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OCR Concludes All-Time Record Year for HIPAA Enforcement with $3 Million Cottage Health Settlement

HHS Gov News - February 07, 2019
The Office for Civil Rights (OCR) at the U.S Department of Health and Human Services concluded an all-time record year in Health Insurance Portability and Accountability Act (HIPAA) enforcement activity.  In 2018, OCR settled 10 cases and was granted summary judgment in a case before an Administrative Law Judge, together totaling $28.7 million from enforcement actions. This total surpassed the previous record of $23.5 million from 2016 by 22 percent.  In addition, OCR also achieved the single largest individual HIPAA settlement in history of $16 million with Anthem, Inc., representing a nearly three-fold increase over the previous record settlement of $5.5 million in 2016.   OCR’s final settlement of the year occurred in December 2018, when Cottage Health agreed to pay $3 million to OCR and to adopt a substantial corrective action plan to settle potential violations of the HIPAA Rules. Cottage Health operates Santa Barbara Cottage Hospital, Santa Ynez Cottage Hospital, Goleta Valley Cottage Hospital and Cottage Rehabilitation Hospital, in California. OCR received two notifications from Cottage Health regarding breaches of unsecured electronic protected health information (ePHI) affecting over 62,500 individuals, one in December 2013 and another in December 2015.     The first breach arose when ePHI on a Cottage Health server was accessible from the internet.  OCR’s investigation determined that security configuration settings of the Windows operating system permitted access to files containing ePHI without requiring a username and password.  As a result, patient names, addresses, dates of birth, diagnoses, conditions, lab results and other treatment information were available to anyone with access to Cottage Health’s server.  The second breach occurred when a server was misconfigured following an IT response to a troubleshooting ticket, exposing unsecured ePHI over the internet.  This ePHI included patient names, addresses, dates of birth, social security numbers, diagnoses, conditions, and other treatment information.   OCR’s investigation revealed that Cottage Health failed to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of the ePHI; failed to implement security measures sufficient to reduce risks and vulnerabilities to a reasonable and appropriate level; failed to perform periodic technical and non-technical evaluations in response to environmental or operational changes affecting the security of ePHI; and failed to obtain a written business associate agreement with a contractor that maintained ePHI on its behalf.   “Our record year underscores the need for covered entities to be proactive about data security if they want to avoid being on the wrong end of an enforcement action,” said OCR Director Roger Severino. “The Cottage settlement reminds us that information security is a dynamic process and the risks to ePHI may arise before, during, and after implementation covered entity makes system changes.”    In addition to the $3 million settlement, Cottage will undertake a robust corrective action plan to comply with the HIPAA Rules.  The resolution agreement and corrective action plan may be found on the OCR website at https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/cottage/index.html.   A summary of all 2018 OCR HIPAA settlements and judgments may be found at https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/2018enforcement/index.html.  

John Dingell, ‘Dean Of The House,’ Remembered As A Force In Health Policy

Kaiser Health News:Medicaid - February 07, 2019

Former Rep. John Dingell, the Michigan Democrat who holds the record as the longest-serving member of the U.S. House, died Thursday night in Michigan. He was 92.

And while his name was not familiar to many, his impact on the nation, and on health care in particular, was immense.

For more than 16 years Dingell led the powerful House Energy and Commerce Committee, which is responsible for overseeing the Medicare and Medicaid programs, the U.S. Public Health Service, the Food and Drug Administration and the National Institutes of Health.

With nearly 60 years of service, Dingell was the longtime “dean of the House,” an honor accorded to the longest tenured member. As a young legislator, he presided over the House during the vote to approve Medicare in 1965. As a tribute to his father, who served before him and who introduced the first congressional legislation to establish national health insurance during the New Deal, Dingell introduced his own national health insurance bill at the start of every Congress.

And when the House passed what would become the Affordable Care Act in 2009, leaders named the legislation after him. Dingell sat by the side of President Barack Obama when he signed the bill into law in 2010.

Dingell was “a beloved pillar of the Congress and one of the greatest legislators in American history,” said a statement from House Speaker Nancy Pelosi. “Yet, among the vast array of historic legislative achievements, few hold greater meaning than his tireless commitment to the health of the American people.”

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He was not always nice. He had a quick temper and a ferocious demeanor when he was displeased, which was often. Witnesses who testified before him could feel his wrath, as could Republican opponents and even other committee Democrats. And he was fiercely protective of his committee’s territory.

In 1993, during the effort by President Bill Clinton to pass major health reform, as the heads of the three main committees that oversee health issues argued over which would lead the effort, Dingell famously proclaimed of his panel, “We have health.”

Dingell and his health subcommittee chairman, California Democrat Henry Waxman, fought endlessly over energy and environmental issues. The Los Angeles-based Waxman was one of the House’s most active environmentalists. Dingell represented the powerful auto industry in southeastern Michigan and opposed many efforts to require safety equipment and fuel and emission standards.

In 2008, Waxman ousted Dingell from the chairmanship of the full committee.

But the two were of the same mind on most health issues, and together during the 1980s and early 1990s they expanded the Medicaid program, reshaped Medicare and modernized the FDA, NIH and the Centers for Disease Control and Prevention.

“It was always a relief for me to know that when he and I met with the Senate in conference, we were talking from the same page, believed in the same things, and we were going to fight together,” Waxman said in 2009.

Dingell was succeeded in his seat by his wife, Rep. Debbie Dingell, herself a former auto industry lobbyist.

Former Rep. John Dingell Dies; Longest-Serving Congressman Was A Force In Health Policy

Kaiser Health News:The Health Law - February 07, 2019

Former Rep. John Dingell, the Michigan Democrat who holds the record as the longest-serving member of the U.S. House, died Thursday night in Michigan. He was 92.

And while his name was not familiar to many, his impact on the nation, and on health care in particular, was immense.

For more than 16 years Dingell led the powerful House Energy and Commerce Committee, which is responsible for overseeing the Medicare and Medicaid programs, the U.S. Public Health Service, the Food and Drug Administration and the National Institutes of Health.

As a young legislator, he presided over the House during the vote to approve Medicare in 1965. As a tribute to his father, who served before him and who introduced the first congressional legislation to establish national health insurance during the New Deal, Dingell introduced his own national health insurance bill at the start of every Congress.

And when the House passed what would become the Affordable Care Act in 2009, leaders named the legislation after him. Dingell sat by the side of President Barack Obama when he signed the bill into law in 2010.

Dingell was “a beloved pillar of the Congress and one of the greatest legislators in American history,” said a statement from House Speaker Nancy Pelosi. “Yet, among the vast array of historic legislative achievements, few hold greater meaning than his tireless commitment to the health of the American people.”

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He was not always nice. He had a quick temper and a ferocious demeanor when he was displeased, which was often. Witnesses who testified before him could feel his wrath, as could Republican opponents and even other committee Democrats. And he was fiercely protective of his committee’s territory.

In 1993, during the effort by President Bill Clinton to pass major health reform, as the heads of the three main committees that oversee health issues argued over which would lead the effort, Dingell famously proclaimed of his panel, “We have health.”

Dingell and his health subcommittee chairman, California Democrat Henry Waxman, fought endlessly over energy and environmental issues. The Los Angeles-based Waxman was one of the House’s most active environmentalists. Dingell represented the powerful auto industry in southeastern Michigan and opposed many efforts to require safety equipment and fuel and emission standards.

In 2008, Waxman ousted Dingell from the chairmanship of the full committee.

But the two were of the same mind on most health issues, and together during the 1980s and early 1990s they expanded the Medicaid program, reshaped Medicare and modernized the FDA, NIH and the Centers for Disease Control and Prevention.

“It was always a relief for me to know that when he and I met with the Senate in conference, we were talking from the same page, believed in the same things, and we were going to fight together,” Waxman said in 2009.

Dingell was succeeded in his seat by his wife, Rep. Debbie Dingell, herself a former auto industry lobbyist.

Podcast: KHN’s ‘What The Health?’ A ‘Healthy’ State Of The Union

Julie Rovner

Kaiser Health News

@jrovner

Read Julie's Stories Anna Edney

Bloomberg

@annaedney

Read Anna's Stories Margot Sanger-Katz

The New York Times

@sangerkatz

Read Margot's Stories Alice Ollstein

Politico

@AliceOllstein

Read Alice's Stories

Health policy played a surprisingly robust role in President Donald Trump’s 2019 State of the Union address.

The president laid out an ambitious set of health goals in his speech Tuesday to Congress and the nation, including reining in drug prices, ending the transmission of HIV in the U.S. during the next decade and dedicating more resources to fighting childhood cancer.

Meanwhile, in Utah and Idaho, two of the states where voters last fall approved expansion of the Medicaid health program, Republican legislatures are trying to scale back those plans.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Anna Edney of Bloomberg News, Margot Sanger-Katz of The New York Times and Alice Ollstein of Politico.

Among the takeaways from this week’s podcast:

  • The Trump administration is proposing to change the drug rebates in Medicare so that consumers purchasing the medicines get more of the savings and the middlemen negotiating the deals get less. But that effort could lead to increased insurance premiums — a consequence that could have significant political repercussions.
  • Trump’s pledge to end HIV transmissions in 10 years was a bit of a surprise since the disease had not been much of a priority in earlier moves by the administration.
  • The efforts to restrict Medicaid expansion approved by voters in Utah and Idaho show the limitations of referendums and could impact a move to get a Medicaid expansion question on the Florida ballot.
  • An intriguing study this week showed that medications to treat cardiac problems saved Medicare money. The results were surprising because generally public health officials suggest that prevention is important to improve health but doesn’t necessarily save money.

Also this week, Rovner interviews KHN senior correspondent Phil Galewitz, who investigated and wrote the latest “Bill of the Month” feature for Kaiser Health News and NPR. It’s about a man with a minor problem — fainting after a flu shot — and a major bill. You can read the story here.

If you have a medical bill you would like NPR and KHN to investigate, you can submit it here.

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

Julie Rovner: NPR’s “Texans Can Appeal Surprise Medical Bills, But the Process Can Be Draining,” by Ashley Lopez

Margot Sanger-Katz: The Los Angeles Times’ “In Rush to Revamp Medicaid, Trump Officials Bend Rules That Protect Patients,” by Noam N. Levey

Anna Edney: Bloomberg News’ “Ketamine Could Be the Key to Reversing America’s Rising Suicide Rate,” by Cynthia Koons and Robert Langreth

Alice Ollstein: The Washington Post’s “’It Will Take Off Like a Wildfire’: The Unique Dangers of the Washington State Measles Outbreak,” by Lena H. Sun and Maureen O’Hagan

To hear all our podcasts, click here.

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

Trump Administration Salutes Parade Of Generic Drug Approvals, But Hundreds Aren’t For Sale

The Trump administration has been trumpeting a huge increase in FDA generic drug approvals the past two years, the result of its actions to streamline a cumbersome process and combat anti-competitive practices. But nearly half of those newly approved drugs aren’t being sold in the United States, Kaiser Health News has found, meaning that many patients are deriving little practical benefit from the administration’s efforts.

The administration’s aggressive push to approve more generics is designed to spur more competition with expensive brand-name drugs, and drive prices lower, President Donald Trump noted at a White House event last month. The Food and Drug Administration has approved more than 1,600 generic drug applications since January 2017 — about a third more than it did in the last two years of the Obama administration.

But more than 700, or about 43 percent, of those generics still weren’t on the market as of early January, a KHN data analysis of FDA and drug list price records shows. Even more noteworthy: 36 percent of generics that would be the first to compete against a branded drug are not yet for sale. That means thousands or even millions of patients have no option beyond buying branded drugs that can cost thousands of dollars per month.

“That’s shockingly high,” said former congressman Henry Waxman, who co-sponsored the 1984 law that paved the way for the generic approval process as we know it today. He said he’d like to know more, but suspects anti-competitive behavior is at least partly to blame and that revisions to the so-called Hatch-Waxman Act might be needed.

The approved generics that haven’t made it to American medicine cabinets include generic versions of expensive medicines like the blood thinner Brilinta and HIV medication Truvada. They also include six different generic versions of Nitropress, a heart failure drug, whose price spiked 310 percent in 2015.

Experts say a variety of factors are to blame. Generics sellers have fought for years against patent litigation and other delay tactics that protect brand-name drugs from competition. In recent years, vast industry consolidation has reduced the ranks of companies willing to purchase and distribute generics. And, in some cases, makers of generics obtain approvals and ultimately make a business decision to sit on them.

“It’s a real problem because we’re not getting all the expected competition,” FDA Commissioner Scott Gottlieb said in an interview, adding that it will be difficult to solve because it has so many causes. It takes five generics on the market to drive prices down to 33 percent of the original brand-name price, according to an FDA analysis.

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Without generics to lower drug costs, branded manufacturers can continue to increase their prices, at a rate of roughly 10 percent a year, said Scott Knoer, chief pharmacy officer at the Cleveland Clinic. “It makes health care costs go up across the board.”

Even if hospital patients don’t directly see high drug prices in their bills, the higher costs get passed to insurers, who pass them on as higher premiums, Knoer said. They also get passed to taxpayers, who pay for drugs covered by Medicare and Medicaid.

Consolidation on multiple tiers of the drug supply chain have changed the face of the generic drug market, warping supply and demand.

In some cases, key pharmaceutical ingredients are unavailable or a manufacturer doesn’t have the capacity to launch a product because it’s having difficulty meeting demand for existing products.

Manufacturing consolidation has dramatically reduced the production of injectable drugs, which are typically administered in a doctor’s office. This may be why 157 injectable generics that were approved in the past two years haven’t been brought to market.

Erin Fox, a pharmacist at the University of Utah who tracks drug shortages, said the KHN analysis of stalled generics “highlights that companies often have a lot of products ‘on the books’ but aren’t really making them.” A few generics on the list — like dextrose 10 percent injection, to treat patients with low blood sugar — would have been helpful to combat shortages the past few years. “This comes up with shortages a lot — it looks like there are more suppliers than there really are,” Fox said.

A lot can change between the time a drugmaker files a generic application with the FDA and the time it’s approved.

Some drugmakers that applied for generic approval years ago switched their attention to more profitable products. Novartis, for instance, recently sold a generics division run by Sandoz so Sandoz could focus on other drugs, including biosimilars, which compete with expensive biologic drugs made from living organisms.

“Some of these [generic] drug applications have been sitting six, seven, eight years,” said Robert Pollock, a former acting deputy director of the FDA’s Office of Generic Drugs who now works for Lachman Consultants. By the time it’s approved, a generic can fall out of favor because patients taking the branded version reported new side effects, or because a more effective branded drug was approved.

For some generic manufacturers, there’s money to be made by waiting. Brand-name drugmakers will pay them to keep their products off the market as part of a tactic sometimes called “pay for delay.” The Federal Trade Commission estimates that such deals cost consumers and taxpayers $3.5 billion a year.

The number of these potentially anti-competitive settlements decreased from fiscal 2014 to fiscal 2015, according to the latest FTC report. Still, Gottlieb said he hopes to crack down on such tactics. The first generic to take on a branded drug is granted 180 days of exclusivity before the second and third generics can be approved, giving those products a clear advantage.

“We don’t like that companies are able to just park [a generic for] 180 days while they cut a deal not to come to market,” Gottlieb said, adding that with help from Congress he hopes to force companies to forfeit exclusivity if they don’t launch on time.

In some cases, Gottlieb said, generic drugmakers wait until they’ve stockpiled a number of newly approved generics and have landed a contract with a purchaser before bringing their medicines to market.

These bundled contracts are secretive, so not much is known about them, but it means companies are filing generic applications just for the option of introducing generics, said health care economist Rena Conti, an associate professor at Boston University. They’ll wait until the most strategic time to launch, which could be after the competition shakes out, leaving them as “the last man standing,” Conti said. Then they can launch and hike the price.

To be sure, the FDA under Gottlieb’s leadership has taken steps to increase generic competition, from shaming brand-name drugmakers for blocking generics to publishing documents to help manufacturers win approval more easily. But approval doesn’t necessarily spur competition.

“We used to say it was all about getting in — once you got approval from the FDA, then you could go to market,” said Chip Davis, CEO of the Association for Accessible Medicines, the trade group for makers of generic drugs. The biggest challenges his members face is that there aren’t enough companies purchasing drugs, Davis said. Consolidation has led to three large buying groups covering 90 percent of the market, according to a Drug Channels Institute report. So, if you’re the fourth or fifth generic, you may have no one left to sell to.

Yet another barrier relates to how drug middlemen select the drugs they’ll cover under industry formularies, which determine what products insurance plans will cover. In some cases, middlemen known as “pharmacy benefit managers” have made it clear they don’t have room on their formularies for another generic. Or they do, but they give branded drugs preferential treatment with lower copays, hurting the generic’s market share.

Barriers to entry are lower under Gottlieb’s FDA than they’ve been in years past, Conti said, and regulations can help foster competition. But, she said, “they can only do so much.”

Methodology

To identify approved drugs that have not reached the market, KHN used the FDA’s Orange Book database — as of Jan. 2 — to identify drug applications approved in 2017 or 2018. We then searched the FDA’s online National Drug Code directory for billing codes for the drugs associated with each application as of the same date. To account for a possible lag, we supplemented this list with a more complete billing code directory that we obtained via a Freedom of Information Act request. It includes codes with expected future launch dates that don’t appear in the online version.

According to experts, a billing code doesn’t necessarily mean a drug is on the market. However, every drug on the market needs a list price for reimbursement. We provided a list of application numbers and billing codes to information technology firm Connecture, which then told us whether each one was active, inactive or had no list price as of Jan. 17.

If an application had at least one billing code with a list price attached, we counted it as on the market, even if other billing codes did not have list prices.

Sometimes, a single generic application can have multiple approval dates. If one of these approval dates occurred in the past two years, we included it in our analysis.

To determine whether a drug was a first generic, KHN used the FDA’s 2017 and 2018 lists of first generics as of Jan 2.

Trump Pledges To End HIV Transmission By 2030. Doable, But Daunting.

Kaiser Health News:The Health Law - February 06, 2019

Noting that science has “brought a once-distant dream within reach,” President Donald Trump on Tuesday night pledged to eliminate HIV transmission within 10 years.

“We have made incredible strides, incredible,” Trump said in the annual State of the Union address. “Together, we will defeat AIDS in America and beyond.”

It’s a goal long sought by public health advocates. But even given the vital gains made in drug therapies and understanding of the disease over nearly 40 years, it is not an easy undertaking.

“The reason we have an AIDS epidemic is not just for a lack of the medication,” said Dr. Kenneth Mayer, medical research director at the Boston LGBT health center Fenway Institute. “There are a lot of social, structural, individual behavioral factors that may impact why people become infected, may impact if people who are infected engage in care and may impact or affect people who are at high risk of HIV.”

Health and Human Services Secretary Alex Azar, who provided details of the initiative after Trump’s announcement, said the administration will target viral hot spots by providing local groups more resources, using data to track the spread of the disease and creating local task forces to bolster prevention and treatment.

Neither Azar nor other federal officials who briefed reporters offered cost estimates for the program.

Azar said the plan seeks to reduce new infections by 75 percent in the next five years and 90 percent in the next decade.

That goal is predicated on growing use of current medications that suppress the virus to such low levels that it is not transmitted during sexual intercourse. PrEP, a drug combination available to individuals with a negative HIV status but may become infected, can reduce their risk of getting the virus by 97 percent, Azar said.”

“This is not the HIV epidemic of the 1990s,” said Terrance Moore, acting executive director of NASTAD, a nonprofit organization that represents officials who administer HIV and hepatitis programs. “We have the tools to end this epidemic.”

Gay and bisexual men made up two-thirds of the nearly 40,000 new HIV cases in 2017, but one clear signal of that difference in the epidemic today is the geography. The nation’s HIV hotbeds are no longer located just in coastal metropolitan areas. In 2017, more than half of the new cases were diagnosed in Southern states.

HHS said it will focus its efforts on the heart of the epidemic: 48 counties across 19 states; the District of Columbia; San Juan, Puerto Rico; and rural areas in seven states, many of which are in the South.

The new federal initiative would expand PrEP access in community health clinics for low-income patients and quickly refer any new clinic patients with HIV to specialized care.

Medications alone are not the answer. Lawmakers must have the political will to move forward with policies based in science, said Moore. Existing programs do not provide enough infrastructure to achieve this goal, he added.

“You can’t be simultaneously attacking and undermining the needs of these communities, while claiming that you want to support them and end the AIDS epidemic,” said Scott Schoettes, HIV project director for the LGBT advocacy group Lambda Legal.

The Trump administration has pursued policies that may hinder the president’s goal. And efforts in the South face additional challenges, like higher levels of poverty, difficulty providing health care in rural areas and historical racial tension.

“I don’t think that these things are things that we cannot overcome,” said Greg Millett, vice president and director of public policy at the HIV research foundation amfAR. “But I also think that we need to be very clear about what the obstacles are and to start thinking now innovatively about how we’re going to be able to obviate them.”

Here are some of the challenges that experts said the president’s plan could face.

Health Insurance

Insurance coverage plays a crucial role in keeping HIV patients healthy.

Comprehensive insurance helps patients access the expensive medications needed to keep the virus under control and vital tests to check on virus levels and white blood cell counts — key health indicators. HIV patients are also often susceptible to infections because the virus compromises the immune system. And they tend to have higher rates of mental health conditions, which could affect their ability to adhere to HIV medication if left untreated.

The Affordable Care Act opened up coverage for thousands of HIV patients with its guarantee of insurance for people with preexisting conditions, but many Republican officials are still calling for the law’s repeal.

In addition, the ACA’s Medicaid expansion led to a substantial jump in the number of people with AIDS who got that coverage, according to the Kaiser Family Foundation. But many states, especially in the South, have not expanded Medicaid. (Kaiser Health News is an editorially independent program of the foundation.)

A federal judge in Texas in December ruled the ACA unconstitutional in a lawsuit waged by a faction of conservative states and supported by the president.

“If you’re not going to provide it through the Affordable Care Act,” Schoettes said, “then there needs to be something that’s as comprehensive in terms of getting people care.

Housing

Although the federal government provides some housing assistance for people with HIV, it does not fill the need.

Those who are homeless or have unstable housing have lower access to HIV medications and poorer treatment outcomes.

A study from the Centers for Disease Control and Prevention found that among individuals living with HIV in certain impoverished urban areas across the country, the lower the household income, the higher the rate of HIV in the area. 

The federal government provides assistance through a program called Housing Opportunities for Persons With AIDS, known as HOPWA. In 2016, HOPWA changed its  funding formula to better allocate its resources to Southern areas hardest hit by HIV.

However, some of these HOPWA programs have waiting lists that can extend years. The nation is also experiencing an affordable housing shortage, which further limits options for low-income individuals living with HIV and their families.

Stigma And Mistrust

Experts continue to cite stigma as a key obstacle for treatment. Twenty-six states have laws that penalize an HIV patient for exposing someone to the virus, including 19 that require people who are aware they are infected to notify sexual partners and 12 that mandate disclosure to needle-sharing partners, according to the CDC.

The problems extend to doctors and medical staff. One study, published in 2016, found widespread stigma against HIV patients among health care staff in Alabama and Mississippi, especially among whites and men.

Gina Brown, a community engagement manager for the Southern AIDS Coalition, in part blames the culture of the South, where religious beliefs often clash with gay culture, for perpetuating these problems. “We are still in Bible Belt country, where religion plays a huge part in how we talk about sex or not talk about sex,” she said.

But federal policies, such as the Trump administration’s ban on transgender men and women serving in the military, also play a role.

Federal officials acknowledged these difficulties and affirmed the program would not discriminate against transgender patients.

In addition, minority communities hard hit by the HIV epidemic harbor lingering distrust toward the medical system due to historical abuses such as the Tuskegee syphilis trials, said Mayer.

Injection Drug Use

The scourge of addiction has killed tens of thousands across the nation, spread hepatitis C and is now leading to spikes in HIV transmission, as drug users share needles. In 2015, Scott County, Ind., sought to combat an HIV outbreak fueled by injected opioid use that infected 215 people. Drug use has also been connected to multiple HIV clusters in Massachusetts and Kentucky.

HHS reported that injection drug users accounted for 1 in 10 new HIV cases in 2016.

Expanding syringe exchange programs across the country could minimize this problem, experts said.

“Unfortunately, in the United States we haven’t done as good a job as other Western countries in making sure that those programs are widely available for those Americans who need them,” said Millett.

The CDC and HHS consider syringe exchange programs effective interventions, but some cities, such as Charleston, W.Va., that implemented the programs have now shut them down because of neighborhood complaints, funding concerns and opposition from citizens who object to providing injection equipment.

Federal funds can be used to support this intervention, but these dollars cannot go directly toward purchasing needles.

Trump Highlights Health Agenda With Vow To Lower ‘Unfair’ Drug Prices

It was not the centerpiece, but health was a persistent theme in President Donald Trump’s State of the Union address at the Capitol on Tuesday night.

Although the administration has focused more on issues of trade, taxes and immigration, the president laid out a series of health-related goals, including some that even Democrats indicated could be areas of bipartisan negotiation or compromise. Trump vowed to take on prescription drug prices, pursue an end to the HIV epidemic and boost funding for childhood cancers.

He also took a victory lap for goals promoted by his administration that had been accomplished. “We eliminated the very unpopular Obamacare individual mandate penalty,” he said, referring to the requirement in the Affordable Care Act that most people must have health insurance or pay a fine. It was eliminated as part of the 2017 GOP tax bill, despite backlash from critics that it could undercut Obamacare, after many failed attempts by Republicans to repeal the law.

And Trump noted congressional passage of a “right to try” bill that was supposed to make it easier for terminally ill patients to gain access to experimental medications, but so far few patients have been able to make the law work for them.

The most likely ground for bipartisanship will be the issue of drug prices, where Democrats are as eager as the president to do something to rein in prices that are spiraling upward.

“It is unacceptable that Americans pay vastly more than people in other countries for the exact same drugs, often made in the exact same place. This is wrong, this is unfair, and together we will stop it. We will stop it fast,” he said. “I am asking the Congress to pass legislation that finally takes on the problem of global freeloading and delivers fairness and price transparency for American patients.”

Democrats are cautiously optimistic on the drug price front. “I really am hopeful about making strides on prescription drug legislation this year on a bipartisan basis,” Wendell Primus, top health aide to House Speaker Nancy Pelosi, said at a conference for health policy researchers hours before the speech.

But not all of Trump’s claims Tuesday about his efforts on drug pricing stand up to close scrutiny. He proclaimed that “in 2018 drug prices experienced their single-largest decline in 46 years.” The drug-price portion of the consumer price index (CPI) declined slightly last year for the first time since 1972, but prices for many individual drugs are still rising sharply.

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Factors beyond the administration’s actions appear to have played the biggest role in the overall slowdown. Drug price increases have slowed largely because patents have expired on expensive, blockbuster drugs and several years have passed since the introduction of expensive medicines to treat hepatitis C, according to independent analysts.

But even as consumer drug prices have moderated, drug spending per hospital admission soared 19 percent from 2015 to 2017, a study sponsored by hospital trade groups found last month. That includes anesthesia drugs, chemotherapy infusions and other medicines that are not counted in the CPI.

Some well-placed Republicans praised the drug price effort. “I expect deep-pocketed interests to oppose anything and everything to protect the status quo,” said Sen. Chuck Grassley (R-Iowa), chairman of the powerful Senate Finance Committee. “But the moment is ripe for action and Americans expect us to work together to get the job done.”

News organizations including Kaiser Health News have reported on dozens of cases of surprise hospital bills, unaffordable costs for life-sustaining drugs and other health-expense shocks for patients. Shereese Hickson, whose experience with a $123,000 bill for multiple sclerosis drugs was covered by KHN and National Public Radio, was watching the speech.

“I’m glad he mentioned it,” she said of Trump’s promise to bring transparency and competition to pharmaceutical prices. “But I would like to see if it really will come true. If you do that — that’s going against the drug companies. They’ll be losing money and they’re not going to let that happen.”

Paul Davis — a retired doctor from Findlay, Ohio, whose family’s experience with a $17,850 bill for a simple urine test was detailed in a KHN-NPR “Bill of the Month” feature last year and who met with Trump about surprise billing last month — said he was disappointed Trump did not go into further detail about his health care proposals.

“He didn’t say anything,” he said.

Davis said he would have liked to have heard more about the administration’s recently announced plan to eliminate drug rebates negotiated by middlemen in the Medicare drug program, as well as the recently implemented policy requiring hospitals to list their prices online.

“If he wanted to use the podium to talk about the wonderful things that he’s done, that’s one of the things he’s gotten accomplished,” Davis said.

In their official responses to the speech, Democrats were more combative. “In this great nation, Americans are skipping blood pressure pills, forced to choose between buying medicine or paying rent,” said Stacey Abrams, former Georgia House minority leader and a rising star in the national Democratic Party. “Maternal mortality rates show that mothers, especially black mothers, risk death to give birth. And in 14 states, including my home state where a majority want it, our leaders refuse to expand Medicaid, which could save rural hospitals, economies and lives.”

California Attorney General Xavier Becerra, who gave the Spanish-language Democratic response, reminded viewers that while the Trump administration is seeking to have the Affordable Care Act overturned in court, Democrats would provide “medical care for your family that no politician can take away from you.”

In another outreach to Democrats, Trump vowed that his budget “will ask Democrats and Republicans to make the needed commitment to eliminate the HIV epidemic in the United States within 10 years. Together, we will defeat AIDS in America,” he said.

Groups that have been fighting HIV praised the promise.

“While we might have policy differences with the president and his administration, this initiative, if properly implemented and resourced, can go down in history as one of the most significant achievements of his presidency,” said Michael Ruppal, executive director of The AIDS Institute.

Trump also promised that his budget, which has been delayed by the recent government shutdown, will seek new funding to expand research into cures and treatments for childhood cancer.

He said he will seek “$500 million over the next 10 years to fund this critical lifesaving research.” The National Institutes of Health has long been a bipartisan favorite in Congress, although Trump in his first budget did seek cuts in NIH funding.

The one area in which bipartisanship will clearly not prevail is that of abortion. Trump reiterated a promise he made to anti-abortion groups as a candidate in 2016 and pushed for a federal bill to ban abortions after 20 weeks of pregnancy.

“Let us reaffirm a fundamental truth: All children — born and unborn — are made in the holy image of God,” he said.

Senate Republicans voted on such a bill in 2018; it failed to advance by a large margin. The bill still lacks the votes in the Senate, and the House now has a majority that supports abortion rights.

Abortion opponents praised the president’s comments. “Once again, President Trump has proved he is our nation’s most pro-life president ever and he is keeping his promise to the voters who fueled his victory,” said Marjorie Dannenfelser of the Susan B. Anthony List.

Abortion-rights supporters, meanwhile, chastised Trump’s comments.

“Shame on the president for using the State of the Union to vilify people who have abortions and the providers who care for them,” said Megan Donovan of the Guttmacher Institute. “Make no mistake: This is part of a larger agenda to eliminate access to abortion altogether.”

Staff writers Jay Hancock, Emmarie Huetteman and Ana B. Ibarra contributed to this report.

HHS Secretary Azar Praises President Trump’s Vision for Healthcare

HHS Gov News - February 05, 2019

HHS Secretary Alex Azar issued the following statement regarding the President’s State of the Union address:

“Americans heard tonight how serious President Trump is about improving the quality and affordability of healthcare. In addition to maintaining a strong commitment to confronting the opioid epidemic and proposing a new dedicated initiative to tackle childhood cancer, the President announced his Administration’s goal to end the HIV epidemic in America within 10 years, and asked Republicans and Democrats to also make this commitment.

“The President also laid out a bold vision to deliver all Americans better care at a lower cost, through bringing competition and price transparency to healthcare. Just last week, he proposed bringing new transparency to how seniors’ drugs are priced at the pharmacy counter by replacing a backdoor system of kickbacks with new upfront discounts to patients. The President has already taken significant action to lower the cost of prescription drugs, and the American people can expect more success in the years ahead.”

Read the blog Ending the HIV Epidemic: A Plan for America

Read the fact sheet Ending the HIV Epidemic: A Plan for America

Utah and Idaho Lawmakers Seek To Scale Back Voter-Approved Medicaid Expansions

Kaiser Health News:The Health Law - February 05, 2019

Three months after voters in Utah and Idaho defied their recalcitrant state legislatures to expand Medicaid through ballot initiatives, Republican lawmakers in those states are hitting back.

A bill is quickly moving through the statehouse in Utah — where 53 percent of voters favored the ballot question last November — that would limit the number of people eligible for an expanded Medicaid program and require that most adults qualifying for the program have a job.

In Idaho, where 61 percent of voters in November approved full Medicaid expansion, a group of 15 conservative state lawmakers is drafting legislation to add a work requirement and monthly premiums for newly eligible adults.

The pushback shows the limits of the ballot referendums — otherwise called “direct democracy,” said Craig Burnett, an assistant professor of political science at Hofstra University in New York.

The reaction from Idaho and Utah lawmakers could chill other potential Medicaid expansion ballot referendums planned for 2020 in Florida and other states, said Jamila Michener, an assistant professor of government at Cornell University.

“The point of ballot initiatives is to exert influence on the lawmaking process directly, but if legislatures undermine that process, it could ring hollow their purpose,” she said.

Jonathan Schleifer, executive director of The Fairness Project, which helped finance the Medicaid expansion initiatives last year, called the action by Utah and Idaho lawmakers “outrageous.”

“We were not surprised by it, but we are disappointed,” Schleifer said. “This shows how out of touch these legislators are with their constituents, and they are disrespecting families and the principles of basic democracy.” The Fairness Project is funded by the Service Employees International Union-United Healthcare Workers West, a California union.

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Republican lawmakers say they want to meet the will of voters but are trying to control state spending at same time.

“We need to put some sideboards on the expansion,” said John Vander Woude, Idaho House majority caucus leader. He said the public did not know the true cost of the Medicaid expansion when they voted for it last fall.

Utah and Idaho are among the 17 states that have not accepted federal funds provided by the Affordable Care Act to expand their Medicaid program to all adults earning less than 138 percent of the federal poverty level (about $17,000 for an individual). Under the ACA, the federal government pays 90 percent of the cost of coverage for people added through the expansion, compared with about 60 percent for people in the traditional Medicaid programs.

After the voter referendums, state officials still have to budget for the expansion and make plans for its implementation.

The pushbacks follow a similar effort by former Maine Gov. Paul LePage, who stymied a voter-directed expansion there for more than a year.

The Utah Senate on Monday voted to limit expansion to only those Medicaid enrollees earning up to only 100 percent of the federal poverty level and add a requirement that most new adult enrollees work. The bill now moves to the House, which is likely to pass it by Friday and send it to Republican Gov. Gary Herbert, who has indicated he may sign it.

Supporters of the ballot referendum note the Obama and Trump administrations have not let other states get ACA funding for a Medicaid expansion that does not cover people up to the full 138 percent of the poverty level. Jesse Cross-Call, an analyst for the left-leaning Center on Budget and Policy Priorities based in Washington, D.C., said that without administration approval of a partial expansion it’s likely “no coverage expansion would ever occur.”

Medicaid expansion has not always been this difficult to get through Republican-controlled states. Arizona, for example, approved expansion five years ago.

Nebraska voters last fall also approved a referendum to expand its Medicaid program. That effort remains on track, said Molly McCleery, director of health care access for Nebraska Appleseed, an advocacy group.

Utah’s ballot initiative would have expanded Medicaid to about 150,000 people. It included a 0.15 percent sales tax increase to pay for the expansion. It did not include a work requirement.

The Trump administration has approved Medicaid work requirements in six states, although only Arkansas has implemented it, as the issue faces litigation in federal court.

Utah lawmakers had some cover to reshape the Medicaid expansion voter referendum because the state’s hospitals didn’t support it. In other states, hospitals typically have been the biggest cheerleaders for full Medicaid expansion because it reduces the number of uninsured patients and, therefore, uncompensated care.

In Idaho, lawmakers seeking to limit the expansion want the Trump administration to approve the work requirement and premiums before expansion can occur. Typically, the federal government takes a year or more to evaluate a state’s request.

Expansion was expected to add coverage for 62,000 people.

On Friday, the Idaho House and Senate Health and Welfare Committees will hold a joint listening session where the public will be asked to testify about Medicaid expansion.

Vander Woude said one concern for him and his colleagues was that the Idaho measure did not lay out how the state would pay for its portion of the expansion.

“The referendum had no financing to show what it would cost,” he said. “The best way to implement this is do it in a cost-effective way to get the results we are looking for.”

Vander Woude said ballot initiatives are a bad idea because they don’t include all the information voters need to make informed decisions. “I think it’s a dangerous way to pass laws,” he said.

He said it was misleading for advocates to stress to voters how the millions in federal funding for Medicaid expansion scheduled to go to Idaho would be directed to other states if Idaho did not expand. But he didn’t dispute that, by not expanding, Idaho has missed out on federal funds that would have gone to provide health services to the state’s poor.

Ideas To Curb Surprise Medical Bills Percolate With Rare Bipartisan Push

Surrounded by patients who told horror stories of being stuck with hefty bills, President Donald Trump recently waded into a widespread health care problem for which almost everyone — even those with insurance — is at risk: surprise medical billing.

Trump’s declaration that taming unexpected bills would be a top priority for his administration echoed through the halls of Congress, where a handful of Republican and Democratic lawmakers have been studying the problem the past couple of years.

The sudden presidential interest has lawmakers on both sides of the aisle expressing optimism about attacking a problem that has affected 57 percent of American adults, according to a University of Chicago survey conducted last summer. Sen. Lamar Alexander, the Tennessee Republican who chairs the influential Health, Education, Labor and Pensions Committee, recently told reporters that he expects to see surprise billing legislation “in the next several months.”

Alexander is encouraged by the movement on both sides of the aisle, said a committee spokesman — giving a particular nod to the efforts of Sen. Bill Cassidy (R-La.). “The chairman looks forward to reviewing their work and hopes it leads to a bipartisan consensus on how to address the issue,” the spokesman added.

“Indications in Congress have always been that this would be something they could do on a bipartisan basis,” said Paul Ginsburg, a health economist at the Brookings Institution, a D.C.-based think tank.

Attention to this practice, which involves charging patients for care that is more expensive than anticipated or not covered by their insurance, has grown following an ongoing Kaiser Health News-NPR “Bill of the Month” investigation into medical billing at large.

While appetite for policymaking is on the upswing, the details of a possible solution remain up in the air.

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The Trump administration has not laid out precisely how it would take on surprise bills. But key lawmakers, including Alexander and Cassidy, have met with administration officials to discuss how to reduce health care costs.

With an eye toward drafting legislation, these two senators and several others have been consulting with billing experts, as well as state and local officials, about the biggest challenges and most promising approaches being used around the country.

And, though Senate Majority Leader Mitch McConnell (R-Ky.) has yet to address the issue, House Speaker Nancy Pelosi (D-Calif.) said it would be a priority.

“Ending surprise billing is an important part of Democrats’ ongoing effort to lower out-of-pocket health costs, and we’ll be working on it in the coming Congress,” said Henry Connelly, a Pelosi spokesman.

Previously introduced bills would impose new notification requirements, as well as limitations on what doctors and hospitals might charge patients. They would regulate bills for either emergency care at an out-of-network facility, or non-emergency care when the facility is in-network but the doctor is not.

  • A draft bill pushed by Cassidy — a gastroenterologist by trade and the leader of a small, bipartisan group of senators studying the issue — would cap what patients pay, and prohibit balance billing, when a patient is expected to make up the difference between what the provider charged and what the insurer paid. Instead of arbitration, the state would set the amount a health plan must pay. In the absence of a local policy, health plans would default to a federal formula outlined in the bill. (This is similar to laws passed in California and Connecticut.)
  • A bill from Sen. Maggie Hassan (D-N.H.) would tackle the issue by preventing a hospital, physician group or other medical provider from charging patients more for an emergency procedure than they would have expected to pay for in-network care. It would then establish an arbitration process to determine what the patient’s health plan should pay. (This is similar to laws passed in New York and New Jersey.)
  • A bill from Rep. Lloyd Doggett (D-Texas), the chairman of the House Ways and Means’ health subcommittee, introduced during the last Congress with Sen. Sherrod Brown (D-Ohio), would require hospitals to notify patients whether they, and the doctors and other providers the patient would see there, are in-network, as well as how much patients could expect to pay out-of-pocket. Without at least 24 hours’ notice and the patient’s consent — or if the patient was receiving same-day, emergency treatment — the hospital would be able to charge the patient no more than an in-network provider would.

To draw attention to the issue, Hassan planned to bring a guest to Tuesday’s State of the Union address who was billed more than $1,600 for a trip to an in-network emergency room. The patient learned after the fact that the doctor she briefly saw there was out-of-network.

“There does seem to be across-the-board understanding that what’s happening to patients right now isn’t right or fair,” Hassan told KHN.

Other members of Congress, including Sen. Amy Klobuchar (D-Minn.) and Sen. Tammy Baldwin (D-Wis.), will bring guests with painful, personal stories regarding the high cost of prescription drugs.

For its part, the administration says its commitment to addressing surprise medical bills is firm.

“President Trump has identified surprise medical bills as a serious concern of the administration. Protecting patients from these outrageous and unexpected bills and charges is a top priority for Secretary [Alex] Azar,” said Caitlin Oakley, a Department of Health and Human Services spokeswoman.

Hassan said she has not heard anything from the White House. But as Congress shifts its focus away from the partial government shutdown, she predicted, surprise billing could emerge as a legislative priority, adding that she and Cassidy have coordinated on the issue.

Both Hassan’s and Cassidy’s bills “would go a long way toward protecting patients,” suggested Zack Cooper, a Yale health economist who researches surprise billing. Hassan’s legislation, he said, has the additional benefit of likely bringing down health care costs.

“There are a lot of issues that can’t be fixed or at least can’t be fixed easily. This is an issue that causes immense pain and is quite visceral and can be fixed,” Cooper said.

And federal legislation is likely necessary, experts say. Some states have passed laws meant to curb surprise billing, and to protect patients from the costs — but those laws don’t affect self-insured large employers, which fall under federal jurisdiction and affect more than 60 percent of people who get insurance through work.

The presidential bully pulpit could be hugely influential — in particular, Ginsburg suggested, by “leaning on Congress” to bring legislation to Trump’s desk.

And new legislation probably is the most effective vehicle, health policy experts said. It’s unclear whether or what kind of executive action HHS could take without Congress.

“Some creative lawyers could come up with creative interpretations [of existing laws] and lead to smart policy,” said Barak Richman, a Duke University law school professor who focuses on health policy.

But re-interpreting federal law would almost certainly invite legal challenges, he added.

Already, competing industry groups are lobbying to put their stamp on any federal policy. The emergency physicians’ trade group has backed an approach like Hassan’s, while the insurance lobby is calling for a Cassidy-style bill. When asked about the industry’s response, Hassan said she has gotten “a variety of feedback — as you would expect.”

For California Attorney General Xavier Becerra, Resistance Is Personal

Kaiser Health News:The Health Law - February 04, 2019

When President Donald Trump demands a border wall or threatens to deport young unauthorized immigrants, one of the loudest opposition voices comes from the son of Mexican immigrants — who also happens to be California’s top lawyer.

Democrat Xavier Becerra, the state’s first Latino attorney general, is not only one of Trump’s biggest critics, he is an unrelenting adversary in court, striking at Republican efforts to overturn federal rules not just on immigration, but on health care, birth control, climate change and more.

On Tuesday, Becerra, 61, will take the national stage when he gives the Spanish-language rebuttal to the president’s State of the Union address. He has challenged the Trump agenda before.

Becerra has taken the Trump administration to court 45 times since former Gov. Jerry Brown appointed him to the job in 2017. In November, voters overwhelmingly gave him a four-year term, validating his decision to leave Congress after 24 years.

Becerra, whose wife is a doctor, is leading a coalition of 20 states and the District of Columbia in defending the Affordable Care Act against a Texas lawsuit that could determine the fate of the law — and with it, health coverage for millions of Americans. And he won a nationwide court injunction last year that blocked the Trump administration’s decision to end the Deferred Action for Childhood Arrivals (DACA) program, which allows qualified young people who were brought into the U.S. illegally as children to obtain temporary work permits.

When news reports last month revealed that Trump was considering diverting emergency disaster relief funds from California, Florida and Texas during the partial federal government shutdown, Becerra condemned the president on Twitter for poaching funds for a “reckless & lawless” border wall.

The fights are ones that Becerra describes as personal. He talked to California Healthline’s Samantha Young about his role — and how his upbringing influences his legal decisions.

The following interview has been edited for length and clarity.

Q: You were a veteran member of Congress in a leadership role. Why did you take this job?

November 2016 hits. We have the election. All the things that I cared about were going to be placed in jeopardy by this new president.

I found myself thinking I probably could make a bigger difference as the attorney general for the entire state of California, defending everything I fought to erect, than as a minority member in the House of Representatives trying to make my point, but always losing.

I made a calculation. I think I made the right choice.

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Q: You have sued the Trump administration 45 times on education, immigration, health care, birth control access, climate change and more. What’s the one case you really wanted to win?

I’ll give you two.

First, the Affordable Care Act, knowing how much it has been a game changer for families. I would never have believed that I’d be leading the effort to protect the entire Affordable Care Act as an attorney general for one of 50 states. But here I am.

The second one is the DACA litigation, because as the son of immigrants, I watched my parents struggle and saw the things they had to live through. I believe these DACA recipients are going to be some of the greatest leaders America has and it’s because they had to go through so much like my parents did. So, it’s very personal.

Q: Do you remember your parents’ economic struggles as a child?

I thought I was middle class growing up as a kid. It really wasn’t until I was driving with my mom to start my first day at Stanford University, driving through Palo Alto, that I realized I’m not middle class.

We always had decent food to eat. I never got a pair of Converse. I never had a pair of Levi’s jeans. Never had that kind of stuff, but I always had clothes. It didn’t dawn on me that we were much different than other folks.

Q: How does your upbringing influence your decisions as attorney general?

Everything I do is informed by what I grew up with. I defend immigrants with a passion because I saw immigrants every day of my life. And I know how hard they work. I never saw a day where my dad didn’t work.

My mom came here when she was 18 from Guadalajara, when she married my dad. Didn’t know English. Learned it. She could always find a job, and when she learned English it became easier. But she could never go very high because she never went to college.

So, when someone wants to knock an immigrant, you’re knocking my dad and my mom.

Q: You believe everyone should have access to health care. Was there ever a period in your life when you didn’t have health insurance?

I don’t ever recall a time when I didn’t. That’s why I’m such a big defender of unions. My dad was a construction worker. My dad got to the sixth grade. As difficult as it is for someone with a sixth-grade education to get a decent job, and while being a manual laborer and working construction doesn’t make you a millionaire, if you work for a union it gets you basic benefits.

I knew what it meant to have health insurance, especially on the day my mom ended up having a miscarriage. She was hemorrhaging at home and she had to be rushed to the hospital. There was no hesitation.

We knew we could go to the doctor — and everybody should know that. For me, health care is a right. I’ve been a single-payer advocate all my life.

Q: Why do you think it’s important to build coalitions with other states when challenging the Trump administration?

Lifting something by yourself is very difficult. When you get a team to do it, it just clicks so much easier. Maybe it’s because I went through Congress more years in the minority than the majority, where you realize what it takes to actually cobble together a coalition to get something done. Or, maybe it’s just that when you’ve been in a minority all your life, the son of immigrants with very little, you know it takes a team effort.

I got through Stanford knowing my family didn’t have a lot of money, so I had to work, take out student loans and receive help from the government. It was a combination of a lot of things.

Q: What’s your response to critics who say state attorneys general are “militarizing” their office to overturn policies your party can’t block in Congress?

Which of the cases should we not have filed? The one to defend the Affordable Care Act, or the one to prevent women from losing access to birth control, or is it the one to allow DACA Dreamers to be deported, or is it the one to make sure that we are defending against a crazy border wall, or is it the one that should allow predatory for-profit colleges to continue to avoid having to provide relief to students who were defrauded?

We’re not doing this because we’re trying to attack the federal government or because we’ve got it out for this particular president. How would we explain to the people who would have been unprotected why we just watched, why we just spectated?

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Transparent Hospital Pricing Exposes Wild Fluctuation, Even Within Miles

The federal government’s new rule requiring hospitals to post prices for their services is intended to allow patients to shop around and compare prices, a step toward price transparency that has generated praise and skepticism.

Kaiser Health News examined the price lists — known in hospital lingo as “chargemasters” — of the largest acute care hospitals in several large cities.

Prices varied widely on some basic procedures, even for basic charges. For instance, the list price on a liter of basic saline solution for intravenous use ranged from $56 to $472.50, nearly seven times as much. A brain MRI with contrast was priced from $1,7210 to $8,800 at the hospitals. And they varied widely even when comparing nearby hospitals.

The new rule mandates that the chargemasters be available on the hospital website in a machine-readable format, but not all hospitals make them easy to find, and understanding them is a bigger obstacle.

(Story continues below.)

KHN senior correspondent Julie Appleby and California Healthline’s Barbara Feder Ostrov recently wrote about this new rule and found price lists befuddling to most anyone without an advanced medical degree.

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Task Force Outlines Strategy To Address California’s Shortfall Of Health Workers

Listen to KQED Politics and Government Reporter Katie Orr’s radio version of this story, which ran on The California Report.

https://californiahealthline.files.wordpress.com/2019/02/020419.mp3

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Gov. Gavin Newsom has proposed bold steps to ensure more Californians have health coverage, but a new report underscores that his success may depend in part on large-scale investments to expand the state’s health care workforce.

A coalition of health, labor and education leaders, in a report released Monday, cited a dearth of health care workers in many regions of the state and recommended spending up to $3 billion over 10 years to address the shortfall. It’s not clear where that money would come from, though the report cited several possible sources.

The proposals of the group, the California Future Health Workforce Commission, include: creating more primary care and psychiatric residency slots; increasing the use of nurse practitioners; boosting scholarships for low-income students who agree to work in underserved areas; and expanding the supply — and training — of home care workers.

The commission also recommended building a more culturally and linguistically diverse pool of health care professionals to better match California’s demographics.

To meet the needs of an aging population, the commission recommended training home care workers and putting them on a more defined career path. In addition, the report focuses on shortages in mental health care, with proposals to create a new training program for psychiatric nurse practitioners and expand the use of mental health peer counselors.

“As we strive to get everyone covered … we need to have the providers there to actually provide the care,” said California Assemblyman Jim Wood, a commission member and chairman of the state Assembly Health Committee. “We need to realize that this is a growing state and our workforce is not growing proportionally.”

Health care providers simply aren’t working in the areas of greatest need, resulting in a two-tier system for the haves and have-nots, he said.

An estimated 7 million Californians live in shortage areas, and the problem is expected to worsen as older physicians retire, baby boomers age and more people live with chronic diseases. About 45 percent of psychiatrists and 37 percent of psychologists in the state are over 60 years old, according to research from the University of California-San Francisco.

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Among the areas experiencing shortages are the San Joaquin Valley and the Inland Empire, as well as the state’s rural northern and Sierra regions, according to the commission.

The report comes less than a month after Newsom unveiled his ambitious health care agenda.

On his first day in office, the Democratic governor proposed extending Medicaid coverage to undocumented young adult immigrants, requiring all Californians to have health insurance, and supplementing federal health insurance subsidies with state money to help them pay for it. He also asked President Donald Trump and congressional leaders to amend federal law to allow California to move toward a single-payer health care system.

Wood said such policies would not be effective without enough providers in the places where they are needed. “Coverage isn’t care, and we can’t just say ‘Everybody’s got coverage’ and walk away,” he said. “If you don’t have access to physicians or dentists or mental health providers in your area, that is an empty promise.”

The commission was established in August 2017 by several health philanthropies hoping to forge a strategy to build the workforce needed by 2030. It consisted of two dozen representatives from hospitals, schools, businesses and labor, and was chaired by University of California President Janet Napolitano and Dignity Health president and CEO Lloyd Dean.

Some of the commission’s proposals would face challenges — especially financial ones. Creating more residencies for primary care physicians and psychiatrists, for example, would cost an estimated $1.56 billion over a decade. And the state’s physicians are likely to oppose giving nurse practitioners more authority.

C. Dean Germano, CEO of Shasta Community Health Center in Redding, Calif., said his community has significant mental health needs and that health centers are often the first place many people go for treatment of depression or anxiety.

“We are sort of handicapped by not having the workforce on the primary care side or on the mental health side,” he said, adding that training students to work in underserved communities is the “golden ticket.”

In Los Angeles County, L.A. Care Health Plan is already working to expand the primary care workforce by offering full scholarships to certain medical school students and loan repayment for physicians recruited to practice in underserved areas.

Investing in more health care professionals — especially primary care providers — can help reduce the overall cost of health care, said Dr. David Carlisle, president and CEO of Charles R. Drew University of Medicine and Science in Los Angeles who served on the commission. The state is expected to need an estimated 4,100 more primary care clinicians in 2030.

“We shouldn’t be intimidated by the $3 billion price tag because, in many ways, we are paying for this already,” Carlisle said. “This is part of the reason why our health care system is so expensive — because patients have to delay care until they are really sick.”

Wood said the estimated cost of the commission’s proposals is a small fraction of the state’s $201 billion annual budget. The report cited other possible funding sources, including philanthropic grants, education dollars, health plan contributions and federal dollars.

Gov. Newsom has “established a vision for how to pursue a pro-health agenda” in California, Carlisle said. “This report provides him with a road map.”

(Five organizations funded the project of the California Future Health Workforce Commission: the California Endowment, California Health Care Foundation, the California Wellness Foundation, Blue Shield of California Foundation and the Gordon and Betty Moore Foundation. Kaiser Health News, which produces California Healthline, has received support from each of these organizations.)

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Winners And Losers Under Bold Trump Plan To Slash Drug Rebate Deals

Few consumers have heard of the secret, business-to-business payments that the Trump administration wants to ban in an attempt to control drug costs.

But the administration’s plan for drug rebates, announced Thursday, would end the pharmaceutical business as usual, shift billions in revenue and cause far-reaching, unforeseen change, say health policy authorities.

In pointed language sure to anger middlemen who benefit from the deals, administration officials proposed banning rebates paid by drug companies to ensure coverage for their products under Medicare and Medicaid plans.

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“A shadowy system of kickbacks,” was how Health and Human Services Secretary Alex Azar described the current system in a Friday speech.

The proposal is a regulatory change applying only to Medicare plans for seniors and managed Medicaid plans for low-income people. But private insurers, who often take cues from government programs, might make a similar shift, administration officials said.

Drug rebates are essentially discounts off the list price. Outlawing them would divert $29 billion in rebates now paid to insurers and pharmacy benefit managers into “seniors’ pocketbooks at the pharmacy counter,” Azar said.

The measure already faces fierce opposition from some in the industry and is unlikely to be implemented as presented or by the proposed 2020 effective date, health policy analysts said.

In any event, it’s hardly a pure win for seniors or patients in general. Consumers are unlikely to collect the full benefit of eliminated rebates.

At the same time, the change would produce uncertain ricochets, including higher drug-plan premiums for consumers, that would produce new winners and losers across the economy.

“It is the most significant proposal that the administration has introduced so far” to try to control drug prices, said Rachel Sachs, a law professor at Washington University in St. Louis. “But I’m struck by the uncertainty that the administration has in what the effects would be.”

Possible Winners: Chronically ill patients who take lots of expensive medicine

The list price for many brand-name medicines has doubled or tripled in recent years. But virtually the only ones affected by the full increases are the many patients who pay cash or whose out-of-pocket payments are based on the posted price.

By banning rebates, the administration says its intention is to ensure discounts are passed all the way to the patient instead of the middlemen, the so-called pharmacy benefit managers or PBMs. That means consumers using expensive drugs might see their out-of-pocket costs go down.

If rebates were eliminated for commercial insurance, where deductibles and out-of-pocket costs are generally much higher, chronically ill patients could benefit much more.

Drug companies

Ending rebates would give the administration a drug-policy “win” that doesn’t directly threaten pharmaceutical company profits.

“We applaud the administration for taking steps to reform the rebate system” Stephen Ubl, CEO of PhRMA, the main lobby for branded drugs, said after the proposal came out.

The change might also slow the soaring list-price increases that have become a publicity nightmare for the industry. When list prices pop by 5 or 10 percent each year, drugmakers pay part of the proceeds to insurers and PBMs in the form of rebates to guarantee health-plan coverage.

No one is claiming that eliminating rebates would stop escalating list prices, even if all insurers adopted the practice. But some believe it would remove an important factor.

Possible Losers: Pharmacy benefit managers

PBMs reap billions of dollars in rebate revenue in return for putting particular products on lists of covered drugs. The administration is essentially proposing to make those payments illegal, at least for Medicare and Medicaid plans.

PBMs, which claim they control costs by negotiating with drugmakers, might have to go back to their roots — processing pharmacy claims for a fee. After recent industry consolidation into a few enormous companies, on the other hand, they might have the market power to charge very high fees, replacing much of the lost rebate revenue.

PBMs “are concerned” that the move “would increase drug costs and force Medicare beneficiaries to pay higher premiums and out-of-pocket expenses,” said JC Scott, CEO of the Pharmaceutical Care Management Association, the PBM lobby.

Insurance companies

Insurers, who often receive rebates directly, could also be hurt financially.

“From the start, the focus on rebates has been a distraction from the real issue — the problem is the price” of the drugs, said Matt Eyles, CEO of America’s Health Insurance Plans, a trade group. “We are not middlemen — we are your bargaining power, working hard to negotiate lower prices.”

Patients without chronic conditions and high drug costs

Lower out-of-pocket costs at the pharmacy counter would be financed, at least in part, by higher premiums for Medicare and Medicaid plans paid by consumers and the government. Premiums for Medicare Part D plans could rise from $3.20 to $5.64 per month, according to consultants hired by the Department of Health and Human Services.

“There is likely to be a wide variation in how much savings people see based on the drugs they take and the point-of-sale discounts that are negotiated,” said Elizabeth Carpenter, policy practice director at Avalere, a consultancy.

Consumers who don’t need expensive drugs every month could see insurance costs go up slightly without getting the benefits of lower out-of-pocket expense for purchased drugs.

Other policy changes giving health plans more negotiating power against drugmakers would keep a lid on premium increases, administration officials argue.

Lawsuit Details How The Sackler Family Allegedly Built An OxyContin Fortune

The first nine months of 2013 started off as a banner year for the Sackler family, owners of the pharmaceutical company that produces OxyContin, the addictive opioid pain medication. Purdue Pharma paid the family $400 million from its profits during that time, claims a lawsuit filed by the Massachusetts attorney general.

However, when profits dropped in the fourth quarter, the family allegedly supported the company’s intense push to increase sales representatives’ visits to doctors and other prescribers.

Purdue had hired a consulting firm to help reps target “high-prescribing” doctors, including several in Massachusetts. One physician in a town south of Boston wrote an additional 167 prescriptions for OxyContin after sales representatives increased their visits, according to the latest version of the lawsuit filed Thursday in Suffolk County Superior Court in Boston.

The lawsuit claims Purdue paid members of the Sackler family more than $4 billion between 2008 and 2016. Eight members of the family who served on the board or as executives as well as several directors and officers with Purdue are named in the lawsuit. This is the first lawsuit among hundreds of others that were previously filed across the country to charge the Sacklers with personally profiting from the harm and death of people taking the company’s opioids.

WBUR along with several other media sued Purdue Pharma to force the release of previously redacted information that was filed in the Massachusetts Superior Court case. When a judge ordered the records to be released with few, if any, redactions this week, Purdue filed two appeals and lost.

The complaint filed by Massachusetts Attorney General Maura Healey says that former Purdue Pharma CEO Richard Sackler allegedly suggested the family sell the company or, if they weren’t able to find a buyer, to milk the drugmaker’s profits and “distribute more free cash flow” to themselves.

That was in 2008, one year after Purdue pleaded guilty to a felony and agreed to stop misrepresenting the addictive potential of its highly profitable painkiller, OxyContin.

At a board meeting in June 2008, the complaint says, the Sacklers voted to pay themselves $250 million. Another payment in September totaled $199 million.

The company continued to receive complaints about OxyContin similar to those that led to the 2007 guilty plea, according to unredacted documents filed in the case.

While the company settled lawsuits in 2009 totaling $2.7 million brought by family members of those who had been harmed by OxyContin throughout the country, the company amped up its marketing of the drug to physicians by spending $121.6 million on sales reps for the coming year. The Sacklers paid themselves $335 million that year.

The lawsuit claims Sackler family members directed efforts to boost sales. An attorney for the family and other board directors is challenging the authority to make that claim in Massachusetts. A motion on jurisdiction in the case hasn’t been heard. That attorney hasn’t responded to a request for comment on the most recent allegations.

Purdue Pharma, in a statement, said the complaint filed by Healey is “part of a continuing effort to single out Purdue, blame it for the entire opioid crisis, and try the case in the court of public opinion rather than the justice system.”

Purdue went on to charge Healey with attempting to “vilify” Purdue in a complaint “riddled with demonstrably inaccurate allegations.” Purdue said it has more than 65 initiatives aimed at reducing the misuse of prescription opioids. The company says Healey fails to acknowledge that most opioid overdose deaths are currently the result of fentanyl.

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Purdue fought the release of many sections of the 274-page complaint. Attorneys for the company said at a hearing on Jan. 25 that they had agreed to release much more information in Massachusetts than has been cleared by a judge overseeing hundreds of cases consolidated in Ohio. Purdue filed both state and federal appeals this week to block release of the compensation figures and other information about Purdue’s plan to expand into drugs to treat opioid addiction.

The attorney general’s complaint says that in a ploy to distance themselves from the emerging statistics and studies that showed OxyContin’s addictive characteristics, the Sacklers approved public marketing plans that labeled people hurt by opioids as “junkies” and “criminals.”

Richard Sackler allegedly wrote that Purdue should “hammer” them in every way possible.

While Purdue Pharma publicly denied its opioids were addictive, internally company officials were acknowledging it and devising a plan to profit off them even more, the complaint states.

Kathe Sackler, a board member, pitched “Project Tango,” a secret plan to grow Purdue beyond providing painkillers by also providing a drug, Suboxone, to treat those addicted.

“Addictive opioids and opioid addiction are ‘naturally linked,'” she allegedly wrote in September 2014.

According to the lawsuit, Purdue staff wrote: “It is an attractive market. Large unmet need for vulnerable, underserved and stigmatized patient population suffering from substance abuse, dependence and addiction.”

They predicted that 40-60 percent of the patients buying Suboxone for the first time would relapse and have to take it again, which meant more revenue.

Purdue never went through with it, but Attorney General Healey contends this and other internal documents show the family’s greed and disregard for the welfare of patients.

This story is part of a reporting partnership between WBUR, NPR and Kaiser Health News

A version of this story first ran on WBUR’s CommonHealth. You can follow @mbebinger on Twitter.

Patients Suffer When Health Care Behemoths Quarrel Over Contracts

David Lerman, a Berkeley, Calif., lawyer, changed health plans this year only to learn that his new insurer has no contract with the dominant medical provider in his community.

Anthem Blue Cross of California, one of the state’s largest health insurers, is battling with Sutter Health over how much it should pay to care for tens of thousands of its enrollees in Northern California. Sutter operates 24 hospitals in the region and lists about 5,000 doctors in its network.

“It’s not the peace of mind I thought I was buying to have the entire Sutter network — which is the biggest game in Northern California — be out-of-network,” said Lerman, whose family is insured through his wife’s job as a California State University professor.

Lerman and his family, who are enrolled in an Anthem Blue Cross PPO, can continue to visit Sutter facilities until midyear even if a new contract does not materialize before then. Fortunately, he said, nobody in his family suffers from a chronic illness. But not knowing which providers ultimately will be in his health plan’s network is aggravating, he said.

Contract disputes between insurers and medical providers have been a regular feature of the national health industry for a long time, but the stakes have risen as big players on both sides have expanded to gain market share — and leverage in network negotiations.

Most negotiations are completed before the old contract expires, and consumers usually don’t hear about behind-the-scenes disagreements. But when insurers and providers fail to reach an agreement on time, it can force patients to pay higher prices for care that is no longer covered by their health plans. At the least, it can cause considerable anxiety.

“It is a game of chicken, and at the end of the day somebody blinks and they come to an agreement,” said Wendell Potter, a former senior executive at health insurance giant Cigna who became a critic of the industry and a strong proponent of sweeping health care reform. “The big losers in this are patients, because there’s a period of uncertainty and angst and a real possibility that the physicians and hospitals you want to go to are no longer in-network.”

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Amy Thoma Tan, a Sutter spokeswoman, said in an emailed statement, “We are in active negotiations with Anthem Blue Cross and recognize that a timely agreement — one that protects access and choice — is in the best interest of our patients, employers, hospitals and clinicians.”

A statement by Eric Lail, an Anthem Blue Cross spokesman, was even less enlightening: “As we negotiate with providers, we try to strike a balance between protecting affordability and providing a broad network of providers to create choices, which can take time.”

Sutter, under fire for high prices, has been accused of using its regional market share for financial advantage. As large hospital systems merge with competitors and snap up medical practices, “it’s much more difficult for insurers to say, ‘OK, we’re letting you go,’” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms.

Corlette said both sides should have a greater incentive these days to come to an agreement. “When you have a big behemoth health care system and a big behemoth payer with tens of thousands of enrolled lives, the incentives to work something out privately become much stronger,” she said. “The PR risks are so high for both parties.”

Other states have seen their share of feuding between health systems and insurers.

In western Pennsylvania, nearly 50,000 people with Medicare managed-care plans from Highmark Health will lose in-network access to University of Pittsburgh Medical Center hospitals and doctors starting July 1, because of a slow-moving divorce between the two regional health giants.

Judy Hays, a retiree who lives outside Pittsburgh, has a rare form of leukemia. She is among many patients caught up in a feud between two regional health giants. She plans to change doctors mid-treatment because she wants to keep her insurance. (Courtesy of Judy Hays)

Among those patients is Judy Hays, a 75-year-old retired office manager from the Pittsburgh suburb of Crescent Township who relies on UPMC’s physicians and hospitals to treat a rare form of leukemia. Now, she plans to change doctors mid-treatment because she wants to keep her insurance, which she said has paid for her expensive medications. “It’s very tough. These people have been taking care of me for the last nine years. I can’t have any interruption in my care,” Hays told Kaiser Health News. “I’m very angry about it.”

In Georgia, WellStar Health System, with 11 hospitals and numerous medical offices, plans to stop accepting Anthem’s individual policyholders as in-network patients on Feb. 4, amid a contract dispute between the two companies.

In 2017, an impasse between Anthem and the Hartford HealthCare system in Connecticut forced hundreds of thousands of patients to go out-of-network before the two parties finally inked a deal. The patients’ bills were retroactively treated as in-network, so patients did not suffer financially.

However, “there were stories of people who had to cancel surgeries and switch providers,” said Ted Doolittle, Connecticut’s state health care advocate. “There was all this anxiety and disruption.”

Under pressure from their constituents, Connecticut lawmakers last year passed legislation enabling consumers to continue getting care at in-network prices for 60 days during contract disputes. The new law is “an improvement,” said Doolittle, who had urged legislators to pass such legislation.

In the current California dispute, Anthem Blue Cross members with PPOs can still use Sutter doctors and hospitals at in-network rates for the next six months, said Thoma Tan, the Sutter spokeswoman. People with HMOs face more uncertainty.

Lail, the Anthem Blue Cross spokesman, said in an emailed statement that “our consumers can continue to see their Sutter care providers for the time being as these negotiations continue.” But as required by state law, the insurer has notified patients with Medicare and Medi-Cal HMO plans that they may be reassigned to non-Sutter providers, Lail said.

There are exceptions that will allow pregnant women, very young children and some other patients to continue receiving care from Sutter at in-network rates, regardless of the type of insurance they have with Anthem Blue Cross, Thoma Tan said.

Sutter has quarreled with other insurers, including Blue Shield of California in a dispute that affected about 270,000 consumers before the two sides reached a deal that took effect in February 2015.

Sutter’s market dominance in California and its high prices for inpatient care have long drawn criticism. One patient reported that Sutter charged $1,555 for a 10-minute ER visit to treat a cut finger, including $55 for a gel bandage and $487 for a tetanus shot.

Last year, state Attorney General Xavier Becerra sued the giant health system, alleging it had illegally overcharged patients and drove out competition in California. Sutter has contended that Becerra overstepped his authority and that limiting Sutter’s ability to negotiate with insurers will harm consumers.

Anthem Blue Cross, which insures hundreds of thousands of Californians and whose parent company, Anthem, generated profits of $3.8 billion in 2017, has also drawn the ire of state regulators. The Department of Managed Care fined it $5 million in 2017 for failing to respond in a timely way to consumer complaints. The state previously had fined Anthem Blue Cross for consumer grievances totaling $6 million between 2002 and 2017.

In Berkeley, David Lerman just wants Anthem and Sutter to resolve their differences so his family will have access to the most comprehensive coverage options.

“As a consumer, is there no place where you can go and not worry that you’ll not be covered?” he fretted. “If I’m sick, do I go to the local hospital — or to the airport and fly to Europe?”

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Nonprofit Dental Insurer Under Scrutiny For ‘Flagrant’ Spending

Dental insurance giant Delta Dental of California is facing mounting criticism for paying its CEO exorbitantly, flying board members and their companions to Barbados for a meeting, and spending a small fraction of its revenue on charitable work — all while receiving significant state and federal tax breaks because of its nonprofit status.

Now, the company — which has 36.5 million enrollees in 15 states and the District of Columbia — is hoping to pay $155 million to acquire a 49.5 percent stake in for-profit medical and dental insurer Moda Health.

Consumer advocates are calling on state regulators to scrutinize the deal, arguing that the proposed acquisition is just the latest questionable move by a nonprofit insurer whose corporate practices may be out of step with its tax-exempt status.

They point out that the company paid its chief executive, Tony Barth, $14.3 million in 2016, two years before he was fired for having a secret relationship with a subordinate. The next nine highest-paid Delta executives earned more than $1 million each that year, bringing the total compensation for the top 10 to more than $30 million in 2016, according to the insurer’s latest available tax filing.

The company earned $5.9 billion in revenue that year.

They just appear to be about nothing more than feathering the nests of their own managers,” said Michael Johnson, a former executive with Blue Shield of California turned whistleblower who has drawn attention to what he describes as the transgressions of nonprofit insurers. “I can’t imagine a more flagrant abuse or dereliction of their duty as a nonprofit.”

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The California Department of Managed Health Care (DMHC), tasked with reviewing the transaction, could impose terms on the insurer, or even prevent the purchase of Oregon-based Moda Health if it determines that the money is supposed to be used to benefit the public. DMHC has said it doesn’t have the authority to change a dental health plan’s nonprofit status.

Advocates agree while arguing the department does have the authority to insist that it comply with its obligations as a nonprofit. When it comes to nonprofit insurers, “the DMHC is the only one who has standing to go to court,” Johnson said.

Delta Dental of California, in a written statement to Kaiser Health News, said its investment in Moda Health will increase access to dental care and treatments, and that it uses consultants and board oversight to ensure that executive pay is appropriate. 

Nonprofits can take a variety of forms, but in order to qualify for an income tax exemption they must generally provide a community benefit. In the U.S. health system, nonprofit hospitals and insurers often meet that requirement by offering free or discounted services or performing charity work.

Nonprofit insurers have raised eyebrows in the past. In the 1980s, Congress rescinded federal income tax-exempt status from Blue Cross Blue Shield health plans across the nation after determining that they weren’t behaving any differently than for-profit insurers.

Dental insurance has historically drawn less scrutiny than medical insurance and is less strictly regulated. While health insurers were required by the Affordable Care Act to spend 80 or 85 percent of premiums on care, dental insurers have no such federal requirement. And when the tax code for nonprofit insurers was rewritten in the 1980s, it allowed nonprofit dental insurers to keep their federal income tax exemption.

Part of what’s being debated now is to whom Delta Dental is responsible and what its money must be spent on. It’s a mutual-benefit corporation, meaning it answers to its members, not the broader public. But in its founding documents, it promised to “assist the people of California.”

In December, Consumer Reports, California Pan-Ethnic Health Network, Health Access and the Western Center on Law & Poverty penned a letter to California regulators asking them to assess whether it’s appropriate for Delta Dental to be investing in a for-profit insurer. 

They argued that the nonprofit insurer has benefited from tax breaks for decades and that surplus revenue earned from consumer premiums should be spent on the public good.

We kind of have to ask whether they may have been overcharging on premiums,” said Dena Mendelsohn, a lawyer with Consumer Reports.

Delta Dental has told the state regulator that even though it is a nonprofit, its assets are not subject to charitable trust obligations.

The company told Kaiser Health News that its overall mission is to improve dental health and access to care, and that it had spent nearly $16 million around the country last year via the Delta Dental Community Care Foundation — just one way it says it upholds its nonprofit social welfare obligations.

At about 50 cents per customer, that charitable work also represents a small fraction of what the company is spending on the purchase, advocates are quick to point out. 

The state ruled on the side of another nonprofit insurer, Blue Shield of California, when it was the subject of a similar debate in 2015. But in a blow to the insurer, the company also agreed to relinquish its state tax exemption after an audit criticized the insurer for holding more than $4 billion in assets and failing to provide affordable insurance to the public.

In an email to Kaiser Health News, Rachel Arrezola, a DMHC spokeswoman, said the department has yet to find evidence that Delta Dental’s assets are subject to charitable spending requirements, but said the review of the purchase is ongoing. The deal was discussed Wednesday at a public meeting in Sacramento.

Beyond the issue of this particular sale, tax-exempt nonprofits must also spend corporate assets carefully. For years, Delta Dental of California’s CEOs have earned millions of dollars, including the $14.3 million in 2016. The company declined to disclose its executive pay for 2017 or 2018.

“That’s a very healthy number,” said Marcus Owens, former director of the arm of the Internal Revenue Service responsible for overseeing nonprofits, and currently a partner of the law firm Loeb & Loeb. “It’s the kind of level that, if the IRS … had the resources to review cases for compensation, they might actually follow up on that.”

Board compensation has also drawn scrutiny, with members receiving from $46,000 to $203,000 in 2016 for one to two hours of work each week, according to tax filings. Board chairs received substantially more that year, in the range of $172,000 to $223,000. And travel for companions and staff to an annual meeting on the Caribbean island of Barbados is part of that compensation for some board members, according to tax filings from Delta Dental of Pennsylvania, an affiliate of Delta Dental of California.

Compensation for board members is not the norm in the nonprofit world, Owens said, though that doesn’t mean it’s inappropriate, particularly for a company as large as Delta Dental. The corporation’s bylaws say board members shouldn’t receive any salary, but can be compensated for the time and expense of preparing for and attending board meetings.

Critics have drawn attention to high executive pay at Delta Dental plans in other states as well, including those in Washington, Michigan and Missouri.

Delta Dental of California defended its pay structure, saying, “We need to attract top executive talent to provide best-in-class service to our enrollees/members. Therefore, we are guided by a ‘pay for performance’ philosophy and employ many governance tools to ensure that executive pay is appropriate.”

This KHN story first published on California Healthline, a service of the California Health Care Foundation.

With Mom’s Green Card On The Line, Family Forgoes Autism Services For Citizen Child

Kaiser Health News:Medicaid - February 01, 2019

As U.S. immigration enforcement becomes stricter under the Trump administration, more immigrant families are cutting ties with health care services and other critical government programs, according to child advocates who work with such families.

In Texas, researchers studying the issue say it’s a major reason why more children are going without health insurance.

Ana, who lives in Central Texas with her husband and two children, has been increasingly hesitant to seek help from the government. In particular, she’s worried about getting help for her 9-year-old daughter, Sara, who was diagnosed with autism a few years ago.

Ana entered the country without documentation about 10 years ago, which is why NPR and KHN have agreed not to use her last name. Both of her children were born in the United States and have been covered by Medicaid for years. But ever since President Donald Trump took office, Ana has been using the program only for basics — such as checkups and vaccinations for the kids.

This decision to forgo care comes at a cost. Managing Sara’s behavior has been challenging, even after the autism diagnosis brought her parents some clarity. Sara acts out and has tantrums, sometimes in public places. Ana finds it difficult to soothe her daughter, and the situation has become more awkward as Sara grows.

“To other people, Sara just seems spoiled or a brat,” Ana said.

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After the diagnosis, Ana felt unsure about her next steps. She eventually went to a nonprofit in Austin that guides and supports parents whose children have disabilities. It’s called Vela (“candle” in Spanish).

At Vela, Ana learned about a range of services Sara could get access to via her Medicaid plan — including therapy to help the child communicate better.

However, the thought of asking for more government services for her daughter increased Ana’s anxiety. “I am looking for groups who are not associated with the government,” Ana explained.

Ana is in the middle of the long, expensive legal process of applying for permanent resident status, known informally as a “green card.” Recently, the Trump administration announced that it may tighten part of this process — the “public charge” assessment. The assessment scrutinizes how many government services a green card applicant currently uses — or might use later in life. If a person uses many government services, they could pose a net financial burden on the federal budget — or so goes the rationale. The government’s algorithms are complex, but “public charge” is part of the determination for who gets a green card and who doesn’t.

The rule change proposed by the Trump administration — which might not come to pass — has already led many applicants, or would-be applicants, to be wary of all government services, even those that wouldn’t affect their applications.

“I am afraid they will not give me a legal resident status,” Ana said.

Her husband already has a green card, and the couple is determined to not jeopardize Ana’s ongoing application. So they have decided — just to be safe — to avoid seeking any more help from the government. That’s even though their daughter, who is a citizen, needs more therapy than she’s getting right now.

“I feel bad that I have to do that,” Ana said.

She says she would love to treat her daughter’s autism, but has decided that there is nothing more important than getting that green card, in order to keep the family together in the U.S.

“I’m running into families that, when it’s time for re-enrollment or reapplication, they are pausing and they are questioning if they should,” said Nadine Rueb, a clinical social worker dealing with Ana’s case at Vela.

Rueb said a range of fears are behind immigrants’ avoidance of government services. Some are staying under the radar to avoid immediate deportation. Others are more like Ana — they just want to be in the best position possible to finally get permanent legal status and move on with their lives.

“The climate of fear is so pervasive at this point, and there is so much misinformation out there,” said Cheasty Anderson, a senior policy associate with the Children’s Defense Fund in Texas.

Anderson said she thinks the parents’ fears have led to an uptick in children going without health coverage in Texas.

A recent study from Georgetown University’s Center for Children and Families found that 1 in 5 uninsured kids in the U.S. lives in Texas. And a big percentage of those uninsured children are Latino.

The report shows that after years of steady decline, the number (and percentage) of uninsured children in the U.S. increased in 2017, the first year of Trump’s presidency. Nationally, 5 percent of all kids are uninsured — and in Texas the rate rose to 10.7 percent, up from 9.8 percent in 2016.

Joan Alker, author of the Georgetown report, said the Trump administration’s effort to crack down on both legal and illegal immigration is one of many factors driving up the uninsured rates. And it’s especially perceptible in Texas, where a quarter of children have a parent who is either undocumented, or who is trying to become a legal resident.

“For these mixed-status families, there is likely a heightened fear of interacting with the government, and this may be deterring them from signing up their eligible children for government-sponsored health care,” Alker said in a phone call with reporters in November, when the report was released.

Anderson, of the Children’s Defense Fund in Texas, said the repercussions fall hardest on kids with disabilities — kids who need services.

“Texas is proud to be Texas in so many ways, but this is one way in which we are failing ourselves,” she said.

From the perspective of Rueb, a disability rights specialist, timing is an essential issue for these children.

“The sooner you catch [the diagnosis or condition], the sooner you support the child [and] the sooner you support the family,” Rueb said. “I think it’s just a win-win for everybody. You are supporting the emotions of the family, and then that supports the child.”

For now, said Ana, she’s relying on the services offered by her daughter’s public school — which aren’t counted in the federal government’s “public charge” assessment. And she’ll keep doing that until she gets that green card.

This story is part of a partnership that includes KUT, NPR and Kaiser Health News.

Trump Administration Proposes to Lower Drug Costs by Targeting Backdoor Rebates and Encouraging Direct Discounts to Patients

HHS Gov News - January 31, 2019

On Thursday, Health and Human Services Secretary Alex Azar and Inspector General Daniel Levinson proposed a rule to lower prescription drug prices and out-of-pocket costs by encouraging manufacturers to pass discounts directly on to patients and bringing new transparency to prescription drug markets.

“Every day, Americans—particularly our seniors—pay more than they need to for their prescription drugs because of a hidden system of kickbacks to middlemen. President Trump is proposing to end this era of backdoor deals in the drug industry, bring real transparency to drug markets, and deliver savings directly to patients when they walk into the pharmacy,” said Secretary Azar.

“This historic action, combined with other administrative and legislative efforts on prescription drug pricing, is a major departure from a broken status quo that serves special interests and moves toward a new system that puts American patients first. Democrats and Republicans looking to lower prescription drug costs have criticized this opaque system for years, and they could pass our proposal into law immediately.”

“This proposal has the potential to be the most significant change in how Americans’ drugs are priced at the pharmacy counter, ever, and finally ease the burden of the sticker shock that millions of Americans experience every month for the drugs they need.”

The HHS proposal would expressly exclude from safe harbor protection under the Anti-Kickback Statute rebates on prescription drugs paid by manufacturers to pharmacy benefit managers (PBMs), Part D plans and Medicaid managed care organizations.

It would create a new safe harbor for prescription drug discounts offered directly to patients, as well as fixed fee service arrangements between drug manufacturers and PBMs. The proposal would also provide a historic new level of transparency to a system that has been shrouded in secrecy for decades.

Under the proposed rule, prescription drug rebates that today amount to, on average, 26 to 30 percent of a drug’s list price may be passed on directly to patients and reflected in what they pay at the pharmacy counter. By encouraging negotiated discounts that are reflected in cost-sharing methods like co-insurance, used for many expensive drugs in Medicare Part D, the proposal is projected to provide the greatest benefits to seniors with high drug costs.

The proposal would also address the most significant incentive drug manufacturers cite in raising their list prices every year, the pressure to provide larger and larger rebates. This rule provides a clear pathway for drug companies instead to compete to have the lower price and out-of-pocket cost to the patient.

This proposal complements efforts in progress laid out in the President’s “American Patients First” blueprint, including requiring the disclosure of list prices in television ads, increasing negotiated discounts in Medicare, banning pharmacy gag clauses, adopting real-time prescription benefit tools, and boosting low-cost generic and biosimilar competition.

Read a fact sheet on the proposed rule.

Read the proposed rule.

People using assistive technology may not be able to fully access information in these files. For assistance, please contact Roman Burleson at 202-868-9699.

Podcast: KHN’s ‘What The Health?’ Live From D.C.: A Look Ahead At Health Policy In 2019

(From left) Tom Miller, Kimberly Leonard, Anna Edney, Joanne Kenen and Julie Rovner(Lynne Shallcross/KHN)

Julie Rovner

Kaiser Health News

@jrovner

Read Julie's Stories Anna Edney

Bloomberg

@annaedney

Read Anna's Stories Joanne Kenen

Politico

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Read Joanne's Stories Kimberly Leonard

Washington Examiner

@leonardkl

Read Kimberly's Stories

The 2020 presidential campaign has begun and health is a big part of it, with Democratic candidates pledging their support for “Medicare-for-all” and many of its variations.

Meanwhile, Republicans and Democrats are both promising to do something about drug prices and “surprise” medical bills. But whether they can translate that agreement on the broad problem to a detailed solution remains to be seen.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Anna Edney of Bloomberg News and Kimberly Leonard of The Washington Examiner. Joining the panel for this week’s live show was Tom Miller of the American Enterprise Institute.

Among the takeaways from this week’s podcast:

  • The early jockeying among Democrats running for president is likely to overshadow any efforts to make changes to the Affordable Care Act or help stabilize its insurance marketplaces.
  • Legislative remedies for the ACA marketplaces are expected to hit the same roadblock that senators found in 2017: demands by conservatives that plans operating in those insurance exchanges be banned from offering abortion coverage.
  • Although the general idea of expanding Medicare garners high public support, if Democrats agree on a plan to push forward, it could be expected to meet strong opposition from the health care industry.
  • Republicans and Democrats have expressed interest in moving legislation to help lower drug prices. One area where they could find common ground might be revisions to the patent laws to help spur more lower-cost generic drugs.
  • Both parties also say they are concerned about surprise bills that patients receive after receiving medical care. Still, there is no consensus on how to approach the problem, and industry stakeholders are split on what remedies the country should take.

The panelists also discussed Anna Edney’s series on the dangers of generic drugs. You can read her stories here, here and here.

To hear all our podcasts, click here.

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

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