medical procedures are often up to 30 percent higher there than in Southern California, which has more competition.

“Consumers are paying more for health care as a result of market consolidation. It is now time for regulators and legislators to take action,” according to the report by the Petris Center on Health Care Markets and Consumer Welfare at UC-Berkeley.

After the report was issued Monday, Becerra said his office would be reviewing those findings and pledged to apply more scrutiny to health care mergers and anticompetitive practices across the state.

Sutter Health has gobbled up doctor practices across the Bay Area, gaining market muscle that has pushed costs upward. Obstetricians employed by Sutter Health, for example, are reimbursed about three times more for the same service than independent doctors, according to a KHN review of OB-GYN charges on several insurers’ online cost estimators. It’s a key reason why Northern California is the most expensive place in the country to have a baby.

Becerra’s lawsuit could build off a similar civil case filed in 2014 by a grocery workers’ health plan.

“It’s time to hold health care corporations accountable,” California Attorney General Xavier Becerra said at a news conference Friday. (Ana B. Ibarra/KHN)

The plaintiffs in that case, scheduled for trial next year, allege Sutter is violating antitrust and fair competition laws. The plaintiffs have been requesting documents related to contracting practices, such as “gag clauses” that prevent patients from seeking negotiated rates and choosing a cheaper provider. They also are challenging “all-or-nothing” terms that require every facility in a health system to be included in insurance networks.

In November, the state judge handling the grocery workers’ case said Sutter was “grossly reckless” when it intentionally destroyed 192 boxes of documents that employers and labor unions were seeking in the lawsuit. San Francisco County Superior Court Judge Curtis E.A. Karnow said Sutter destroyed documents “knowing that the evidence was relevant to antitrust issues. … There is no good explanation for the specific and unusual destruction here.”

The lead plaintiffs, the United Food and Commercial Workers and its Employers Benefit Trust, are a joint employer-union health plan that represents more than 60,000 employees, dependents and retirees. The court certified its case as a class action in August, allowing hundreds of other employers and self-funded health plans to potentially benefit from the litigation.

In addition to its 24 hospitals, Sutter’s nonprofit health system has 35 surgery centers, 32 urgent-care clinics and more than 5,000 physicians in its network.

KHN senior correspondent Jenny Gold and reporter Ana Ibarra contributed reporting.

Calif. Bill Targets Profiteering In Addiction Treatment, Dialysis Industries

March 28, 2018

A California lawmaker is seeking to rein in addiction treatment centers and dialysis providers accused of profiteering off vulnerable patients by collecting millions of dollars in inflated medical claims.

Supporters of the proposed legislation, scheduled for a key Senate hearing next month, say some providers, industry middlemen and charities with ties to providers are signing patients up for health insurance and paying the premiums only to line their own pockets. They say these arrangements drive up insurance costs industrywide.

“Providers have a right to make a profit, but certainly not when those profit motives can compromise the health and well-being of patients and raise premiums for other Californians,” state Sen. Connie Leyva (D-Chino), the chief sponsor of the bill, said in a statement.

A major insurer, Blue Shield of California, and a powerful labor group, the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), are also supporting the measure, Senate Bill 1156.

Premium assistance programs, in which providers and other outsiders step in to cover premiums for patients who cannot afford them, have drawn the ire of health insurers since the Affordable Care Act rolled out in 2014.

The health law made it easier for outside parties to quickly enroll patients who need lengthy or expensive treatment, because the law prevented insurers from denying applicants with preexisting conditions. Insurers say it opened the door to more fraudulent or unjustified billing, which has mostly occurred on individual policies purchased in the state insurance marketplaces set up under the ACA.

The opioid crisis has further inflamed the problem. There are widespread reports of patient brokers and unscrupulous treatment centers enrolling patients in private plans and even entering phony information to make sure they are deemed eligible. The patient might actually be eligible for government-funded programs such as Medicaid or Medicare, but commercial plans typically pay more. Within weeks, the insurer is billed tens of thousands of dollars, which may be shared among the parties in the scheme.

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Meanwhile, critics say, an addicted patient may receive subpar care and relapse, causing the insurer to pay still more.

Treatment providers and other opponents of the California bill accuse insurers of exaggerating the problem. They also warn against impeding consumers’ ability to receive help from charities and other legitimate groups when so many households struggle to pay medical bills.

Representatives of the addiction treatment industry acknowledge that cases of fraud and abuse exist in patient referrals, billing and payment of premiums. But they don’t think that this state proposal would be as effective as stronger enforcement of federal anti-kickback laws that target patient-steering and conflicts of interest.

Stampp Corbin, president of the Addiction Treatment Advocacy Coalition, a nonprofit group in Los Angeles that represents California’s for-profit treatment centers, said the bigger problem is that insurers improperly withhold payments for drug treatment or vastly underpay for services. He said that makes rehab centers less likely to accept new patients at a time when demand is skyrocketing.

“This bill is just a band-aid,” Corbin said. “It’s not addressing any of the issues created by health plan underpayments or lack of payment.”

The American Kidney Fund, which has come under fire for its premium assistance program, has said anecdotal reports of patients being steered into private coverage are overblown.

Last year, the nonprofit group, which receives funding from drugmakers and dialysis providers, said it helped more than 3,800 dialysis patients in California pay their health insurance premiums. Roughly 35 percent of those patients had employer plans and 15 percent were on individual policies, but about half were on Medicare or supplemental Medigap plans, which also can require premiums.

In a statement, the kidney group blasted the California bill, saying it “seeks to limit those patients’ access to lifesaving financial assistance and is nothing more than a thinly-veiled attempt by large health insurance companies to kick kidney patients off their insurance plans.”

Under the legislation, third-party groups would have to certify that patients are not eligible for Medicare, Medicaid or federal subsidies on an individual policy. They also would have to disclose to state insurance regulators in advance that they intend to pay a patient’s premiums.

The bill would require third parties to pay premiums for the full plan year and not stop after treatment has been rendered. If the outside party fails to fulfill the law’s provisions, the health plan could pay for services at the prevailing Medicare rate, which would presumably be lower than the commercial reimbursement.

The Senate Health committee is scheduled to take up the bill at an April 18 hearing.

The insurance industry’s main lobbying group, America’s Health Insurance Plans, said there’s a role for legitimate charities to assist consumers. But the trade group said stricter rules are needed to address conflicts of interest.

Blue Shield of California, based in San Francisco, estimated that it paid out $64 million in claims from January 2014 to June 2016 on policies involving third-party premium payments.

In 2016, the Obama administration issued rules barring dialysis facilities from making premium payments for health plans in the individual market without disclosure to the insurer and confirmation from the health plan that third-party payments would be accepted. But a federal judge in Texas blocked the regulations from going into effect.

It’s unclear whether the Trump administration will issue new rules, leaving state leaders to grapple with the issue for now.

One of the main supporters of the California bill, SEIU-UHW, has been sharply critical of the dialysis industry, singling out what it says are outsized profits.

Next week, SEIU said it plans to file more than 600,000 petition signatures with state officials in hopes of putting a measure on the November ballot to limit the revenue collected by dialysis companies to 15 percent above the cost of patient care.

Bill Of The Month: For Toenail Fungus, A $1,500 Prescription

March 16, 2018

When Anne Soloviev, a retiree who lives in Washington, D.C., received a prescription to treat toenail fungus, she never thought to ask how much it cost. As it turned out, she was prescribed a topical medication costing almost $1,500. (Cheryl Diaz Meyer for KHN)

During Anne Soloviev’s semiannual visit to Braun Dermatology & Skin Cancer Center in Washington, D.C., in January, the physician assistant diagnosed fungus in two of her toenails. Soloviev is vigilant about getting skin checks, since she is at heightened risk for skin cancer, but she hadn’t complained about her toenails or even noticed a problem.

The assistant noted some unusual discoloration where the nail meets the skin. “They took a toenail clipping and said, yeah, you have a fungus,” Soloviev recalled.

So the PA called a prescription into a specialty pharmacy with mail-order services, which would send medication to Soloviev’s Capitol Hill home.

It seemed like an easy fix to an inconsequential health issue. “I did not ask how much it cost — it never crossed my mind, ever,” said Soloviev, a former French teacher, who still works part time.

Then the bill came.

Patient: Anne Soloviev, 77 on March 18, of Washington, D.C.

The Bill: $1,496.09 for Kerydin, a topical medication that treats toenail fungus. Originally produced by Anacor Pharmaceuticals Inc., it is now a product of Sandoz, a Novartis division.

Service Provider: My Express Care Pharmacy, plus Braun Dermatology & Skin Cancer Center

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The Medical Treatment: Shortly after the physician assistant phoned in the prescription to My Express Care Pharmacy, in Maryland, the pharmacy contacted Soloviev for her health insurance information.

Soloviev is covered by Medicare, Parts A and B, and has supplemental insurance through her late husband’s government health benefits that covers prescription drugs. She also has a health reimbursement account (HRA), which contains almost $1,500 pretax dollars each year to pay for uncovered medical expenses. She typically uses that pot of money to cover copays for the other medicines she takes regularly.

Kerydin, the toenail medication, arrived by overnight mail, and an automatic refill came a few weeks later. She began swabbing it on the two toenails, as directed, having been told it would take about 11 months to treat the fungus.

She thought little of it.

But when Soloviev went to her local CVS to pick up another medication — a statin that is usually paid for by her HRA — she discovered her reserve was empty.

Anne Soloviev’s prescription for Kerydin, at $1,496.09 per monthly refill, wiped out her entire health reimbursement account for the year. (Courtesy of Anne Soloviev)

Unbeknownst to her, Kerydin, which it turned out costs nearly $1,500 per monthly refill, had wiped out her entire reimbursement account.

What Gives: We’re talking about mild toenail fungus. The price tag is difficult to rationalize, experts said.

“Reality check — this is $1,500 for a medicine to treat [it],” said Wendy Epstein, an associate law professor at DePaul University, who researches health care law. “That’s quite a chunk of change.”

Leslie Pott, Sandoz’s vice president of communications, explained that Kerydin is patent-protected and priced “at parity” with its one market competitor, Jublia. She also pointed out that to secure a place on an insurer’s list of approved drugs — its formulary — the drugmaker often had to offer substantial discounts to insurers and various middlemen. “We have no visibility into the extent to which these discounts are passed onto patients or payers,” she wrote in an email.

When Anne Soloviev visited the dermatologist in January, the physician assistant diagnosed fungus in two of her toenails and gave her a prescription for a topical medication. “I did not ask how much it cost — it never crossed my mind, ever,” Soloviev said. (Cheryl Diaz Meyer for KHN)

There are many prescription treatment options for toenail fungus — both older medicines in pill form and newer topical treatments such as Kerydin, said Dr. Shari Lipner, an assistant professor at Weill Cornell Medicine and director of its nail unit. The patient in this case would have been a candidate for “quite a few” of them.

Patients are likely to pay less for the pills, for which a course of treatment lasts three months, compared with the newer topical treatments, she said, adding that the pills also seem to have greater efficacy.

In its application for Food and Drug Administration approval granted in 2014, Anacor Pharmaceuticals highlighted that a yearlong treatment of Kerydin completely cured toe fungus in 6.5 percent of patients for one trial, and 9.1 percent of patients in another.

Over-the-counter treatments are also available, but there’s not much data on them, Lipner said.

Xavier Davis, Braun Dermatology & Skin Cancer Center’s practice manager, said a drug’s price tag simply isn’t a factor when prescribers recommend a course of treatment.

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“When our providers are treating patients, we’re not treating them based on what the cost’s going to be. We look for what’s the best care for the patient,” Davis said. “If the patient calls and says that’s too expensive, then we’ll look for alternatives.”

Kavita Patel, a nonresident fellow at the Brookings Institution and a practicing physician, said this process contributes to the problem. “My sister’s a dermatologist, and she’ll do the same thing — she’ll prescribe and she doesn’t know. You’re getting at many layers of how [messed] up the system is, starting with the doctor doesn’t know.”

And patients often don’t see the actual price. Or they see it too late, when they’re at the pharmacy counter picking up medicines they have been told they need or in a roundabout way discover unexpected payouts.

In January, Soloviev’s insurance plan was billed the full price of Kerydin. Of that, $1,439.57 came from her HRA. The difference, $56.52, was covered by a patient-assistance program from the drug manufacturer, explained Jonathan Lee, a pharmacist for My Express Care.

In February, when Soloviev’s prescription was refilled, her plan was again billed the full drug price. But she didn’t know about that either. A manufacturer coupon was applied to cover what remained of her insurer’s $2,000 annual deductible and the $60 copay. Her insurance then kicked in to pay the difference.

Such patient-assistance programs and coupons are meant to insulate patients from cost sharing, so that they don’t feel a pinch from a drug’s price. But in this case, the drugmaker’s patient-assistance program apparently took effect only once Soloviev’s HRA has been wiped out, allowing the manufacturer to maximize revenue from both patient and insurer.

DePaul University’s Epstein said it took her “15 minutes to figure out what was going on” here. And, unlike the average patient, she studies this issue for a living.

Lee, the pharmacist, said even he didn’t realize that money could be withdrawn directly from a patient’s HRA without her knowledge, and he’s been in the business for the better part of a decade.

None of that is consolation for Soloviev, who said: “I just find it is outrageous for a fungal medicine to cost $1,400, to be prescribed for 11 months, and for neither the PA nor the pharmacy to warn you,” Soloviev said.

Resolution: Though she has told My Express Care not to renew the prescription, Soloviev’s HRA is depleted. For the rest of the year, she’ll have to pay out-of-pocket costs for any other medications, an expense she hadn’t planned on.

The Takeaway: For even the most informed of patients, getting a new prescription can mean walking through a financial minefield. And Soloviev hit a number of booby traps.

Bottom line, experts say, medical professionals should make the patient aware if they prescribe a high-priced medicine and explain why it’s beneficial.

Patients should play defense and ask their physicians about the cost of every new prescription. They should ask again at the pharmacy — even if that means calling a mail-order pharmacy. Because costs can vary depending on each patient’s coverage, they may need to contact their insurance carrier or the PBM that handles their medicine claims.

And if the cost is extremely high, they should ask their doctor about generic or over-the-counter alternatives.

“This is an important component of the decision a patient’s going to make,” Epstein said. “If it’s toenail fungus and not life-or-death, it strikes me … an individual might want to have relevant data.”

This is a monthly feature from Kaiser Health News and NPR that will dissect and explain real medical bills in order to shed light on U.S. health care prices and to help patients learn how to be more active in managing costs. Do you have a medical bill that you’d like us to see and scrutinize? Submit it here and tell us the story behind it.

Patients Overpay For Prescriptions 23% Of The Time, Analysis Shows

March 13, 2018
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As a health economist, Karen Van Nuys had heard that it’s sometimes cheaper to pay cash at the pharmacy counter than to put down your insurance card and pay a copay.

So one day, she asked her pharmacist how much her prescription would cost if she didn’t use her health coverage and paid cash.

“And sure enough, it was [several dollars] below my copay,” Van Nuys said.

Van Nuys and her colleagues at the University of Southern California Schaeffer Center for Health Policy & Economics decided to launch a first-of-its-kind study to see how often this happens. They found that customers overpaid for their prescriptions 23 percent of the time, with an average overpayment of $7.69 on those transactions.

The USC study, released Tuesday, analyzed the prices that 1.6 million people paid for 9.5 million prescriptions in the first half of 2013, based on data from Optum Clinformatics, an organization that sells anonymized claims data for analysis, and National Average Retail Price (NARP) data, which contained drug prices paid by insurers and was based on a national survey of pharmacists.

It showed that the overpayments totaled $135 million during that six-month period.

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The practice of charging a copay that is higher than the full cost of a drug is called a “clawback” because the middlemen that handle drug claims for insurance companies essentially “claw back” the extra dollars from the pharmacy. (The middlemen, known as pharmacy benefits managers, include Express Scripts, CVS Caremark and OptumRx.)

Here’s how it works: After taking your insurance card, your pharmacist says you owe a $10 copay, which you pay, assuming that the drug costs more than $10 and your insurance is covering the rest. But unbeknownst to you, the drug actually cost only $7, and the PBM claws back the extra $3. Had you paid out-of-pocket, you would have gotten a better deal.

Until Van Nuys and her colleagues went digging, no one knew how common the practice was.

“Clearly this is going on [at a] much higher frequency than most people imagine,” said Geoffrey Joyce, who directs health policy at the center and was a coauthor on the study. “You’re penalizing people for having insurance.”

(Story continues below.)

The findings cover only a small portion of the population over a short time span, so they might not be perfectly reflective of what’s going on nationally, Joyce said. But they debunk the perception that clawbacks are rare.

Steve Hoffart, who owns Magnolia Pharmacy, an independent compounding and retail pharmacy in Magnolia, Texas, said clawbacks are still happening — even though Texas legislators passed a law to prohibit them. Hoffart said he collects and sends $1,100 or $1,200 a month in clawbacks to the PBMs.

The National Community Pharmacists Association, of which Hoffart is a member, said the new research “is illustrative of just one of many ways that PBMs’ lack of transparency disadvantages pharmacy patients. … If you want to reduce prescription drug costs, policymakers must demand greater transparency from PBMs.”

The trade group for the PBMs, the Pharmaceutical Care Management Association, said that overall the PBMs bring down the total cost of prescription drugs, lowering costs for patients and insurers.

“We support the patient paying the lowest price available at the pharmacy counter,” the group said in a statement.

The USC researchers found that brand-name drugs had the highest clawbacks — an average overpayment of $13.46 per prescription. Clawbacks on generic drugs were $7.32, on average. The drug with the most frequent clawbacks was zolpidem tartrate — generic Ambien, a drug used to treat insomnia.

Although the research team was able to obtain copay data, it didn’t have data on what the PBMs paid for the drugs, said Van Nuys, the lead study author and executive director of the Schaeffer Center’s life sciences innovation project. As a stand-in, the reserachers used the National Average Retail Price data, which existed for a short period in 2013. They included clawbacks only of $2 or more.

Sometimes, the clawbacks are stunning. The day before Hoffart testified in favor of Texas’s new anti-clawback law, a patient was charged a $42.60 copay for a generic version of simvastatin, a statin drug. The patient could have paid $18.59 out-of-pocket, and the clawback was $39.64, Hoffart said, adding that the clawback made him lose money on the transaction.

Patients often aren’t told they could pay less without using insurance unless they ask.

“If they don’t ask, they’re not going to get the information they need,” Hoffart noted.

But even then, some insurance plans prohibit pharmacists from telling patients due to gag clauses. Six states have prohibited the gag clauses and 20 more are considering similar legislation, according to the National Conference of State Legislatures.

How Medicaid Became A Go-To Funder For Schools

March 09, 2018

This KHN special series examines the reach and the role of Medicaid, the federal-state program that began as a medical program for the poor but now provides a wide variety of services for a large swath of America.

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OAKLAND, Calif. — Gerardo Alejandrez used to punch classmates, throw chairs and curse at his teachers, conduct that forced him to switch from school to school. “I had a lot of anger issues,” the 16-year-old said recently.

Then Gerardo entered a class at Oakland Technical High School for students who have mental health or behavior issues. In that classroom, the teacher gets support from Erich Roberts, a psychiatric social worker assigned to the group. Oakland Unified School District bills Medicaid, the nation’s insurance program for low-income residents, for Roberts’ services.

Those payments officially cover the time he spends — in and out of the classroom — providing therapy and other assistance for nine Medicaid-covered youths as well as meeting with their family members. Roberts’ presence in the classroom is also an asset for the teacher and four other kids in the class who are not on government insurance. Many of the students in the class would likely drop out without the extra help, Roberts said.

Medicaid, created in 1965 to provide health insurance to the poor, now functions as a lifeline for millions of American students such as Gerardo — whose grades have improved and who wants to become a fashion designer — as well as hundreds of school districts across the country like Oakland Unified. The public insurance program has evolved so that it now finances myriad education-related services, including transportation for kids with disabilities, school clinics and counseling for children from turbulent backgrounds. Medicaid funds are now woven into the nation’s educational system.

But as Congress seeks to cut federal health spending, the use of Medicaid dollars in schools could come under new scrutiny. Critics question whether schools are the best entities to provide all the services they now do, and if the educational system has become too reliant on the health program. Educators and advocates counter that schools are the opportune place to address health-related issues and that federal law requires them to provide such benefits. And, they say, if Medicaid doesn’t pay, who will?

With a Republican administration vowing to trim Medicaid, Kaiser Health News is examining how the U.S. has evolved into a “Medicaid Nation,” where huge swaths of Americans rely on the program, directly and indirectly, often unknowingly. Medicaid’s role in schools is a telling example.

Medicaid spends only $4 billion of its $400 billion annual budget in schools — a “very small portion of the pie,” said Jessica Schubel, a senior policy analyst at the bipartisan Center on Budget and Policy Priorities. But for the school districts providing an array of services that have quietly become vital to students and families, losing this funding source would be immense, she said, “a big deal.”

Rodney Davis (right) became anxious and stopped wanting to go to school until he started seeing JP De Oliveira, a clinical counselor with the nonprofit East Bay Agency for Children. Medicaid pays for De Oliveira’s work with students at Hoover Elementary School in Oakland, Calif. (Heidi de Marco/KHN)

An Expanded Purview

The exact nature of the consequences would depend largely on the state and school districts, as jurisdictions deploy Medicaid funds differently. Since states must contribute a portion of total Medicaid funding to the federal allocation, the amount of money available for school district spending is in part determined by statehouse politics.

Generally, the federal program can help districts provide a variety of services, staff and equipment for their students. Although not all districts tap into funding, Medicaid will reimburse districts for in-school vision and hearing exams, occupational therapy for special-education students, even diabetes and asthma management. It covers wheelchairs and other medical devices so a student can attend class. In Oakland Unified School District and others around the nation, Medicaid also supports mental health services.

In 2017, a survey by the School Superintendents Association found that 68 percent of superintendents said Medicaid dollars funded school nurses, counselors and other health staff members. More than half of superintendents said they have worked to expand the number of students enrolled in Medicaid, which can increase revenue to the school districts. The funds also enable districts to pay staff salaries like Roberts’, buy medical equipment and generally bolster their education budgets, Schubel said.

Medicaid provides mental health services at Oakland Technical High School in Oakland, Calif. (Heidi de Marco/KHN)

Artwork portraying children’s feelings hangs in the office of JP De Oliveira, a clinical counselor at Hoover Elementary School in Oakland. (Heidi de Marco/KHN)

But some critics of Medicaid, notably political conservatives, question how funds flow into school districts and whether educators have wrongly plumbed the program to cover budget shortfalls. They argue that because the districts already receive other sources of federal funding for special-education and health services in schools, they don’t need federal Medicaid dollars to pay for them.

Lindsey Burke, director of the Center for Education Policy for the Heritage Foundation, a conservative think tank, argues that Medicaid expenses overall are growing too quickly. She said changes are needed to allow states and districts more flexibility and to reward “sound choices” about what to deliver using Medicaid money.

“Medicaid requires that poor children’s health care be covered, but does not prescribe that such coverage be delivered by school districts,” Burke said.

In the past, the government penalized some school districts for straying far afield from intended purposes. Ten years ago, federal investigators uncovered improper billing for school-based Medicaid services, and cases of waste and fraud in Texas, Massachusetts and New York. Dollars meant for medical care were used for children’s transportation or school officials’ salaries or benefits. Texas, in particular, was found in 2007 to have submitted close to 300 incorrectly coded claims, resulting in nearly $19 million of federal payments for costs not allowed under Medicaid’s in-school services program.

Schubel of the Center on Budget and Policy Priorities, who has studied Medicaid in schools, emphasized that school administrations are in the business of providing education — they are not in the business of providing medical services.

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Filling Gaps Left By The Feds

The increasing reliance by schools on Medicaid in many states is in some ways a byproduct of federal mandates to broaden educational services and a lack of specific funds to pay for them.

In 1975, Congress passed the Individuals with Disabilities Education Act (IDEA), which gave students with disabilities the right to a free education adapted to their needs. The law stipulates that Congress can pay up to 40 percent of the average cost per student for every child receiving special education. However, payments have never met that threshold.

Medicaid helps bridge the gap.

Among the students served by Medicaid in the classroom is Michael Walt, a 10-year-old with Williams syndrome, a genetic abnormality that causes heart problems and severe developmental delays. His school, Forestdale Elementary in Springfield, Va., provides a team of speech and occupational therapists to improve Michael’s physical and intellectual abilities.

Michael Walt, a pupil at Forestdale Elementary School in Alexandria, Va., was diagnosed with attention deficit hyperactivity disorder, autism and Williams syndrome, a condition linked to intellectual disabilities and heart conditions. Medicaid provided access to a team of therapists who taught him to walk, talk and hold utensils. (Heidi de Marco/KHN)

Lara Walt walks son Michael to the school bus in Alexandria, Va., on Oct. 4, 2017. Michael is one of over 25,700 students expected to receive special-education services in Fairfax County Public Schools this academic year. (Heidi de Marco/KHN)

Medicaid contributes $1.5 million a year on average to help pay for health services and therapy, said Fairfax County Public Schools spokesman John Torre. Their schools bill Medicaid for services including physical and occupational therapy, psychological counseling and speech-language assistance. It also pays for specialized transportation for students with disabilities, which Michael uses nearly every morning.

His mother, Lara Walt, an attorney, said services offered at school have improved Michael’s speech, gait and motor skills. He can now eat oatmeal with a spoon. Though her son may never live independently, she said, without Medicaid funds supporting special-education services, “he’d be in a much worse space.”

Across the country, JP De Oliveira, a professional clinical counselor with the Oakland-based East Bay Agency for Children, works at Hoover Elementary School in Oakland with students who are in Medi-Cal and have diagnoses that qualify them for counseling. His time with those kids is billed to Medi-Cal.

One of the students, 7-year-old Rodney Davis, is an outgoing child who became anxious last year and stopped wanting to go to school. Oliveira counsels Rodney, plays games with him and leads him in breathing exercises. “He really needs that reassurance … that everything is going to be OK,” Oliveira said.

Different States, Different Spending

While some California counties in and of themselves deploy millions of Medicaid dollars each year in classrooms, some entire states deploy little — or none. Much is unknown about exactly how Medicaid funds are spent in schools. “There is just not very good documentation of what policies states and locals have and how much they are using it,” said Nora Gordon, an associate professor at Georgetown University’s McCourt School of Public Policy.

Los Angeles Unified School District, which has a total budget of $7.5 billion and serves about 750,000 children, each year receives more than $20 million in funding from Medi-Cal, the name of its Medicaid program. The money helps pay for medical screenings, specialized equipment and health services for students at medical and mental health clinics. It is also used to enroll students and their families in health insurance plans under the Affordable Care Act.

The district has nurses to serve each school, including 12 positions that are fully funded by Medi-Cal. The nurses provide a range of services, such as immunizations and asthma treatment.

In contrast, Wyoming does not bill Medicaid for any school-based health services. Instead, its state Department of Education reimburses school districts to cover special-education services. However, schools can use federal funds available through a separate federal funding stream — IDEA — to pay for additional resources like assistive technology, supplies and some staffing, said Brent Bacon, the department’s chief academic officer. These can range from a pencil grip to hiring a job coach to help students transition out of high school.

Bacon did not give a specific reason why Wyoming does not use Medicaid funding for special-education services. Dallas Myers, director of special education for Fremont County School District 1 in central Wyoming, said these federal dollars may complicate students’ ability to access these services.

“If you use Medicaid, you cap that service at a certain allowable fee,” he said. “And we couldn’t begin to get those professional staff people to serve our kids in a rural state like Wyoming if Medicaid came into the state.”

The federal and state share of payments varies, depending on how states prioritize such funding or bill Medicaid. In 2015, California covered about half of nearly $180 million in Medi-Cal funding for school-based services. Across Virginia, Medicaid payments for school-based health services totaled $58.8 million in 2015, of which nearly half came from the state’s coffers.

Tom Smith, a legislative liaison for the Virginia Association of School Superintendents, said the loss of federal Medicaid dollars could force school districts in Virginia and elsewhere to cut other services or dip into state and local funds that will translate into cuts in other sections of the budget, like infrastructure. “Everyone will feel the pain in one way or another,” he said.

From The ER To Inpatient Care — At Home

March 06, 2018

Phyllis Petruzzelli spent the week before Christmas struggling to breathe. When she went to the emergency department on Dec. 26, the doctor at Brigham and Women’s Faulkner Hospital near her home in Boston’s Jamaica Plain neighborhood said she had pneumonia and needed hospitalization. Then the doctor proposed something that made Petruzzelli nervous. Instead of being admitted to the hospital, she could go back home and let the hospital come to her.

As a “hospital-at-home” patient, Petruzzelli, 71 this week, learned doctors and nurses would come to her home twice a day and perform any needed tests or bloodwork.

A wireless patch a little bigger than her index finger would be affixed to her skin to track her vital signs and send a steady stream of data to the hospital. If she had any questions, she could talk face-to-face via video chat anytime with a nurse or doctor at the hospital.

Hospitals are germy and noisy places, putting acutely ill, frail patients at risk for infection, sleeplessness and delirium, among other problems. “Your resistance is low,” the doctor told her. “If you come to the hospital, you don’t know what might happen. You’re a perfect candidate for this.”

So Petruzzelli agreed. That afternoon, she arrived home in a hospital vehicle. A doctor and nurse were waiting at the front door. She settled on the couch in the living room, with her husband, Augie, and dog, Max, nearby. The doctor and nurse checked her IV, attached the monitoring patch to her chest and left.

When Dr. David Levine arrived the next morning, he asked why she’d been walking around during the night. Far from feeling uncomfortable that her nocturnal trips to the bathroom were being monitored, “I felt very safe and secure,” Petruzzelli said. “What if I fell while my husband was out getting me food? They’d know.”

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After three uneventful days, she was “discharged” from her home hospital stay, and the equipment removed from her home. “I’d do it again in a heartbeat,” Petruzzelli said.

Brigham Health in Boston is one of a slowly growing number of health systems that encourage selected acutely ill emergency department patients who are stable and don’t need intensive, round-the-clock care to opt for hospital-level care at home.

In the couple of years since Brigham and Women’s Hospital started testing this type of care, hospital staff who were initially skeptical have generally embraced it, said Levine.

“They very quickly realize that this is really what patients want, and it’s really good care,” he said.

This approach is quite common in Australia, England and Canada but it’s faced an uphill battle in the United States.

A key obstacle, clinicians and policy analysts agree, is getting health insurers, whose systems aren’t generally set up to cover hospital care provided in the home, to pay for it.

At Brigham Health, the hospital can charge an insurer for a physician house call, but the remainder of the hospital-at-home services are covered by grants and funding from Partners HealthCare’s Center for Population Health, which is affiliated with Brigham Health, said Levine.

Health insurers don’t have a position on hospital-at-home programs, said Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, an industry trade group.

“Overall, health insurance providers are committed to ensuring patients have access to care they need, and there are Medicare Advantage plans that do cover this type of at-home care,” Donaldson said in a statement.

Levine, a clinician-investigator at Brigham and Women’s Hospital and an instructor at Harvard Medical School, was the lead author of a study published last month that reported the results of a small, randomized, controlled trial comparing the health care use, experience and costs of Brigham patients who either received hospital-level care at home or in the hospital in 2016.

The 20 patients analyzed in the trial had one of several conditions, including infection, heart failure, chronic obstructive pulmonary disease or asthma. The trial found that while there were no adverse events in the home-care patients, their treatment costs were significantly lower, about half that of patients treated in the hospital.

Why? For starters, labor costs for at-home patients are lower than for patients in a hospital, where staff must be on hand 24/7. Home-care patients also had fewer lab tests and visits from specialists.

The study found that both groups of patients were about equally satisfied with their care, but the home-care group was more physically active.

Brigham Health is conducting further randomized controlled trials to test the at-home model for a broader range of diagnoses.

Dr. Bruce Leff began exploring the hospital-at-home concept more than 20 years ago, conducting early studies at Veterans Affairs medical centers and Medicare Advantage plans that found fewer patient complications, better outcomes and lower costs in home-care patients.

Caregivers reported less stress, Leff’s research found. For caregivers, traveling to an unfamiliar hospital, finding and paying for parking and trying to time bedside meetings with clinical staff, all the while worried about a loved one’s health, is wearing, experts note.

Hospitals, accustomed to the traditional “heads-and-beds” model that emphasizes filling hospital beds in a brick-and-mortar facility have been slow to embrace change, however.

There are practical hurdles, too.

“It’s still easier to get Chinese food delivered in New York City than to get oxygen delivered at home,” said Leff, a professor of medicine and director of Johns Hopkins Medical School’s Center for Transformative Geriatric Research.

Since Mount Sinai’s seven-hospital system launched its Hospital-at-Home program in New York City in 2014, more than 700 patients have chosen home over hospital care. Patients can be referred to the program from selected emergency departments as well as some Mount Sinai primary care practices and urgent care centers. And they have fared well on a number of measures.

The average length of stay for acute care was 5.3 days in the hospital versus 3.1 days of treatment for home-care patients, while 30-day readmission rates for home-based patients were about half of those in the hospital: 7.8 percent versus 16.3 percent for the two-year period ending December 2016.

Begun with a three-year, $9.6 million grant from the federal Center for Medicare & Medicaid Innovation in 2014, Mount Sinai’s program initially focused on Medicare patients with six conditions, including congestive heart failure, pneumonia and diabetes. Since then, the program has expanded to include dozens of conditions, including asthma, high blood pressure and serious infections like cellulitis, and is now available to some privately insured and Medicaid patients.

The health system has also partnered with Contessa Health, a company with expertise in home care, to negotiate contracts with insurers to pay for hospital-at-home services.

Among other things, insurers are worried about the slippery slope of what it means to be hospitalized, said Dr. Linda DeCherrie, clinical director of the mobile acute care team at Mount Sinai Health System.

“[Insurers] don’t want to be paying for an admission if this patient really wouldn’t have been hospitalized in the first place,” DeCherrie said.

Need A Medical Procedure? Pick The Right Provider And Get Cash Back

March 05, 2018

Laurie Cook went shopping recently for a mammogram near her home in New Hampshire. Using an online tool provided through her insurer, she plugged in her ZIP code. Up popped facilities in her network, each with an incentive amount she would be paid if she chose it.

Paid? To get a test? It’s part of a strategy to rein in health care spending by steering patients to the most cost-effective providers for non-emergency care.

State public employee insurance programs were among the early adopters of this approach. It is now finding a foothold among policymakers and in the private sector.

Scrolling through her options, Cook, a school nurse who is covered through New Hampshire’s state employee health plan, found that choosing a certain facility scored her a $50 check in the mail.

She then used the website again to shop for a series of lab tests. “For a while there, I was getting a $25 check every few weeks,” said Cook. The checks represented a share of the cost savings that resulted from her selections.

Lawmakers in nearby Maine took the idea further, recently enacting legislation that requires some private insurers to offer pay-to-shop incentives, part of a movement backed by a conservative foundation to get similar measures passed nationally.

Similar proposals are pending in a handful of other statehouses, including Virginia, West Virginia and Ohio.

“If insurance plans were serious about saving money, they would have been doing this stuff years ago,” said Josh Archambault, a senior fellow at the Foundation for Government Accountability, a limited-government advocacy group based in Naples, Fla., that promotes such “right-to-shop” laws. “This starts to peel back the black box in health care and make the conversation about value.”

Still, some economists caution that shop-around initiatives alone cannot force the level of market-based change needed. While such shopping may make a difference for individual employers, they note it represents a tiny drop of the $3.3 trillion spent on health care in the U.S. each year.

“These are not crazy ideas,” said David Asch, professor of medicine, medical ethics and health policy at the Penn Medicine Center for Health Care Innovation in Philadelphia. But it’s hard to get consumers to change behavior — and curbing health care spending is an even bigger task. Shopping incentives, he warned, “might be less effective than you think.”

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If they achieve nothing else, though, such efforts could help remove barriers to price transparency, said Francois de Brantes, vice president at the Health Care Incentives Improvement Institute, a nonprofit that designs benefit programs.

“I think this could be quite the breakthrough,” he said.

Yet de Brantes predicts only modest savings if shopping simply results in narrowing the price variation between high- and low-cost providers: “Ideally, transparency is about stopping folks from continuously charging more.”

Among the programs in use, only a few show consumers the price differences among facilities. Many, like the one Cook used, merely display the financial incentives attached to each facility based on the underlying price.

Advocates say both approaches can work.

“When your plan members have ‘skin in the game,’ they have an incentive to consider the overall cost to the plan,” said Catherine Keane, deputy commissioner of administrative services in New Hampshire. She credits the incentives with leading to millions of dollars in savings each year.

Several states require insurers or medical providers to provide cost estimates upon patients’ requests, although studies have found that information can still be hard to access.

Now, private firms are marketing ways to make this information more available by incorporating it into incentive programs.

For example, Vitals, the New Hampshire-based company that runs the program Cook uses, and Healthcare Bluebook in Nashville offer employers — for a fee — comparative shopping gizmos that harness medical cost information from claims data. This information becomes the basis by which consumers shop around.

Crossing Network Lines

Maine’s law, adopted last year, requires insurers that sell coverage to small businesses to offer financial incentives — such as gift cards, discounts on deductibles or direct payments — to encourage patients, starting in 2019, to shop around.

A second and possibly more controversial provision also kicks in next year, requiring insurers, except HMOs, to allow patients to go out-of-network for care if they can find comparable services for less than the average price insurers pay in network.

Similar provisions are included in a West Virginia bill now under debate.

Touted by proponents as a way to promote health care choice, it nonetheless raises questions about how the out-of-network price would be calculated, what information would be publicly disclosed about how much insurers actually pay different hospitals, doctors or clinics for care and whether patients can find charges lower than in-network negotiated rates.

“Mathematically, that just doesn’t work” because out-of-network charges are likely to be far higher than negotiated in-network rates, said Joe Letnaunchyn, president and CEO of the West Virginia Hospital Association.

Not necessarily, counters the bill’s sponsor, Del. Eric Householder, who said he introduced the measure after speaking with the Foundation for Government Accountability. The Republican from the Martinsburg area said “the biggest thing lacking right now is health care choice because we’re limited to our in-network providers.”

Shopping for health care faces other challenges. For one thing, much of medical care is not “shoppable,” meaning it falls in the category of emergency services. But things such as blood tests, imaging exams, cancer screening tests and some drugs that are administered in doctor’s offices are fair game.

Less than half of the more than $500 billion spent on health care by people with job-based insurance falls into this category, according to a 2016 study by the Health Care Cost Institute, a nonprofit organization that analyzes payment data from four large national insurers. The report also noted there must be variation in price between providers in a region for these programs to make sense.

Increasingly, though, evidence is mounting that large price differences for medical care exist — even among rates negotiated by the same insurer.

The price differences are so substantial it’s actually scary,” said Heyward Donigan, CEO of Vitals.

At the request of Kaiser Health News, Healthcare Bluebook ran some sample numbers for a Northern Virginia ZIP code, finding the cost of a colonoscopy ranged from $670 to $6,240, while a knee arthroscopy ranged from $1,959 to $20,241.

Another challenge is the belief by some consumers that higher prices mean higher quality, which studies don’t bear out.

Even with incentives, the programs face what may be their biggest challenge: simply getting people to use a shopping tool.

Kentucky state spokeswoman Jenny Goins said only 52 percent of eligible employees looked at the shopping site last year — and, of those, slightly more than half chose a less expensive option.

“That’s not as high as we would like,” she said.

Still, state workers in Kentucky have pocketed more than $1.6 million in incentives — and the state said it has saved $11 million — since the program began in mid-2013.

Deductibles, the annual amounts consumers must pay before their insurance kicks in and are usually $1,000 or more, are more effective than smaller shopping incentives, say some policy experts.

In New Hampshire, it took a combination of the two.

The state rolled out the payments for shopping around — and a website to look for best prices — in 2010. But participation didn’t really start to take off until 2014, when state employees began facing an annual deductible, said Deputy Commissioner Keane.

Still, the biggest question is whether these programs ultimately cause providers to lower prices.

Anecdotally, administrators think so.

Kentucky officials report they already are witnessing a market response because providers want patients to have an incentive to choose them.

“We do know providers are calling and asking, ‘How do I get my name on that list’ [of cost-effective providers]?” said Kentucky spokeswoman Goins. “The only way they can do that is to negotiate.”

Cartoon Mascot Masks Nasty Health Care Feud

February 28, 2018
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SACRAMENTO, Calif. – In the age of Black Panther, Thor and Captain America, California’s health insurance plans bring you … A giant, androgynous red heart.

The health insurers debuted their bubbly superhero Tuesday in front of California’s stately Capitol building. The heart, who wore black booties and white, Michael Jackson-esque gloves, had no name. No matter. S/he bopped. S/he waved at school children. S/he flashed the thumbs-up. S/he made the Capitol feel a bit like Disneyland.

Passers-by couldn’t help but giggle at the insurance industry’s mute mascot. And they certainly seemed to have no clue that the anthropomorphized heart was merely the latest PR stunt in an ongoing feud between two health system titans: health insurers and drugmakers.

“It’s very cute. I don’t know exactly what’s going on. … What is happening here exactly?” asked Christine Danho, 25, an administrative assistant who stopped to snap a picture.

In recent years, the two deep-pocketed industries have pointed fingers at each other over the rising cost of prescription drugs, each side accusing the other of ripping off patients who need life-saving medicines.

The California Association of Health Plans, which bankrolled the event, introduced its heart “hero” and “high-priced drug nemesis” with fighting words for drugmakers.

“Pharma has made a practice of swarming the State Capitol with their minions working to keep drug prices sky high,” the lobbying group’s press release proclaimed.

True, drugmaker Pfizer shelled out $732,454 in 2017 to lobby California policymakers on health care, and the California Life Sciences Association, comprised largely of pharmaceutical companies, spent $522,323, according to the California Secretary of State.

But among the top five spenders in health care lobbying last year? The health plan association itself, which doled out about $1.2 million.

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Drugmakers called the health plans out on their own tactics.

“Like a broken record, the insurers continue to blame everyone else for high health care costs when their policies are making lifesaving medicines increasingly more expensive for patients,” said Priscilla VanderVeer, a vice president with Pharmaceutical Researchers and Manufacturers of America (PhRMA).

VanderVeer’s colleague, Nicole Kasabian Evans, was a spokeswoman for the health plans not so long ago, but now she helps run PhRMA’s public relations strategy in California. And she had no qualms about criticizing her former employer’s media strategy.

“Honestly, are they generating any real news out of this event?” Kasabian Evans asked. It’s nothing more than “someone in a costume hand[ing] out tchotchkes,” she declared.

The health plan group said it timed the event to coincide with American Heart Month, and highlighted three heart disease medications on a poster board whose prices have spiked in recent years.

During the first hour of the event, the heart looked lonely, hoping for a little attention. But as the sun warmed the air and an unrelated rally brought people to the Capitol steps, onlookers cozied up to the health plans’ cherry red mascot for photo-ops or grabbed free heart-shaped stress balls.

Eric Wang ran into the heart-shaped mascot while visiting California’s Capitol. He said high drug prices are “something we need to figure out.” (Pauline Bartolone/KHN)

Lila Cervantes posed for a photo with the heart mascot at the Capitol in Sacramento. When it comes to insurers and pharmaceutical companies feuding over health costs, she said, “there’s probably a lot of right and a lot of wrong on both sides.” (Pauline Bartolone/KHN)

Eric Wang, visiting from Los Angeles for a meeting with legislators, said opposing groups need to “work together to figure out a way to make our health care system affordable.”

But it’s unlikely the feud between drugmakers and health insurers will dissipate anytime soon. The federal government is only taking small steps to control drug prices, which means the debate over drug prices will continue to flare in state houses around the country.

“That’s where the fight has shifted,” said Steve Pearson, an expert on medical costs with  the Institute for Clinical and Economic Review. “There’s going to be a lot more money from both industries.”

Lila Cervantes, who was at the Capitol  advocating for higher education funding, posed for a picture with the heart, but she admitted later that she didn’t know much about the war between health insurers and drugmakers.

“There’s probably a lot of right and a lot of wrong on both sides,” Cervantes said. “We gotta’ sometimes take the politics out of it and … do what’s best for the people.”

Anthem Calls On Eye Surgeons To Monitor Anesthesia During Cataract Surgery

February 20, 2018

If you need cataract surgery, your eye surgeon may have to do double duty as your anesthetist under a new policy by health insurer Anthem. In a clinical guideline released this month, the company said it’s not medically necessary to have an anesthesiologist or nurse anesthetist on hand to administer and monitor sedation in most cases.

Some ophthalmologists and anesthesiologists say the policy jeopardizes patient safety, and they are calling on Anthem to rescind it.

“The presence of anesthesia personnel is one of the key ingredients in the patient safety and effectiveness of cataract surgery today,” said Dr. David Glasser, an ophthalmologist in Columbia, Md., who is secretary for federal affairs at the American Academy of Ophthalmology, a professional group for eye physicians and surgeons. “An ophthalmologist cannot administer conscious sedation and monitor the patient and do cataract surgery at the same time.”

Anthem, which offers commercial insurance plans in 14 states, said anesthesia needs vary and so should coverage. According to a statement from the company, “Anthem’s Medical Policy and Technology Assessment Committee, a majority of whom are external physicians, reviewed the available evidence addressing the use of general anesthesia and monitored anesthesia care for cataract surgery. According to the literature reviewed, there is no one definitive approach regarding the use of anesthesia for cataract surgery and patient-specific needs should be taken into consideration as well as potential risk of harm to individuals who are sedated during surgical procedures.”

Medicare, the health care program for people age 65 and older, covers cataract surgery, including anesthesia services.

A cataract, typically related to aging, is caused by protein deposits on the lens of the eye that make it cloudy and can distort vision. During a cataract operation, the surgeon makes an incision in the surface of the eye with a laser or blade and then uses a tool to break up the clouded lens, pull it out and replace it with an artificial one.

Cataract surgery is common. More than half of Americans have either had a cataract or had cataract surgery by the time they reach age 80, according to the National Eye Institute.

Surgery is typically performed on an outpatient basis and takes less than an hour. Though drowsy while sedated, patients are generally conscious during the procedure and can hear what’s said to them and speak if necessary.

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Eye surgeons often have an anesthesiologist or a nurse anesthetist present to administer intravenous drugs to help keep the patient relaxed and ensure they don’t move during the operation as well as monitor their vital signs and adjust medication as necessary.

Anthem’s new policy states that this type of monitored anesthesia care is medically necessary only if the patient is under 18 years old, or is unable to cooperate or communicate because of dementia or other medical conditions, can’t lie flat, has known problems with anesthesia, or if a complex surgery is anticipated.

But some ophthalmologists and anesthesiologists disagree.

“I wouldn’t even consider doing a cataract surgery without an anesthesiologist or nurse anesthetist in the room,” said Dr. David Aizuss, an eye surgeon who is president-elect of the California Medical Association. “If you’re working inside the eye it’s a very confined space, and if the patient gets agitated and starts moving around you have to get the equipment out of the eye very quickly.”

Although Anthem posted the new policy online, providers are seeking clarification from the company about the timing of its implementation in their states, physicians said.

Until then, some practices are taking no chances. At the Freedom Vision Surgery Center in Encino, Calif., where Aizuss practices, Anthem patients who come in for cataract surgery are asked to pay $400 out-of-pocket upfront for anesthesia services.

Professional groups representing California eye physicians and anesthesiologists have written to Anthem requesting the policy be rescinded. In addition, the California Medical Association has lodged complaints with state regulators.

This isn’t the first time Anthem has come under scrutiny for changes to its clinical guidelines that some have charged help the company’s bottom line at patients’ expense. Last year, the company announced it would no longer pay for emergency department visits it later determined were not emergencies. Then in September it said it would no longer pay for imaging tests like MRIs in many cases if patients got them at hospital-owned centers rather than independent imaging centers.

Last week, Modern Healthcare reported that the company said it was modifying its ER rule so that certain types of visits would always be paid for, including those by patients who are directed to the emergency department by their provider or have recently had surgery.

Some safety experts said they were concerned about Anthem’s new policy, even for routine cataract surgeries.

“If you’re putting a knife in my eye, that’s not routine for me,” said Leah Binder, president and CEO of the Leapfrog Group, a nonprofit organization that advocates for improved safety and quality at hospitals. Noting that anesthesiologists and nurse anesthetists were pioneers in the patient safety movement, she said there are better ways for Anthem to save money than shutting them out of the operating room.

“How about identifying the surgeons who have the highest complication rates, and letting patients know about them?” she suggested.

‘Bill Of The Month’: A College Student’s $17,850 Drug Test

February 16, 2018

This is the debut of a monthly feature from Kaiser Health News and NPR that will dissect and explain real medical bills in order to shed light on U.S. health care prices and to help patients learn how to be more active in managing costs. Do you have a medical bill that you’d like us to see and scrutinize? Submit it here and tell us the story behind it.

Full Story

Investigation: A $17,850 Bill For A Simple Urine Test Stuns Texas Student

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In her late 20s and attending college in Texas, Elizabeth Moreno suffered from debilitating back pain caused by a spinal abnormality. “I just could not live with the pain,” she said. “I couldn’t get dressed by myself, I couldn’t walk across my house, let alone to class, and nothing, no drug that had been prescribed to me, even dulled the pain.”

Moreno says she also tried chiropractic medicine and acupuncture, but they didn’t make the pain go away. Finally, a doctor at the student health center referred her to an orthopedic specialist who performed tests and concluded a disc was blocking nerves down her legs and needed to be removed. Moreno’s father, a retired Ohio doctor who had seen many failed back surgeries over his career, agreed it was the best course.

In late 2015, Moreno had the operation in Houston, which she described as “a complete success.” She gave it little thought when the surgical office asked her to leave a urine sample for a drug test.

Then the bill came.

Patient: Elizabeth Moreno, then 28, a student at Texas State University in San Marcos.

Total bill: $17,850 for a urine test in January 2016

Service provider: Sunset Labs LLC of Houston

Medical treatment: Moreno had a disc removed from her back in December 2015. Her surgeon prescribed an opioid painkiller, hydrocodone. At a follow-up office visit in mid-January 2016, the staff asked her to leave a urine sample, which she figured was routine. In March 2017, over a year later, the lab sent her a bill for $17,850 for testing her urine for a slew of drugs, including cocaine, methadone, anti-anxiety drugs and several other drugs she had never heard of.

(Story continues below.)

What gives: Urine drug testing has exploded over the past decade amid alarm over rising opioid overdose deaths. Many doctors who prescribe the pills rely on the urine tests to help reduce drug abuse and keep patients with chronic pain safe. Yet the tests have become a cash cow for a burgeoning testing industry, and critics charge that unneeded and often expensive ones are sometimes ordered for profit rather than patient care. Doctors can decide whether to test patients who take opioids for short periods, such as after an operation. Moreno’s surgeon would not discuss her urine test — why he ordered it and why the sample was tested for so many substances.

After having surgery to remove a disc from her back, Elizabeth Moreno gave it little thought when the surgical office asked her to leave a urine sample for a drug test. But then came the bill for the urine test: $17,850. (Julia Robinson for KHN)

Three experts contacted by Kaiser Health News questioned the need for such extensive testing and were shocked to hear of the lab’s prices. They said these tests rarely cost more than $200, and typically much less, depending on the complexity and the technology used. Some doctors’ offices use a simple cup test, which can detect several classes of drugs on the spot and could be purchased for about $10. Bills can climb higher when labs run tests to detect the quantity of specific drugs and bill for each one, as the lab did here.

The experts KHN interviewed said that the lab’s prices for individual tests were excessive, such as charging $1,700 to check for amphetamines or $425 to identify phencyclidine, an illegal hallucinogenic drug also known as PCP. They also criticized a charge of $850 for two tests to verify that her urine sample had not been adulterated or tampered with.

Moreno’s insurer, Blue Cross and Blue Shield of Texas, refused to pay any of the bill, arguing that the lab was out-of-network and thus not covered. Had it chipped in, it would have covered the service at $100.92, according to an explanation of benefits the insurance company sent to Moreno.

Sunset Labs says its list prices were “in line” with its competitors in the area. It also said doctors treating pain agree extensive urine testing is “the best course of action” and that a lab “is not in the position” to question tests ordered by a doctor.

Related Story: Pain Hits Long After Surgery When Doctor’s Daughter Is Stunned By $17,850 Urine Test

Resolution: Fearing damage to his daughter’s credit rating, Moreno’s father, Dr. Paul Davis, paid the lab $5,000 in April 2017 to settle the bill. A retired doctor, he also has filed a formal complaint about the bill with the Texas attorney general’s office, accusing the lab of “price gouging of staggering proportions.” The lab’s attorney said he was not aware of the complaint. A Texas attorney general’s spokesperson confirmed to KHN that the office had received complaints about the lab, but declined further comment.

The takeaway: When a physician asks for a urine or blood sample, always ask what it’s for. Insist that it be sent to a lab in your insurance network.

Source: AG complaint; interviews

Pain Hits After Surgery When A Doctor’s Daughter Is Stunned By $17,850 Urine Test

February 16, 2018

After Elizabeth Moreno had back surgery in late 2015, her surgeon prescribed an opioid painkiller and a follow-up drug test that seemed routine — until the lab slapped her with a bill for $17,850.

A Houston lab had tested her urine sample for a constellation of legal and illicit drugs, many of which, Moreno said, she had never heard of, let alone taken.

“I was totally confused. I didn’t know how I was going to pay this,” said Moreno, 30, who is finishing a degree in education at Texas State University in San Marcos and is pregnant with twins.

Related: ‘Bill Of The Month’: A College Student’s $17,850 Drug Test

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Do you have an exorbitant or baffling medical bill? Join the KHN and NPR’s Bill-of-the-Month Club and tell us about your experience. We’ll feature a new one each month.

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Her bill shows that Sunset Labs LLC charged $4,675 to check her urine for a slew of different types of opioids: $2,975 for benzodiazepines, a class of drugs for treating anxiety, and $1,700 more for amphetamines. Tests to detect cocaine, marijuana and phencyclidine, an illegal hallucinogenic drug also known as PCP or angel dust, added $1,275 more.

The lab also billed $850 to test for buprenorphine, a drug used to treat opioid addiction, and tacked on an $850 fee for two tests to verify that nobody had tampered with her urine specimen.

Total bill: $17,850 for lab tests that her insurer, Blue Cross and Blue Shield of Texas, refused to cover, apparently because the lab was not in her insurance network. The insurer sent Moreno an “explanation of benefits” that says it would have valued the work at just $100.92.

Moreno’s father, in a complaint to the Texas attorney general’s office about the bill, identified the Houston surgeon who ordered the costly test as Dr. Stephen Esses. His office told Kaiser Health News the surgeon would have no comment.

Bill Of The Month

Understanding A $17,850 Urine Test

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Sunset Labs is part of a network of pain clinics and other medical businesses founded by Houston anesthesiologist Phillip C. Phan, according to Texas secretary of state filings and court records. Court records say Phan’s companies also own the facility where Moreno had her operation.

Three experts interviewed by KHN said the lab grossly overcharged; they also doubted the need for the test.

“This just blows my mind,” said Jennifer Bolen, a former federal prosecutor and lab and pain management consultant. “It’s very high and incredibly out of the norm.”

Dan Bowerman, a medical fraud expert, called the lab bill “outrageous” and “unconscionable” and said it should have prompted an investigation.

“Sounds real fishy,” added Charles Root, a veteran industry adviser. He wondered if the lab had “misplaced the decimal point,” because such a test should cost a few hundred dollars, tops.

The lab disagrees.

Sunset’s billings “are in line with the charges of competing out-of-network labs in the geographical area,” lab attorney Justo Mendez said in an emailed statement.

Mendez said pain doctors agree that extensive urine testing is “the best course of action” and that a lab “is not in the position” to question tests ordered by a doctor.

Urine testing for patients with chronic pain has grown explosively over the past decade amid a rising death toll from opioid abuse. Pain doctors say drug testing helps them make sure patients are taking the drugs as prescribed and not mixing them with illegal substances.

Yet the testing boom costs billions of dollars annually and has raised concerns that some labs and doctors run urine tests needlessly — or charge exorbitant rates — to boost profits.

Some insurers have refused to pay, which can leave patients like Moreno threatened with ruinously high bills they had no idea they had incurred.

“Surprise bills larded with unexpected expenses and little explanation inflict sticker shock on vulnerable patients,” said James Quiggle, communications director of the Coalition Against Insurance Fraud, whose members include insurers, consumer groups and government agencies. Quiggle said many “puffed-up bills straddle a fine line between abuse and outright fraud.”

Moreno said her insurance covered the disc removal surgery in December 2015. She said the operation went well and she weaned off the hydrocodone pain pills. To her surprise, on a second return about a month later, the surgeon’s office asked her to leave a urine sample.

“I didn’t think anything of it,” Moreno said of the test. “I said fine, whatever.”

More than a year later, she said, the lab phoned while she was driving and asked her to pay the $17,850 bill. The lab then sent her an invoice, dated March 10, 2017, which states: “[B]ased upon information from your health plan, you owe the amount shown.”

(Story continues below.)

Luckily, her father, Dr. Paul Davis, was visiting her in Texas at the time. Davis, 66, is a retired family practice doctor from Findlay, Ohio.

Davis doubted the need for the test, not to mention what he thought was a sky-high price. He said the University of Findlay, where he helped train physician assistants, gave applicants a basic drug test at a cost of $174, while the local juvenile courts in Ohio paid $10 for a simple drug screen.

Fearing it would ruin his daughter’s credit scores, Davis said, he called Sunset and settled the bill in April 2017 by paying $5,000, which he said he now regrets. The lab sent Moreno a receipt that said it discounted her bill because of “financial need/hardship.”

Asked for comment, Blue Cross spokesman James Campbell said he couldn’t discuss a specific case but noted:

”We are disappointed as well as concerned about transparency whenever [any] member is surprised by an excessive charge for a seemingly routine service or received services that may not have been medically necessary.”

Campbell also said the lab was out-of-network and “we do not control how much they charge for services rendered.” The insurer encourages patients to confirm that all medical care they seek comes from medical providers in the Blue Cross network, he added.

Prices for urine tests can vary widely depending upon complexity and the technology used. Some doctors’ offices use a simple cup test, which can detect several classes of drugs on the spot. These tests rarely cost more than $200, and typically much less.

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Bills climb higher when labs check for levels of multiple drugs and bill for each one, a practice insurers argue is seldom medically justified. But even labs sued by insurers alleging wildly excessive testing typically have billed $9,000 or less, court records show. One insurer sued a lab for charging $1,845 for a drug test, for instance.

Davis said Sunset Labs ignored his requests for a full explanation of the charges. In May, he filed a written complaint about the bill with the Texas attorney general’s office that included a copy of the bill and accused the lab of “price gouging of staggering proportions.”

“Young people just starting out, such as my daughter, may not have the ability to pay and this could result in damaged credit ratings or even bankruptcy,” he wrote.

Davis got a letter back from Attorney General Ken Paxton, who said the office would “review the information.” A spokesperson for Paxton told KHN: “We have received complaints about that business, but we can’t comment on anything else.” Sunset attorney Mendez said the lab is “not aware” of any such complaints.

In an interview, Davis also questioned the need for his daughter’s urine test because she received opioids only for a short period and the results would have had no impact on her treatment. In his complaint to the attorney general, Davis said the surgeon told him he ordered the tests because he feared possible retribution from the state medical licensing board for not testing patients who had been prescribed an opioid. The Texas Medical Board doesn’t require urine tests for patients receiving opioids for short-term pain, said spokesman Jarrett Schneider. That’s a “question of independent medical judgment as to whether the physician believes a drug test should be required,” he said.

Bad Reviews

Sunset Labs has an “F” rating with the Houston Better Business Bureau, which on its website posts an August 2017 complaint from a patient charged $16,150 for a urine test.

“This is not covered under my health insurance so I am expected to pay this excessive bill,” the complaint reads.

A second website that publishes government billing numbers of doctors and medical businesses includes a comment section with more than a dozen negative “reviews,” mostly complaints that the lab slammed patients with thousands of dollars in fees their insurers balked at paying.

In a pair of lawsuits filed in 2015, three doctors seeking to quit working at pain clinics operated by Phan accused the facilities of improper billing practices, including unnecessary urine testing. The doctors said they feared losing their medical licenses unless they severed their ties.

In one suit, Drs. Purvi Patel and Lance LaFleur also alleged that the pain clinics “pressured” doctors to overprescribe medical gear and genetic tests to insured patients “regardless of medical necessity.” The case did not go forward because the doctors did not pursue it. Neither doctor would comment.

In the second legal case, pain specialist Dr. Baominh Vinh said he resigned in April 2015 “based on certain questionable business practices … that are inconsistent with my ethical boundaries.” Vinh also alleged urine testing was overused. In a countersuit against Vinh, the pain clinics called his allegations a “falsehood” to justify violation of his employment contract.

The parties settled in March of last year. Terms are confidential, but a lawyer for the pain clinics said Vinh paid money to the company “and not vice versa.”

FDA Head Vows To Tackle High Drug Prices And Drugmakers ‘Gaming The System’

February 15, 2018
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Food and Drug Administration Commissioner Scott Gottlieb said he will do everything “within my lane” to combat high drug prices and that he sees drug companies “gaming the system to try to block competition” in a multitude of ways in the marketplace.

In a wide-ranging interview with Kaiser Health News on Thursday, Gottlieb also said that he wants to speed up the U.S. approval process for generic and “biosimilar” versions of biologic drugs, which are drugs comprised of living organisms, such as plant or animal cells.

“Where we see things that we can address, we’re going to take action,” Gottlieb said, adding that he is most bothered when brand-name companies use tactics to block makers of generics and biosimilars from developing drugs. He deflected questions about whether the FDA approves drugs of questionable value that carry exorbitant prices.

“I think we should have a free market for how products are priced,” Gottlieb said. A free market “provides proper incentives for entrepreneurs who are going to make the big investments needed to innovate. But that system is predicated on a premise that when patents have lapsed you’ll have vigorous competition from generic drugs.”

The FDA, Gottlieb said, worked with the White House on a proposal to bring generics to market faster by ensuring that a 180-day exclusivity period isn’t used by drugmakers to block competition. He said there are “situations where you see deals cut” in which a drugmaker will get the 180-day exclusivity and then be persuaded to sit on it without ever selling the drug — essentially delaying the brand drug from facing generic competition.

Currently, generics makers must buy large quantities of the brand-name product in the U.S. to run their own clinical trials. But the companies that make brand-name medicines, in some cases, are making it very difficult for makers of generics to purchase their drugs, he said.

“They are adopting all kinds of commercial restrictions with specialty pharma distributors and wholesalers” to prevent sales to generic companies, Gottlieb said, adding that not every branded company is using the tactic, but it is “going on across the board.”

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To come up with a generic, a drugmaker needs 2,000 to 5,000 doses for testing, Gottlieb said. He said the companies were willing to pay sticker price but are being blocked in other ways.

The FDA is now exploring whether generics makers could buy the drugs they need in the less-expensive European market without having to do additional work to prove the biologics from Europe are the same — even though the American and European versions are often manufactured in the same plants. Gottlieb wants to get rid of such tests, known as “bridging” studies.

“I have lawyers now looking at this,” Gottlieb said. The FDA has been exploring the issue for a couple of months, he said, and he thinks it may be “hard for us to get there without legislation, but we’re not done yet looking at this; we’re still pressing on this.”

Last fall, Gottlieb said that he wanted to “end the shenanigans” that interfere with competition in the marketplace. Since then, the FDA has released a steady stream of action plans and new guidance that tinkers with the drug development system.

“All of these steps are going to have an impact, and I don’t think there’s one silver bullet,” Gottlieb said. “If anyone [thinks] there is one thing you can do with policy intervention that is going to dramatically change drug prices, that’s not true.”

Instead, he said, there are “layers of things that we can do to try to make sure the system is working.”

The agency has been approving drugs at a fast clip: The FDA’s Center for Drug Evaluation and Research approved a record 46 new drugs in 2017, including treatments for sickle cell disease and Batten disease and new cancer therapies. The list doesn’t include landmark gene and cellular therapies and vaccines that are regulated as biologics.

That rate of approvals has raised concerns about the value and quality of drugs being approved. Specifically, criticism of the FDA’s handling of cancer drugs has increased in recent years.

Although some patient advocates want the FDA to approve new drugs more quickly, others charge that the agency greenlights mediocre cancer drugs that do little to prolong survival or improve quality of life. A 2014 study found that the cancer drugs approved from 2002 to 2014 extended survival by an average of just 2.1 months. For many cancer drugs, there is no evidence showing they prolong life.

Once drugs are on the market, companies can charge whatever the market will bear; prices for cancer therapies now routinely top $100,000 a year.

But Gottlieb said it’s not his job to help insurance companies or government programs decide which drugs to cover. Health systems and insurers “have a difficult time saying no,” Gottlieb said, “so they want to put the regulator in the position of saying no.”

Gottlieb acknowledged that it can be difficult for insurance plans to decide which drugs they should include on their drug list. But insurance plans “ought to have the confidence to make [such decisions] and not say, ‘Well, it’s the job of the federal government to make those decisions for us.’”

Gottlieb defended his agency’s approval of drugs that help the average cancer patient live just two or three extra months, noting that some patients do much better than average on cancer drugs — perhaps living months or even years longer than expected. He also said it would be wrong to make cancer patients wait years to try a drug that has a chance to help them.

“We’re ultimately going to learn why some patients respond really well and some don’t,” he said. If you “try to have all that information upfront when you approve a drug, [you’ll] end up having a development process that is very long and very costly and a lot fewer products will be developed.”

Gottlieb maintains that the FDA sets a high standard for approving drugs.

“It is important that we have a rigorous bar” for approval, he said, “but a bar that doesn’t impede these products from coming to the market.”

California’s Regulators To Investigate Aetna’s Medical Coverage Decisions

February 13, 2018

Both of California’s health insurance regulators said they will investigate how Aetna Inc. makes coverage decisions, as the lawsuit of a California man who is suing the nation’s third-largest insurer for improper denial of care heads for opening arguments on Wednesday.

The Department of Managed Health Care, which regulates the vast majority of health plans in California, said Monday it will investigate Hartford, Ct.-based Aetna after CNN first reported Sunday that one of the company’s medical directors had testified in a deposition related to the lawsuit that he did not examine patients’ records before deciding whether to deny or approve care. Rather, he relied on information provided by nurses who reviewed the records — and that was how he was trained by the company, he said.

Insurance Commissioner Dave Jones had already told CNN his office would investigate Aetna, which he reconfirmed in a statement Monday.

“If a health insurer is making decisions to deny coverage without a physician ever reviewing medical records, that is a significant concern and could be a violation of the law,” Jones said.

It is unclear how widespread the review of patient claims by non-physicians is in the industry or whether other insurers will feel compelled to revisit their practices.

The California Department of Insurance, which Jones heads, regulates only a small fraction of the state’s health plans, but they include several Aetna policies. He has previously criticized Aetna for “excessive” health insurance rate hikes, though neither his agency nor the managed health care department has the power to stop the increases.

Jones’ investigation of Aetna will review denials of coverage or pre-authorizations during the tenure of the medical director who testified in the California lawsuit, Jay Ken Iinuma, who has since left the company. Insurance department investigators will also look into Aetna’s procedures for managing medical coverage decisions generally.

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The dual investigations come as federal regulators are examining a planned $69 billion purchase of Aetna by pharmaceutical giant CVS — a deal that many experts believe could transform the health care industry.

It’s unclear how the investigations might affect Aetna’s future coverage decisions, or those of other insurers, said Shana Alex Charles, an insurance industry expert and assistant professor at California State University-Fullerton. But she praised the decision to investigate as exactly what insurance regulators should be doing. “Without that strict oversight, corners get cut,” Charles said.

Scott Glovsky, the lawyer representing the California plaintiff, Gillen Washington, said he and his client were “very pleased” by the news that Aetna will be investigated. Speaking Monday, before the managed care department said it would also investigate, Glovsky said his client brought the case “to stop these illegal practices, and we’re looking forward to the insurance commissioner’s investigation so we can make things safer for Aetna patients.”

Washington, of Huntington Beach, had been receiving expensive medication for years to treat a rare immune system disorder known as Common Variable Immune Deficiency.

But in 2014, Aetna denied the college student’s monthly dose of immunoglobulin replacement therapy, saying his bloodwork was outdated. During the appeal process, Washington developed pneumonia and was hospitalized for a collapsed lung.

In recent years, as California Healthline reported last June, patients with similar diseases have faced increasing difficulty getting their insurers to approve treatments, according to clinicians and patient advocates.

In an emailed statement on Monday, Aetna did not directly address the question of case reviews by non-physicians. It said its “medical directors review all necessary available medical information for cases that they are asked to evaluate. That is how they are trained, as physicians and as Aetna employees.” It added, “adherence to those guidelines, which are based on health outcomes and not financial considerations, is an integral part of their yearly review process.”

Aetna also noted that it has paid for all of Washington’s treatments since 2014 and continues to do so.

Aetna said in previous documents filed in the lawsuit that it is standard for people with Washington’s immunodeficiency disease to get regular blood tests and that Washington had failed to do so. But Washington’s attorney said his client clearly needed the medication and that Aetna’s action violated its contract with Washington.

Charles, the professor, said she was most surprised by the fact that Iinuma had admitted not only that he hadn’t reviewed Washington’s medical records personally, but also that he had no experience treating his disease. The burden should be on insurers to demonstrate why treatment should be stopped, not on doctors and patients to show why it should be continued, Charles said.

“It’s easy to see the cases as just files and not people standing in front of you,” she said.

Indiana Gets Federal Approval For Medicaid Plan That Could Slice Enrollment

February 02, 2018

Indiana on Friday became the second state to win federal approval to add a work requirement for adult Medicaid recipients who gained coverage under the Affordable Care Act, but a less debated “lockout” provision in its new plan could lead to tens of thousands of enrollees losing coverage.

The federal approval was announced by Health and Human Services Secretary Alex Azar in Indianapolis.

Medicaid participants who fail to submit in a timely manner their paperwork showing they still qualify for the program will be blocked from enrollment for three months, according to the updated rules.

Since November 2015, more than 91,000 enrollees in Indiana were kicked off Medicaid for failing to complete the eligibility redetermination process, according to state records. The process requires applicants to show proof of income and family size, among other things, to see if they still qualify for the coverage. Until now, these enrollees could simply re-apply anytime. Although many of those people likely were no longer eligible, state officials estimate about half of those who failed to comply with its re-enrollment rules were still qualified.

Indiana’s Medicaid expansion began in February 2015, providing coverage to 240,000 people who were previously uninsured, helping drop the state’s uninsured rate from 14 percent in 2013 to 8 percent last year. The HHS approval extends the program, which was expiring this month, through 2020.

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The new lockout builds on one already in place in the state for people who failed to pay monthly premiums and had annual incomes above the federal poverty level, or about $12,200 for an individual. They are barred for six months from coverage. During the first two years of the experiment, about 10,000 Indiana Medicaid enrollees were subject to the lockout for failing to pay the premium for two months in a row, according to state data.

In addition, more than 25,000 enrollees were dropped from the program after they failed to make the payments, although half of them found another source of coverage — usually through their jobs.

Another 46,000 were blocked from coverage because they failed to make the initial payment.

“The ‘lockout” is one of the worst policies to hit Medicaid in a long time,” said Joan Alker, executive director of the Georgetown University Center for Children and Families. “Forcing people to remain uninsured for months because they missed a paperwork deadline or missed a premium payment is too high a price to pay. From a health policy perspective it makes no sense because during that period, chronic health conditions such as hypertension or diabetes are just likely to worsen.”

Indiana’s Medicaid expansion is being closely watched in part because it was spearheaded by then-Gov. Mike Pence, who is now vice president, and his top health consultant, Seema Verma, who now heads the federal Centers for Medicare & Medicaid Services.

The expansion, known as Healthy Indiana, enabled non-disabled adults access to Medicaid. It has elicited criticism from patient advocates for complex and onerous rules that require these poor adults  to make payments ranging from $1 to $27 per month into health savings accounts or risk losing their vision and dental benefits or even all their coverage, depending on their income level.

Indiana Medicaid officials said they added the newest lockout provision in an effort to prompt enrollees to get their paperwork submitted in time. The state initially requested a six-month lockout.

“Enforcement may encourage better compliance,” the state officials wrote in their waiver application to CMS in July.

The new rule will lead to a 1 percent cut in Medicaid enrollment in the first year, state officials said. It will also lead to a $15 million reduction in Medicaid costs in 2018 and about $32 million in savings in 2019, the state estimated.

The number of Medicaid enrollees losing coverage for failing to comply with redetermining their eligibility has varied dramatically each quarter from a peak of 19,197 from February 2016 to April 2017 to 1,165 from November 2015 to January 2016, state reports show. In the latest state report, 12,470 enrollees lost coverage from August to October 2017.

The Kentucky Medicaid waiver approved by the Trump administration in January included a similar lockout provision for both failing to pay the monthly premiums or providing paperwork on time. Penalties there are six months for both measures. But the provision was overshadowed because of the attention to the first federal approval for a Medicaid work requirement.

Like Kentucky, Indiana’s Medicaid waiver’s work requirements, which mandate adult enrollees to work an average of 20 hours a month, go into effect in 2019. But Indiana’s waiver is more lenient. It exempts people age 60 and over and its work-hour requirements are gradually phased in over 18 months. For example, enrollees need to work only five hours per week until their 10th month on the program.

Most Medicaid adult enrollees do work or go to school or are too sick to work, studies show.

Indiana also has a long list of exemptions and alternatives to employment. This includes attending school or job training, volunteering or caring for a dependent child or disabled parent. Nurses, doctors and physician assistants can give enrollees an exemption due to illness or injury.

Three patient advocacy groups have filed suit in federal court seeking to block the work requirements.

Robin Rudowitz, associate director for the Kaiser Family Foundation’s Program on Medicaid and the Uninsured, said it’s difficult to gauge whether work requirements or renewal lockouts will have more of an impact on coverage.  She noted both provisions apply to most demonstration beneficiaries. (KHN is an editorially independent program of the foundation).

“Any documentation requirement could lead to increased complexity in terms of states administering the requirements and individuals complying,” she said, adding that it could result “in potentially eligible people falling off of coverage.”

Stalled Health Programs Await A Green Light On The Hill

February 02, 2018

With the clock ticking on the current stop-gap bill that funds the federal government through Feb. 8, Congress is steeling itself to consider another must-pass budget bill. And, once again, health care could be caught in the crosshairs.

During previous debates over government funding, it was the high-profile Children’s Health Insurance Program that went months without reauthorization and became a bargaining chip in January. That program has since been extended for six years.

But the future of a host of other programs remains unsettled. Among them, funding for the nation’s 1,400 community health centers and a delay on capping Medicare coverage of physical and outpatient therapy.

The specific provisions behind these initiatives expired last fall. Advocates now are pressing lawmakers to keep them operational by including language in the broader spending bill that must pass next week to prevent another government shutdown.

Some of the items in this eclectic legislative mix are often left to the last minute to catch a ride on another bill — known as “extenders” by Washington insiders, because they extend funding that is set to expire or delay funding cuts that would otherwise take effect.

On the surface, these efforts may sound like wonky, inside-the-Beltway machinations, but program advocates say they have real-life implications for many of the nation’s neediest patients. For them, the congressional delay is causing concern. Here are some things you should know:

The provisions are important and wide-ranging.

Renewing federal funding for community health centers is the biggest ticket item — the clinics cost $3.6 billion per year, and provide basic health care for about 27 million low-income people. Also at stake is the Maternal, Infant and Early Childhood Home Visiting Program, through which trained home visitors teach poorer, at-risk mothers healthy parenting strategies to new mothers who are deemed at-risk and have low incomes.

Another provision forestalls planned reductions put in place by the Affordable Care Act — in federal funds given to particularly vulnerable hospitals that serve a particularly high rate of low-income patients, known as Disproportionate Share Hospitals.

And yet another would prevent limits, put in place by earlier budget bills, from being applied to Medicare’s coverage of physical therapy, outpatient therapy and speech-language pathology treatment. Without action, coverage would be cut off after $2,010 of occupational therapy is provided and another $2,010 for the combination of physical therapy and speech-language pathology. Each limit would translate into Medicare reimbursement for fewer than 20 visits.

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OK, so why hasn’t Congress acted on these yet?

These are generally smaller programs that, in the past, were authorized or extended via provisions attached to larger, must-pass bills. One of the favorite vehicles was the “doc fix,” which regularly moved through Congress to make adjustments in how Medicare paid doctors. That is, until a landmark 2015 law — the Medicare Access and CHIP Reauthorization Act, or MACRA — permanently addressed physician payment.

CHIP finally got funding in the Jan. 22 federal spending deal, but the other items were left on the table. One issue, many said: They’re simply not as sexy, and the impact is harder to spot immediately.

“The problem is too much of the focus was on just one egg in the basket, and that egg got done. Now the rest of the eggs are saying, ‘What about me?’” said Rodney Whitlock, a health policy consultant and former Republican Senate staffer. “The real-world impact of not addressing those is slowly becoming problematic.”

Most of the programs aren’t politically controversial.

These programs usually pass with bipartisan support. For lobbyists and policy analysts on both sides of the aisle, that makes the funding lapse especially disorienting.

“Even things that should be easy and bipartisan are taking much, much longer and encountering much more difficulty than I think any of us would have expected,” said Eliot Fishman, senior director of health policy at the liberal advocacy group Families USA and a former member of the Obama administration. “It’s clearly a matter of political gamesmanship.”

There is some room to debate how to pay for these initiatives. But even that is limited, suggested Thomas Miller, a resident fellow at the conservative American Enterprise Institute.

“If it’s your economic interest at stake … this is an end-all and be-all. But these are not gigantic items — the consequences for the larger fiscal picture are not immense,” Miller said.

Take the therapy caps. They were first put in place as part of the 1997 Balanced Budget Act, as part of an effort to curb Medicare outpatient spending.

But in 1999, right when the caps were scheduled to kick in, pushback from physicians and patient advocates led Congress to delay their effective date. Since then, Congress, has — except for a brief lapse — kept them at bay.

This delay in funding has consequences for patients.

Stephanie Weyrauch, a Minnesota-based physical therapist concerned about the therapy caps, said she and her colleagues are already starting to ration care.

She described, for instance, a 69-year-old man who is recovering from a stroke and about halfway through his allotted therapy. He will require several more sessions later this year just for that condition, which would bring him up to the cap. If his other ailments — shoulder problems and poor blood flow – worsen, Medicare wouldn’t cover treatment.

“We have to make sure we’re doing what’s best for our patients. Sometimes that means we stop therapy early to prepare for a potential next episode,” she said.

A fix from Congress could come next week. 

Congress already provided some short-term funding for community health centers, which is “keeping the lights on,” Fishman said. But it lasts only until the end of March.

And the Maternal, Infant and Early Childhood Home Visiting Program is operating on previously allocated dollars.

In the meantime, the affected programs are struggling to plan for the future, Fishman noted. They are trying to come up with budgets and make staffing decisions without a sense of what their income will actually be.

But some people expressed optimism about what will be included in the funding bill likely to take shape in Congress next week.

“I continue to believe that when a spending deal gets worked out this train will ride along. … It is an election year,” Whitlock said. “No matter what, this is one of those where it’s got to get worked out.”

Podcast: ‘What The Health?’ The State Of The (Health) Union

January 31, 2018

In his first State of the Union Address, President Donald Trump told the American public that “one of my greatest priorities is to reduce the price of prescription drugs.” But that message could barely begin to sink in before other health news developed: The director of the Centers for Disease Control and Prevention was forced to resign Wednesday after conflict-of-interest reports.

Meanwhile, outside the federal government, Idaho is proposing to allow the sale of individual insurance policies that specifically violate portions of the Affordable Care Act. And three mega-companies — Amazon, Berkshire-Hathaway, and JPMorgan Chase — say they will partner to try to control costs and improve quality for their employees’ health care.

This week’s “What The Health?” panelists are Julie Rovner of Kaiser Health News, Alice Ollstein of Talking Points Memo and Julie Appleby and Sarah Jane Tribble of Kaiser Health News.

Among the takeaways from this week’s podcast:

  • Despite Trump’s strong rhetoric in the State of the Union Address, the president has taken few actions during his first year in office to reduce drug prices.
  • The president touted that Republicans had repealed the health law’s requirement that individuals get health insurance or pay a penalty. But that change in the law doesn’t go into effect until 2019, so his comments could be confusing to some taxpayers.
  • Idaho officials have announced that they are going to allow insurers to issue policies that don’t meet all the criteria of the federal health law. But it’s not clear that insurers are interested in participating in the experiment.
  • “Alexa, send me my Lipitor!” Can Amazon’s announcement that it and two other corporate behemoths are taking on employees’ health care create a new formula for keeping costs down and improving quality? Email Sign-Up

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Plus, for “extra credit,” the panelists recommend their favorite health stories of the week they think you should read, too.

Julie Rovner: Kaiser Health News’ “No Car, No Care? Medicaid Transportation At Risk In Some States,” by JoNel Aleccia.

ALSO: JAMA’s “Are Medicaid Work Requirements Legal?” by Nicholas Bagley.

Alice Ollstein: Politico’s “Trump’s Top Health Official Traded Tobacco Stock While Leading Anti-Smoking Efforts,” by Sarah Karlin-Smith and Brianna Ehley.

Julie Appleby: The Atlantic’s “Why We Forget Most of the Books We Read,” by Julie Beck.

Sarah Jane Tribble: The New York Times’ “5-Year-Olds Work Farm Machinery, And Injuries Follow,” by Jack Healy.

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcher or Google Play.

After Months In Limbo For Children’s Health Insurance, Huge Relief Over Deal

January 25, 2018

When parts of the federal government ground to a halt this past weekend, Linda Nablo, who oversees the Children’s Health Insurance Program in Virginia, had two letters drafted and ready to go out to the families of 68,000 children insured through the program, depending on what happened.

One said the federal government had failed to extend CHIP after funding expired in September and the stopgap funding had run out. The program would be shutting down and families would lose their insurance.

The other letter said they could stop worrying because federal funding had finally come through and the program’s future was assured.

Since Monday’s deal to end the shutdown included a six-year reauthorization of CHIP, enrolled families in Virginia will get that second letter. The program will go on and no children will lose their health insurance.

Taking Stock Of Costs

After months of uncertainty, Nablo said she’s relieved. “Hugely relieved. It’s over and the program is safe, and we can all go back to our normal jobs,” she said.

Preparations to shut down the program in Virginia began over the summer, even before funding expired. Staff spent untold hours gearing up to end the program, retooling enrollment systems, changing contracts and more.

“Those aren’t huge dollar amounts,” Nablo said. “I think the cost more is in the worry from parents.”

CHIP covers children in low-income families — most can’t afford private insurance and their children might have had to go uninsured. Nationally, about 9 million children get health coverage through CHIP.

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An Unprecedented Situation

In its 20-year history, CHIP had always been uncontroversial, even popular in both parties. Its funding needs to be periodically renewed, and it always had been taken care of well in advance of the money running out.

CHIP is a match program — states and the federal government split the cost. When states made their budgets for this year, they assumed federal funding for CHIP would be there, so they were blindsided by the funding gap.

Every state’s calculus for how long they could run on leftover money was different. In Texas, Hurricane Harvey threw off that state’s projections. Because of the disaster, it waived fees for CHIP and enrollment spiked, so it had less money coming in and more going out.

A handful of states — including Virginia — sent out letters warning families their coverage was in jeopardy because of the uncertainty in Congress.

“One state — Connecticut — did freeze enrollment between the week of Christmas and New Year’s,” said Joan Alker of the Georgetown University Center for Children and Families, which monitored CHIP funding closely the past few months.

Virginia’s Nablo said there might be other, more subtle, costs from all the uncertainty.

“I can’t quantify it, but I am sure there are states that held off on things like mounting an outreach program to encourage people to enroll because they didn’t know if the program was going to be there for them,” she said. “There may have been states that were thinking of implementing some efficiencies or innovations, but didn’t because — again — is the program going to be there?”

Six Years Of Certainty

Alker said she is happy with the CHIP deal Congress passed. It’s the same one they agreed on in September, she noted, so she’s not sure why it took a shutdown to finally get it through.

The deal keeps the federal investment in the program at its current level for two fiscal years. After that, the amount that states have to pay for the program will increase.

“At least states now have time to plan for that,” Alker said. “Overall, it really was a fair and reasonable compromise.”

What puzzles her is why it was extended only for six years when the Congressional Budget Office estimated extending CHIP for 10 years would save the federal government $6 billion, she said.

“The six-year [extension] is a small saver — it saves just under a billion dollars,” Alker said. “Now there’s nothing preventing Congress from coming back as they move ahead with the bigger budget deal — they could come back and extend CHIP for four more years and grab those savings.”

Impact On Children’s Uninsured Rate

Alker does worry that the months of uncertainty around CHIP may have already caused children to drop out of the program, increasing the uninsured rate among children, she said. That should become clear in the fall, when the Georgetown Center For Children and Families does its annual assessment of the children’s uninsured rate.

If that trend develops nationally, it hasn’t been the case in Virginia, where CHIP enrollment went up this past fall.

“We actually saw a boost in enrollment,” Nablo said. “I can’t really quite explain it.”

Maybe, she said, it was all the attention the unprecedented funding crisis brought to CHIP. A silver lining, perhaps, to many months of anxiety.

This story is part of a partnership that includes WAMU, NPR and Kaiser Health News. Selena Simmons-Duffin is a producer at NPR’s “All Things Considered,” currently on an exchange with Washington, D.C., member station WAMU.

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