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Health Officials’ Plug For Next FDA Chief: Go Big On E-Cig Regulation

In an almost uniform response to the impending exit of Food and Drug Administration Commissioner Scott Gottlieb, city and county public health officials are urging the Trump administration to go bigger in its response to adolescents’ growing use of e-cigarettes.

The issue, they say, is reaching crisis levels and many worry the FDA’s much-touted efforts are falling short.

Gottlieb, whose almost two-year tenure heading the agency won praise for advancing key regulations in an administration geared toward deregulation, plans to leave April 5, with his farewell tour emphasizing his work on e-cigarettes. His departure, though, highlights a complicated, two-track story.

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In Washington, Gottlieb has been credited with taking on Big Tobacco and the e-cigarette industry. But health officials on the front lines say they want more federal action.

“We were encouraged by some of the statements and actions of the [outgoing] FDA commissioner,” said Bill Snook, a spokesman at the health department in Kansas City, Mo.

But Dr. Sara Cody, who runs the Santa Clara County, Calif., health department, views the steps taken by the FDA as “too little and too late.” She pointed to proposed regulations that haven’t taken effect and to limits on how flavored vapes are sold that she and others argued did not go far enough.

Gretchen Musicant, who heads Minneapolis’ health department, agreed. “Their action so far is not demonstrable,” she said.

Now, they are waiting to see what Gottlieb’s permanent successor — who has yet to be named — will do. (Dr. Norman “Ned” Sharpless, director of the National Cancer Institute, will fill Gottlieb’s role on an interim basis and has been a vocal supporter of efforts to curb e-cigarette use.)

Experts see youth vaping rates at epidemic levels: In 2018, about 1 in 5 high school-age students were reported to use electronic cigarettes, according to data from the federal Centers for Disease Control and Prevention.

“There’s an entire generation of youth becoming addicted to nicotine,” Cody said.

And the consequences are vast. Jerry Berkson, an assistant principal at Palo Alto High School in California, said his desk is full of vapes he has confiscated from students. For more than a month this school year, the administration had to shut down certain bathrooms during class time so that students wouldn’t go there to smoke. Increasingly, students have missed large chunks of class because illicit e-cigarettes keep setting off the fire alarm.

It’s a complex issue for federal regulators, though. E-cigarettes, which don’t burn tobacco but do contain nicotine, have found champions among adult smokers trying to quit. Many say the devices provide a less damaging alternative — and are more effective than nicotine patches or nicotine gum.

But use by adolescents, who appear to be lured by the flavored juices that fuel these vapes, pose a concern. Even without tobacco, nicotine addiction and exposure can severely damage a young person’s brain. Plus, some users will, medical experts say, end up transitioning to tobacco-filled products.

As vaping rates among teens climb, the FDA has made a high-profile effort to address the public health concern without trampling on adults’ rights. The agency in 2016 classified electronic cigarettes as tobacco products that fall under its regulatory jurisdiction.

Gottlieb has threatened e-cig manufacturers, saying the FDA would ban their products if companies didn’t take steps to combat youth vaping. His declaration that youth vaping constituted an “epidemic” has brought attention to the issue, said Samir Soneji, an associate professor of health policy at the Dartmouth Institute.

And, during a recent wide-ranging interview with KHN, Gottlieb reiterated his expectation that “the FDA is prepared to look at banning” these products, specifically mentioning the products that use flavored pods, or cartridges, “because those are the ones kids are abusing.”

Food and Drug Administration Commissioner Scott Gottlieb(Francis Ying/KHN)

Last week, the agency put out a draft guidance that would bar the sale of fruit- and candy-flavored e-cigarettes in places easily accessible to young people. It would also require manufacturers to submit documentation by 2021 showing that flavored products meet public health standards in order to gain the FDA’s approval. Until then, those flavors could stay on the market.

Those steps have won praise from some experts.

“These actions show … an appropriate response to the rapidly escalating youth e-cigarette epidemic,” said Steven Kelder, an epidemiology professor at the University of Texas School of Public Health in Austin.

But others worry this is part of a broader pattern: federal action that takes too long and is too narrow to have the needed effect.

Critics say that giving manufacturers until 2021 to get a federal OK — and leaving flavored products on the market until then — means more years for children to develop nicotine addictions or transition from electronic cigarettes to conventional tobacco products.

“They’re proposing things and putting them off into the future. But the actual enactment of their recommendations has not happened yet,” said Minneapolis’ Musicant.

Also, the restrictions on flavors don’t touch menthol- or mint-flavored products, which are used by more than 50 percent of young vapers, according to CDC data.

Multiple local public health advocates highlighted mint and menthol flavors as a major concern when it comes to youth use but note that federal regulators have not addressed the issue. This was a theme at a recent gathering in Washington, D.C., of the Big Cities Health Coalition, an organization of health departments from around the country.

“They need to be included in the ban,” said Snook, of Kansas City.

Other health lobbies, such as the American Heart Association and the Campaign for Tobacco-Free Kids, have made the same argument.

In a statement, Gottlieb suggested that the FDA would take a harder look at those flavors if they continued to pose a problem — and said the agency is not restricting them, for now, because of their appeal to adults trying to quit tobacco.

“We won’t ignore data regarding the popularity of mint- and menthol-flavored [vapes] among kids, should the concern rise,” Gottlieb said. “We’ll continue to use all available resources to monitor the rates and use patterns among youth and adults for these products, and we’ll reconsider our policies with respect to these products, if appropriate.”

States and counties have taken steps on their own.

The FDA’s response so far, Musicant said, spurred Minneapolis to take action — restricting the sale of flavored products to stores where only adults 18 and older can enter and raising the tobacco age to 21. But there are limits to what the city and even state can do. (Online sales, for instance, are a major vape source for young people and can’t be addressed without federal input.)

San Francisco has banned the sale of any flavored tobacco product, a law encompassing e-cigarettes and conventional ones, and it is weighing a ban on e-cig sales altogether, until the products have FDA approval. In Santa Clara County, only adult vape shops can sell e-cigs, Cody said.

Locally based policies will quickly hit a ceiling, Soneji said. They create a potential for a “black market” — a San Francisco resident could pick up e-cigarettes in neighboring Oakland, for instance. That problem doesn’t exist if the federal government steps in, he added.

And delays matter substantially, especially given the speed with which adolescent vaping has taken off.

“The pace at which this epidemic is developing is shockingly fast,” Cody said. “That means the response has to be so fast — and it’s not.”

Federal Judge Again Blocks Medicaid Work Requirements

Kaiser Health News:Insurance - March 27, 2019

For a second time in nine months, the same federal judge has struck down the Trump administration’s plan to force some Medicaid recipients to work to maintain benefits.

The ruling Wednesday by U.S. District Judge James Boasberg blocks Kentucky from implementing the work requirements and Arkansas from continuing is program. More than 18,000 Arkansas enrollees have lost Medicaid coverage since the state began the mandate last summer.

Boasberg said that the approval of work requirements by the Department of Health and Human Services “is arbitrary and capricious because it did not address … how the project would implicate the ‘core’ objective of Medicaid: the provision of medical coverage to the needy.”

The decision could have repercussions nationally. The Trump administration has approved a total of eight states for work requirements, and seven more states are pending.

Still, health experts say it’s likely the decision won’t stop the administration or conservative states from moving forward. Many predict the issue will ultimately be decided by the Supreme Court.

Kentucky Gov. Matt Bevin, a Republican, has threatened to scrap the Medicaid expansion unless his state is allowed to proceed with the new rules, a move that would drop more than 400,000 new enrollees. He said the work requirement will help move some adults off the program so the state has enough money to help other enrollees.

Bevin, who is running for re-election this fall, had threatened to end the Medicaid expansion during his last campaign but backed off that pledge after his victory.

Kentucky had been slated to begin its work requirement next Monday, but current provisions will instead stay in place, according to Adam Meier, who heads up the state’s Medicaid program. He said officials there believe they have “an excellent record for appeal and are currently considering next steps.”

Arkansas Gov. Asa Hutchinson said he was disappointed with the decision. He added that he would read review the opinion overnight and announce Thursday how the state would respond.

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In his decision on Kentucky, Boasberg criticized HHS officials for approving the state’s second effort to institute work requirements partly because Bevin threatened to end the Medicaid expansion without it.

Under this reasoning, he said, states could threaten to end their expansion or do away with Medicaid “if the Secretary does not approve whatever waiver of whatever Medicaid requirements they wish to obtain. The Secretary could then always approve those waivers, no matter how few people remain on Medicaid thereafter because any waiver would be coverage promoting compared to a world in which the state offers no coverage at all.”

In a statement, Seema Verma, the head of the Centers for Medicare &  Medicaid Services, suggested the rulings would not dissuade her efforts to approve work requirements in other states. The administration wants “to give states greater flexibility to help low income Americans rise out of poverty,” she said and will “vigorously support their innovative, state-driven efforts to develop and test reforms that will advance the objectives of the Medicaid program.”

The decision by federal officials in 2018 to link work or other activities such as schooling or caregiving to eligibility for benefits is a historic change for Medicaid, which is designed to provide safety-net care for low-income individuals.

Top Trump administration officials have promoted work requirements, saying they incentivize beneficiaries to lead healthier lives. Democrats and advocates for the poor decry the effort as a way to curtail enrollment in the state-federal health insurance entitlement program that covers 72 million Americans.

Despite the full-court press by conservatives, most Medicaid enrollees already work, are seeking work or go to school or care for a loved one, studies show.

Critics of the work policy hailed the latest ruling, which many expected since Boasberg last June stopped Kentucky from moving ahead with an earlier plan for work requirements. The judge then also blasted HHS Secretary Alex Azar for failing to adequately consider the effects the policy.

“This is a historic decision and a major victory for Medicaid beneficiaries,” said Joan Alker, executive director for the Georgetown University Center for Children and Families. “The message to other states considering work requirements is clear — they are not compatible with the objectives of the Medicaid program.”

Sally Pipes, president of the conservative San Francisco-based Pacific Research Institute, called the ruling “a major blow” to the Trump administration but said this won’t end its efforts. “The Department of Health and Human Services is very committed to work requirements under Medicaid,” she said.

“It is my feeling that those who are on Medicaid who are capable of working should be required to work, volunteer, or take classes to help them become qualified to work,” Pipes said. “Then there will be more funding available for those who truly need the program and less pressure on state budgets.”

Several states, including Virginia and Kentucky, have used the prospect of work rules to build support among conservatives to support Medicaid expansion, which was one of the key provisions of the Affordable Care Act. That expansion has added more than 15 million adults to the program since 2014.

Previously the program mainly covered children, parents and the disabled.

Particularly irksome to advocates for the poor: Some states, including Alabama, which didn’t expand Medicaid, are seeking work requirements in the traditional Medicaid program for parents with incomes as low as $4,000 a year.

The legal battle centers on two issues — whether the requirements are permissible under the Medicaid program and whether the administration overstepped its authority on allowing states to test new ways of operating the program.

Alker said that state requests for Medicare waivers in the past have involved experiments that would expand coverage or make the program more efficient. The work requirements mark the first time a waiver explicitly let states reduce the number of people covered by the program.

States such as Kentucky have predicted its new work requirement would lead to tens of thousands of enrollees losing Medicaid benefits, though states argued some of them would get coverage from new jobs.

Under the work requirements — which vary among the states in terms of what age groups are exempt and how many hours are needed — enrollees generally have to prove they have a job, go to school or are volunteers. There are exceptions for people who are ill or taking care of a family member.

In Arkansas, thousands of adults failed to tell the state their work status for three consecutive months, which led to disenrollment. For the first several months last year, Arkansas allowed Medicaid recipients to report their work hours only online. Advocates for the poor said the state’s website was confusing to navigate, particularly for people with limited computer skills.

While the administration said it wanted to test the work requirements, none of the states that have been cleared to begin have a plan to track whether enrollees find jobs or improve their health — the key goals of the program, according to a story in the Los Angeles Times.

Craig Wilson, director of health policy at the Arkansas Center for Health Improvement, a nonpartisan health research group, said he believes policymakers will appeal court rulings all the way to the Supreme Court.

“As long as they hold on to hope that some judge will rule in their favor, states will continue to pursue work requirements,” he said.

FDA Chief Calls For Release Of All Data Tracking Problems With Medical Devices

FDA Commissioner Scott Gottlieb announced in a tweet Wednesday that the agency plans to release hundreds of thousands, if not millions, of previously unpublished injury and malfunction reports tied to about 100 medical devices.

“We’re now prioritizing making ALL of this data available,” Gottlieb tweeted.

This is an old database where historical information wasn't easily accessible electronically owing to the system's age. But it's imperative that all safety information be available to the public. We're now prioritizing making ALL of this data available. https://t.co/T1c3qQQQ3E

— Scott Gottlieb, M.D. (@SGottliebFDA) March 27, 2019

A recent Kaiser Health News investigation revealed the scope of a hidden reporting pathway for device makers, with the agency accepting more than 1.1 million such reports since the start of 2016.

Device makers for nearly 20 years were able to quietly seek an “exemption” from standard, public harm-reporting rules. Devices with such exemptions have included surgical staplers and balloon pumps used in the vessels of heart-surgery patients.

Gottlieb’s tweet also referenced the challenge in opening the database, saying it “wasn’t easily accessible electronically owing to the system’s age. But it’s imperative that all safety information be available to the public.”

The agency made changes to the “alternative summary reporting” program in mid-2017 to require a public report summarizing data filed within the FDA. But nearly two decades of data remained cordoned off from doctors, patients and device-safety researchers who say they could use it to detect problems.

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Gottlieb’s announcement was welcomed by Madris Tomes, who has testified to FDA device-review panels about the importance of making summary data on patient harm open to the public.

“That’s the best news I’ve heard in years,” said Tomes, president of Device Events, which makes the FDA device-harm data more user-friendly. “I’m really happy that they’re taking notice and realizing that physicians who couldn’t see this data before were using devices that they wouldn’t have used if they had this data in front of them.”

Since September, KHN has filed Freedom of Information Act requests for parts or all of the “alternative summary reporting” database and for other special “exemption” reports, to little effect. A request to expedite delivery of those records was denied, and the FDA cited the lack of “compelling need” for the public to have the information. Officials noted that it might take up to two years to get such records through the FOIA process.

As recently as Friday, though, the agency began publishing previously undisclosed reports of harm, suddenly updating the numbers of breast implant malfunctions or injuries submitted over the years. The new data was presented to an FDA advisory panel, which is reviewing the safety of such devices. The panel, which met Monday and Tuesday, saw a chart showing hundreds of thousands more accounts of harm or malfunctions than had previously been acknowledged.

Dr. Michael Carome, director of Public Citizen’s health research group, said his initial reaction to the news is “better late than never.”

“If [Gottlieb] follows through with his pledge to make all this data public, then that’s certainly a positive development,” he said. “But this is safety information that should have been made available years ago.”

HHS Deputy Secretary Eric Hargan Statement on Announcement of Presidential Task Force on Protecting Native American Children in the Indian Health Service System

HHS Gov News - March 27, 2019

HHS Deputy Secretary Eric Hargan issued the following statement on President Trump’s order to establish a Presidential Task Force on Protecting Native American Children in the Indian Health System:

“The Department of Health and Human Services welcomes the establishment of President Trump’s Task Force as part of ongoing efforts by HHS and IHS to protect American Indian and Alaska Native children and to investigate and prevent the kind of horrific, unacceptable abuses perpetrated by a former IHS doctor who left the agency in 2016 and is now in federal prison. IHS continues to update its procedures and policies to prevent and stop abuse, which will be assessed by an outside, independent contractor and will be the subject of a separate review by HHS’s Office of Inspector General. Abuse in IHS facilities is appalling, intolerable, and a betrayal of all of the American Indians and Alaska Natives who rely on the IHS for care, as well as to the dedicated IHS employees who provide that care.”

View IHS Principal Deputy Director Michael Weahkee's Statement

Device-Safety Experts To FDA: Make Data Public

Medical device safety researchers are calling on the Food and Drug Administration to release hundreds of thousands of hidden injury and malfunction reports related to about 100 medical devices.

A recent Kaiser Health News investigation revealed that the FDA granted device makers numerous “exemptions” from the standard rules of publicly reporting harm related to devices.

One such program began about 19 years ago and allowed companies to file alternative summary reports about injuries or malfunctions into a database not visible to doctors, medical researchers or the public.

While the FDA pledged quickly to review the safety of one such device — the surgical stapler — researchers say the agency needs to open the data on scores of other devices, which have included mechanical ventilators and pacemaker electrodes.

“The FDA absolutely should be making all of this information available,” said Diana Zuckerman, president of the National Center for Health Research, who has testified to Congress and the FDA about device safety.

During a recent interview, FDA Commissioner Scott Gottlieb said that he had no immediate plans to release the device-safety reports, but that the matter is under review. In an updated statement Tuesday, he added that “we are looking at ways to make ASR [alternative summary reporting] data received prior to 2017 more easily accessible.”

“I think that the imperative of the agency is to make as much of this information available to the public as possible,” Gottlieb said during the interview last week. “I think these databases by and large should be searchable to the public.”

An agency spokeswoman said the FDA revoked most of the “alternative summary reporting” exemptions in mid-2017 and asked device makers who kept their exemptions to file a public report summarizing what information they’d send in a spreadsheet directly to the agency. That new approach doesn’t affect the hidden reports dating to 2000.

Agency data show that more than 2 million alternative summary reports have been filed since the start of 2014.

In a February guidance statement for device makers, the FDA said summary reporting can streamline reporting for the industry and simplify the agency’s review process “while maintaining or enhancing the quality, utility, and clarity of MDRs [device reports] through a more holistic view of reportable event trends.”

Makers of about 100 devices filed reports that way over the years, and the FDA has not disclosed the reports’ content beyond responding to KHN’s questions about specific devices. Among the devices involved are implantable defibrillators and the staplers, which in 2016 were linked to under 100 public reports of harm, even as nearly 10,000 malfunction reports were filed discreetly within the FDA.

Asked for more detail on staplers and other devices with exemptions, the agency referred to the Freedom of Information Act process, which can take nearly two years.

That’s not soon enough for organizations like the ECRI Institute. Chief policy officer Ronni Solomon said the nonprofit does device-safety analyses for the government and evidence-based reports for hospitals and performs device-related accident investigations.

Having thorough data on device-related harm is key on all fronts, she said, noting that the organization is exploring ways to get access to more FDA data.

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Dr. Alan Shapiro, an associate professor at the New York University School of Medicine who has used the agency’s public device-safety database, called MAUDE, in his research, said paring down patient-safety data and keeping it in-house is the wrong move in the current era of artificial intelligence and automation.

He noted that an important safety tenet in hospitals is: the more eyes on the patient the better. He said there’s a clear parallel to the work researchers do with agency data to identify device-safety lapses.

“The FDA isn’t so capable that they can afford to hide data,” he said.

Hani Elias, chief executive of Lumere, said his consulting company uses the open FDA device data to advise health systems across the nation on device safety for purchasing decisions. He co-founded the company after seeing hospitals make device-buying decisions based on the effectiveness of the sales force rather than on quality and safety.

“There’s a lot of benefit in opening up this data,” Elias said.

Among the benefits of greater transparency would be the peer pressure among device makers — stripped of reporting exemptions — to make their products safer.

“You don’t want to be the people known for the products known for hurting people,” said Alan Card, an assistant professor and patient-safety researcher at the University of California-San Diego School of Medicine.

 

In 2018, the FDA approved a new pathway for makers of 5,600 device types to file malfunction reports in summary format. That program relieves the device makers of seeking a special exemption. It requires one public report detailing a novel or unique type of malfunction. Information about subsequent, similar malfunctions can be sent straight to the FDA in a spreadsheet.

The agency has also quietly granted device makers other summary-reporting exemptions for injury information gleaned from litigation and from device-specific registries used for research. Device makers filing such reports also have to file a public report summarizing the data that is sent directly to the FDA and isn’t readily available to the public.

Agency records show that some cardiac device makers have filed hundreds of death reports under the registry exemption. The FDA confirmed that nearly 12,000 litigation summary reports related to injuries associated with pelvic mesh were filed in 2017 alone.

Prior to the KHN investigation, Zuckerman said she was aware the FDA granted reporting exemptions but the sheer number of reports “takes my breath away.”

In the interview, Gottlieb said he “wasn’t aware of the full scope of the reports that weren’t going into MAUDE.” Gottlieb has announced his resignation; his last day will be April 5.

Card also said the KHN report was a surprise, but now that it’s out, it’s time for the FDA to open the records to help doctors and patients make the safest choices. “There are a lot of people out there who are trying to make reasonable decisions on data that isn’t what it was purported to be,” he said.

Analysis: Why Should Americans Be Grateful For $137 Insulin? Germans Get It For $55

This month, Eli Lilly and Co. announced with some fanfare that it was manufacturing a generic version of its own best-selling insulin brand, Humalog, which it would sell for half off — $137.35 versus about $275.

David Ricks, the chief executive of Lilly, said the company was making this seemingly beneficent gesture because “many patients are struggling to afford their insulin.”

But they’re struggling, in large part, because since 2001 Lilly has raised the price of a vial of Humalog to about $275, from $35. Other insulin makers have raised prices similarly.

In Germany, the list price of a vial of Humalog is about $55 — or $45 if you buy five at a time — and that includes some taxes and markup fees. Why not just reduce the price in the United States to address said suffering?

Instead, Lilly decided to come out with a new offering, a so-called authorized generic. This type of product is made by or under an agreement from the brand manufacturer. The medicines are exactly the same as the brand-name drug — often made in the same factory with the same equipment to the same formula. Only the name and the packaging are different.

It is, perhaps, a sign of how desperate Americans are for something — anything — to counteract the escalating price of drugs that Lilly’s move was greeted with praise rather than a collective “Huh?”

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Imagine if Apple sold a $500 iPhone for $250 if it was called, say, a yPhone, and simply lacked the elaborate white box and the little Apple logo on the back. That would be patently absurd. An iPhone in a brown paper bag is still an iPhone. And Humalog with a new name isn’t a generic — except according to the bizarre logic of the pharmaceutical industry. Like so many parts of our health care system, its existence has more to do with convoluted business arrangements than health.

Generics, as traditionally understood, are copies of brand-name drugs made by competing manufacturers once the original patent protection has expired. To be approved by the Food and Drug Administration, they must have the same active chemical ingredients as the brand drug and be absorbed equally into the blood, though they could look different and contain different inactive additives.

Historically and in practice they tend also to be far cheaper, because the advent of generics often introduces robust competition into the market. That is why brand manufacturers sometimes produce an authorized generic once they lose patent protection. That way, they can compete at the lower price point, while preserving the original for those with extreme label loyalty.

More recently, authorized generics like Lilly’s stem largely from a different strategy — based on the perverse ways money flows through our health system and who keeps the cash.

Over the past 20 years, drugmakers have continuously raised the price of some essential medicines in the United States because, well, they can in a country that doesn’t set drug prices. And they do — until the bad publicity catches up with them.

Mylan got hauled before Congress in 2016 for raising the price of an EpiPen. Now it’s insulin’s turn. The other two major makers of brand-name insulin products — Novo Nordisk and Sanofi — have raised prices in lockstep with Lilly. But they are based in Europe, so the Indiana-based Lilly has been the primary focus of angry protests here.

Part of insulin’s price rise in the United States is because of the middlemen who buy the drugs on behalf of insurers and hospitals and negotiate discounts off the list price for their clients. So Lilly often doesn’t make the full $275 a vial (though, since rebates are secret, we don’t know how much less).

By selling an authorized generic, rather than merely lowering the brand’s price, Lilly is essentially doing an end run around those middlemen and giving patients who don’t purchase through an insurer another option.

It is also making sure that if and when cheaper versions of Humalog emerge, it will have an offering to compete.

In fact, a “biosimilar” version of Humalog already exists. It was introduced to the United States last year. And yet it costs around the same price as the brand-name drug. Why? It is made by Sanofi, which has no interest in starting a price war to lower costs.

Finally, Lilly has generated a few positive headlines. “Eli Lilly Will Sell Half-Price Version of Humalog, Its Best-Selling Insulin,” this paper reported.

Mylan effectively calmed its EpiPen PR crisis by introducing a cheaper authorized generic. Now Lilly, following a similar playbook, is hoping for a similar result.

Will it work? Politicians and patients will decide.

But they might well keep these two thoughts in mind: If the product being sold were electricity or gas for your car, a price rise of more than 600 percent over 15 years would be regarded as price gouging and wouldn’t be tolerated. And in Germany and many other developed countries, there is no need for a $137.35 vial of “authorized generic” for Humalog. At around $50 a vial, Humalog as Humalog costs far less.

Medicaid Expansion Boosts Hospital Bottom Lines — And Prices

Kaiser Health News:Insurance - March 27, 2019

The Medicaid expansion promoted by the Affordable Care Act was a boon for St. Mary’s Medical Center, the largest hospital in western Colorado. Since 2014, the number of uninsured patients it served dropped by more than half, saving the nonprofit hospital more than $3 million a year.

But the Grand Junction hospital’s prices did not go down.

“St. Mary’s is still way too costly,” said Mike Stahl, CEO of Hilltop Community Resources, which provides insurance to about half of its nearly 600 employees and their families in western Colorado. “We are not seeing the decreases in our overall health bills that I believe the community overall should be feeling.”

Stahl and other employers in Colorado hoped that as hospitals saved millions of dollars in charity care from the Medicaid expansion, it would lead to a curb in consumer and employer health costs and insurance premiums.

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A new state report found that didn’t happen.

While hospitals are financially better off since the expansion, they have increased the costs they shift to commercial health plans since 2009, the state researchers said.

The state report noted the average hospital profit per each patient discharge rose to $1,359 in 2017, twice the amount in 2009. For patients covered by commercial and employer-based health plans, margins per discharge rose above $11,000 in 2017 compared with $6,800 in 2009.

Julie Lonborg, a spokeswoman for the Colorado Hospital Association, said the state agency that did the study was biased against hospitals and had a “predetermined conclusion.” Hospitals in the state are not doing as well as the report suggests, she added, noting that a third of them face operating losses.

And some insurers have not passed along savings to customers that hospitals give them, she said.

Hundreds of thousands of state residents gained coverage under the Medicaid expansion, lowering Colorado’s uninsured rate by half to 7 percent. In addition, hospitals’ uncompensated care costs dropped by more than 60 percent, or more than $400 million statewide.

Kim Bimestefer, executive director of the Colorado Department of Health Care Policy & Financing, said that hospitals have used their expanded revenues to focus on adding services that provide high profits or expanding operations in wealthier areas of the state that often duplicate what is already available.

“They used those dollars to build free-standing [emergency departments], acquired physician practices, build new facilities where there was already sufficient capacity,” she said. “Hospitals had a fork in the road to either use the money coming in to lower the cost shift to employers and consumers or use the money to fuel a health care arms race. With few exceptions, they chose the latter.”

Hospital’s Profit Margin Doubles

In written testimony to the state legislature last year, Colorado officials pointed to St. Mary’s as an example of a hospital with high overhead and operating costs — factors they said can lead to higher insurance premiums.

The facility’s profit margin was above 14 percent from 2015 to 2017, according to the latest available tax returns. Those figures are nearly double St. Mary’s margin before expansion and twice the margin of the average U.S. hospital in 2017, according to American Hospital Association data.

Colorado is the first state to analyze whether hospital cost-shifting — often referred to as a “hidden tax” on health plans — dropped following Medicaid expansion.

But a conservative think tank in Arizona said hospitals there did not cut prices following that state’s Medicaid expansion.

“Not only did [it] fail to deliver on the promises of alleviating the hidden healthcare tax, it allowed urban hospitals to increase charges on private payers dramatically,” said a report from the Phoenix-based Goldwater Institute.

Some critics point out that hospitals are also benefiting because Congress has repeatedly delayed a key ACA provision that would have cut federal funding for hospitals with large numbers of Medicaid and uninsured patients.

The continuation of the program — called Medicaid disproportionate share payments — has provided Colorado hospitals a total of $108 million.

How Outside Costs May Factor In

The hospital industry disputes reports that it has merely pocketed profits from Medicaid expansion. They say many factors influence how much they charge employers and private insurers, including the need to upgrade technology and meet rising health and drug costs.

Lonborg of the state hospital association said hospitals need to shift costs to private employers to make up for lower prices paid by Medicare and Medicaid and to make up for care hospitals give for free to the uninsured.

But, she added, other factors, including the need to keep up with rapid population growth, have kept costs from dropping.

Janie Wade, chief financial officer for SCL Health, the Broomfield, Colo., hospital chain that owns St. Mary’s and seven other facilities, said its costs are higher because it has sicker and older patients than most.

She said looking at just the hospital profit margins on St. Mary’s IRS-990 form is not a fair assessment because it doesn’t take into account costs that are outside the hospital, such as its 93 physician practices. The hospital lost nearly $12 million on those doctor practices in 2017, she said.

Across all operations, she added, the hospital’s operating margin fell from 9.5 percent in 2015 to 4.5 percent in 2018.

Wade said the hospital used some of its new revenue to purchase 14 physician practices in recent years. That was designed, she added, not to ensure they send their patients to St. Mary’s but to help keep those doctors in the city so they can staff important services such as trauma and maternity care.

“Medicaid expansion was a good thing and, of course, we supported it,” Wade said.

But she pointed out that the hospital loses money on Medicaid and Medicare, which together cover more than three-quarters of its patients.

St. Mary’s has sought to keep price increases for commercial insurers and employers to no more than the general inflation rate and made it even lower for some, according to Wade. If employers’ rates were rising more than that, she said, it was likely because insurers were adding price increases.

Officials from Rocky Mountain Health Plans, which was recently acquired by UnitedHealthcare and is one of Grand Junction’s largest insurers, would not comment.

Dave Roper, who used to oversee employee benefits for the city of Grand Junction and now heads a local employer coalition, said the state report confirms what local businesses leaders have long known. “St. Mary’s has no incentive to reduce its costs,” he said.

Edmond Toy, a senior adviser for the nonprofit Colorado Health Institute, said the argument that pursuing the ACA policy would help lower insurance premiums “broadened the appeal of Medicaid expansion … and conceptually it makes total sense.”

But he noted health experts have long debated whether the higher prices hospitals charge people with private insurance are designed to make up for the losses they take on with Medicare, Medicaid and uninsured patients.

He said the state report shows how hospitals in heavily consolidated markets don’t have to cut prices as their bottom lines improve. “They can charge whatever the market will bear.”

Marianne Udow-Phillips, director of the Center for Health and Research Transformation at the University of Michigan, said hospitals have considerable bargaining power in many places because of health system consolidations and their purchases of many physician practices.

“It does appear Colorado hospitals have a strong negotiating position with payers, or payers there are not negotiating very effectively,” said Udow-Phillips. “Hospitals are not going to give it away.”

Trump Administration And Democrats Return Health Law To Political Center Stage

[UPDATED at 4:30 p.m. ET]

“The Mueller Report” is so last week’s news. Health care has returned in force as the dominant political issue in Washington, reflecting what voters have been telling pollsters for the past year.

The Trump administration moved Monday night to get more in line with President Donald Trump’s voter base by endorsing a Texas federal judge’s December opinion that the entire Affordable Care Act should be struck down as unconstitutional.

After he arrived at the Capitol for lunch with Republican senators Tuesday, Trump endorsed the change, suggesting it will usher in Republican priorities instead. “The Republican Party will soon be known as the ‘party of health care!’” he told reporters.

Less than two hours later, House Democrats unveiled their proposals to not only protect the health law, but also expand it — including extending help paying premiums and other costs to families higher up the income scale than those now eligible and reinstating cuts made by the administration for outreach to help people sign up for coverage.

Speaker Nancy Pelosi said that, since taking control of the House in January, Democrats have been fighting to preserve the health law and “voted on Day One” to file a motion in the Texas court case to support the ACA.

The arguments are a return to one of the key battles during the 2018 midterm elections. Democrats hammered their Republican opponents on the GOP’s two-year efforts to repeal the ACA — and especially its popular protections for people with preexisting medical problems and Medicaid expansion — and credited those attacks for big gains the party scored in the House and legislatures around the country.

House Majority Leader Steny Hoyer said those Democrats were elected to “protect and expand” the health law. He warned Republicans not to undermine it, saying, “Americans don’t want to see the ACA protections undone.”

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The new filing in the Texas case marks an about-face for the Justice Department. The Republican attorneys general and governors who brought the case argued that when Congress zeroed out the tax penalty for people who lacked health coverage as part of the 2017 tax bill, the entire Affordable Care Act was rendered unconstitutional. In December, U.S. District Judge Reed O’Connor agreed with them, although he put his ruling on hold while the case is on appeal.

At that time, the Justice Department did not endorse the GOP plaintiffs’ argument. It suggested instead that the elimination of the tax penalty should invalidate only those parts of the health law most closely associated with it — notably, the provisions requiring insurance companies to sell to people with preexisting conditions and not charge them more.

The health law is being defended by a group of Democratic attorneys general, led by California’s Xavier Becerra. They filed their brief Monday night, just before the Justice Department issued its position change.

“The Affordable Care Act is landmark legislation that has transformed the nation’s healthcare system,” said the brief. Striking it down “would strip existing healthcare coverage from millions of Americans” and “it would make a mockery of the dramatic votes in which the same Congress rejected earlier efforts to repeal or substantially revise the ACA.”

The Department of Health and Human Services declined to comment on the change of position, which was filed as part of the appeal process. Kerri Kupec, a spokeswoman for the Justice Department, said the department “has determined that the district court’s comprehensive opinion came to the correct conclusion and will support it on appeal.”

Trump has repeatedly called for the law to be repealed and replaced, but when Republicans controlled Congress they could not muster the necessary votes. Just last week, the president lashed out Sen. John McCain (R-Ariz.), who died in August, for failing to support that effort.

If the law is invalidated, it would not only directly affect the 11 million people who purchase insurance through the ACA marketplaces, but also millions of low-income people who gained coverage under the expansion of the federal-state Medicaid health program. The Urban Institute estimates full repeal would result in nearly 20 million more uninsured Americans.

The ACA also includes substantial changes to the Medicare program, extends protections to people with employer-provided insurance and includes such seemingly unrelated provisions as requiring calorie counts on restaurant menus and making it easier to make generic copies of expensive biologic drugs.

Health analysts warn that the law is so embedded into the fabric of the nation’s health system that eliminating it could have consequences well beyond the things it created.

“The act is now part of the plumbing of the health-care system,” wrote University of Michigan law professor Nicholas Bagley in a post for the Incidental Economist website. “Which means the Trump administration has now committed itself to a legal position that would inflict untold damage on the American public.”

Democrats, who already had their health event scheduled for Tuesday, were quick to pounce on what they see as a GOP weakness.

“In two short sentences, the Trump administration crystallized its position that the health care coverage enjoyed by nearly 20 million people, as well as the protections by tens of millions more with preexisting conditions, should be annihilated,” said Senate Minority Leader Chuck Schumer on the floor Tuesday morning.

Democratic presidential candidates also voiced their opposition.

“I’ll say it for the zillionth time: We will not let the Trump administration rip health care away from millions of Americans. Not now. Not ever,” tweeted Sen. Elizabeth Warren (D-Mass.).

Sen. Kamala Harris (D-Calif.) said in an interview on MSNBC that health care is “one of the biggest most critical issues facing American families. the existence of preexisting conditions and that being a barrier to people having access to health care. We decided as a nation” that it was wrong, she said, to deny someone with a preexisting condition access to health care, and that the Republicans’ latest move amounts to “playing politics with people’s public health.”

New Rules Will Ease Patients’ Access To Electronic Medical Records, Senate Panel Says

[UPDATED at 2 p.m. ET on March 26]

The chairman of the Senate health committee on Tuesday backed new federal regulations to remove roadblocks patients can face in obtaining copies of their electronic medical records.

“These proposed rules remove barriers and should make it easier for patients to more quickly access, use and understand their personal medical information,” Lamar Alexander (R-Tenn.), chairman of the Health, Education, Labor & Pensions Committee, said in a statement prepared for a hearing on the rules that kicked off Tuesday at 10 a.m.

Special Reports Botched Operation

Death By 1,000 Clicks

By Fred Schulte and Erika Fry, Fortune Mar 18

Where electronic health records went wrong.

The rules, proposed last month by the Department of Health and Human Services, take aim at so-called information blocking, in which tech companies or health systems limit the sharing or transfer of information from medical files.

Alexander said HHS believes the new rules should give more than 125 million patients easier access to their own records in an electronic format.

“This will be a huge relief to any of us who have spent hours tracking down paper copies of our records and carting them back and forth to different doctors’ offices. The rules will reduce the administrative burden on doctors so they can spend more time with patients,” Alexander said.

The proposal requires manufacturers to fashion software that can readily export a patient’s entire medical record — and mandates that health care systems provide these records electronically at no cost to the patient.

Congress jump-started the nation’s switch from paper to electronic health records in 2009 using billions of dollars in financial stimulus funding to help doctors and hospital purchase the equipment. Officials expected the shift to cut down on medical errors, reduce unnecessary medical testing and other waste and give Americans a bigger role in managing their health care.

Yet in the decade since the rollout, critics have argued that the government spent billions financing software that can cause some new types of errors and typically cannot share information across health networks as intended.

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Botched Operation,” a recent investigation published by KHN and Fortune, found that the federal government has spent more than $36 billion on the initiative. During that time, thousands of reports of deaths, injuries and near misses linked to digital systems have piled up in databases — while many patients have reported difficulties getting copies of their complete electronic files.

Sen. Patty Murray (D-Wash.), ranking member on the committee, cited two patients profiled in the article to illustrate the potential dangers from EHRs that can’t exchange information.

“It’s patients who get hurt. Like the man in California, who suffered brain damage after his diagnosis was delayed because a hospital’s software couldn’t properly interface with a lab’s software,” she said at the hearing. “Or the woman in Vermont, who died of a brain aneurysm that might have been caught if a software problem hadn’t stopped the order for a test she needed.”

Jonathan Lomurro, a medical malpractice attorney in New Jersey, said his clients usually have to go to court to get their complete medical record. The information that health care providers fight most bitterly to keep from them, he said, are the audit logs — or the data that show every time a record has been accessed or edited, and by whom and when.

That “metadata,” he and other plaintiff attorneys argue, is critical for patients to understand the history of their care, particularly in cases where something has gone wrong.

In an interview prior to Tuesday’s hearing, Lomurro criticized the HHS proposal, saying it limits a patient’s ability to obtain these logs. While the proposed rule requires the systems to share most data from a medical record with a patient, it excludes audit trails from that classification.

“While the proposal talks about the need of patient access … they then strip the greatest protections from the patient,” said Lomurro. “I am at a loss on how this could ever be a beneficial change to the rules and help patients.”

Seema Verma, who heads the Centers for Medicare & Medicaid Services, agreed that patients should be entitled to audit log information. “At the end of the day, it’s all of the patient’s data. If it affects and touches their medical record, then that belongs to them,” Verma said in an interview last month.

The HHS proposal also encourages doctors and other users of EHR technology to share information about software problems they encounter by prohibiting “gag clauses” in sales contracts. Critics have long argued that the clauses have prevented users from freely discussing flaws, including software glitches and other breakdowns that could result in medical errors and patient injuries. In 2012, an Institute of Medicine report blamed the confidentiality clauses for impeding efforts to improve the safety of health information technology.

But a major remaining problem in wiring up medicine is the lack of interoperability across rival data systems, said Christopher Rehm, chief medical informatics officer of LifePoint Health, a hospital system in Brentwood, Tenn. In testimony prepared for the Tuesday hearing, Rehm called it “the equivalent of telling people they must buy cars and move those cars from place to place, but there are no roads and no agreed-upon design for the roads, let alone the funding to actually pay for the construction.”

According to Rehm, the average-sized community hospital (161 beds) spends nearly $760,000 a year on information technology investments needed to meet federal regulations. He said the costs “are crushing our industry where margins are already thin.”

Price Of A Brace Brings Soccer Player To His Knees

Last October, Esteban Serrano wrenched his knee badly during his weekly soccer game with friends.

Serrano, a software engineer, grew up playing soccer in Quito, Ecuador, and he has kept up his sport since moving to the United States two decades ago.

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He hobbled off the field and iced the knee. But the pain was so severe, he made an appointment with Rothman Orthopaedic Institute, a network of orthopedists practicing in Greater Philadelphia, New Jersey and New York.

The doctor diagnosed a strain of the medial collateral ligament, or MCL, and prescribed over-the-counter pain medication as well as a hinged knee brace, which he used for several weeks until he’d healed.

He expected his insurance to cover his treatment as a plan from a previous job had covered him when he needed surgery to fix a broken nose sustained in another soccer game in 2017.

Then the bill came.

Patient: Esteban Serrano, 41, a software engineer and father of two from Phoenixville, Pa., in suburban Philadelphia.

Esteban Serrano, a software engineer, grew up playing soccer in Quito, Ecuador, and he has kept up his sport since moving to the United States two decades ago.(Paula Andalo/KHN)

Total Bill: $1,197: $210 for the office outpatient visit, $105 for the X-ray and $882 for a hinged knee brace, all billed by the orthopedic practice. His insurer, Aetna, covered the visit and the X-ray, but only $52.59 of the cost of the brace. That left Serrano with a balance of $829.41.

Service Provider: Rothman Orthopaedic Institute in Bryn Mawr, Pa.

Medical Service: A doctor examined Serrano’s knee and sent him for an X-ray. The doctor said he should use a knee brace for four weeks and recommended a hinged one sold through the practice.

What Gives: An MCL injury is a common knee injury occurring frequently among participants in contact sports. According to the American Academy of Physical Medicine and Rehabilitation, the MCL is involved in at least 42 percent of knee ligament injuries. Although most cases are sports-related, such injuries can also result from everyday activities like tripping on stairs.

“The doctor told me that he thought I didn’t have damage, that it was more of an inflammation, but he ordered an MRI just to make sure,” said Serrano. (The MRI confirmed that suspicion.)

Serrano said the brace did ease the discomfort and stabilized his knee as it healed. However, the shocking bill was almost more painful — he owed the orthopedic practice $829.41.

“You can find the same brace for less than $250 online,” he said.

The bill came close to Christmas, when Serrano’s 12-year-old daughter wanted her first iPhone. “I told her ‘Sorry, honey, but I already paid a price of an iPhone for the hinged knee brace,’” Serrano joked.

Serrano emphasized that he felt lucky to have the money to handle a bill that for many people could equal a month’s rent or three months of groceries.

Knee braces fall into a category of products called “durable medical equipment,” whose prices can vary widely. Items range from slings and braces to wheelchairs and commodes to glucose meters and breast pumps for new mothers. Doctors and hospitals that dispense and prescribe such equipment for patients to take home almost always bill for them and add hefty markups that can catch patients unaware.

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Braces and other products “are often marked up two or three times what the cost is, and unfortunately, that is the standard practice,” said Dr. Matthew Matava, an orthopedic surgeon and chief of sports medicine for Washington University Physicians in St. Louis.

Rothman Orthopaedic didn’t respond to requests for comments.

The type of hinged knee brace Serrano bought was a Donjoy Playmaker. Donjoy is one of the nation’s largest producers of braces. A customer service representative for the company said it charges a retail price of $242.51 for the model Serrano got. Serrano paid more than three times that price.

When Esteban Serrano injured his knee, his insurer, Aetna, covered the cost of his visit to an orthopedist and an X-ray, but only $52.59 of the cost of the brace. Serrano was left with a balance of $829.41.(Paula Andalo/KHN)

In an emailed statement about the case, an Aetna spokesman wrote that “while the cost of a knee brace, or any other health care service, is determined by the negotiated rate between the health care provider and the health plan, the starting point is the charge from the health care provider.”

It is not even clear that such an elaborate knee brace was needed for Serrano’s injury.

More From Our Bill Of The Month Series

Dr. Elizabeth Matzkin, chief of Women’s Sports Medicine at Brigham and Women’s Hospital in Boston and an assistant professor at Harvard Medical School, said that while it is helpful to give patients some kind of knee brace for support after MCL injuries, the use of a hinged knee brace does not influence recovery, according to studies. She called hinged braces “luxury products.” Simpler, cheaper braces also offer support.

Resolution: Serrano recalled that when he received the brace, the practitioner showed him a form with its estimated cost in writing. He remembered his share was more than $700, but he didn’t pay too much attention because he assumed his insurance would cover it.

After receiving the bill, he made several phone calls to the doctor’s practice to get a copy of the form he’d signed. It stated that the product could be returned within seven days. A month had already passed. Because he had not met his deductible, his $829.41 balance was even more than the estimate.

The Takeaway: These days, many types of equipment dispensed by doctors’ offices or hospitals involve a charge. Don’t assume generosity. Ask the doctor to identify precisely what you need and explain why you need it.

When a doctor or hospital offers you a piece of equipment to help your healing, decide if you really need it or will use it. Say “no” if you will not. Ask if you will be billed for it and how much.

Many items can be purchased at a fraction of the cost online or from a pharmacy just down the block.

Know your insurance plan’s copay for medical equipment (often 20 percent). The cost of purchasing the equipment yourself online may well be less than the copay if you purchase through a medical office.

NPR produced and edited the interview with KHN Editor-in-Chief Elisabeth Rosenthal for broadcast.

Do you have an exorbitant or baffling medical bill? Join the KHN and NPR Bill-of-the-Month Club and tell us about your experience.

States Push For Caregiver Tax Credits

Kaiser Health News:States - March 25, 2019

Gloria Brown didn’t get a good night’s sleep. Her husband, Arthur Brown, 79, has Alzheimer’s disease and had spent most of the night pacing their bedroom, opening and closing drawers, and putting on and taking off his jacket.

So Gloria, 73, asked a friend to take Arthur out for a few hours one recent afternoon so she could grab a much-needed nap. She was lucky that day because she didn’t need to call upon the home health aide who comes to their house twice a week.

The price of paying for help isn’t cheap: The going rate in the San Francisco Bay Area ranges from $25 to $35 an hour. Gloria Brown estimates she has spent roughly $72,000 on caregivers, medications and supplies since her husband was diagnosed four years ago.

“The cost can be staggering,” said state Assemblyman Jim Patterson (R-Fresno), author of a bill that would give family caregivers in California a tax credit of up to $5,000 annually to help offset their expenses.

A 2016 study by AARP found that the average caregiver spends $6,954 a year on out-of-pocket costs caring for a family member. The expenses range from $7 for medical wipes to tens of thousands of dollars to retrofit a home with a walk-in shower or hire outside help.

Gloria Brown estimates she has spent roughly $72,000 on caregivers, medications and supplies. As her husband’s disease progresses, she expects costs to escalate.

AARP, a lobbying organization for people 50 and older, is pushing similar bills in at least seven other state legislatures this year, said Elaine Ryan, the group’s vice president of State Advocacy and Strategy Integration. Arizona, Illinois, Nebraska, New Jersey, New York, Rhode Island and Wisconsin are considering legislation, and AARP expects measures also to be introduced in Florida, Massachusetts and Ohio.

In Wisconsin, two Republicans and two Democrats are behind that state’s tax credit measure.

“We need a whole discussion about how we can best keep people at home and meet their needs,” said state Rep. Debra Kolste, a Democrat who explained that most people know someone who is caring for a family member. She hopes the measure can make it through the Republican legislature and be signed by Wisconsin’s Democratic governor.

New Jersey approved a state income tax credit in 2017 specifically for caregivers of wounded veterans. However, efforts in other states have failed, including in Arizona last year and Mississippi and Virginia this year.

At the federal level, bills that would have created a federal income tax credit of up to $3,000 never got out of congressional committees last year.

“Whether I’m in Billings, Mont., or in Mississippi, the caregiver tax credit is something that people are asking for,” Ryan said. “All they’re asking for is a little financial help to offset these costs.”

A tax credit, said Brown and other caregivers, would be welcome relief to the estimated 4.5 million family caregivers in California who care for a loved one with a chronic, disabling or serious health condition. Nationwide, the AARP estimates there are about 40 million people caring for family members. 

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The Browns, who have been married 51 years and live in San Mateo, Calif., have good medical coverage but, like most seniors, live on a fixed income.

As her husband’s disease progresses, Gloria Brown expects costs to escalate. For instance, she wants to install bars in the bathroom to help prevent her husband from falling, and anticipates she will need more professional help.

“I think we’re just moving into that stage where I’m going to see the dollars going out for things that will help to make things easier for him at home and more comfortable,” Brown said. “It’s a cost you just hadn’t anticipated.”

The Browns, who have been married 51 years and live in San Mateo, Calif., have good medical coverage but, like most seniors, live on a fixed income.

Long-term caregiving has emerged as one of the major issues in California’s Capitol this year, with proposals ranging from naming a state “Aging Czar” to funding a new cash benefit for long-term care services. In his State of the State address last month, Gov. Gavin Newsom called for a master plan for aging.

“I’ve had some personal — and painful — experience with this recently,” Newsom told the joint session of the legislature.

Newsom, whose father had dementia and died last year, also has tapped former first lady Maria Shriver to lead a new Alzheimer’s Prevention and Preparedness Task Force, and has asked lawmakers to approve $3 million in state funds for Alzheimer’s disease research.

Patterson’s bill would provide up to a $5,000 state income tax credit to family caregivers for five years, starting in tax year 2020. They would be reimbursed for 50 percent of eligible expenses, such as retrofitting a home, hiring an aide and leasing or buying specialty equipment. The credit would be available to individuals who make up to $170,000 a year, or joint income tax filers who make up to $250,000.

Patterson, a Republican in the minority, is hopeful he can convince his colleagues that giving people a tax credit is financially sound because it would enable caregivers to keep their loved ones at home rather than relying on more expensive government services.

“If members of the legislature and the governor would look through the eyes of their own families, friends and neighbors … I think it can be passed and be signed,” Patterson said.

But the measure faces competition for a slice of California’s $21 billion surplus, from proposals by the governor and lawmakers to boost funding for education, health care, housing and dozens of other programs.

For Pam Sogge of Oakland, Calif., a tax credit would allow her to hire a home health aide for an additional three hours a week.

Her husband, Rick Sogge, 61, has early-onset Alzheimer’s and becomes frantic when left by himself. Sometimes when she leaves him alone in another room of their home, he searches for her every two minutes.

Because Rick Sogge is still physically healthy, most of the couple’s caregiving expenses pay for part-time help to take him on outings so Pam can work, run errands or go to the doctor’s office.

“You have a very uncertain financial future. You don’t know what’s going to happen. You don’t know how long it’s going to take. So you’re very conservative,” said Pam Sogge, 56, who has been caring for her husband for five years. “A tax credit, in a way, it’s permission and encouragement to get some help.”

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

She Was Dancing On The Roof And Talking Gibberish. A Special Kind Of ER Helped Her.

For decades, hospitals have strained to accommodate patients in psychiatric crisis in emergency rooms. The horror stories of failure abound:

Patients heavily sedated or shackled to gurneys for days while awaiting placement in a specialized psychiatric hospital, their symptoms exacerbated by the noise and chaos of emergency medicine. Long wait times in crowded ERs for people who show up with serious medical emergencies. High costs for taxpayers, insurers and families as patients languish longer than necessary in the most expensive place to get care.

“If you are living with schizophrenia or bipolar disorder, that is a really tough way to begin that road to recovery,” said Dr. Jack Rozel, president of the American Association for Emergency Psychiatry.

In pockets across the country, hospitals are trying something new to address the unique needs of psychiatric patients: opening emergency units specifically designed to help stabilize and treat patients and connect them to longer-term resources and care. These psychiatric ERs aim to address the growing number of patients with mental health conditions who end up hospitalized because traditional emergency rooms don’t have the time or expertise to treat the crisis.

The rate of ER visits involving psychoses, bipolar disorder, depression or anxiety jumped more than 50 percent from 2006 to 2013, according to the federal Agency for Healthcare Research and Quality. Roughly 1 in 8 emergency department visits now stem from mental illness or substance use disorders, the data show.

The psychiatric ERs, staffed with nurses, social workers and psychiatrists, work to treat and release patients in under 24 hours, much as traditional emergency rooms handle physical ailments. Those who are well enough to go home get discharged, while those who need more treatment are admitted to the hospital or transferred to an inpatient facility.

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There are now roughly 100 such units across the country, said Dr. Scott Zeller, vice president of acute psychiatry at Vituity, a physician-led organization that provides staffing and consulting services to medical centers nationwide.

Zeller pioneered the approach while working as chief of psychiatric emergency services at John George Psychiatric Hospital in Alameda County, Calif. Over time, he transformed the center from a traditional ward where restraints were common into one that treated patients in a more supportive, living-room like setting. The results — in terms of both patient outcomes and cost-savings — made Zeller a believer.

He is helping design 10 new units, including in California, Florida, Illinois and Tennessee. Each is distinct, accepting patients in somewhat different circumstances and offering a slightly different range of services.

Patients who arrive at an emergency room for psychiatric or substance use disorders are more than twice as likely to be admitted than other patients, federal data show. And yet about 80 percent of the time, Zeller said, patients’ mental health crises can be resolved without a costly inpatient hospital stay. A patient may be having a psychotic episode because he fell off his medications, for example, or having drug-induced hallucinations.

“We need to treat people at the emergency level of care,” he said. “The vast majority of psychiatric emergencies can be resolved in less than 24 hours.”

Nowhere To Hide

Wearing a hospital gown, Rachel Diamond lay back in her recliner in a spacious room in a relatively new ward at Providence Little Company of Mary Medical Center San Pedro, a hospital near the Port of Los Angeles. Nearby, a few patients slept on identical recliners, draped in soft blankets. Others communed at a kitchen table over microwaved meals. A nurse walked through the locked unit with a rolling cart, dispensing medications.

Except for a nursing station in the middle of the room, the unit didn’t look much like a health care facility. The room was divided into men’s and women’s sides, with separate TVs. A few smaller rooms — where patients could meet with a psychiatrist or social worker — lined the unit’s edge.

Rachel Diamond says she has been diagnosed with depression and anxiety and has landed in multiple ERs over the past decade when her symptoms spiked out of control. During her stay at Providence Little Company of Mary, which lasted just over a day, she slept, received medications and met with nurses, a social worker and a psychiatrist.(Heidi de Marco/KHN)

Anya Price, interim clinical supervisor and a nurse, said the unit was designed to feel more like a home than a hospital. “We’re operating from an understanding that they’re coming here to get better,” Price said.

The open design of the unit, known as the “Outpatient Behavioral Health Center,” allows patients to move freely. Staff said it also helps reduce problems because they can quickly spot a patient who may be getting agitated. Dr. Herbert Harman, a psychiatrist and medical director for the facility, said violence and the need for restraints are rare.

The unit is in a building a short walk from the medical center emergency room. It opened in 2017 and accepts patients from emergency rooms across Los Angeles County once they are deemed stable medically. So far this year, its staff has treated about 400 patients, Price said.

One recent morning, the patients included a man in his 40s found on the railroad tracks after an alcohol binge, and a woman with a history of schizophrenia who said she was seeing spirits. Some were there on involuntary holds because authorities had decided they were at risk of hurting themselves or others because of their illness.

Nurse Anya Price, interim clinical supervisor, talks to a new patient about the procedures at a new unit at Providence Little Company of Mary Medical Center San Pedro designed for people in psychiatric crisis.(Heidi de Marco/KHN)

Staffers at the new emergency psychiatric facility run by Providence Little Company of Mary Medical Center San Pedro prepare for an incoming patient on the morning of Feb. 28, 2019. The hospital near the Port of Los Angeles opened the behavioral health unit in 2017 and accepts patients from emergency rooms across Los Angeles County.(Heidi de Marco/KHN)

A nurse at a psychiatric emergency unit at Providence Little Company of Mary Medical Center San Pedro talks to patient Anthony Montes.(Heidi de Marco/KHN)

Diamond, 30, said she has been diagnosed with depression and anxiety and has landed in multiple ERs over the past decade when her symptoms spiked out of control. During those stays, she said, she often felt isolated and in the dark about her treatment. Doctors typically numbed her with medications and consigned her to a guarded room. “No one really talked to me,” said Diamond, who lives in Torrance, Calif. “It was like I was a caged animal.”

She had been living in a car and fighting with her boyfriend in late February when she decided she wanted to end her life. She tried jumping out of a moving car, and when that didn’t work, she grabbed a bottle of pills. She gets help for her mental health issues, but sometimes, she said, the stress becomes too much. This time, she was taken to a hospital emergency room in Torrance before being transferred to the San Pedro unit.

During her time in the behavioral health center — about 26 hours — she slept, received medications and met with nurses, a social worker and a psychiatrist. She said it was calmer than a regular ER, and the staff had time to talk, listen and help her through the worst of the crisis.

“I genuinely feel better enough to leave,” she said. “I haven’t been able to say that in a while.”

A Return On Investment

Zeller argues that the use of emergency psychiatric clinics is both humane and cost-effective. Research on the Alameda County model found such units can dramatically reduce how long patients spend in medical emergency rooms, and that about three-quarters of patients treated in the units can be discharged to the community rather than to inpatient care. That, Zeller said, can lessen the overwhelming demand for inpatient psychiatric beds and preserve available spots for those who truly require them. The model saves money for hospitals in part because the patients spend less time in emergency care.

“The return on investment is exponential,” he said.

In Montana, the Billings Clinic opened a psychiatric stabilization unit last April across the street from the traditional ER. Dr. Eric Arzubi, psychiatry department chair, said nearly 10 percent of the visits in the Billings Clinic emergency room involve people in psychiatric crisis. Since the new unit opened, wait times for psychiatric patients have dropped from about 10 hours to four hours, and fewer patients are being admitted to the inpatient unit. Arzubi said his staff isn’t trying to cure people of their mental illness but rather stabilize them and get them the care they need.

“Just like in the emergency room, you don’t get comprehensive care,” Arzubi said. “But you can stop the bleeding, you stabilize the patient and get them to the right level of care.”

In some cases, that means a transfer to an inpatient facility.

Chantelle Unique has been diagnosed with bipolar disorder and schizophrenia. She had been dancing on the roof and speaking gibberish when her mother called 911. Unique says she has had a hard time in regular emergency rooms. “There are a million people,” she says.(Heidi de Marco/KHN)

Chantelle Unique takes her medication during her stay at a special psychiatric emergency facility at Providence Little Company of Mary Medical Center San Pedro.(Heidi de Marco/KHN)

Staff at the San Pedro unit decided soon after Chantelle Unique arrived that she would be one of those patients. Unique, who is 23, has been diagnosed with bipolar disorder and schizophrenia. She had been dancing on the roof and speaking gibberish when her mother called 911.

Unique said she has had a hard time in regular emergency rooms. “There are a million people,” she said. For most of a morning at the San Pedro facility, she sat calmly watching TV, talking to nurses and eating spaghetti. But at one point, she started pacing and yelling at other patients. Nurses and security guards quickly surrounded her and persuaded her to return to her recliner and take additional medication.

Finding an inpatient bed for a patient like Unique with more progressed mental illness is not always easy, said clinical social worker Mark Tawfik. But he’s committed to finding a way. “We have to make sure we find them adequate resources,” he said. “Otherwise, they will come right back.”

For Price, the clinical supervisor, even when a patient requires a transfer for more intensive care, there’s satisfaction in knowing that person is headed in the right direction. If Unique hadn’t been brought in, Price said, she would have been out in the community, lost to her delusions, putting herself at risk of accident or arrest.

In the unit, staff made sure she was safe, Price said, in addition to providing “a warm bed, some food and some compassion.”

OCR Issues Notice of Resolution to the State of Hawaii After Hawaii Takes Action in Safeguarding Conscience Protections for Pregnancy Care Centers

HHS Gov News - March 23, 2019

The Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) announced today that it issued a Notice of Resolution to the State of Hawaii after Hawaii took corrective action in response to OCR’s investigation of complaints of discrimination by the state against non-profit pregnancy resource centers.

Complainants, Aloha Pregnancy Care and Counseling Center, Inc. and Calvary Chapel Pearl Harbor, filed a complaint with OCR alleging that Hawaii engaged in impermissible discrimination under one or more of federal conscience laws when Hawaii enacted the notice requirements of Act 200, a 2017 law which required them to disseminate a government-scripted notice that promotes abortion – a service for which they do not offer, counsel, recommend, or refer. The Complainants are pro-life and dedicated specifically to providing women options other than abortion.

OCR’s new Conscience and Religious Freedom Division initiated an investigation into the allegations under OCR’s authority to enforce the Weldon and Coats-Snowe Amendments. As a result of OCR’s investigation, on March 15, 2019, Hawaii’s Attorney General issued a memorandum to the Department of the Attorney General for the State of Hawaii, which is charged with enforcing Act 200, stating that it will not enforce Act 200’s notice provisions against any limited service pregnancy center.

The Hawaii Attorney General also committed to notify Hawaii’s legislature of its decision not to enforce Act 200’s notice provisions against any limited service pregnancy center.

Hawaii’s actions follow the Supreme Court’s ruling in National Institute of Family & Life Advocates v. Becerra, 138 S. Ct. 2361 (2018) (NIFLA), which held that a California law similar to Hawaii’s Act 200 likely violated pregnancy resource centers’ Free Speech rights.  The action also follows stipulated permanent injunctions, entered by the U.S. District Court for the District of Hawaii against Act 200 in separate litigation in September 2018, against Hawaii enforcing the Act against the plaintiffs in the lawsuits.  Hawaii’s action in response to OCR’s investigation commits the state to respect the rights of every pro-life pregnancy resource center in the state, not just the particular parties covered by the injunctions. As a result, OCR now considers the complaints before it as satisfactorily resolved, and will be closing the matter.

Roger Severino, director of OCR stated, “Although Hawaii should never have burdened the rights of nonprofits seeking to provide pregnant women life-affirming options, we commend Hawaii for committing to not enforcing Act 200’s notice provisions against anyone, in response to our investigation.” Severino continued, “OCR takes allegations of conscience violations seriously.  We encourage other states to take a hard look at their own laws and make sure that they do not violate federal conscience and religious freedom statutes in health and human services.”

View OCR’s Notice of Resolution to Hawaii.*

* People using assistive technology may not be able to fully access information in these files.  For assistance, please contact the OCR Call Center at OCRMail@hhs.govor (800) 368-1019.

Must-Reads Of The Week (Some Flying Below The Radar)

The Friday Breeze

Want to read the best and most provocative stories from the week? Welcome to the Friday Breeze, where we compile them all — so you’re set with your weekend reading.

Your wonderfully entertaining compiler of “The Friday Breeze,” Brianna Labuskes, is off today, so I’m jumping in to keep you abreast of this week’s vital health care news. Here’s what I found most fascinating, some of it far away from the headlines.

Let’s dive into my “Department of Health Studies,” where I found several worthy of your time.

First, the scourge of fentanyl drug overdoses is rising most sharply among African-Americans. The CDC’s National Center for Health Statistics, which did the study, said the synthetic opioid is also a factor in the rise of death rates across other demographic groups.

The Washington Post: Fentanyl Drug Overdose Deaths Rising Most Sharply Among African Americans

A group of academics studying anti-vaccination posts on Facebook found that it’s not just the unfounded fear of autism driving the sentiment. While 86 percent of the posters were women, their motivation varied from conspiracy — as in poliovirus does not exist and pesticides caused the clinical symptoms of polio — to a belief in alternative medicine — eating yogurt cures human papillomavirus.

Science Direct: It’s Not All About Autism: The Emerging Landscape of Anti-Vaccination Sentiment on Facebook

Many news outlets reported on a study on the Apple Watch and its heavily promoted ability to detect an irregular heartbeat. The Apple-funded study, which has not been published or peer-reviewed, concluded the watch works.

CNN: Apple Watch App Could Detect Life-Threatening Irregular Heartbeat, Study Says

Moving on to data, the Robert Wood Johnson Foundation issued its county health rankings this week. It’s a user-friendly display of a matrix of health indicators that lets you spot the country’s trouble spots. This year’s report, the foundation explains, tried to get at the relationship of the cost of housing to health. “The research reveals that in the most segregated counties nearly one in four black households spends more than half their income on housing, compared with one in 10 white households.”

Robert Wood Johnson Foundation: How Healthy Is Your Community?

Doctors will like this one: a study comparing hospital CEO salaries — nonprofit hospital CEOs, mind you — with physician salaries. CEO salaries are five times higher than surgeons’ salaries, up from a ratio of 3-to-1 only 10 years earlier.

Healthcare Dive: CEO Salaries at Nonprofit Hospitals Up 93% Since 2005

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Drug prices remain the hot topic this week in health care news. The BBC looked at the high drug prices in the U.S. compared with the prices in Great Britain and chortled a bit.

BBC News: The Human Cost of Insulin in America

Elisabeth Rosenthal, the editor-in-chief of KHN, wrote an analysis in The New York Times of Eli Lilly’s baffling public relations move to cut insulin prices in the U.S. with an “authorized generic.” She writes, “It is, perhaps, a sign of how desperate Americans are for something — anything — to counteract the escalating price of drugs that Lilly’s move was greeted with praise rather than a collective ‘Huh?’”

The New York Times: Why Should Americans Be Grateful for $137 Insulin? Germans Get It for $55

While we are on the topic of the high cost of health care, the federal government’s General Accountability Office issued a report on air ambulances and the sky-high bills the companies send patients. (KHN featured the problem in its “Bill of the Month” series and the St. Louis Post-Dispatch did some excellent pieces on the problem last year.) Bob Herman of Axios noted that the report found that the median price of medical helicopter transport in 2017 was $36,400.

Government Accountability Office: Air Ambulance: Available Data Show Privately-Insured Patients Are at Financial Risk

I’d be remiss if I didn’t mention a fabulous article by another KHN staffer, Fred Schulte, who with Erika Fry of Fortune magazine wrote about the mess that electronic health records have become. It’s long, but so good at illuminating a problem that is largely invisible to patients.

Fortune: Death by a Thousand Clicks: Where Electronic Health Records Went Wrong

The Baltimore Sun produced a great graphic, a live map of sewage pollution in the city. The accompanying article says: “More than 14 million gallons of sewage-tainted water has washed into Baltimore streams over the past two months, but city officials haven’t alerted the public of the contamination.”

The Baltimore Sun: Baltimore Launches Live Map of Sewage Pollution — and Temporarily Stops Alerting the Public to Contamination

Enjoy the weekend with this selection of things to read.

State Laws Ban Surprise Medical Bills. She Got One for $227K And Fought Back.

The first surprise was the massive heart attack, which struck as Debbie Moehnke waited in a Vancouver, Wash., medical clinic last summer.

“She had an appointment because her feet were swollen real bad,” said Larry Moehnke, her husband. “But she got in there and it was like, ‘I can’t breathe, I can’t breathe!’”

Her life suddenly at risk, the 59-year-old was rushed by ambulance, first to a local hospital, where she was stabilized, and then, the next day, to Oregon Health & Science University across the river in Portland for urgent cardiac care.

That meant heart bypass surgery, replacement of one valve and repair of another. Just as she recovered from that, Debbie Moehnke developed a raging infection that required powerful IV antibiotics to treat. She spent a month in the hospital, some of it in intensive care, before she was discharged home.

That’s when she got the next surprise: Bills totaling more than $454,000 for the medical miracle that saved her life. Of that stunning amount, officials said, she owed nearly $227,000 after her health insurance paid its part.

“I wish I would have known. I would have said ‘no’ to life support,” said Debbie Moehnke, a former cocktail waitress who suffers from signs of early-onset dementia. “We’ll lose everything.”

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Large “surprise bills” like the Moehnkes received have become a national epidemic outraging patients and politicians alike. Solutions have been elusive to date, even in a progressive state like Washington.

Lawmakers in Olympia this year are trying for the fourth time to pass legislation banning the practice that leaves consumers with huge out-of-pocket costs.

“Everybody agrees we’ve got to get the consumer out of being stuck in between,” said Mike Kreidler, the state insurance commissioner who has repeatedly backed the proposals.

While the protection would be beneficial to patients, there has been formidable and effective pushback from insurers, hospitals and doctors.

The central issue is money. Such surprise bills, or “balance bills,” typically occur when a patient’s insurer and a hospital or doctor not in its network don’t agree on what treatment is worth. The insurer — LifeWise Health Plan of Washington, in this case — pays what it judges to be fair. Providers then bill patients for the balance, which can easily tally tens if not hundreds of thousands of dollars.

As of December, 25 states had laws providing protection against balance bills, according to the Commonwealth Fund. Those laws take consumers out of the middle in billing disputes and force providers and insurers to negotiate directly for payment.

When an insurer and a provider disagree about how much a service is worth, who decides the legitimate charge? The proposed bills in Washington state use a “commercially reasonable” rate as the standard. But what does that mean in a country where medical prices are so variable?

“We need to make sure that any law that is enacted doesn’t tilt the scale toward one side or another,” said Chelene Whiteaker, senior vice president of government affairs for the Washington State Hospital Association.

The Washington state legislation borrows from a 2015 New York law that sends insurers and providers to baseball-style binding arbitration if they can’t come to an agreement about costs. Both parties remain cautious.

“I hope they will give up the idea that this is a chance to stick it to doctors,” said Dr. Nathan Schlicher of the Washington State Medical Association.

Leonard Sorrin, vice president of congressional and legislative affairs for Premera Blue Cross, which operates LifeWise, said in a statement that his organization is working for legislation that prevents balance billing, but also “maintains a contracting balance that allows health plans to build networks for members and pays the provider a fair rate.”

While patients can generally avoid balance billing by staying in-network, a life-or-death emergency such as Debbie Moehnke’s can make that impossible. Also, many in-network hospitals often use out-of-network doctors, leaving patients vulnerable to surprise charges.

So much money is at stake that, even when they exist, laws are filled with loopholes and offer only patchwork protection. For example, hospitals are not prohibited from sending balance bills; patients have to know they’re protected by law and go to considerable effort to contest them.

And about 60 percent of employer-based plans are governed by federal rather than state law. There is currently no federal prohibition against balance billing, although a bipartisan bill to end the practice was proposed last year.

Oregon, where Debbie Moehnke was treated, does have a law banning surprise bills, which took effect last year. But it applies only to out-of-network charges sent to a patient who received care at an in-network provider. And it covers only insurers regulated in the state, which excludes the Moehnkes’ plan, according to state insurance officials.

The proposed Washington legislation would ban balance billing for most of the state’s nearly 6 million insured consumers under age 65. But it could skip about 2 million people who get coverage through employers with self-funded plans. Those plans are regulated by a federal law, called ERISA, shorthand for the Employee Retirement Income Security Act of 1974, which doesn’t prohibit balance billing.

Self-insured employers would be allowed, but not required, to participate in provisions of the new law, if approved.

So far, however, change has come too slowly for families like the Moehnkes, who found themselves facing crushing bills, despite buying a well-subsidized plan on the state’s insurance exchange. In Debbie Moehnke’s case, the full bill from OHSU and affiliated providers was $454,550.54. Her insurance paid $227,959.19.

That left the Moehnkes with bills totaling $226,591.35.

“What do you think you’re going to do, squeeze blood out of a turnip?” said Larry Moehnke, 70, a big-rig truck driver.

Married 32 years, the Moehnkes and their two dogs, Coco and Belle, live in a 47-year-old mobile home in rural southwestern Washington. Larry Moehnke hasn’t been able to work since health problems of his own developed after his wife’s heart attack. They’re getting by on his Social Security income of $1,884 a month.

Charges for Debbie Moehnke’s emergency care totaled more than $454,000. Her health insurance plan agreed to pay about half the costs, leaving the couple responsible for the rest. With help from a patient advocate, the bill was eventually erased.(Michael Hanson for KHN)

LifeWise spokesman Bo Jungmayer said the insurer paid for her emergency care to the extent required under the Affordable Care Act.

Debbie Moehnke was hospitalized at OHSU from Aug. 14 to Sept. 12, 2018. She was initially admitted for her emergency heart treatment. While there, she developed an unidentified infection that required two additional weeks of care.

Only later did the couple learn that she could have been transferred to an in-network hospital, potentially saving tens of thousands of dollars.

“They never said anything about not being ‘in network’ or anything,” Larry Moehnke said.

Debra Tomsen, OHSU’s director of hospital billing and coding, said LifeWise officials should have notified the Moehnkes after receiving bills for nearly $250,000 halfway through her stay.

“Insurance should tell them they’re incurring out-of-pocket costs,” she said.

Jungmayer, of LifeWise, said it was up to OHSU to let Debbie Moehnke know about the high bills — and about the option to transfer to another hospital.

“Typically we allow that conversation between the provider and the patient while they’re there,” he said. “I don’t know why OHSU didn’t ask them.”

Early this month, after repeated inquiries about Debbie Moehnke’s care — first from a reporter, then from a patient advocate alerted by the Washington state insurance commission — the couple’s outstanding bills were resolved.

With the help of Jared Walker, who runs Dollar for Portland, a nonprofit group, the couple applied for a medical charity care waiver, in itself a complicated process. OHSU officials granted the waiver, erasing the sky-high debt.

“Their balance is now zero,” OHSU spokeswoman Tamara Hargens-Bradley confirmed in an email.

The Moehnkes are relieved, but they said they resent that they endured the stress of mounting bills and collection calls for six months when there was a solution available.

“Nobody ever said anything about charity care,” said Larry Moehnke.

That’s not how the process should work, said Kreidler.

“It shouldn’t be one where the squeaky wheel gets help,” he said. “There should be fairness and equality in the system. You shouldn’t have to file a complaint. This should be ingrained into the system so that when you have a problem and you’re due relief, you get it.”

FDA Chief Calls For Stricter Scrutiny Of Electronic Health Records

Food and Drug Administration Commissioner Scott Gottlieb on Wednesday called for tighter scrutiny of electronic health records systems, which have prompted thousands of reports of patient injuries and other safety problems over the past decade.

“What we really need is a much more tailored approach, so that we have appropriate oversight of EHRs when they’re doing things that could create risk for patients,” Gottlieb said in an interview with Kaiser Health News.

Gottlieb was responding to “Botched Operation,” a report published this week by KHN and Fortune magazine. The investigation found that the federal government has spent more than $36 billion over the past 10 years to switch doctors and hospitals from paper to digital records systems. In that time, thousands of reports of deaths, injuries and near misses linked to EHRs have piled up in databases — including at least one run by the FDA.

Gottlieb said Congress would need to enact legislation to define when an electronic health record would require government oversight. He said that the digital records systems, which store a patient’s medical history, don’t fit neatly under the agency’s existing mandate to regulate items such as drugs and medical devices.

Gottlieb said the best approach might be to say that an EHR that has a certain capability becomes a medical device. He called EHRs a “unique tool,” noting that the risks posed by their use aren’t the same as for a traditional medical device implanted in a patient. “You need a much different regulatory scheme,” he said.

The 21st Century Cures Act of 2016 excludes the FDA from having oversight over electronic health records as a medical device.

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Gottlieb said that health IT companies could add new functions that would improve EHRs, but they have been reluctant to do so because they didn’t want their products to fall under FDA jurisdiction. He added that he was “not calling” for FDA to take over such a duty, however, and suggested that any new approach could be years away. Proponents have long argued that widespread use of EHRs can make medicine safer by alerting doctors to potential medical errors, though critics counter that software glitches and user errors may cause new varieties of medical mistakes.

How closely the FDA should watch over the digital medical record revolution has been controversial for years. The agency’s interest in the issue perked up after Congress decided in February 2009 to spend billions of dollars on digital medical records as part of an economic stimulus program.

At the time, many industry groups argued that FDA regulation would “stifle innovation” and stall the national drive to bring medicine into the modern era. Federal officials responsible for doling out billions in subsidies to doctors and hospitals generally sympathized with that view and were skeptical of allowing the FDA to play a role.

The debate became public in February 2010, when Jeffrey Shuren, an FDA official, testified at a public hearing that the agency had tied six deaths and more than 200 injuries to health information technology. In all, the FDA said, it had logged 260 reports in the previous two years of “malfunctions with the potential for patient harm.”

The agency said the findings were based largely on reports voluntarily submitted to the FDA and suggested “significant clinical implications and public safety issues.” In one case cited, lab tests done in a hospital emergency room were sent to the wrong patient’s file. Since then, several government and private repositories have associated thousands of injuries, near misses and deaths to EHR technology.

Shuren said in 2010 that the agency recognized that health information technology had great potential to improve patient care, but also needed oversight to “assure patient safety.”

While some safety proponents agree that EHRs offer tremendous benefits, they also see a greater opportunities to improve their safety.

Dean Sittig, a professor of bioinformatics and bioengineering at the University of Texas Health Science Center, said EHRs have improved safety within the health care system, but they have not eliminated errors to the extent that he would have expected. Federal officials were initially pushing for rapid adoption and “there wasn’t a lot of interest in talking about things that could go wrong,” Sittig told KHN and Fortune.

Earlier this month, Gottlieb announced his resignation from the FDA. His last day is scheduled to be April 5.

KHN correspondents Sarah Jane Tribble, Sydney Lupkin and Julie Rovner contributed to this report.

Podcast: KHN’s ‘What The Health’ Surprise! Fixing Surprise Medical Bills Is Harder Than it Looks

Julie Rovner

Kaiser Health News

@jrovner

Read Julie's Stories Anna Edney

Bloomberg

@annaedney

Read Anna's Stories Joanne Kenen

Politico

@JoanneKenen

Read Joanne's Stories Alice Miranda Ollstein

Politico

@AliceOllstein

Read Alice's Stories

Surprise medical bills — when patients receive an unexpected bill from a health provider not in their insurance network — are among the few problems in health care just about everyone wants to solve. But it turns out that no one in the health industry wants to take responsibility for paying those bills. That could complicate efforts toward a legislative fix, despite bipartisan support.

And the 2020 presidential campaign is already in full swing, with candidates staking out some surprisingly diverse positions on how to expand access to health care.

This week’s panelists are Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Anna Edney of Bloomberg News and Alice Miranda Ollstein of Politico.

Also, Rovner interviews Scott Gottlieb, the commissioner of the Food and Drug Administration, who is stepping down in early April.

Among the takeaways from this week’s podcast:

  • State and federal lawmakers of both parties and industry groups say they want to find a way to protect patients from getting surprise bills from out-of-network doctors and hospitals after treatment. But they can’t find agreement on a way to fix the system.
  • Efforts to end surprise bills generally fall into two categories: setting rates for out-of-network services (which might be based on some percentage of Medicare rates) or requiring patients and providers to go through an arbitration process (a technique some states are using).
  • Among Democratic candidates for president, the push for switching to a “Medicare-for-all” system appears to be moderating a bit as more centrists call for less sweeping changes in the health care system, hoping to avoid blowback from people who like their current insurance and a united opposition from industry groups.
  • The Trump administration’s budget proposal would put money behind the effort to stop the spread of HIV. But while medical advances have made HIV eradication possible, obstacles remain, including the difficulty of reaching many of the communities that need the support.

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

Julie Rovner: Fortune’s “Death by a Thousand Clicks: Where Electronic Health Records Went Wrong,” by Erika Fry and KHN’s Fred Schulte

Joanne Kenen: NBC’s “Surprise Medical Bills Lead to Liens on Homes and Crippling Debt,” by Lindsey Bomnin and Stephanie Gosk

Anna Edney: Stat News’ “The Astounding 19-Year Journey to a Sea Change for Heart Patients,” by Matthew Herper

Alice Miranda Ollstein: The New York Times’ “States Seek Financial Relief for Family Caregivers,” by KHN’s Samantha Young

To hear all our podcasts, click here.

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

Health Plans For State Employees Use Medicare’s Hammer On Hospital Bills

States. They’re just as perplexed as the rest of us over the ever-rising cost of health care premiums.

Now some states are moving to control costs of state employee health plans. And it’s triggering alarm from the hospital industry. The strategy: Use Medicare reimbursement rates to recalibrate how they pay hospitals.  If the gamble pays off, more private-sector employers could start doing the same thing.

“Government workers will get it first, then everyone else will see the savings and demand it,” said Glenn Melnick, a hospital finance expert and professor at the University of Southern California. “This is the camel’s nose. It will just grow and grow.”

In North Carolina, for instance, state Treasurer Dale Folwell next year plans to start paying hospitals Medicare rates plus 82 percent, a figure he said would provide for a modest profit margin while saving the state more than $258 million annually.

“State workers can’t afford the family premium [and other costs]. That’s what I’m trying to fix,” he said. The estimated $60 million in savings to health plan members, he said, would mainly come from savings in out-of-pocket costs.

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That approach differs from the traditional method of behind-the-scenes negotiating, in which employers or insurers ask for discounts off hospital-set charges that rise every year and generally are many times the actual cost of a service. Private-insurer payments, even with those discounts, can be double or triple what Medicare would pay.

This state-level activity could be a game changer, fueling a broad movement toward lower hospital payments. Montana’s state employee program made the adjustment two years ago; Oregon will start this fall. Delaware’s state employee program is also considering such “Medicare-based contracting” as one of several options to lower spending.

The bold move comes as other factors — notably marketplace competition among hospitals and high-deductible insurance plans aimed at getting consumers to “shop” for lower prices — have largely failed to slow rising health care premiums.

For hospitals, though, it can be viewed as “an existential threat,” said USC’s Melnick.

Indeed, the treasurer’s plan in North Carolina has drawn heated opposition, with a hospital industry-associated group running television ads warning of dire consequences, especially for rural hospitals, some of which they say might be forced to close. When the plan first came out, the state’s hospital association complained it would reduce statewide hospital revenue by an estimated $460 million.

Hospitals in areas with large concentrations of state workers “would be getting reimbursed less than the cost of care,” said Cody Hand, the association’s senior vice president and deputy general counsel. “Our biggest concern is this is not something that we were at the table for in discussion.”

Rural hospitals are particularly at risk, Hand said, because many were already teetering on the brink financially and the payment change would be an additional problem.

After months of acrimony, the North Carolina treasurer in mid-March agreed to grant a 20 percent boost in payment to rural hospitals that would give those hospitals an additional $52 million a year. On average, rural hospitals would be paid 218 percent of the Medicare rate.

Nationwide, hospitals have long complained that Medicare underpays them, and some hospital and business groups have warned employers that tying payments from state workers’ plans more closely to Medicare could result in higher charges to private-sector businesses.

“The result will be a cost shift of tens of millions of dollars to other Oregonians,” wrote the Oregon Association of Hospitals and Health Systems as lawmakers there debated a plan (that eventually became law) paying hospitals 200 percent of Medicare rates.

But policy experts are skeptical.

“Even if Medicare pays a bit below cost, 177 percent of Medicare should be at least 50 percent above cost,” said Mark Hall, director of the health law and policy program at Wake Forest University. “Is that a reasonable margin? I guess that’s up for debate, but to most people 50 percent margin might sound reasonable.”

Another concern some people have raised is that hospitals might refuse to join networks that employ these states’ Medicare-based strategy.

Indeed, Montana officials worked hard to get all hospitals in the state to agree to accept for the state worker program an average of 234 percent of Medicare’s reimbursement rates. A few hospitals held out, right up to the deadline, backing down only after pressure from employee unions.

The risk if hospitals opt to remain out-of-network is that workers could be “balance billed” for the difference between those Medicare-plus rates and their generally much higher charges, amounts that could be hundreds or even thousands of dollars.

To prevent that, Oregon lawmakers set the law’s in-network reimbursement for hospitals at 200 percent of Medicare. But those that opt out would receive only 185 percent.

The measure also bars hospitals from billing state workers for the difference between those amounts and the higher rates they might like to charge.

“Oregon thought it through,” said Gerard Anderson, a professor at Johns Hopkins who researches health care costs. “Hospitals need to go on a diet. The private sector has not put them on a diet, but maybe the state employee plans will.”

And In The Private Sector …

For decades, health insurance costs for employers and workers have risen faster than inflation despite various efforts to rein them in.

Currently, a typical family plan offered by employers tops $19,000 a year in premiums, while the price tag for a single employee is close to $7,000.

To be sure, hospital costs make up just one part of what premiums cover, along with doctor costs, drug payments and other services. Spending on hospital care accounts for about one-third of the nation’s $3.5 trillion health care tab.

“Health care is just becoming unaffordable,” said Cheryl DeMars, president and CEO of The Alliance, a group of 240 private-sector, self-insured employers that directly contract with hospitals in Wisconsin, northern Illinois and eastern Iowa.

In January, The Alliance began what it calls “Medicare-plus” contracting. As new hospitals join and existing contracts come up for renewal, the group is negotiating rates, basing them on what Medicare pays, DeMars said.

And it will likely save money: Under its old method of paying, the group was forking out between 200 to 350 percent of Medicare for inpatient and outpatient hospital services in its network. Two new contracts have been signed so far, averaging 200 percent of Medicare across inpatient, outpatient and physician payments, according to The Alliance.

“We want to pay a fair price and we’re in the process of determining what that should be,” said Kyle Monroe, vice president of network development for The Alliance. “Is it 200 percent? Is it something less?”

Under traditional payment methods, the negotiated prices insurers for public- and private-sector employers pay for hospital care vary widely, by facility, treatment and insurer. But they’re generally above Medicare rates by a substantial margin.

A group of self-insured employers recently commissioned Rand Corp. to study what private insurers pay hospitals in 22 states, compared with Medicare rates.

Initial results found private employers were paying, on average, 229 percent of Medicare rates to hospitals across the states in 2017, according to Chapin White, an adjunct senior policy researcher at Rand who conducted the study.

Economists like Melnick say they would prefer that market competition — consumers voting with their feet, so to speak — would drive business to the highest-quality, lowest-cost providers.

But, so far, hospitals have held the line against this scenario and that’s not likely to change. “They’re going to fight like crazy,” Melnick said.

HHS releases additional $487 million to states, territories to expand access to effective opioid treatment; 2019 SOR grants will total $1.4 billion

HHS Gov News - March 21, 2019

Today, the U.S. Department of Health and Human Services (HHS) released an additional $487 million to supplement first-year funding through its State Opioid Response (SOR) grant program. The awards to states and territories are part of HHS’s Five-Point Opioid Strategy and the Trump administration’s tireless drive to combat the opioid crisis.

Together with the $933 million in second-year, continuation awards to be provided under this program later this year, the total amount of SOR grants to states and territories this year will total more than $1.4 billion.

This funding will expand access to treatment that works, especially to medication-assisted treatment (MAT) with appropriate social supports.

“One year ago this week, President Trump launched his national opioid initiative, which called for expanding access to compassionate, evidence-based treatment, including MAT. This week’s funding awards to states were possible because of legislation Congress passed and President Trump signed since then,” said HHS Secretary Alex Azar. “Our strategy is beginning to produce results, thanks to so many Americans working on the ground, in their own communities, to turn the tide on this crisis.”

The State Opioid Response grants administered by HHS’s Substance Abuse and Mental Health Services Administration (SAMHSA) aim to address the opioid crisis by increasing access to MAT using the three Food and Drug Administration (FDA) approved medications for the treatment of opioid use disorder, reducing unmet treatment need, and reducing opioid overdose-related deaths through the provision of prevention, treatment and recovery activities for opioid use disorder.

“Strategies such as employing psychosocial supports, community recovery services and MAT using medicines approved by the FDA constitute the gold standard of treatment for opioid use disorders,” said Dr. Elinore F. McCance-Katz, Assistant Secretary for Mental Health and Substance Use. 

Last summer, SAMHSA announced the first year of SOR funding. States and territories received funding based on a formula, with a 15 percent set-aside for the 10 states with the highest mortality rates related to drug overdose deaths.

Other funding, including $50 million for tribal communities under the Tribal Opioid Response (TOR) grant program, has been awarded separately. These programs are built from the foundations laid in the $1 billion provided to states and territories through SAMHSA’s Opioid State Targeted Response (STR) program. SAMHSA has complemented the work of the STR program with a national center of excellence that provides technical assistance and training to leverage local subject matter experts at the community level to sharpen treatment access and delivery.

SAMHSA also operates a 24/7, national Helpline that people can call to find treatment referral resources for mental health or substance use disorders: 800-662-HELP (4357). People can visit https://findtreatment.samhsa.gov/ to locate those resources, as well.

To learn more about SAMHSA-supported resources, please visit SAMHSA's Prescription Drug Misuse and Abuse page.

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Individual grantee awards

Grantee Supplement Amounts Alabama $7,174,439 Alaska $2,102,524 American Samoa $130,500 Arizona $10,580,576 Arkansas $2,699,458 California $36,457,252 Colorado $7,878,627 Connecticut $5,809,710 Delaware $6,574,372 District of Columbia $11,028,183 Federated States of Micronesia $130,500 Florida $26,129,676 Georgia $10,378,266 Guam $130,500 Hawaii $2,107,130 Idaho $2,146,028 Illinois $15,132,452 Indiana $9,472,850 Iowa $2,306,209 Kansas $2,112,683 Kentucky $16,431,436 Louisiana $6,128,230 Maine $2,308,700 Maryland $17,314,430 Massachusetts $18,729,196 Michigan $14,571,442 Minnesota $4,630,613 Mississippi $3,985,560 Missouri $9,586,028 Montana $2,103,853 Nebraska $1,000,000 Nevada $3,768,628 New Hampshire $11,996,921 New Jersey $11,257,470 New Mexico $2,770,397 New York $19,226,204 North Carolina $12,023,391 North Dakota $2,098,462 Northern Mariana Islands $130,500 Ohio $29,122,692 Oklahoma $3,993,464 Oregon $4,109,241 Pennsylvania $29,194,799 Rhode Island $6,574,635 South Carolina $7,440,757 South Dakota $2,098,099 Tennessee $9,679,492 Texas $24,131,586 Utah $4,154,404 Vermont $2,098,908 Virgin Islands $130,500 Virginia $8,252,814 Washington $11,261,155 West Virginia $14,630,361 Wisconsin $6,253,212 Wyoming $0 (state declined)  TOTAL $483,669,515

Costly Confusion: Medicare’s Wellness Visit Isn’t The Same As An Annual Physical

When Beverly Dunn called her new primary care doctor’s office last November to schedule an annual checkup, she assumed her Medicare coverage would pick up most of the tab.

The appointment seemed like a routine physical, and she was pleased that the doctor spent a lot of time with her.

Until she got the bill: $400.

Dunn, 69, called the doctor’s office assuming there was a billing error. But it was no mistake, she was told. Medicare does not cover an annual physical exam.

Dunn, of Austin, Texas, was tripped up by Medicare’s confusing coverage rules. Federal law prohibits the health care program from paying for annual physicals, and patients who get them may be on the hook for the entire amount. But beneficiaries pay nothing for an “annual wellness visit,” which the program covers in full as a preventive service.

“It’s very important that someone, when they call to make an appointment, uses those magic words, ‘annual wellness visit,’” said Leslie Fried, senior director of the Center for Benefits Access at the National Council on Aging. Otherwise, “people think they are making an appointment for an annual wellness visit and it ends up they are having a complete physical.”

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An annual physical typically involves an exam by a doctor along with bloodwork or other tests. The annual wellness visit generally doesn’t include a physical exam, except to check routine measurements such as height, weight and blood pressure.

The focus of the Medicare wellness visit is on preventing disease and disability by coming up with a “personalized prevention plan” for future medical issues based on the beneficiary’s health and risk factors.

At their first wellness visit, patients will often fill out a risk-assessment questionnaire and review their family and personal medical history with their doctor, a nurse practitioner or physician assistant. The clinician will typically create a schedule for the next decade of mammograms, colonoscopies and other screenings and evaluate people for cognitive problems and depression as well as their risk of falls and other safety issues.

They may also talk about advance care planning with beneficiaries to make decisions about what type of medical treatment they want in the future if they can’t make decisions for themselves.

At subsequent annual wellness visits, the doctor and patient will review these issues and check basic measurements. Beneficiaries can also receive other covered preventive services such as flu shots at those visits without charge.

When the Medicare program was established more than 50 years ago, its purpose was to cover the diagnosis and treatment of illness and injury in older people. Preventive services were generally not covered, and routine physical checkups were explicitly excluded, along with routine foot and dental care, eyeglasses and hearing aids.

Over the years, preventive services have gradually been added to the program, and the Affordable Care Act established coverage of the annual wellness visit. Medicare beneficiaries pay nothing as long as their doctor accepts Medicare.

However, if a wellness visit veers beyond the bounds of the specific covered preventive services into diagnosis or treatment — whether at the urging of the doctor or the patient — Medicare beneficiaries will typically owe a copay or other charges. (This can be an issue when people in private plans get preventive care, too. And it can affect patients of all ages. The ACA requires insurers to provide coverage, without a copay, for a range of preventive services, including immunizations. But if a visit goes beyond prevention, the patient may encounter charges.)

And to add more confusion, Medicare beneficiaries can opt for a “Welcome to Medicare” preventive visit within the first year of joining Medicare Part B, which covers physician services.

Meanwhile, some Medicare Advantage plans cover annual physicals for their members free of charge.

Many patients want their doctor to evaluate or treat chronic conditions like diabetes or arthritis at the wellness visit, said Dr. Michael Munger, who chairs the board of the American Academy of Family Physicians. But Medicare generally won’t cover lab work, such as cholesterol screening, unless it’s tied to a specific medical condition.

At Munger’s practice in Overland Park, Kan., staffers routinely ask patients who come in for a wellness visit to sign an “advance beneficiary notice of noncoverage” acknowledging that they understand Medicare may not pay for some of the services they receive.

As long as beneficiaries understand the coverage rules, it’s not generally a problem, Munger said.

“They don’t want to come back for a separate visit, so they just understand that there may be extra charges,” he said.

Beneficiaries may not be the only ones who are unclear about what an annual wellness visit involves, said Munger. Providers may be put off if they think that it’s just another task that adds to their paperwork.

A recent study published in the journal Health Affairs found that in 2015 just over half of practices with eligible Medicare patients didn’t offer the annual wellness visit. That year, 18.8 percent of eligible beneficiaries received an annual wellness visit, the analysis found.

Primary care physicians generally want to see their patients at least once a year, Munger said, but it needn’t be for a complete physical exam.

A wellness visit or even a visit for a sprained ankle could give doctors an opportunity to check in with patients and make sure they’re on track with preventive and other care, Munger said.

When Dunn called the doctor’s office about the $400 bill, she said, the staff told her she had signed papers agreeing to pay whatever Medicare didn’t cover.

Dunn doesn’t dispute that.

“There were lots of papers that I signed,” she said. “But nobody told me I would get a bill for $400. I would remember that.”

In the end, the clinic waived all but $100 of the charge, but warned her that next year she’ll have to pay $300 if she wants an annual physical with that doctor. If she comes in just for an annual wellness visit, she’ll be seen by a physician assistant.

Dunn is considering her options. She would like to stay with her new doctor, who came highly recommended, and she’s worried she might have trouble finding another one just as good who accepts Medicare. But $300 seems steep to her for a checkup.

“This whole thing was so stressful for me,” she said. “I lost sleep for nights. It’s not that I couldn’t afford it, but it didn’t seem right.”

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