July 2, 2018

GAO: More Oversight Needed on 340B Contract Pharmacies; House 340B Hearing Mid-July

In a new report for the House Energy and Commerce Committee, the Government Accountability Office suggests that HHS, and more specifically HRSA, should perform more oversight and more audits on 340B.. Most specifically, GAO said that HRSA should perform “audits to assess for duplicate discounts in Medicaid managed care,” and require “information on how entities determined the scope of noncompliance and evidence of corrective action prior to closing audits.” GAO concluded that HRSA failed to ensure that discounted drugs are going to the right patients and the agency  has incomplete data on the total number of pharmacy contract arrangements. Click here for the report.

  • U.S. Rep. Chris Collins (R-NY) introduced his long anticipated 340B legislation, the Drug Discount Accountability Act, to create a user-fee program and require annual Inspector General reports on the program.  Click here.
  • The House Energy & Commerce Committee is expected to announce another hearing on 340B for July 11.  340B advocate Rep. David McKinley (R-WV) is likely to testify.

Azar: Drugs Should Be Priced on How Well They Work

HHS Secretary Alex Azar testified before the Senate Finance Committee last week his agency is in the process of rewriting safe harbor guidelines for anti-kickback restrictions to let drug makers base the price of drugs on how well they work. Azar also discussed the President’s proposal to do away with rebates in Medicare Part D as well as his desire to introduce private price negotiation of doctor-administered drugs in Part B. He implied during questions that HHS is looking into bundling drugs with physician services, as Medicare does with dialysis, while also telling the Committee that many brand drug makers have told HHS they’d like to voluntarily lower their list prices, but they’ve been thwarted by pharmacy benefit managers. To view the hearing and read the written testimony, click here.

  • CMS rejected Massachusetts Medicaid request to limit prescription drug coverage in its Medicaid program through a limited formulary of drugs. Click here.
  • Alternatively, CMS is allowing Oklahoma to enter into value-based purchasing arrangements with drug manufacturers. Click here.

Judge Blocks Kentucky’s Medicaid Work Requirements, Could Impact Other States
U.S. District Judge James E. Boasberg late last week blocked Kentucky’s Medicaid work requirements, stating that the approval by the Trump Administration requires further review. The Judge determined that HHS acted in an “arbitrary and capricious” manner when it approved the requirement that low-income people work or otherwise engage in their communities to qualify for the safety-net health insurance. Since the Kentucky plan was approved, the Administration has granted three more states permission to impose similar requirements. Kentucky Gov. Matt Bevin (R) has threatened to cancel Medicaid expansion in the state if courts blocked the work requirement or other changes he sought. To view the decision, click here.

Hospital ED Billing Investigations Reveal Major Cost Variance Issues; Senate Examines Cost Issues

A baby was treated with a nap and a bottle of formula. His parents received an $18,000 bill.  This is one of the findings of a new media investigative report by Vox and Kaiser Health News that collected more than 1,400 emergency room bills submitted by readers in all 50 states and Washington, DC, as part of an investigation into emergency room billing practices.  Click here for the newest in a series of reports.

  • The Senate HELP Committee held the first of a series of hearings on the high cost of health care last week, as it searches for answers to slow the cost curve. Click here for the expert testimony.

Government Watchdogs Say CMS Is Not Aggressive Enough on Fraud

The GAO and the HHS Inspector General said last week that CMS needs to act aggressively to curb billions of dollars in erroneous payments. This, following CMS announcement earlier in the week that it made changes to enhance “initiatives designed to improve Medicaid program integrity.”  In fact, the government watchdogs stated that the CMS’ plan to reduce Medicaid over-payments does not go nearly far enough to curb fraud and abuse. “There are huge gaps in knowledge about the extent of the program integrity issues in the Medicaid program, and much more needs to be done,” Comptroller General Gene Dodaro told the Committee. Click here to view the hearing and read the written testimony, and here for CMS’ new initiative.
  • HHS OIG announced that they participated in the “largest health care fraud take-down in history,” with state and federal law enforcement partners leading to charges for more than 600 defendants in 58 federal districts involving $2 billion in losses to Medicare and Medicaid, click here for details.
New Tax Law to Hit Not-for-Profit Hospitals
Religious organizations, hospitals and colleges are among the list of not-for-profit groups that have enjoyed tax-exempt status historically but will be paying on certain types of employee fringe benefits this year. The new measure, part of the GOP tax plan passed earlier this year, imposes a 21-percent tax on the cost of some fringe benefits nonprofits provide to their employees, such as parking and commuter passes. Supporters of the provision said it levels the playing field between for-profit organizations and nonprofits. However, many organizations impacted by the new law say it will be a significant financial and administrative burden and have signed a petition demanding it be repealed. For more on the impact of the new provision from Politico, click here.
Amazon to Buy Online Pharmacy PillPack, Shaking Up Pharmacy Business

In a major shake up to the pharmaceutical industry, reports leaked last week that Amazon will purchase online drug distributor PillPack, giving the online giant the ability to ship prescriptions around the country, and overnight, making it a direct threat to the established $400 billion pharmacy business. Details of the acquisition weren’t released, but Bloomberg reported it is worth $1 billion and sent stock prices for CVS Health and Walgreens plummeting. PillPack, that pre-sorts medications and ships them to customers’ homes in 49 U.S. states, will allow Amazon to instantly jump into the prescription drug market, utilizing PillPack’s drug distribution licenses. Click here for more from Bloomberg.

Value-Based Payments Not showing Savings; Senate Seeks Answers to the High Cost of Care

A study released last week is raising new questions about value-based payment programs and their impact on the cost of care. The report suggests that despite the greater use of models like accountable care organizations, there is no slowdown in cost growth. Researchers analyzed the performance results of ACOs and other population-based value-based payment models in market-level impacts rather than model-level impacts. The study says that many markets are still creating value-based programs and other changes to payment and care delivery models, even though they are not currently certain to lower costs. To read the report, click here.
Food as Medicine: More Health Plans Offer Tailored Meals
A growing number of health plans are providing medically tailored meals and studies are showing that these initiatives have resulted in significant drops in ER visits and hospital readmission rates.  The growing number of “food as medicine” programs nationally are aimed at improving nutrition among adults with serious illnesses to help them heal, recover from medical procedures and control chronic diseases. Aetna and two other insurers also have added the benefit for their Medicaid enrollees in the Philadelphia area. California’s Medicaid program in May began a three-year pilot project to provide meals to several thousand adults with chronic diseases. In New York, the nonprofit group God’s Love We Deliver provides medically tailored meals to two dozen Medicaid managed long-term care plans. Click here for the report.
  • The Root Cause Coalition continues to be the leading national advocate for finding and implementing solutions for the Social Determinants of Health. Click here for details.
Hospitals Change Billing Practices Because of Hospital-Acquired Conditions: Study
The CMS policy that penalizes hospitals for hospital-acquired conditions hasn’t had a huge impact and has led to changes in billing practices, according to a new study. In 2008, CMS stopped reimbursing for hospital-acquired conditions – mainly infections – and shifted those costs back to health systems to hold them accountable. However, hospitals are still paid if the issues are present upon arrival at the hospital. Researchers analyzed more than 65 million Medicare hospitalizations between 2007 and 2011, specifically urinary tract infections linked to catheters and blood infections linked to central lines. After the policy change, the number of infections coded as present on arrival went up, while the number coded as not present on arrival went down. Click here for the full report.
ACA Exchange Plans on Track for Most Profitable Year Ever
ACA marketplace insurance plans are make more money since 2014 when the exchange began, according to a new report released by the Kaiser Family Foundation. The analysis found that in the first quarter of 2018, health insurers posted a better financial performance than any other year of the ACA marketplace. The levels of profitability are on track to be about the same as they were before Obamacare went into law. On average, insurers are bringing in $154.54 per enrollee more than they are paying out every month, which is much higher than the 2015 levels of $36.16 per month. Additionally, medical costs accounted for just 68 percent of premiums collected by insurers, down from 75 percent during the same period in 2017, and 88 percent during the first quarter of 2015. Click here for the report.
  • The number of health insurance plans sold outside of ACA’s exchanges fell by half in 2018, according to a study by the Robert Wood Johnson Foundation, click here.
Rural Hospitals Struggle To Provide Respiratory Services
Rural hospitals, in particular Critical Access Hospitals, are less likely to provide respiratory care services, according to a new report from the University of Minnesota Rural Health Research Center.  The population in rural areas have higher rates of COPD, so the authors conclude that rural patients likely have to travel longer distances to access these services or forgo them altogether. Advocates for respiratory therapy see telemedicine as an affordable solution to provide care to rural populations where a full-time specialist is too costly. To read the report, click here.
  • The CAH Coalition in Washington advocates exclusively for Critical Access Hospitals and is spearheading numerous federal initiatives. Click here for more.
Fewer Patients Dying in Hospitals
In-hospital deaths fell in the last 15 years from 33 percent in 2000 to 20 percent in 2015, according to a new study published in JAMA last week. The researchers suggest the change is due to more patients opting to die at home or at assisted living facilities.  Additionally, researchers site “multiple efforts between 2000 and 2015 attempted to improve care at the close of life,” and the ACA penalties on readmissions have provided “an opportunity to improve more timely access to and effectiveness of palliative care and hospice services.” Click here for the study.
Pharma Cuts Opioid and Other Rx Marketing To Docs
Pharmaceutical companies spent less money to market opioids to doctors in 2016 than in prior years after studies show that payments to doctors by opioid makers are linked to more prescribing of the drugs, click here.  Medical device and pharmaceutical companies still made payments to physicians and teaching hospitals last year to the tune of $8.4 billion, but less than the previous year’s $8.81 billion, according to CMS’ Open Payments system. Click here.
D.C. Has the Most Psychopaths: Study
A new study published in the Social Science Research Network says that Washington, D.C., has the most psychopaths followed by Connecticut, California, New Jersey, and a tie of New York and Wyoming for fifth. The states that are least psychopaths are West Virginia, Vermont, Tennessee, North Carolina, and New Mexico. The study looked at survey data on the “Big Five” personality traits. The “Big Five” are agreeableness, extraversion, openness, conscientiousness, and neuroticism, which were compared to traits commonly associated with psychopaths. The study also noted that there was no correlation between homicide rates and the state’s level of psychopaths. Click here.
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