Attacks on 340B Continue; Providers Urged to Comment on Mega-Rule

A federal court has struck down the 340B orphan drug policy that currently requires manufacturers to provide drug discounts when orphan drugs are used either off-label or to treat common conditions. (Click here for the actual court decision.) Obamacare expanded the 340B program to cancer centers, critical access hospitals, rural referral centers and sole community hospitals for outpatient drugs. The government interpreted the law to compel pharmaceutical manufacturers to give those hospitals discounts for orphan drugs when they’re used to treat something other than the rare diseases and conditions they were developed to target. Click here for more.

  • The executive vice president and chief operating officer of Henry Ford Health System in Detroit, Robert Riney, issued an urgent plea to providers to send their comments about the new 340B proposed regulations to HRSA by the October 27 deadline. Click here for his op-ed in Modern Healthcare.

ICD-10 Transition May Not Be As Smooth as Has Been Reported

Not everyone is painting a rosy picture of the ICD-10 transition — now in its third week. Clearinghouse TriZetto Provider Solutions said that within the first 12 days they had already seen nearly 10,000 denials as a result of ICD-10. TriZetto anticipates the claim denial rate will increase 200 percent as the healthcare industry continues to transition to the new code set. According to the company, TriZetto works with more than 350 health plans “touching” more than half the U.S. insured population and reach more than 250,000 providers. Click here for the story.


More Health Insurance Co-Ops Fail

Two more health insurer Co-Ops announced last week they would close – Colorado and Oregon – leaving 15 of the original 23 in business. The last two to close say the federal government’s decision a few weeks ago to short-change them on Risk Corridor reimbursements led to their demise — CMS said that it would initially pay out just 12.6 percent of anticipated payments for the risk corridors program. Click here and here for the story.


Medicare Premiums Increasing; No Social Security Boost for Seniors

Low inflation in the U.S. means people receiving Social Security payments won’t be given a cost-of-living increase for 2016, the government said. Advocates said the news is of particular concern because of rising Medicare premiums and reduced buying power for health care. Also affected are federal retirees, disabled veterans and people getting help under the federal disability program for people with low incomes. The decision affects more than 70 million Americans. Congress is reviewing potential solutions that could be incorporated into the debt ceiling increase need in early November. Click here and here for more.


Safety-Nets Harder Hit; Readmit Penalty Program Gains Support; Some Hospitals Fighting Poverty

Safety-net hospitals experience higher mortality, complication and readmission rates–along with higher costs–for nine common elective surgical procedures, according to a study in JAMA Surgery last week. The poorer outcomes are likely caused by limited hospital resources rather than by the sicker, at-risk population being served. The situation is likely to worsen because of impending Medicare reimbursement penalties for poor quality performance, putting safety-net hospitals at financial risk. Click here for the study.

  • Legislation that would allow CMS to adjust hospital penalties based on the socio-economic status of patients continues to gain support in Congress…there are now 57 House cosponsors. Click here for a summary of the bill. Click here to see if your House member supports it.
  • Most large hospitals operate health clinics in low-income communities. But more and more, in places as varied as Detroit, New York City and Waco, Texas, hospitals have instituted programs that are not strictly medical, but are instead intended to lift communities out of poverty. Click here for the story.

MedPAC Suggests Changes to Rural Hospital Payments

With rural hospitals closing throughout the country, the Medicare Payment Advisory Commission (MedPAC) has made a few fairly radical suggestions to try and reverse their fate. Among MedPAC’s suggestions: Converting rural hospitals to freestanding emergency rooms or clinics. Thirty rural hospitals have closed since early 2013, according to MedPAC. The closures rise to 41 if those in the rural portions of metropolitan statistic areas (MSAs) are included. Total discharges from rural hospitals have declined 12 percent from 2003 to 2013 and 27 percent for critical access hospitals. In the latter category, discharges declined 4 percent just from 2012 to 2013. Click here for a summary from MedPAC’s most recent discussion.


CMS Says Medicare Claims Backlog Dwindling

CMS says it is whittling down the backlog of thousands of disputed Medicare claims from providers and patients. The Office of Medicare Hearings and Appeals held a national conference call last week to announce that its new Settlement Conference Facilitation pilot had been a success and was now going to be expanded. Click here for a very good summary.


More Health Systems May Become Insurers

As U.S. health insurers chart an unprecedented consolidation of the industry, hospitals are taking a fresh look at becoming insurers themselves to keep more of their patients’ healthcare dollars in house. Hospital and physician groups say the mega-mergers announced this past summer could drive up premiums and limit choices for consumers. According to interviews with more than a dozen hospital executives and industry consultants, some hospitals are concerned about the impact of this consolidation in their local markets, and are considering offering their own insurance plans. Click here for the story.


Medicaid Enrollment, Spending Increases 14 percent in 2015

Medicaid enrollment and spending each increased on average by about13.8 percent in fiscal year 2015, “largely due to the ACA coverage expansions,” according to a new report from the Kaiser Foundation. Expansion states reported Medicaid enrollment and total spending growth was nearly three times the rate of non-expansion states. All states (except Alaska) use at least one provider tax or fee to help finance Medicaid. Eighteen (18) states increased or planned to increase one or more provider taxes or fees in FYs 2015 and 2016. Seven (7) of the Medicaid expansion states (Arizona, California, Colorado, Indiana, Kentucky, Nevada and Ohio) reported plans to use increased provider taxes or fees to fund all or part of the costs of the ACA Medicaid expansion beginning in January 2017, when states must pay a small share of the costs of the expansion. To view the report, click here.


HHS Says 10 Million Will Sign Up on Health Exchanges

An estimated 9.4-11.4 million Americans could have coverage through the Health Insurance Marketplace by the end of 2016, HHS is now projecting. That’s 300,000 to 2.3 million more than the 9.1 million people HHS expects will be enrolled at the end of 2015. HHS projects three-quarters of the new enrollees will come from the ranks of the uninsured, and the rest from people who previously had individual coverage outside the exchanges. Click here for details from HHS.


Cyberattacks Will Cost Health System $305 Billion Over 5 Years: Study

Cyberattacks in the next five years will cost the U.S. health system roughly $305 billion in lost revenue, a new report from Accenture finds. Accenture used survey data showing that half of patients would find a different provider if they were informed their medical records had been stolen. Apply that fact to the lifetime medical value of a patient and you get the rather large loss figure. The report finds that 80 million patients will be affected by a data breach of a health care provider, and one in 13 will be the victim of medical identify theft. Click here for the report.


Medicare Part D Drug Plans Likely To Grow Double Digits

Prescription drug plans under Medicare Part D are expected to grow by 13 percent in 2016 – the most in seven years, according to a new analysis analysis. The increases follow a growth in Part D costs per person of almost 11 percent in 2014, according to CMS, which blamed spending on high-cost specialty drugs. To view the Kaiser Foundation report, click here.


NY AG Probing Notorious Drug Company: Report

The pharmaceutical company behind a recent massive price hike of an old drug is under scrutiny for whether it violated antitrust rules to thwart generic competition. The New York Times obtained a copy of a letter sent by the New York attorney general’s office to Turing Pharmaceuticals CEO Martin Shkreli, which indicates the state is probing whether the company’s restricted distribution of the drug Daraprim is being used to illegally make it harder for would-be competitors to get brand-name samples to conduct required testing for FDA approval of generic versions. Click here for the story.


Rx in U.S. Costs At Least Three Times Anywhere in the World

The 20 best-selling pharmaceuticals in the world cost on average three times more in the US as in the UK, six times more than in Brazil and 16 times more than in India, the country with the lowest prices for most of the drugs. The study notes that approval of generic drugs is slower in the US and many older drugs are subject to regular price increases. Click here for details.


HOPD Prices Increasing More than At ASCs: Study

The prices for procedures at hospital outpatient departments have increased in recent years at a much higher rate than ambulatory surgical centers (ASCs), according to a study published in Health Affairs. The mean private insurer payment to an ASC to perform a colonoscopy increased 15.5 percent between 2007 and 2012, from $701 to $810. But for hospitals, the mean payment rose from $900 to $1,221, an increase of 35.7 percent. The price gap between the two surgical ventures was even wider for a knee arthroscopy with debridement. At an ASC, the mean payment increased 32.3 percent, from $1,695 to $2,142. But for outpatient surgery centers at hospitals, the mean payment rose 76.7 percent, from $1,278 to $2,258. Click here for the study (subscription required).


Hospital Prices Dip

Hospital prices dipped at a seasonally adjusted -0.2 percent from August to September, the lowest increase since 1998, according to data from the Bureau of Labor Statistics. Altogether, hospital prices grew 3.3 percent between September 2014 and September of this year. Inpatient services prices grew an unadjusted 3.2 percent, and 2.9 percent for outpatient services. The cost of physician services rose by an unadjusted 2 percent. Click here for the Labor Department data. Click here for the latest health spending analysis from Altarum.


Utilization of Some “Low Value” Services Decreasing: Study

A study from JAMA Internal Medicine finds a mixed picture of utilization of “low value” services identified by the Choosing Wisely Campaign. Some decreased, but others increased, and the authors suggest that additional interventions are necessary. Those that dropped since 2012 include the use of imaging for headaches, heart imaging, and prescription of antibiotics for sinusitis. But HPV testing for women under age 30 increased, as did the use of prescription nonsteroidal anti-inflammatory drugs in patients with hypertension, heart failure and chronic kidney disease. Click here for the study.


Excessive Alcohol Use Costing U.S. More Than $250 Billion: CDC

Excessive alcohol use continues to be a drain on the American economy, according to a study released by the CDC last week. Excessive drinking cost the U.S. $249 billion in 2010, or $2.05 per drink, a significant increase from $223.5 billion, or $1.90 per drink, in 2006. Most of these costs were due to reduced workplace productivity, crime, and the cost of treating people for health problems caused by excessive drinking. Binge drinking, defined as drinking five or more drinks on one occasion for men or four or more drinks on one occasion for women, was responsible for most of these costs (77 percent). Two of every 5 dollars of costs — over $100 billion — were paid by governments. Click here for the CDC report.


CDC: New Data Base Detects, Measures Rx Abuse

Drug overdose is the leading cause of injury death in the United States – mostly due to abuse and misuse of prescription opioid pain relievers, benzodiazepines (sedatives/tranquilizers), and stimulants — according to the CDC. Information from state prescription drug monitoring programs can be used to detect and measure prescribing patterns that suggest abuse and misuse of controlled substances, according to a report released last week by the CDC. The eight states that submitted 2013 data—California, Delaware, Florida, Idaho, Louisiana, Maine, Ohio and West Virginia—represent about a quarter of the U.S. population. Click here for the report.