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Administration Challenges ACA’s Preexisting Conditions Protection In Court

The Trump administration is refusing to defend key parts of the Affordable Care Act, essentially arguing that federal courts should find the health law’s protection for people with preexisting conditions unconstitutional.

The federal lawsuit hinges on the ACA’s individual mandate, or the requirement to get health coverage or pay a penalty. The mandate has long been a sticking point for conservatives, who argue that the government should not be telling individuals what coverage they must have.

But that mandate was crucial to persuading insurers to offer plans under the ACA. It helped expand their risk pools while the law forced them to guarantee coverage to any customer. Insurers were not allowed to raise costs for people with preexisting conditions. The administration’s brief, filed Thursday in federal district court in Fort Worth, Texas, takes aim at those links.

Twenty Republican state attorneys general filed suit on Feb. 26, charging that Congress’ changes to the law in last year’s tax bill rendered the entire ACA unconstitutional. In the tax law, Congress repealed the penalty for people who fail to have health insurance starting in 2019.

The attorneys general argue that a Supreme Court decision in 2012 saved the ACA from being declared an unconstitutional overreach of congressional power by declaring the penalty a tax and pointing out that Congress has the power to levy taxes. Without the tax penalty, they argue, “the Court should hold that the ACA is unlawful and enjoin its operation.”

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The Trump administration Thursday did not go that far. Rather, it argued that without the tax to encourage healthy people to sign up, the parts of the law guaranteeing coverage to people with health conditions and charging them the same rates should be struck down as well.

The administration called on the court to declare the provisions that guarantee coverage to be “invalid beginning on January 1, 2019,” when the mandate penalty goes away.

Here are five things to know about this latest in a long line of challenges to the health law:

If This Lawsuit Succeeds, Who Would Be Affected?

People who buy their own insurance because they are self-employed or don’t get coverage through their jobs or the government. There are about 21 million people who do so, buying either through brokers or from a state or federal Affordable Care Act marketplace.

But it’s not clear how many Americans have preexisting conditions and could be affected. Estimates vary widely because there is not a standard definition of what counts as a preexisting condition. Before the ACA passed, insurers commonly rejected people with cancer, heart failure, diabetes, arthritis and even less serious conditions.

Based on those pre-ACA examples, the Kaiser Family Foundation estimates that 27 percent of people under age 65 have a preexisting condition. Of course, not all of them buy coverage on their own. (Kaiser Health News is an editorially independent program of the foundation.)

America’s Health Insurance Plans, an industry trade group, Friday criticized the federal government’s filing.

“Zeroing out the individual mandate penalty should not result in striking important consumer protections” that help guarantee coverage to people with preexisting conditions, the statement said. “Removing those provisions will result in renewed uncertainty in the individual market, create a patchwork of requirements in the states, cause rates to go even higher for older Americans and sicker patients, and make it challenging to introduce products and rates for 2019.”

Is Anything Going To Change Right Away? What About Next Year?

Don’t look for big changes yet.

The lawsuit could easily go all the way to the Supreme Court before there is a resolution, which could take years. So, the preexisting conditions protection is likely to stay in place during that period.

More immediately, there might be some effect on premiums for next year. Health insurers are currently deciding whether to sell coverage in the individual market in 2019 — and what they’re going to charge.

“The more uncertainty there is, the more the actuaries are going to be plugging into their projections for premium rates,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute.

But others say the legal brief may have minimal impact next year on premiums. That’s because insurers already expected the Trump administration would not defend the ACA — and they know that a resolution of the case will be years away, said industry consultant Robert Laszewski.

A bigger effect on premiums, according to both Corlette and Laszewski, are factors already in play that are expected to draw younger and healthier people out of the ACA marketplace. Those include Congress’ decision to repeal the individual mandate penalty and rules expected soon from the administration that will expand the market for lower cost and short-term policies that won’t have to follow all the ACA rules.

How Is This Lawsuit Different From Previous Challenges To The ACA?

The Supreme Court has twice upheld the constitutionality of the health law. Most famously, in 2012, a narrow majority led by Chief Justice John Roberts turned back a challenge that was also filed by Republican attorneys general, along with the National Federation of Independent Business. Roberts wrote in a 5-4 ruling that the requirement for most Americans to either have insurance or pay a fine constitutes a tax — even though Democrats had gone to great lengths to not call it a tax — and was therefore constitutional.

In 2015, the court ruled that Congress did not intend to provide financial aid exclusively for premiums to individuals in states that operated their own insurance exchanges.

This current lawsuit, led by Texas Attorney General Ken Paxton and Wisconsin Attorney General Brad Schimel, argues that since Congress has changed the law to remove the penalty forcing individuals to get insurance, it has inadvertently rendered the rest of it impermissible under the 2012 Supreme Court ruling.

“Texans have known all along that Obamacare is unlawful and a divided Supreme Court’s approval rested solely on the flimsy support of Congress’s authority to tax,” said Paxton when the suit was filed. “Congress has now kicked that flimsy support from beneath the law.”

Other legal observers point out that’s not how it works.

“Congress is always free to amend its statutes, even to omit what it previously thought was essential,” wrote Nick Bagley, a law professor at the University of Michigan, in a blog. “That’s what Congress did when it zeroed out the mandate. So we don’t have to speculate what Congress would’ve done if it had a choice between invalidating the ACA’s insurance reforms or just invalidating the mandate. Congress made that choice.”

If The Trump Administration Isn’t Going To Defend The Health Law In This Lawsuit, Who Will?

In May, the court allowed more than a dozen Democratic attorneys general to “intervene” in the case and defend the law.

“The goal of Texas’ lawsuit is to leave Americans without health insurance, forcing them to choose between their health and other needs,” said California Attorney General Xavier Becerra. Allowing the Democratic officials to join the suit “allows us to protect the health and well-being of these Americans by defending affordable access to healthcare.”

If Nothing Is Going To Happen Right Away, Why Is This Such A Big Deal?

The guarantees for coverage for people with preexisting conditions are among those most valued by the public. Even if the lawsuit stands little chance of success, putting those provisions back in play can create uncertainty for insurers and patients. It could also possibly provide Democrats another talking point for the coming midterm elections in November.

Legal experts also point out that the Trump administration’s failure to defend the law could have long-lasting implications for the rule of law in the nation.

“If the Justice Department can just throw in the towel whenever a law is challenged in court, it can effectively pick and choose which laws should remain on the books,” wrote Bagley. “That’s as flagrant a violation of the President’s constitutional duty to take care that the laws are faithfully executed as you can imagine.”

Must Reads Of The Week From Brianna Labuskes

The Friday Breeze

Newsletter editor Brianna Labuskes, who reads everything on health care to compile our daily Morning Briefing, offers the best and most provocative stories for the weekend.

A distinctly sad and sobering week: days of suicide stories follow the deaths of Anthony Bourdain and Kate Spade. The events, and a devastating report about spiking suicide rates across the country, threw self-harm and mental health awareness into the spotlight. Advocates took to social media to spread the message: Depression “doesn’t discriminate.”

Here’s what else you may have missed this week.

The Justice Department is refusing to defend the health law in court, leaving a coalition of blue-state attorneys general to do the heavy lifting. It’s a political gamble for the administration as it could rattle an already unstable marketplace as the midterm elections creep up on us.

“Of all the things the Trump administration has done to destabilize the market, this may be the most major,” said Timothy Jost, a professor emeritus at Washington and Lee University and a health law supporter. Also, meet the Texas plaintiffs at the heart of the case who feel compelled to follow the letter of the law, despite the lack of penalty.

In a compelling profile, they’re likened to people who don’t “take a tag off of their mattress” because of the legal warning.

The New York Times: Justice Dept. Says Crucial Provisions of Obamacare Are Unconstitutional

Politico: Texas Plaintiffs Personalize Uphill Legal Challenge to Overturn Obamacare

And, these insurers say they don’t expect to lose customers next year, but they’re still planning on raising premiums by the double digits. At first that might warrant a “huh?” moment, but it all comes down to a business calculation. The insurers know when one company loses customers that can have a ripple effect though the marketplace. So, they’re all in a defensive crouch.

Modern Healthcare: Insurers Downplay Mandate Repeal’s Effect, But Still Raise Premiums

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Other big news is the grim outlook for Medicare’s trust fund — it’s now expected to be depleted in 2026 instead of 2029, as was projected last year. To be clear, though, the money that’s running out is used to pay for hospital visits. Other services are supported primarily through general funds.

The New York Times: Medicare’s Trust Fund Is Set to Run Out in 8 Years. Social Security, 16.

Single-payer, single-payer, single-payer. You’ve probably heard that phrase a lot in the past year or so, especially this week when the California gubernatorial race was at center stage. But Democrats are being warned not to actually utter those words on the trail, leadership being worried that it could divide the party and make progressive candidates vulnerable to attacks from the GOP. That doesn’t mean talk about universal coverage is verboten, it’s just that the hot buzzword won’t be on too many candidates’ lips this summer and fall.

Politico: The 2 Words You Can’t Say in a Democratic Ad

The New York Times: In Fight for California Governor, Candidates Head to Ideological Corners

Thanks, but no thanks: Pharma companies aren’t all that interested in taking advantage of the relaxed provisions included in the “Right-to-Try” legislation that lawmakers passed recently after a series of fits and starts. It turns out, Big Pharma likes to go through the FDA anyway … which opponents have been saying all along.

The Wall Street Journal: The ‘Right to Try’ Law Says Yes, The Drug Company Says No

And, you think it’s hard to control drug prices for popular, lifesaving medications? What about when the treatment is for a problem no one wants to talk about?

The New York Times: Prices Keep Rising for Drugs Treating Painful Sex in Women

In our miscellaneous file for the week: In somewhat-rare good news, a study found that many women with a common form of breast cancer can skip chemotherapy; a court is weighing whether punishing an offender for having a drug relapse counts as “cruel and unusual punishment”; marijuana addiction is surging, but experts are having a hard time convincing people it even exists; and remember Brazil’s Zika babies? They’re growing up.

The Associated Press: Many Breast Cancer Patients Can Skip Chemo, Big Study Finds

The New York Times: She Went to Jail for a Drug Relapse. Tough Love or Too Harsh?

Stateline: Yes, You Can Become Addicted to Marijuana. and the Problem Is Growing.

The Associated Press: From Shrieks in Bucket to Laughs, Brazil Zika Baby Improves

I also feel duty-bound to point out that the U.S. has now issued a health alert over the unexplained brain injuries that have cropped up in diplomats serving in China. The mystery — make of it what you will — continues! Lots to read this weekend!

Readout of HHS Secretary Azar’s Roundtable with Medical Device Leaders

HHS Gov News - June 08, 2018

On Thursday, HHS Secretary Alex Azar held a roundtable discussion with leaders from medical device companies and the industry group AdvaMed. The gathering was part of ongoing efforts at HHS to explore ways to break down barriers to innovation as part of the Trump Administration’s work to improve healthcare in the United States. Both President Trump and Secretary Azar are deeply committed to lowering the cost of healthcare while increasing quality and protecting incentives for innovation.

Secretary Azar mentioned that he was especially interested in hearing from the individual participants about ways to advance HHS’s priority of paying for value in healthcare, as well as ways medical technology innovation can assist in another HHS priority, combating the opioid crisis. Participants shared their experiences with securing reimbursement from Medicare and Medicaid and approval from FDA, discussed proposals for reforming reimbursement within these programs, and provided feedback on the pro-innovation approaches being taken by the FDA.

Individual participants also discussed ways in which current interpretations of the Anti-Kickback Statute may be impeding value-based care models. Similar regulatory topics were raised by other individual healthcare stakeholders at a roundtable regarding impediments to coordinated care hosted by Deputy Secretary Eric Hargan on Thursday.

The medical technology meeting included representatives from Abiomed Inc., AdvaMed, Boston Scientific, CVRx, IlluminOss, STERIS, and Varian. Secretary Azar thanked the participants for their insights and emphasized HHS’s commitment to advancing value-based care and supporting scientific innovation.

HHS Secretary Azar Praises Trump Administration ‘Truth about Opioids’ Campaign

HHS Gov News - June 08, 2018

HHS Secretary Alex Azar issued the following statement regarding the Trump Administration’s release of a set of advertisements promoting awareness among young people around opioid addiction:

“No one individual has done more to raise awareness of our country’s opioid crisis than President Trump. Raising awareness is a key piece of defeating the threat of opioid addiction, which too many Americans still do not fully understand. These ads are a targeted effort to promote awareness, especially among our youth, about the deadliness of opioid misuse and the risks of opioid addiction. HHS is proud to support these efforts, which reflect a recommendation from the President’s Commission on Combating Drug Addiction and the Opioid Crisis, and to continue our department’s work to educate the public about opioid addiction.”

See more about the ads here: opioids.thetruth.com

More information on HHS work to combat the opioid crisis can be viewed at https://www.hhs.gov/opioids/

Podcast: KHN’s ‘What The Health?’ Health Care Politics, Midterm Edition

Julie Rovner

Kaiser Health News

@jrovner

Read Julie's Stories Rebecca Adams

CQ Roll Call

@RebeccaAdamsDC

Read Rebecca's Stories Stephanie Armour

The Wall Street Journal

@StephArmour1

Read Stephanie's Stories Alice Ollstein

Talking Points Memo

@AliceOllstein

Read Alice's Stories

The 2018 midterm elections were supposed to be a referendum on President Donald Trump, not about issues such as health care. Still, voters, Democrats and, to a lesser extent, Republicans seem to be keeping health care on the front burner.

The news from Medicare’s trustees that its hospital trust fund is on shakier financial footing than it was last year, hefty premium increases being proposed in several states and activity on Medicaid expansion all take on a political tinge as the critical elections draw closer.

Also this week, an interview with Matt Eyles, president and CEO of America’s Health Insurance Plans, the health insurance industry trade group.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Stephanie Armour of The Wall Street Journal, Alice Ollstein of Talking Points Memo and Rebecca Adams of CQ Roll Call.

Among the takeaways from this week’s podcast:

  • Outside Washington, concerns about health care accessibility and prices remain a big issue.
  • Democrats, looking toward the midterm elections in the fall, think that health care can be a potent issue for them. But many also believe that they can’t just run on complaints that the Republicans are sabotaging the Affordable Care Act. They are seeking to find a message that looks to the future.
  • Republicans see the plans by the White House to implement new regulations that allow expansion of association health plans and short-term health plans as a strong action that will thwart complaints that they haven’t fixed the ACA.
  • The states are beginning to release the initial requests from health insurers for premium increases. They vary substantially, but many appear to be partly attributed to the decision last year by Congress to repeal the penalty for people who don’t get insurance.
  • The report this week by the Medicare trustees that the hospital trust fund is closer to insolvency has ignited Democratic criticism of changes in health care law that were part of the GOP tax cut last year.
  • Arkansas has begun implementing its work requirements for healthy adults covered by the Medicaid expansion. It’s the first state to do that. But critics point out that those adults will have to register their work hours online only — and many do not have access to computers.

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

Julie Rovner: Mother Jones’ “’Behave More Sexually:’ How Big Pharma Used Strippers, Guns, And Cash To Push Opioids,” by Julia Lurie

Alice Ollstein: Politico’s “Trump Seeks to Reorganize the Federal Government,” by Helena Bottemiller Evich and Andrew Restuccia

Rebecca Adams: ProPublica’s “Hundreds of Illinois Children Languish in Psychiatric Hospitals After They’re Cleared for Release,” by Duaa Eldeib

Stephanie Armour: Kaiser Health News’ “Outsiders Swoop In Vowing To Rescue Rural Hospitals Short On Hope – And Money,” by Barbara Feder Ostrov

To hear all our podcasts, click here.

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

Could California Shape The Fate Of The Affordable Care Act In November?

In the state that’s leading the opposition to many of President Donald Trump’s health policies, California voters will face a stark choice on the November ballot: keep up the resistance or fall in line.

The results of Tuesday’s primary have set up general-election contests between candidates — for governor, attorney general, insurance commissioner and some congressional seats — with sharply differing views on government’s role in health care.

The outcome in the Golden State could help shape the fate of the Affordable Care Act and influence whether Republicans in Washington take another shot at dismantling the landmark law.

“For the Affordable Care Act, California is a bellwether state,” said David Blumenthal, president of the Commonwealth Fund, a New York-based health policy research organization. If California voters don’t elect more Democrats to Congress, it will be harder for the party to gain legislative control and “the Affordable Care Act will continue, as it has been, to be under attack from an empowered Republican majority,” he said.

Despite being targeted for voting last year to repeal the ACA and cut Medicaid funding, several Republican incumbents performed well at the polls in California.

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“California was supposed to lead the blue wave, but that’s not what we saw” in the primary, said Ivy Cargile, an assistant professor of political science at California State University-Bakersfield.

In the California governor’s race, Democratic front-runner Gavin Newsom quickly sought to cast the November contest as a referendum on Trump and his effort to undo much of President Barack Obama’s legacy, particularly on health care.

A series of Trump tweets endorsing Republican candidate John Cox, a multimillionaire real estate investor, helped propel the political outsider to the general election.

“It looks like voters will have a real choice — between a governor who will stand up to Donald Trump and a foot soldier in his war on California,” Newsom said Tuesday night to supporters in San Francisco.

California has embraced the federal health law enthusiastically and stands to lose more than any other state if the ACA is gutted. About 1.5 million Californians buy coverage through the state’s Obamacare exchange, Covered California, and nearly 4 million have joined Medicaid as a result of the program’s expansion under the law.

Newsom, a former San Francisco mayor and the current lieutenant governor, has pledged to defend the coverage gains made under the ACA. He has vowed to go even further by pursuing a state-run, single-payer system for all Californians.

Newsom won the primary with 33 percent of the vote and Cox placed second with 26 percent. Some mail-in votes and provisional ballots continue to be counted.

Cox has slammed Newsom and fellow Democrats for imposing government controls on health care that he says make coverage too expensive for families. He said he isn’t interested in defending the Affordable Care Act and that, if the law is scrapped, millions of Californians can go into high-risk insurance pools — an idea that predates the health law.

Andrew Busch, a government professor at Claremont McKenna College, said the political divide over health care has grown even wider this year as single-payer has gained support from mainstream Democrats in California.

“I’d say the Republican candidates are pretty much where the Republicans have been, but the Democratic candidates have shifted to the left, so the choice is starker than it has been,” Busch said.

Heading into Tuesday’s primary, it wasn’t clear that California voters would face such drastically different choices on the November ballot. Under the state’s primary system, the top two vote-getters, regardless of party affiliation, advance to the general election. That left many experts predicting single-party matchups across the state.

But that scenario also didn’t pan out in the race for attorney general, a position that has played a key role in California’s resistance politics since Trump was elected. Democratic incumbent Xavier Becerra, who has become a national leader against Trump’s agenda, will face off against Republican Steven Bailey in the fall.

Becerra has filed more than 30 lawsuits on health care and other issues since taking office in January 2017.

Bailey, a criminal attorney and former judge, has blamed the Affordable Care Act for driving up health care costs, and he favors less industry regulation. He also has criticized Becerra for fixating too much on Trump.

“Just because a tweet comes out of Washington, it doesn’t require a lawsuit to be filed the next day,” Bailey said.

Health care could also play a role in several of California’s congressional races. Democrats are trying to win back control of the House, in part to better block Republican efforts to roll back the ACA.

“The actions of the Trump administration, the elimination of the individual mandate and its impact on markets will become more of an issue,” said Chris Jennings, a former health care adviser in the Obama administration. “The conservative caucus has been forcefully advocating for another aggressive return to the repeal effort.”

One of the most-watched races nationally is in a district of California’s San Joaquin Valley where Republican incumbent Jeff Denham drew several Democratic opponents after voting to repeal the health law last year — as did all of California’s Republican House members.

Denham led a crowded primary field with 38 percent of the vote Tuesday. Democrat Josh Harder is holding on to second place with nearly 16 percent, just ahead of a Republican challenger. The results are pending until late-arriving ballots are counted.

Harder said the Republicans’ repeal-and-replace effort on health care was a major reason he decided to run. He made it a centerpiece of his campaign and ran ads criticizing Denham for voting to take away coverage from thousands of his constituents. About 40 percent of residents in this Modesto-area district are enrolled in Medicaid, the government insurance program for the poor and disabled.

Denham has defended his repeal vote, saying that patients’ access to doctors has only gotten worse since coverage was expanded under the ACA. In a statement last year, Denham said, “coverage does not necessarily equal care and families must resort to overflowing emergency rooms to be seen.”

But Dan Schnur, a Republican political strategist who teaches at the University of Southern California and the University of California-Berkeley, said health care has gone from a negative to a positive for Democratic candidates, who have spent the past several elections defending Obamacare.

“As a result, they’re doing everything they can to emphasize the health care debate rather than run away from it,” he said.

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

Californians Face ‘Real Choice’ On Health Care In November

In the state that’s leading the opposition to many of President Donald Trump’s health policies, California voters will face a stark choice on the November ballot: keep up the resistance or fall in line.

The results of Tuesday’s primary have set up general-election contests between candidates — for governor, attorney general, insurance commissioner and some congressional seats — with sharply differing views on government’s role in health care.

The outcome in the Golden State could help shape the fate of the Affordable Care Act and influence whether Republicans in Washington take another shot at dismantling the landmark law.

“For the Affordable Care Act, California is a bellwether state,” said David Blumenthal, president of the Commonwealth Fund, a New York-based health policy research organization. If California voters don’t elect more Democrats to Congress, it will be harder for the party to gain legislative control and “the Affordable Care Act will continue, as it has been, to be under attack from an empowered Republican majority,” he said.

Despite being targeted for voting last year to repeal the ACA and cut Medicaid funding, several Republican incumbents performed well at the polls in California.

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“California was supposed to lead the blue wave, but that’s not what we saw” in the primary, said Ivy Cargile, an assistant professor of political science at California State University-Bakersfield.

In the California governor’s race, Democratic front-runner Gavin Newsom quickly sought to cast the November contest as a referendum on Trump and his effort to undo much of President Barack Obama’s legacy, particularly on health care.

A series of Trump tweets endorsing Republican candidate John Cox, a multimillionaire real estate investor, helped propel the political outsider to the general election.

“It looks like voters will have a real choice — between a governor who will stand up to Donald Trump and a foot soldier in his war on California,” Newsom said Tuesday night to supporters in San Francisco.

California has embraced the federal health law enthusiastically and stands to lose more than any other state if the ACA is gutted. About 1.5 million Californians buy coverage through the state’s Obamacare exchange, Covered California, and nearly 4 million have joined Medicaid as a result of the program’s expansion under the law.

Newsom, a former San Francisco mayor and the current lieutenant governor, has pledged to defend the coverage gains made under the ACA. He has vowed to go even further by pursuing a state-run, single-payer system for all Californians.

Newsom won the primary with 33 percent of the vote and Cox placed second with 26 percent. Some mail-in votes and provisional ballots continue to be counted.

Cox has slammed Newsom and fellow Democrats for imposing government controls on health care that he says make coverage too expensive for families. He said he isn’t interested in defending the Affordable Care Act and that, if the law is scrapped, millions of Californians can go into high-risk insurance pools — an idea that predates the health law.

Andrew Busch, a government professor at Claremont McKenna College, said the political divide over health care has grown even wider this year as single-payer has gained support from mainstream Democrats in California.

“I’d say the Republican candidates are pretty much where the Republicans have been, but the Democratic candidates have shifted to the left, so the choice is starker than it has been,” Busch said.

Heading into Tuesday’s primary, it wasn’t clear that California voters would face such drastically different choices on the November ballot. Under the state’s primary system, the top two vote-getters, regardless of party affiliation, advance to the gener<aal election. That left many experts predicting single-party matchups across the state.

But that scenario also didn’t pan out in the race for attorney general, a position that has played a key role in California’s resistance politics since Trump was elected. Democratic incumbent Xavier Becerra, who has become a national leader against Trump’s agenda, will face off against Republican Steven Bailey in the fall.

Becerra has filed more than 30 lawsuits on health care and other issues since taking office in January 2017.

Bailey, a criminal attorney and former judge, has blamed the Affordable Care Act for driving up health care costs, and he favors less industry regulation. He also has criticized Becerra for fixating too much on Trump.

“Just because a tweet comes out of Washington, it doesn’t require a lawsuit to be filed the next day,” Bailey said.

Health care could also play a role in several of California’s congressional races. Democrats are trying to win back control of the House, in part to better block Republican efforts to roll back the ACA.

“The actions of the Trump administration, the elimination of the individual mandate and its impact on markets will become more of an issue,” said Chris Jennings, a former health care adviser in the Obama administration. “The conservative caucus has been forcefully advocating for another aggressive return to the repeal effort.”

One of the most-watched races nationally is in a district of California’s San Joaquin Valley where Republican incumbent Jeff Denham drew several Democratic opponents after voting to repeal the health law last year — as did all of California’s Republican House members.

Denham led a crowded primary field with 38 percent of the vote Tuesday. Democrat Josh Harder is holding on to second place with nearly 16 percent, just ahead of a Republican challenger. The results are pending until late-arriving ballots are counted.

Harder said the Republicans’ repeal-and-replace effort on health care was a major reason he decided to run. He made it a centerpiece of his campaign and ran ads criticizing Denham for voting to take away coverage from thousands of his constituents. About 40 percent of residents in this Modesto-area district are enrolled in Medicaid, the government insurance program for the poor and disabled.

Denham has defended his repeal vote, saying that patients’ access to doctors has only gotten worse since coverage was expanded under the ACA. In a statement last year, Denham said, “coverage does not necessarily equal care and families must resort to overflowing emergency rooms to be seen.”

But Dan Schnur, a Republican political strategist who teaches at the University of Southern California and the University of California-Berkeley, said health care has gone from a negative to a positive for Democratic candidates, who have spent the past several elections defending Obamacare.

“As a result, they’re doing everything they can to emphasize the health care debate rather than run away from it,” he said.

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

HHS To Allow Insurers’ Workaround On 2019 Prices

Federal officials will not block insurance companies from again using a workaround to cushion a steep rise in health premiums caused by President Donald Trump’s cancellation of a program established under the Affordable Care Act, Health and Human Services Secretary Alex Azar announced Wednesday.

The technique — called “silver loading” because it pushed price increases onto the silver-level plans in the ACA marketplaces — was used by many states for 2018 policies. But federal officials had hinted they might bar the practice next year.

At a hearing Wednesday before the House Education and Workforce Committee, Azar said stopping this practice “would require regulations, which simply couldn’t be done in time for the 2019 plan period.”

States moved to silver loading after Trump in October cut off federal reimbursement for so-called cost-sharing reduction subsidies that the ACA guaranteed to insurance companies. Those payments offset the cost of discounts that insurers are required by the law to provide to some low-income people to help cover their deductibles and other out-of-pocket costs.

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States scrambled to let insurers raise rates so they would stay in the market. And many let them use this technique to recoup the lost funding by adding to the premium costs of midlevel silver plans in the health exchanges.

Because the formula for federal premium subsidies offered to people who purchase through the marketplaces is based on the prices of those silver plans, as those premiums rose so did the subsidies to help people afford them. That meant the federal government ended up paying much of the increase in prices.

At the committee hearing Wednesday, under questioning from Rep. Joe Courtney (D-Conn.), Azar declined to say if the department was considering a future ban.

“It’s not an easy question,” Azar said.

The fact that the federal government ended up effectively making the payments aggravated many Republicans, and there have been rumors over the past several months that HHS might require the premium increases to be applied across all plans, boosting costs for all buyers in the individual market.

Seema Verma, the administrator of the Centers for Medicare & Medicaid Services, told reporters in April that the department was examining the possibility.

Apparently that will not happen, at least not for plan year 2019.

Verma Unveils State Medicaid Scorecard But Refuses To Judge Efforts

Kaiser Health News:States - June 05, 2018

The Trump administration Monday released a Medicaid “scorecard” intended to show how the nation’s largest health program is performing. But the nation’s top Medicaid official didn’t want to draw any conclusions.

“This is about bringing a level of transparency and accountability to the Medicaid program that we have never had before,” said Seema Verma, administrator of the Centers for Medicare & Medicaid Services.

Yet in a meeting with reporters, Verma refused to discuss the findings in any detail or comment on any individual states that performed poorly or exceptionally.

“I will let you look at the data and make your own conclusions,” she told journalists a few minutes before the report was posted online.

When reporters pressed Verma to comment on the document, she refused to give an assessment of the Medicaid program, the federal-state health program for low-income residents. She has run Medicaid for the past 15 months.

“The idea here is to give you a sense of where states are on different areas,” she said. “The idea is to be used for best practices,” and it’s “an opportunity for us to identify” and have discussions with states that aren’t performing well.

Medicaid covers about 75 million people, about half of them children.

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The report looked at how well states provide a wide variety of health services to children and adults. It also reviewed how quickly the federal government was approving state waiver requests to change their programs.

But not all states provided data for each service because sharing information was voluntary.

For example, half the states did not show how well they control Medicaid enrollees’ blood pressure.

The National Association of Medicaid Directors panned the scorecard. It acknowledged the need for a system to measure performance but said its members have concerns about its accuracy and usefulness.

“There are significant methodological issues with the underlying data, including completeness, timeliness, and quality,” the association said in a statement. It noted that most of the data comes from 2015.

As expected, the data showed great variation in how states provide care, including immunizing teenagers or getting dental care to children. A big reason is that state Medicaid benefits and payments to doctors vary dramatically, the Medicaid directors said, so that “it will not be possible to make apples-to-apples comparisons between states.”

In her first public speech, Verma promised last November to release a Medicaid scorecard. She said states won’t immediately face any consequences for poor performance — but that could change.

“The data … begins to offer taxpayers insights into how their dollars are being spent and the impact those dollars have on health outcomes,” Verma said Monday.

Sara Rosenbaum, a professor of health law and policy at George Washington University in Washington, D.C., who previously led a congressional advisory board on Medicaid, suggested that the information is still too incomplete to be of great value.

“It is amazing to me that in 2018 this is all we have when trying to understand how the nation’s largest insurer performs for its poorest and most vulnerable residents,” she said.

KHN’s coverage of children’s health care issues is supported in part by the Heising-Simons Foundation.

U.S. Government Statement on Launch of Final Report by the WHO Independent High-Level Commission on Noncommunicable Diseases

HHS Gov News - June 05, 2018

Upon the release of the final report of the World Health Organization Independent High-level Commission on Noncommunicable Diseases, called “Time to Deliver,” Commissioner Eric Hargan, HHS Deputy Secretary, released the following statement:

“Noncommunicable diseases (NCDs) have long been a burden on the lives of people in developed countries like the United States, and a drain on government resources. But today, they increasingly impact lower- and middle-income countries as well.  Fifteen million people ages 30 to 70 die annually from NCDs, according to a recent U.N. General Assembly report.  Seven million of those are from developing and middle-income countries, which is a relatively new phenomenon. 

We can’t wish away the NCDs challenge. Addressing NCDs requires identifying and pursuing comprehensive, cost-effective, evidence-based, and multi-sectoral strategies and applying them in a way that engages individuals and entire communities.  That is why I agreed to be part of the WHO Independent High-level Commission on NCDs.  The Commission’s goal was to offer bold, new, and multifaceted recommendations that have not entered  the international NCD discussion, and that is why I welcome this report.  Though compromise was necessary in finalizing the language, I believe the report offers recommendations that can truly help accelerate global action against NCDs. 

The report reflects a new spirit of partnership and collaboration with the private sector, which will improve the health and productivity of all. Work in this spirit will make a far greater impact than dismissing this critical sector, as has traditionally been the case with many in the global health community, who often prefer to “go it alone” in addressing public health issues.  The global health community will benefit from innovative public-private partnerships to prevent and mitigate diseases, including NCDs.  Private entities and governments both want healthy and productive workers, customers and taxpayers.  To that end, the report states, and we agree, that governments should engage constructively with the private sector and that public-private partnerships can be an important tool to contribute to effective NCD responses. 

We must do all we can to treat those now afflicted with NCDs, but the best way to meet this challenge is to ensure they never occur in the first place.  One of the best places to focus on prevention is to work with adolescents to help create healthy lifestyle habits.  Thus, the report states that governments should convene marketing experts and behavioral economists to develop public health campaigns designed to educate different populations on how best to prevent and mitigate the risk factors and harms of NCDs.  The private sector can, and should, be included in such efforts. 

The report encourages governments to harness emerging technologies for NCD action.  We have learned in the United States the value of using technology to produce cost-savings and health benefits. Simple telecommunications technologies can help connect providers and patients, even in our most rural areas. In U.S. communities with few doctors per capita and a high burden of chronic disease, telehealth has led to improved disease management and health education.  Technology can be used to educate communities about healthy lifestyles, coordinate training among providers, and provide treatment to hard-to-reach individuals in rural and urban settings. 

Strengthening health infrastructure and primary care, ensuring effective engagement with those people living with behavioral and mental health conditions, and bringing together different levels of governments and civil society, are also worthy of praise and attention and must be part of any solution. 

Any lasting solution to the problem of NCDs will require collaboration with the private sector.  No government or advocacy group can match the private sector’s capacity to reach targeted populations.   We look forward, with the international health community, to partnering appropriately with the private sector as part of the solution to achieve our goals of reducing the prevalence of NCDs. 

Overall, this report offers a list of recommendations governments can use now to combat the rise of NCDs.  As the title of the report says, it is truly time to deliver bold actions if we are going reduce premature mortality from NCDs.  As a representative of the United States, I stand ready to do my part and look forward to the next phase of work on the High-level Commission.”

The report is available here: http://www.who.int/ncds/management/time-to-deliver/en/

A Hospital ER Charges An ‘After-Hours’ Fee. Who Has To Pay It?

This week, I responded to readers who were unhappy with their health plan’s decision not to pay an emergency department surcharge for after-hours care and concerned about difficulties getting Medicare to cover claims unrelated to a workers’ compensation injury. Another reader asked about a recently announced hardship exemption from the requirement to have health insurance.

Q: I visited a local emergency room one night after I had a severe allergic reaction that caused intense itching, hives, swelling and blistering. Now I received an “explanation of benefits” notice from my insurer that I will be billed by the in-network hospital for “after-hours” service. My insurer does not cover that charge. I am so enraged. Is there anything I can do to get the hospital to remove the charge?

Tacking on an after-hours surcharge to an emergency department bill strikes some consumers as unfair, since the facilities are open 24 hours a day.

The practice is “pretty rare” but defensible, said Dr. Paul Kivela, an emergency physician in Napa, Calif., who is president of the American College of Emergency Physicians. He noted that the cost to staff an emergency department at night is higher than by day. The surcharge is typically modest, often less than $100, experts say.

But that’s neither here nor there. The extra charge should have been built into the overall rate, said Betsy Imholz, special projects director for Consumers Union, an advocacy group. “It’s infuriating,” she said. “I don’t blame [the patient] for being annoyed.”

Just because your health plan is balking now at paying the surcharge, that may not be the final word. Hospitals and insurers frequently sort out these surcharges between themselves, without holding patients responsible, said Richard Gundling, a senior vice president at the Healthcare Financial Management Association, an industry group.

“If it’s an in-network provider, an insurer is generally responsible for addressing the billing of that code under its negotiated contract with the providers,” Gundling said.

Medicare beneficiaries are not responsible for paying the surcharge.

If the hospital pursues the patient to pay the charge, Imholz recommended that consumers file an appeal with their health plan, noting that appeals on many issues are frequently successful.

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Q: I fell in 2015 and my injuries are being covered by the workers’ compensation program. It pays only the claims that are related to my back and neck injuries. But Medicare has been refusing all the claims it receives, including a hospital stay for an acute asthma attack as well as routine visits to my primary care physician. The program states that these claims are the responsibility of workers’ comp. What can I do?

Your workers’ compensation insurer is the “primary payer” for medical bills that are related to your work-related injury. Medicare is responsible for your other medical care.

Without more information, it’s impossible to know exactly why Medicare is denying your claims for medical care that’s not related to your work injury.

However, the problem may be rooted in the mandatory data-reporting requirements that the federal Centers for Medicare & Medicaid Services put in place about a decade ago, said Darrell Brown, an executive vice president and chief claims officer at Sedgwick Claims Management Services.

Under the federal rules, insurers and plan administrators have to report claims data about Medicare beneficiaries who are also covered by a group health plan or who receive payments under workers’ compensation, among other things. The aim is to ensure that the Medicare program isn’t acting as a primary payer on some claims when another health plan or program should be doing so.

“My guess is that there’s something that went wrong with that reporting,” Brown said. “There’s so much data that they’re getting, and there’s so much room for error as well.”

Start by contacting the number or person on the notice you received from the Medicare program denying your claim, Brown said. You may also have to contact the workers’ compensation carrier. But your first step should be to find out why the Medicare program mistakenly believes that your asthma hospitalization and other care is related to your workers’ comp injury.

Q: Why is there a new exemption from the penalty for not having health insurance if you live in a bare county with no marketplace insurers? There aren’t any of those and next year there’s no penalty, so what’s the point? 

As you note, starting next year, people will no longer owe a penalty for not meeting the Affordable Care Act’s requirement of having health insurance.

People will, however, be able to apply to the marketplace for a hardship exemption if they live somewhere where there are no marketplace insurers. That may give them another option for coverage.

People who qualify for a hardship or affordability exemption can receive an “exemption certificate number,” often referred to as an ECN, which will allow them to buy a catastrophic plan that meets health law standards and is typically available only to people under age 30, said Tara Straw, a senior policy analyst at the Center on Budget and Policy Priorities.

These ACA-compliant plans may be purchased off the exchange, even if no insurers are selling marketplace plans in a particular area.

Catastrophic plans cover the essential health benefits. They often have lower premiums than plans on the health law’s marketplace, but their deductibles are comparatively very high and people can’t receive premium tax credits to pay for them. The high out-of-pocket costs may explain why they haven’t been popular. Fewer than 1 percent of marketplace enrollees picked one in 2018.

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

Suspension Of California’s Aid-In-Dying Law Leaves Sick Patients In Limbo

Kaiser Health News:States - June 05, 2018

Dozens of terminally ill patients in California who counted on using the state’s medical aid-in-dying law may be in limbo for a month after a court ruling that suspended the 2016 measure.

A judge who ruled in May that the law was improperly enacted refused to vacate that decision at the request of advocates last week. Riverside County Superior Court Judge Daniel Ottolia set a hearing for June 29, however, to consider a separate motion by state Attorney General Xavier Becerra to reverse the decision.

Opponents cheered what they hope will be the end of a law they’ve fought from the day it was passed. Compassion & Choices, an advocacy group that promotes aid-in-dying, filed a notice of appeal late Friday and asked Becerra to uphold the group’s legal opinion that their appeal would trigger a stay of Ottolia’s judgment. Such a stay would reinstate the law pending further court action. Becerra did not immediately respond to the group, or to requests for comment.

For an estimated 200 patients who had already started the process of hastening their deaths, the decision has sparked confusion and fear, said Kat West, Compassion & Choices’ national policy director.

As of May 30, doctors had stopped writing prescriptions for the lethal medications and pharmacists had stopped filling them, leaving patients uncertain how to proceed, she said.

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Dr. Lonny Shavelson, a Berkeley, Calif., physician whose practice focuses on aid-in-dying, said more than a dozen of his patients have been directly affected by the suspension.

“These are patients who are in various stages of the process, all the way from a first verbal request to those about to get the medication,” he said.

They include Debbie Gatzek Kratter, 69, a lawyer from Half Moon Bay, Calif., diagnosed last year with terminal pancreatic cancer, who has planned to take the drugs when her suffering becomes too great.

Knowing she had the choice has helped her tolerate the disease, but the suspension has made her “very uncomfortable,” she said.

Debbie Gatzek Kratter, a lawyer diagnosed with pancreatic cancer, plans to use California’s medical aid-in-dying law when her suffering becomes intolerable. The 2016 law has been suspended pending a court review. (Courtesy of Debbie Gatzek Kratter)

Kratter said she is considering moving to Washington state, where medical aid-in-dying remains legal, or flying to Switzerland, where physician-assisted death is allowed. Others may choose grimmer options, she said.

“This has the feeling to me of the coat-hanger abortion,” she said. “People are going to try to take things into their own hands in bad ways.”

But opponents of what’s sometimes called assisted suicide said the suspension “now opens the door to a discussion about how to better care for people at the end of their lives.”

“Halting the law likewise has the benefit of protecting a great many vulnerable people against deadly harm through mistakes, abuse and coercion — risks that go hand in hand with this type of dangerous public policy,” Matt Valliere, executive director of the group Patients Rights Action Fund, said in a statement.

California’s End of Life Option Act took effect nearly two years ago. It allowed terminally ill adults to request lethal medications from their doctors through a process that requires verbal and written requests at least 15 days apart. The practice is also permitted in six other states and Washington, D.C.

More than 100 people used California’s law in the first six months after it was enacted, according to state health officials. Hundreds more are estimated to have used it since then, though no official reports have been issued. Shavelson said he has received more than 600 requests and attended 87 deaths since the law took effect.

Several groups, including the Life Legal Defense Foundation and the American Academy of Medical Ethics, challenged the law, saying it failed to protect elderly, infirm and vulnerable patients. In mid-May, Ottolia upheld the groups’ motion that the law was unconstitutional because legislators improperly passed it during a special session limited to health care issues.

“Even the strongest proponents of assisted suicide should be gravely concerned about the lack of safeguards and protection in the law that was found to be unconstitutionally enacted by the Legislature,” Stephen Larson, a lawyer for the plaintiffs, said in an email.

Compassion & Choices challenged that decision May 30 on behalf of two terminally ill patients and a treating physician, but Ottolia rejected their motion. However, Ottolia granted a request from Becerra to consider a separate motion on the same matter June 29.

That leaves patients and doctors without clear answers for at least a month, Shavelson said.

Among the questions: If Shavelson accepts a patient’s first verbal request now, will it count toward the waiting period? Will patients who used previously obtained medications have their deaths classified as suicides, rather than as a result of their underlying illness, as required by the law? Would doctors who provide the lethal drugs be legally liable?

For actively dying patients, even a temporary pause in the law could have a profound — and permanent — effect, Shavelson added.

“They are sick, home on oxygen, at home on hospice, in pain, wondering how they’re going to die,” he said. “I have to tell them, ‘We don’t know.’”

Health Care Simmers On Back Burner In California Heartland’s Hot House Races

MODESTO, Calif. — About a dozen mostly retired locals took over a corner of a busy intersection on a recent Saturday afternoon in this San Joaquin Valley city, toting signs that read “Dump Denham 2018.”

Several cars zooming by honked in support. Buda Kajer-Crain, 69, paced up and down the sidewalk waving a large American flag. She said she wanted U.S. Rep. Jeff Denham (R-Turlock) gone, in part because of his vote one year ago to dismantle the Affordable Care Act.

“We had a big formal town hall meeting where he said he would not support taking away the ACA,” said the retired clinical-lab scientist. “He lied.”

Kajer-Crain, a Democrat, said Denham’s vote to take apart the national health law and curtail the Medicaid program betrayed his constituents, who rely heavily on both. Other activists and pundits have in the past year identified assaults on the ACA as a potentially pivotal issue in the 2018 midterm elections in California’s traditionally red — but increasingly purple and blue — heartland.

On the cusp of Tuesday’s primaries, however, it is far from clear that health care is the wedge issue in California congressional races that pundits once envisioned. After all the rallies and protests in San Joaquin Valley districts and around the state last year, the urgency on health care seems to have waned — at least for now.

All four Republican House members in the Valley voted, along with the rest of California’s Republican delegation, to dismantle and replace the Affordable Care Act last year. But at this point, three of the four appear likely to win re-election.

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Denham’s seat is considered the most vulnerable, according to several political forecasters. Even if it flips, however, it’s not certain health care will be the defining issue. Denham faces five Democratic opponents and most list health care as a priority. At least as important, however, is the district’s general political bent — it now has a slight Democratic majority and voted for Hillary Clinton in 2016.

Meanwhile, the seat of House Majority Leader Kevin McCarthy (R-Bakersfield) is considered safe, and the districts of U.S. Rep. Devin Nunes (R-Visalia) and U.S. Rep David Valadao (R-Hanford) could be competitive but are likely to remain red, forecasters said.

Polls on congressional candidates are hard to come by until the general election, but the vulnerability of House seats can be roughly measured by the general political environment, campaign financing and the apparent strength of challengers, experts say.

Nationally, health care is one of the top issues for Democrats in the midterms but ranks further down for Republicans, behind the economy, immigration and gun policy, according to a recent Kaiser Family Foundation poll. In general, the election centers on attitudes toward President Donald Trump, the poll found. (Kaiser Health News, which produces California Healthline, is an editorially independent program of the foundation.)

“Most voters may not necessarily be concerned about who voted for the [Republican] health care bill,” said Kyle Kondik, managing editor at Sabato’s Crystal Ball, a political forecasting site run by the University of Virginia Center for Politics. They’re just voting the party, he said.

The Republican bill that would have replaced key parts of Obamacare — known as the American Health Care Act — passed the House last May and failed by one vote in the Senate. It would have widely reduced the tax credits that help many people buy insurance from ACA marketplaces, eliminated the tax penalty for people who don’t have insurance, and phased out the Medicaid expansion that has covered 15 million people. Congress ultimately repealed the tax penalty for being uninsured, effective as of 2019.

At the time, some advocates and residents of the San Joaquin Valley said the “yes” votes of Republican House members undermined their own constituents. They noted that the region has the some of the biggest gaps in access to health care in the state, if not the country, and that it is plagued with dirty air and high rates of chronic conditions such as asthma and diabetes.

The UC Berkeley Labor Center estimated in 2017 that if the ACA were repealed, more than 465,000 people in the San Joaquin Valley would lose their Medi-Cal coverage in 2027 and the local health care system would lose more than $3 billion in annual Medi-Cal funding.

“Medi-Cal Saves Lives” billboards, like this one in central Modesto, are positioned across California. (Ana B. Ibarra/California Healthline)

Denise Hunt, founder of Indivisible Stanislaus 2.0, part of the “Resistance” movement against President Donald Trump, holds a “Dump Denham” sign in protest of Republican congressman Jeff Denham. The race for his House seat, representing part of California’s San Joaquin Valley, is billed as one of the most hotly contested heading into midterm elections. (Ana B. Ibarra/California Healthline)

It’s not entirely clear why health care seems to have taken a back seat in the run-up to the primaries. Some experts predict it will probably play a bigger role in the general election in November; others say it’s no longer the hot topic it was, and voters have moved on to other issues.

As is often the case, poor people who face obstacles to care may be less inclined to go to the polls or unable to vote because they are in the country illegally. And though the region increasingly is voting Democratic, it still has many true-red voters who oppose the ACA and are fiercely loyal to their incumbent Congress members.

Stephen Tootle, a Republican in Nunes’ district and a history professor at the College of the Sequoias in Visalia, said Obamacare hasn’t really helped the people in his district, who still struggle with poor access to providers and hospital closures. “It’s a joke,” he said.

He supports Nunes because he says the congressman is a champion for water allocation. For Tootle, it’s the No. 1 issue “that really affects how people live here.”

Stephen Routh, a political science professor at California State University-Stanislaus, said he expects health care to play a bigger role in the general election, when incumbent Republicans will have only one challenger.

On Nov. 6, the races in each district will be between the two top vote-getters from Tuesday’s primary contests. As that date approaches, Routh said, Democrats are “going to mention Obamacare repeal endlessly. That’s going to be a major hammering point.”

But Vito Chiesa, a Republican and a member of the Stanislaus County Board of Supervisors, said voters are not as concerned about health care, because it “seems people believe the ACA is here to stay in some form.

”Immigration … is the hotter issue right now. That’s the soup du jour,” he said.

Mary Borbon, 36, who lives in Lemoore, a town of about 26,000 people in Valadao’s district, said she cares about health care, especially its affordability. She’s been on and off Medi-Cal as her income from seasonal jobs fluctuates. But, like Chiesa, she said that’s not all she or other voters are thinking about. “Right now I’d say the economy and immigration are big,” she said.

Valadao is likely to win re-election, according to Sabato’s Crystal Ball, even though registered Democrats significantly outnumber Republicans in his district and more than half of his constituents are on Medi-Cal. Many residents remain loyal to Valadao, a local dairy farmer and businessman who has represented the district since 2013. Some say he’s likable and relatable. Others don’t think the Democrats have a strong enough candidate to represent their district, which includes all of Kings County and parts of Fresno, Kern and Tulare counties.

Josh Harder, a Democratic candidate who seeks to unseat Republican Jeff Denham, poses with two of his supporters, Dr. Roland Nyegaard and his wife, Kate Nyegaard, during a recent canvassing event. On Tuesday, voters in California’s 10th congressional district will decide whether Harder will be on the November ballot. (Ana B. Ibarra/California Healthline)

If “the blue wave” can flip any House seat in the San Joaquin Valley, bets are on Denham’s district, experts say. Some longtime voters like Kajer-Crain, the street protester, think it can be done.

Denham is not only facing another Republican — Ted Howze, a veterinarian and former council member in the city of Turlock. He is also up against Democrat Sue Zwhalen, who has 40 years of experience as an emergency room nurse and says she has received strong support from her Republican friends and neighbors.

Political newcomer Josh Harder, also a Democratic candidate focusing on health care, has already released advertisements directly attacking Denham’s vote to roll back the ACA.

“Health care,” he said during a canvassing event in Turlock, “is the reason I’m running for Congress.”

Tuesday’s election could be an important gauge of whether that’s a winning strategy.

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

Outsiders Swoop In Vowing To Rescue Rural Hospitals Short On Hope — And Money

CEDARVILLE, Calif. — Beau Gertz faced a crowd of worried locals at this town’s senior center, hoping to sell them on his vision for their long-beloved — but now bankrupt — hospital.

In worn blue jeans and an untucked shirt, the bearded entrepreneur from Denver pledged at this town hall meeting in March to revive the Surprise Valley Community Hospital — a place many in the audience counted on to set their broken bones, stitch up cattle-tagging cuts and tend to aging loved ones.

Gertz said that if they vote June 5 to let him buy their tiny public hospital, he will retain such vital services. Better still, he said, he’d like to open a “wellness center” to attract well-heeled outsiders — one that would offer telehealth, addiction treatment, physical therapy, genetic testing, intravenous vitamin infusions, even massage. Cedarville’s failing hospital, now at least $4 million in debt, would not just bounce back but thrive, he said.

Gertz, 34, a former weightlifter who runs clinical-lab and nutraceutical companies, unveiled his plan to pay for it: He’d use the 26-bed hospital to bill insurers for lab tests regardless of where patients lived. Through telemedicine technology, doctors working for Surprise Valley could order tests for people who’d never set foot there.

To some of the 100 or so people at the meeting that night, Gertz’s plan offered hope. To others, it sounded suspiciously familiar: Just months before, another out-of-towner had proposed a similar deal — only to disappear.

Outsiders “come in and promise the moon,” said Jeanne Goldman, 72, a retired businesswoman. “The [hospital’s] board is just so desperate with all the debt, and they pray this angel’s going to come along and fix it. If this was a shoe store in Surprise Valley, I could care less, but it’s a hospital.”

Goldman says the hospital’s board is just so desperate with all the debt that they “pray this angel’s going to come along and fix it.” (Heidi de Marco/KHN)

About 100 people attended the town hall meeting hosted by Beau Gertz. (Heidi de Marco/KHN)

(Heidi de Marco/KHN)

Looking For Salvation

The woes of Surprise Valley Community Hospital reflect an increasingly brutal environment for America’s rural hospitals, which are disappearing by the dozens amid declining populations, economic troubles, corporate consolidation and, sometimes, self-inflicted wounds.

Nationwide, 83 of 2,375 rural hospitals have closed since 2010, according to the North Carolina Rural Health Research Program. These often-remote hospitals — some with 10, 15, 25 beds — have been targeted by management companies or potential buyers who promise much but often deliver little while lining their own pockets, according to allegations in court cases, a Missouri state audit and media reports.

Enticed by such outsiders, some struggling rural hospitals around the country have embraced lab billing for faraway patients as a rescue plan. That’s because Medicare and commercial insurers tend to pay more for tests to sustain endangered rural hospitals compared with urban hospitals and especially outpatient labs. In general, this kind of remote billing is controversial and legally murky, and it recently has resulted in allegations of fraud in several states, according to government documents and media reports.

Surprise Valley’s hospital has 22 skilled nursing beds, one acute bed and three “swing” beds that can be used as needs arise. (Heidi de Marco/KHN)

(Heidi de Marco/KHN)

Rural hospital boards, however, tend not to have expertise in the health care business. The president of Surprise Valley Community’s board, for instance, is a rancher. Another board member owns a local motel; a third, a construction company. That lack of experience “leaves them vulnerable in many cases,” said Terry Hill of the nonprofit National Rural Health Resource Center, based in Duluth, Minn.

Seeking to distinguish himself from other would-be rescuers who ran into legal trouble, Gertz described his proposal to residents as perfectly legal — a legitimate use of telemedicine, essentially remote treatment via electronic communication such as video. “If you do it correctly,” he said in an interview with Kaiser Health News, “there is a nice profit margin. There [are] extra visits you can get from telemedicine but … it has to be billed correctly and it can’t be abused.”

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Gertz runs several companies — founded within the last four years —including two labs, SeroDynamics and Cadira Labs, as well as a wellness company called CadiraMD.

He pledged in court documents to buy the bankrupt hospital for $4 million and cover its debts, saying he had lined up a $4 billion New York company as a financial backer. Kaiser Health News was unable to locate the company under the name Gertz cited, Next Genesis Development Group. He did not respond to emails seeking clarification on the issue.

Gertz, who acknowledged that he had never before run a hospital, was asked at the same gathering whether he had disclosed his “financials” to the hospital board. “As a private entity, I don’t have to show my financials and I have not provided my financials to the board,” he replied.

It was not clear whether board members had ever asked. Surprise Valley Health Care District board President John Erquiaga declined to comment.

Cedarville, a hamlet of about 514 residents, is in one of California’s poorest counties, with a median income of roughly $30,000. The closest hospital with an emergency room is about 25 miles away over a mountain pass. (Heidi de Marco/KHN)

(Heidi de Marco/KHN)

A Sad Decline

Surrounded by the Warner and Modoc mountains and forests in California’s northeastern corner, Surprise Valley is home to four small communities. The largest is Cedarville, population 514, at last count.

The valley, covered in sagebrush and greasewood, is part of Modoc County, one of California’s poorest, with a median income of about $30,000. The closest hospital with an emergency room is roughly 25 miles away, over a mountain pass.

One of hundreds of rural hospitals built with help from the 1946 federal Hill-Burton Act, the Surprise Valley hospital opened in 1952 to serve a thriving ranching community. But it has struggled since, closing in 1981, reopening as a health clinic in 1985, then reconverting to a hospital in 1986.

A county grand jury report in 2014-15 found that “mismanagement of the [hospital district] has been evident for at least the past five years.”

By last summer, those in charge didn’t seem up to the task of running a modern hospital. By then, it was hardly a hospital at all. Crushed by debt, it primarily offered nursing home care, an emergency room, a volunteer ambulance service and just one acute care bed, with three others available if needed.

Surprise Valley Community Hospital (Heidi de Marco/KHN)

Besides its ER and volunteer-staffed ambulance service, Surprise Valley’s hospital in recent years has functioned mostly as a nursing home, saddled with crushing debt. (Heidi de Marco/KHN)

(Heidi de Marco/KHN)

When state inspectors arrived last June, they found chaos. The hospital’s chief nursing officer resigned during the inspection. Staffers reported unpaid checks to vendors hidden in drawers. Inspectors learned that the hospital had sent home temporary nurses because it couldn’t pay them, according to their report.

The hospital’s then-chief administrator, Richard Cornwell — who staffers said had instructed them to hide the checks, according to the report — had taken a leave of absence and was nowhere to be found. Cornwell, a health care accountant from Montana, was later fired and replaced with the hospital’s lab director, who in turn resigned, according to public records. Reached by Kaiser Health News, Cornwell declined to comment.

Federal regulators suspended Medicare and Medicaid payments to the hospital — a rarely invoked financial penalty — over concerns about patient care. Those payments have since been reinstated, but a follow-up state inspection in November 2017 identified more patient care concerns.

Jean Bilodeaux, 74, a journalist who lives in Cedarville says members of the hospital board “blew up” at her when she raised important questions about the hospital’s finances in stories she wrote for the Modoc County Record, a weekly newspaper. (Heidi de Marco/KHN)

Infighting ensued, with some residents fiercely committed to keeping the hospital open and others favoring closure, perhaps replacing it with a small clinic. Local journalist Jean Bilodeaux, 74, said board members often kept the public in the dark, failing to show up for their own meetings and sometimes making decisions outside public view.

When Bilodeaux raised questions about the hospital’s finances in the Modoc County Record, a weekly newspaper, she recalled, board members “started screaming at me,” she said. Now “I don’t even step foot in that hospital.”

Ben Zandstra, 65, a pastor in Cedarville, said that while Cornwell was in charge, he too got a chilly reception at the hospital, where he had long played guitar for patients on Christmas Eve. “I became persona non grata. It’s the most divisive thing I’ve seen in the years I’ve lived here.”

Ben Zandstra, pastor of the Surprise Valley Community Church in Cedarville, says the hospital’s administrators made clear he was no longer welcome at the hospital after he voiced concerns. (Heidi de Marco/KHN)

A White Knight, Vanished

Even residents who say they have experienced poor care at Surprise Valley Community believe its continued existence in some form is crucial — for its 50 or so jobs, for its ER, and because it puts the region on the map.

Eric Shpilman, 61, a retired probation officer, said his now-deceased wife received “unspeakable” treatment at Surprise Valley. But to shut it down? “It would take out the heart of Surprise Valley, the heart out of Cedarville.”

Last summer, the board turned to an outside management company for help.

Jorge Perez, CEO of Kansas City-based EmpowerHMS — which promises on its website to “rescue rural hospitals” — agreed to take over Surprise Valley’s debt and operate the hospital for three years, according to a management agreement with the board.

Eric Shpilman, a retired probation officer who lives in Fort Bidwell, Calif., works at a ranch in Cedarville. “If the hospital closes, it’s irreplaceable,” says Shpilman, who says his wife received “unspeakable” treatment at the hospital before she died. (Heidi de Marco/KHN)

In the two months after EmpowerHMS took over management, Surprise Valley’s revenue more than doubled, according to financial documents provided by the hospital.

Then, according to hospital officials’ public statements, the company stopped making the promised payments, and they haven’t been able to contact EmpowerHMS or Perez since. In January, when Surprise Valley filed for bankruptcy, documents filed in court said EmpowerHMS had “abandoned” the hospital.

Around the time Perez took over, he and companies with which he was involved were dogged by allegations of improper laboratory billing at facilities in Mississippi, Florida, Oklahoma and Missouri, according to ongoing lawsuits by insurers and others, a state audit and media reports. Missouri’s attorney general in May opened an investigation into one of the hospitals Perez managed, and Sen. Claire McCaskill (D-Mo.) recently called for a federal investigation into lab billing practices at one of the hospitals.

Medicare rules and commercial insurance contracts, with some exceptions, require people to be treated on an inpatient or outpatient basis by the hospitals that are billing for their lab tests. But insurers have alleged in court documents that hospitals Perez was involved with billed for tests — to the tune of at least $175 million — on patients never seen at those facilities. Perez has maintained that what he is doing is legal and that it generates revenue that rural hospitals desperately need, according to Side Effects Public Media.

Experts say insurers are catching on to voluminous billing by hospitals in communities that typically have generated a tiny number of tests. At one Sonoma County district hospital not associated with Perez, an insurer recently demanded repayment for $13.5 million in suspect billings, forcing the hospital to suspend the lucrative program and put itself up for sale.

Lab tests for out-of-town patients have “been a growing scheme in the last year, slightly longer,” said Karen Weintraub, executive vice president of Healthcare Fraud Shield, which consults for insurers. “There’s an incentive to bill for things not necessary or even services not rendered. It also may not be proper based on contracts with insurers. The dollars are getting large.”

Some residents were aware of controversy surrounding Perez and his companies and said they tried to warn the hospital district board. “All they wanted to hear was, ‘We will pay the bills,’” Bilodeaux said.

Neither Perez nor EmpowerHMS returned requests for comment. However, Michael Murtha, president of the National Alliance of Rural Hospitals, said in an email that he was responding on behalf of Perez, who chairs the coalition’s board.

“The mission to rescue rural hospitals and set them on a path of sustainability is a difficult undertaking, and it would be a disservice to their communities to preclude struggling facilities from availing themselves of every legal and regulatory means to generate badly needed revenue,” Murtha wrote, in part.

“Such pioneering efforts are not always welcomed by those who have benefited from the status quo,” he said.

Regarding Perez’s role at Surprise Valley, Murtha wrote that Perez tried to help save the facility by “effectively” donating over $250,000 but then discovered it faced “more challenges than had been initially realized.” Murtha said Perez worked to attract others who might be better able to help the hospital.

Businessman Beau Gertz faced a tough crowd of worried locals at a recent board meeting in Cedarville, hoping to sell his vision for their beloved but bankrupt hospital. (Heidi de Marco/KHN)

The Surprise Valley Health Care District held its meeting at the local church on March 28, 2018. (Heidi de Marco/KHN)

The Surprise Valley Health Care District is a public facility and supported by taxes on homeowners. Residents raised concerns at public meetings that they would personally be on the hook for thousands of dollars per household to pay off the hospital’s debt. (Heidi de Marco/KHN)

A New Savior?

One of those “others” in Perez’s orbit was Gertz, the Denver entrepreneur, who arrived in Surprise Valley several months ago.

The Denver executive told residents and Kaiser Health News that he operated a lab that previously performed tests for hospitals owned or managed by Perez’s companies. At one hospital board meeting, Gertz also said he had handled marketing for Perez companies for 1½ years.

However, he said he had parted ways with Perez after learning of his controversial dealings in other states, and Gertz said Perez now owes him more than $14 million. (Gertz and his companies have not been named as defendants in lawsuits reviewed by Kaiser Health News involving Perez and his companies.)

“I come in with a certain guilt by association,” he told the Modoc County Board of Supervisors in April, according to a recording of the meeting. But Gertz sought to assuage any concerns, telling the supervisors he had a “passion” for rural life. He’d grown up on a farm, he said, where he “hung out with the chickens” and cleaned the stables every morning.

Gertz said his plan was different from Perez’s and legal because the hospital and one of his Denver labs, SeroDynamics, had become one business. With the hospital board’s approval earlier this year, he loaned the district $2.5 million for it to buy SeroDynamics — effectively an advance on the hospital’s purchase price of $4 million, according to bankruptcy court documents. SeroDynamics’ website now proclaims the lab a “wholly-owned subsidiary” of the Surprise Valley hospital, with “national reach.”

Robert Michel, a clinical laboratory management consultant who learned of the terms of the transaction from a reporter, offered a critical assessment. “The essence of this arrangement is to use the hospital’s existing managed-care contracts with generous payment terms for lab tests as a vehicle to bill for claims in other states,” said Michel, editor-in-chief of a trade magazine for the lab industry. This arrangement “should ring all sorts of bells” for the hospital board, he said.

Cedarville (Heidi de Marco/KHN)

For now, Gertz has said, dollars are flowing in. According to the journalist Jean Bilodeaux, Gertz phoned in to a Surprise Valley hospital board meeting last month to report that the lab billing so far had netted about $300,000. According to bankruptcy court documents, 80 percent of the profits will go to his companies, 20 percent to the hospital.

Those are terms some in Surprise Valley are willing to live with.

The next step, for Gertz, is taking ownership of Surprise Valley’s entire operation. For the 1,500 district residents, voting no on Tuesday almost certainly means closure, leaving taxpayers with potentially more debt, including any money they may owe Gertz.

That is good enough reason to go with the Denver entrepreneur, said acting hospital administrator Bill Bostic.

“He’s got something we haven’t got — which is money,” Bostic said.

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

HHS Secretary Azar Praises New FDA Actions to Promote Generic Competition and Lower Drug Prices

HHS Gov News - May 31, 2018

Health and Human Services Secretary Alex Azar issued the following statement on the Food and Drug Administration’s announcement of two guidances regarding drug manufacturers’ use of shared risk evaluation and mitigation strategies:

“HHS is taking more action on President Trump’s blueprint to put American patients first. The FDA’s announcement today will help generic drug manufacturers bring low-cost competition to market faster and discourage brand-name companies’ misuse of laws meant to protect public health. Greater competition in drug markets is one of the key pieces of our plan to bring down drug prices. HHS will continue taking action to promote competition, building on accomplishments like the record number of generic drugs the FDA has approved under President Trump.”

Read more FDA Commissioner Scott Gottlieb’s statement on the actions here: https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm609365.htm

As Puerto Rico Struggles To Rebuild Health System, Changes In Medicaid Loom

Kaiser Health News reporter Carmen Heredia Rodriguez joined Tanzina Vega, the host of WNYC’s “The Takeaway,” and Omaya Sosa Pascual, co-director of Puerto Rico’s Center for Investigative Journalism, to discuss changes in Puerto Rico’s Medicaid program and health care issues there.

Listen: Virginia Reverses Course On Medicaid Expansion

Virginia lawmakers Wednesday voted to expand the state’s Medicaid program, ending several years of bitter fights with Democratic governors and providing coverage for an estimated 400,000 people. Julie Rovner, Kaiser Health News’ chief Washington correspondent, discusses the development with WAMU anchor Matt McCleskey. She says that since the state has one of the least generous Medicaid programs in the country, adding coverage for such a large number of people is likely to strengthen the state’s health care system, especially hospitals.

Virginia Reverses Course On Medicaid Expansion

Kaiser Health News:States - May 31, 2018

Virginia lawmakers Wednesday voted to expand the state’s Medicaid program, ending several years of bitter fights with Democratic governors and providing coverage for an estimated 400,000 people. Julie Rovner, Kaiser Health News’ chief Washington correspondent, discusses the development with WAMU anchor Matt McCleskey. She says that since the state has one of the least generous Medicaid programs in the country, adding coverage for such a large number of people is likely to strengthen the state’s health care system, especially hospitals.

Podcast: KHN’s ‘What The Health?’ Virginia, The VA, And Military Medicine

Julie Rovner

Kaiser Health News

@jrovner

Read Julie's Stories Rebecca Adams

CQ Roll Call

@RebeccaAdamsDC

Read Rebecca's Stories Joanne Kenen

Politico

@JoanneKenen

Read Joanne's Stories Paige Winfield Cunningham

The Washington Post

@pw_cunningham

Read Paige's Stories

After a five-year fight, the Virginia legislature voted this week to expand the Medicaid program to an estimated 400,000 low-income residents who are not currently eligible for health coverage. And New Jersey became the second state to impose a state-level “individual mandate” requiring most residents to have health insurance or pay a fine, following last year’s repeal of the federal penalty.

Meanwhile, Congress has quietly passed a major bipartisan bill to overhaul and streamline health programs provided to the nation’s veterans. The bill includes an expansion of veterans’ ability to get private care paid for outside the Department of Veterans Affairs system, in certain cases.

Also this week, an interview with Dr. Arthur Kellerman, dean of the Uniformed Services University of the Health Sciences, the military’s medical school in Bethesda, Md.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Paige Winfield Cunningham of The Washington Post and Rebecca Adams of CQ Roll Call.

Among the takeaways from this week’s podcast:

  • Two key factors helped push Medicaid expansion through the Virginia General Assembly. One was the Trump administration’s endorsement of work requirements for nondisabled adults and the other was the blue wave that shook the state last November when the House of Delegates nearly turned from a safe Republican majority to Democratic control.
  • New Jersey’s passage of a mandate that state residents get coverage or face a penalty was surprising because that provision was one of the most disliked parts of the federal Affordable Care Act.
  • Even as Congress sent the president the bill expanding VA programs, there is a widening debate in Washington about whether the system should be privatized. That debate has helped both create the vacancy at the top of the Department of Veterans Affairs and complicated efforts to fill it.

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

Julie Rovner: Bloomberg News’ “Is There a Doctor Aboard? Airlines Often Hope Not,” by Ivan Levingston

Joanne Kenen: The Atlantic’s “Ambien Doesn’t Cause Racism,” by Olga Khazan

Rebecca Adams: ProPublica’s “Why Your Health Insurer Doesn’t Care About Your Big Bills,” by Marshall Allen

Paige Winfield Cunningham: The New York Times’ “Origins of an Epidemic: Purdue Pharma Knew Its Opioids Were Widely Abused,” by Barry Meier

Also: The New Yorker’s “The Family That Built an Empire of Pain,” by Patrick Radden Keefe

To hear all our podcasts, click here.

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

Readers And Tweeters Bare Their Teeth On Dental Disparities (And Other Fine Points)

Letters to the Editor is a periodic Kaiser Health News feature. KHN welcomes all comments and will publish a selection. We edit for length and clarity and require full names.

Foaming At The Mouth Over Dental Insurance?

In response to the revelation that a 61-year-old academic had to rely on handouts from his mom to cough up over $50,000 for dental work (“When Is Insurance Not Really Insurance? When You Need Pricey Dental Care,” May 21), Trista McGlamery of Atlanta tweets that an ounce of prevention is worth a ton.

I blew through my coverage this year having 11 cavities filled and scaling done, so I will agree dental insurance isn't sufficient. Another aspect of this is the gap in quality rural dental care. How many people are facing enormous bills now thanks to substandard care earlier? https://t.co/ZrxdmR3o6n

— Trista McGlamery (@tristamac) May 21, 2018

— Trista McGlamery, Atlanta

Jillian Tullis of San Diego seconds that emotion.

Great article about #dentistry. ‘Underlying this “insurance” system in the U.S. is a broader, unstated premise that dental treatment is somehow optional, even a luxury. From a coverage standpoint, it’s as though the mouth is walled off from the rest of the body.’ #healthcare https://t.co/pvLXpRdbjC

— Jillian Tullis (@ProfJillian) May 21, 2018

— Jillian Tullis, San Diego

A professor of economics at Elon University, Steve DeLoach, questions the logic:

It really defies logic. Why do we treat the inside of your mouth different that any other part of your body? Lots of economic problems here since an unhealthy mouth directly affects the health of the rest of your body (which is covered by typical insurance). https://t.co/RHCjABv2lj

— Steve DeLoach (@steve_deloach) May 28, 2018

— Steve DeLoach, Elon, N.C.

Taking the long view is historian Debby Levine of Providence, R.I.

Worth thinking about historical reasons that American mouths and teeth have their own insurance system separate from the rest of the body: https://t.co/Wx37BudOC1

— D Lev (@debbylevine) May 21, 2018

— Debby Levine, Providence, R.I.

Rachel Perrone of Washington, D.C., tells how she took it in the teeth for her son.

I brought my son in for a tooth that was coming in wonky and *hurting* him. But because that was considered orthodonture, not a penny of it was covered. I'll be paying on it forever. https://t.co/ZJ0KzvHpRB

— Rachel Perrone (@RachelPerrone) May 21, 2018

— Rachel Perrone, Washington, D.C.

Representing Pharmacists

I’m disappointed that your image of a pharmacist is a white male (“Looking For Lower Medicare Drug Costs? Ask Your Pharmacist For The Cash Price,” May 30). In 2015, according to the Bureau of Labor Statistics, 57 percent of pharmacists were women, nearly 9 percent were black or African-American, 15 percent Asian and roughly 5 percent Hispanic. Please consider reflecting the diversity of people in this occupation.

— Regina Flynn, Strafford, N.H.

Pardon Our ‘Spanish’

In the story “California Lawmakers Seek Reparations For People Sterilized By The State” (April 25), Samantha Young’s use of the adjective “Spanish” to describe the predominantly Mexican Hispanic/Latino community in Hayward, Calif., should be reconsidered. I know this is a complicated descriptive-language issue, but the female population targeted for sterilization was heavily Mexican, and Rosie was of Mexican heritage in a community with little representation from Spain. I’d be inclined not to use the word “Spanish” to generalize about this community.

— Dave Hallock, Edmonds, Wash.

Why Punish The Ill?

Many of these incarcerated individuals who are receiving psychotropic medications have needed them for years but were unable to obtain them for any number of reasons (“Use Of Psychiatric Drugs Soars In California Jails,” May 8). It’s a shame that the only way they can get what their bodies require is to be imprisoned. In fact, the prisons are not just filled with criminals. In most states, inmate populations are made up largely of those with “medical needs” not “criminal rehabilitation needs.” A case of “the wrong doctors treating the wrong diseases.”

— Joe Blough, Rock Hill, Mo.

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