Physician Groups Play Hardball Opposition Against Surprise Billing Fixes

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Source: BenefitsPRO

Congress may be attempting to take action against surprise bills that prove to be the financial undoing of so many consumers, but not if physician groups have anything to say about it.

And they’re saying as much as they can, as loudly as they can, according to a report in Modern Healthcare. In fact, according to congressional staff, physician groups are willing to make the entire effort against surprise billing go down in flames rather than find themselves on the receiving end of efforts to curtail how much money they can make.

According to Modern Healthcare, it’s not just physician groups’ public relations and advertising that’s pushing back hard against any sort of action. There’s also lobbying and the influx of dark money, too, to ads against lawmakers, particularly vulnerable senators, in their home districts. And the American Hospital Association is asking members to “go directly to their representatives and senators to lobby against the benchmark proposal.”

According to one congressional aide close to the negotiations, “it’s not a matter of tweaks to get providers to stand down, it’s that provider groups don’t want to see a solution here. They want the status quo. They’ve charted out where Congress could end up, and they are ready for the whole thing to come down. For them, surprise billing can stay in the mix.”

Another staffer said that the massive effort is causing policy aides to doubt whether providers actually want any action at all. That staffer is quoted saying, “Our question is, what happened to their commitment to protecting the patients? It shows just how big of a cash cow this practice is, that they’re willing to pour millions of dollars into fighting these bills.”

Provider groups deny that, with Chip Kahn, CEO of the Federation of American Hospitals, which represents for-profit hospitals, quoted saying, “We want to see legislation. It’s a problem we can’t solve ourselves—I wish we could—and we need legislation to ensure patients don’t suffer from sticker shock, that their copayments are reasonable and within the bounds of their coverage.”

But neither the proposed “benchmark” solutions proposed by Senate and House health committee leaders, nor a limited arbitration proposal, are making much headway at present, with efforts focused in apparent ploy to keep votes from occurring at all. The benchmarking proposals are being characterized in ads and other campaigns as “rate-setting,” and efforts focused on Democrats say that benchmarking could “undercut the health safety net.”

Even lobbyists are somewhat concerned about the turn the battle is taking, with the report quoting one who said, “The fact that industry on both sides could scare Congress into inaction on an issue that is financially ruining Americans through no fault of their own is unconscionable.” That provider lobbyist, the report adds, “wants a ‘split the baby’ policy that ‘doesn’t destabilize the relationship between providers and payers.’”

“What we’ve seen (from industry) is, ‘First, protect me financially. And to the extent we can then take patients out of the middle, that’s great,” Shawn Gremminger, senior director of federal relations for the consumer advocacy group Families USA told Modern Healthcare.

Millions and millions are being spent on this August push against surprise billing legislation. The losers are sure to be consumers.

Paging More Doctors: California’s Worsening Physician Shortage

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Source: CalMatters

In a northern California valley stretching under miles of bright blue sky between two snowy volcanic peaks, Mt. Lassen and Mt. Shasta, Daniel Dahle is known as a godsend, a friend, a lifesaver, a companion until the end.

For more than three decades, “Doc” Dahle has been the physician in Bieber, serving a region about the size of five smaller U.S. states. When he started, he was one of five doctors in the region.  Today he is joined by only one other full-time physician.

At 71, Dahle has delayed retirement for years — waiting for someone to take his place.

“I was going to retire November 8th of last year; it was going to be a third of a century,” he said. “It’s tough to recruit young new vibrant family practitioners or internists or pediatricians to come up here.”

Unfortunately, Dahle’s situation is not unique.

California is facing a growing shortage of primary care physicians, one that is already afflicting  rural areas and low-income inner city areas, and is forecasted to impact millions of people within ten years. Not enough newly minted doctors are going into primary care, and a third of the doctors in the state are over 55 and looking to retire soon, according to a study by the Healthforce Center at UC-San Francisco.

That means by 2030, the state is going to be in dire need of physicians. Studies show the state could be down by as many as 10,000 primary care clinicians, including nurse practitioners and physician assistants. Some areas — the Central Valley, Central Coast and Southern Border region — will be hit especially hard. So too will be remote rural and inner-city residents, communities of color, the elderly, those with mental illness or addiction, and those without health coverage.

Many people will be forced to wait longer for doctor visits, travel longer distances to see someone, and may become so discouraged they forego preventative care and even care for chronic, serious disease until emergency treatment is necessary.

The federal government’s Council on Graduate Medical Education recommends 60 to 80 primary care doctors per 100,000 people. Statewide in California, the number already is down to just 50 per 100,000 — and in some places it’s even lower:  down to 35 in the Inland Empire and 39 in the San Joaquin Valley, according to a report from The Future Health Workforce Commision.

Among the causes of the physician shortage:

  • High student loan debt induces medical students to go into specialty care, which pays more than primary care — currently only 36 percent of doctors provide primary care.
  • Low Medi-Cal reimbursement rates for primary care drive doctors away from low-income areas and primary care.
  • Even primary care physicians often shy away from rural areas, opting instead to practice in big cities near medical centers and specialists.
  • Medical school students don’t reflect the diversity of the state, which also influences where new doctors practice — and where they don’t.

UC Davis Medical School Dean of Admissions and Outreach Mark Henderson said his medical school is focused on trying to eliminate the shortage between Davis and the Oregon border.

At Davis, where there is a focus on primary and rural care, about half of graduates go into primary care. But at most other medical schools, that percentage is 20 to 30 percent and it’s not enough.

“We still don’t take enough students from (rural and underserved) communities that will have a deep desire to want to go back to the community,” Henderson said. “You have to take a different type of a student, you can’t take the same old usual suspect.”

New doctors “take these specialty areas that pay higher, and that leaves us with a shortage of primary care physicians including pediatricians, internists, family practice physicians and OB/GYNs,” said John Baackes, CEO of LA Care Health Plan, which has the largest number of Medi-Cal members in the state.

He said in rural areas, veteran doctors who are solo practitioners are having a hard time bringing in new doctors to take over.

“Young doctors are increasingly going to salaried positions” at institutions such as Kaiser, said Baackes.

In low-income areas, a different deterrent comes into play. Dismal Medi-Cal reimbursement rates  keep some students out of primary care and repels some primary medical graduates, said Elaine Batchlor, CEO of MLK Jr. Community Hospital in South Los Angeles.

“It’s difficult for physicians to support a practice in that environment and organized medical groups are not attracted to the community because of low (Medi-Cal) reimbursements,” she said.

The California Future Health Workforce Commission — made up of business, elected and health care leaders — released a report earlier this year warning of the looming shortage of health workers to meet the needs of the “growing, aging and increasingly diverse population.”

“If we’re looking to the future in a state where we have everyone covered, we can’t do it with the workforce we have and we are not doing it well now in many places,” said Assemblyman Jim Wood, a Santa Rosa Democrat who was part of the commission.

The commission found that already 7 million Californians live in federally designated Health Professional Shortage Areas because they lack primary care physicians, dentists and mental health professionals. Most are in the Inland Empire, part of Los Angeles, the San Joaquin Valley and in remote parts of the state, like where Dahle practices.

He tries to assist the next generation of providers: He takes physician-assistant trainees nearly year-round from the University of Iowa, where one of his former physician assistants runs a program.

“These guys are smarter than me already,” Dahle said. “Actually, we teach each other. We teach them the art of medicine and they teach me all the new science of medicine. It works out really good.”

The trainees live with Dahle in his log cabin on 160 acres just outside of town, down a 5-mile dirt road. His dog Clint, a Pyrenees he rescued, eagerly awaits him each afternoon.

Over the course of two recent days, Dahle treated patients with hyperthyroidism, migraines, diabetes, swollen lymph nodes, chronic ear infections, knee pain and constant nausea, and performed a skin biopsy to test for cancer.

Inevitably, country doctors have to be able to do more with less — and be willing to live far from urbanity.

“The younger generation of providers, they don’t have the clinical skills or know-how. They’re not trained the same as Dr. Dahle,” said Shannon Gerig, CEO of Mountain Valleys Health Centers, which operates seven centers across 6,000 square miles in the northern part of California including in Bieber, where Dahle is the lone doctor at that center. “It’s a scary thing for them to come out and be so remote, and know that they are going to be solo a lot, and they are going to be depended on by the mid-level staff…and they don’t have specialty (doctors) around them.”

Dahle has birthed thousands of babies, diagnosed cancers, done skin biopsies, assisted in minor surgeries, attended to patients on their deathbeds and occasionally rushed out into the forest or to a ranch to treat those whacked by a falling hay bale, a downed tree or a stubborn horse. He once finished a pelvic exam by flashflight because the power went out, did minor toe surgery in his office while taking direction from a surgeon on the phone, and jumped in a helicopter transport to accompany a patient with a broken neck enroute to a far-away trauma center.

He also works in the Fall River Mills’ emergency room one 24-hour shift a week, and makes hospital rounds first thing most days.

One recent morning, he greeted and joked with Wilma Chesbro, 88, who used to be an operating room scrub nurse with Dahle, and now is a patient in long-term care.

She grasped his hand, reminding him that when they first met decades ago she thought he was a “yokel” because he’s from a local town. But Chesbroe cried and lost her breath every time she tried to express just how much Dahle meant to her.

“He’s brilliant,” she said through her tears. “But he doesn’t show it. I have so much respect for him.”

Earlier this year he was named Country Doctor of the Year by AMN Healthcare, the largest health staffing agency in the country. The welcome sign to Bieber announces it has 510 residents; the health centers there cater to about 17,000 residents across several towns.

Much of the area is designated “frontier” by the federal government because so few people live there. Beiber has one motel, and passersby who blink might miss the Big Valley Market, where Dahle gets a maple bar for breakfast most days. Fields and ranches dot the wide-open valley, giving way to forests and rising peaks. The nearest Safeway grocery store is in Burney, 40 miles away. The isolation has made some prospective physicians make a U-turn and drive away, without ever stepping foot in the clinic for their scheduled interview. Many have told Dahle their spouse or partner saw the town and said “no way.”

Doc Dahle grew up in nearby Tulelake, the son of a potato farmer. He was drafted from college to Vietnam. Later he finished college at Oregon State, then was turned down for medical school there four times before he was accepted at the University of Rochester. When he graduated he returned to northern California to practice. His cousin is Brian Dahle, a GOP state senator who represents the area.

But Doc Dahle may just be the better known of the two. Thousands of  residents in these parts go out of their way to see him.

“Patients are fine waiting, because they know when they see Dr. Dahle he will take whatever amount of time he needs to talk with them, to get the care they need. I guess you’d call it old school,” said Gerig, who was Dahle’s patient before becoming his boss.

She began working as a registered nurse with Dahle 25 years ago, and he delivered her three babies via C-section. It seems everyone has a connection like that. At a local bar, a group of guys ticked off what Dahle has done for them — one called him a “lifesaver” for diagnosing a 99 percent carotid artery blockage.

This is why Dahle is fired up about finding his replacement. This is his “family,” he said.

He’s got his eye on a young doctor couple out of Davis. But there is one hitch. The local hospital in Fall River Mills, just about 25 miles up the road, closed its obstetrics unit, forcing pregnant women go at least a hundred miles to Redding or Shasta to deliver.

Unless the hospital reopens that wing, Dahle may not be able to land the couple despite their interest. The husband is in primary care and has already filled in at Dahle’s clinic, but the wife, who is from Fall River Mills, is training to be an OB-GYN.

“We’re not going to be able to recruit these homegrown kids to come back here without something changing,” said Dahle. “We have got to do this for our community.”

That’s the reason he’s sticking around, for the community and to work on bringing the couple back home.

“I love my job,” said Dahle, who is twice divorced, acknowledging it was always hard to stay married because he is wedded to medicine. “I have never regretted ever being a doctor.  Everyday I go to work and say that I help somebody.”

If he ever does retire, he plans to scuba dive, hunt rocks and travel.

But he’ll still probably have lunch on Tuesdays at the Roundup Bar, just like he does now for the hot dog special. Sometimes, if someone sees Dahle heading over, they’ll call the bar and buy Dahle’s beer.

“He’s a staple in our community. He holds us all together,” said bar owner Scott Johnson. “This is like his second office. He comes here and everyone gathers round and asks him questions to avoid a doctor visit.”

GOP, Dems Offer Compromise to Reduce Drug Costs for Seniors

Image result for GOP, Dems Offer Compromise to Reduce Drug Costs for Seniors imagesSource: The New York Times

Two veteran senators — a Republican and a Democrat — unveiled compromise legislation Tuesday to reduce prescription drug costs for millions of Medicare recipients, while saving money for federal and state health care programs serving seniors and low-income people.

Iowa Republican Chuck Grassley and Oregon Democrat Ron Wyden said the bill would for the first time limit drug copays for people with Medicare’s “Part D” prescription plan , by capping patients’ out-of-pocket costs at $3,100 a year starting in 2022. They’re hoping to have it ready soon for votes on the Senate floor.

The legislation would also require drugmakers to pay a price-hike penalty to Medicare if the cost of their medications goes up faster than inflation. Drugs purchased through a pharmacy as well as those administered in doctors’ offices would be covered by the new inflation rebates.

Political compromises over health care are rare these days. The bill reflects efforts by lawmakers of both parties to move beyond the rancorous debates over the Obama-era Affordable Care Act and focus on ways to lower costs for people with health insurance. Separate legislation to address “surprise medical bills” has already cleared the Senate Health, Education, Labor and Pensions committee.

The senators said preliminary estimates from the Congressional Budget Office show that the Medicare program would save $85 billion over 10 years, while seniors would save $27 billion in out-of-pocket costs over the same period, and $5 billion from slightly lower premiums. The government would save $15 billion from projected Medicaid costs.

CBO also projected that Medicare’s inflation rebate would have ripple effects, leading to prescription drug savings for private insurance plans sponsored by employers or purchased directly by consumers.

The senators announced a Thursday vote on the package by the Finance Committee, which oversees Medicare and Medicaid. Grassley is the panel’s chairman, while Wyden serves as the senior Democrat.

“Pharmaceutical companies play a vital role in creating new and innovative medicines that save and improve the quality of millions of American lives, but that doesn’t help Americans who can’t afford them,” Grassley and Wyden said in a joint statement. “This legislation shows that no industry is above accountability.”

The White House encouraged the Senate negotiations, and spokesman Judd Deere said the Trump administration stands ready to “work with senators to ensure this proposal moves forward and advances the president’s priority of lowering drug prices.”

Democrats controlling the House want to go farther by granting Medicare legal authority to directly negotiate prices with pharmaceutical companies. Direct negotiations are seen as a nonstarter in the Republican-controlled Senate, but the bill’s drug price inflation penalty may yet find support among Democrats in the House.

Grassley’s office said the bill will force drugmakers and insurers to take greater responsibility for keeping Medicare prescription prices in line, instead of foisting increases on taxpayers and beneficiaries.

The lack of a cap on out-of-pocket costs for Medicare’s popular prescription benefit has left some beneficiaries with bills rivaling a mortgage payment. That’s because with Medicare’s current protection for catastrophic costs, patients taking very expensive drugs are still responsible for 5% of the cost, with no dollar limit on what they pay. For example, 5% of a drug that costs $200,000 a year works out to $10,000.

The Grassley-Wyden bill does not directly address the problem of high launch prices for new medications, but its inflation rebates could put the brakes on price hikes for mainstay drugs such as insulin.

The bill drew a rebuke from the pharmaceutical industry, while AARP praised Grassley and Wyden.

Other provisions of the legislation would:

— Change an arcane Medicaid payment formula through which drugmakers can avoid paying rebates on certain drugs, depending on fluctuations in prices.

— Allow state Medicaid programs to pay for expensive gene therapy treatments on the installment plan, spreading out the costs over several years.

— Require drugmakers to provide public justification for new high cost drugs or steep hikes in the prices of existing medications.

— Require middlemen known as pharmacy benefit managers to disclose details of the discounts they are negotiating and how much they are passing on to consumers. The benefit managers negotiate with pharmaceutical companies on behalf of insurers and consumers.

— Provide doctors with new computer tools they can use to estimate out-of-pocket medication costs for patients with Medicare.

Doctor Alexa Will See You Now: Is Amazon Primed To Come To Your Rescue?

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Source: Kaiser Health News

Now that it’s upending the way you play music, cook, shop, hear the news and check the weather, the friendly voice emanating from your Amazon Alexa-enabled smart speaker is poised to wriggle its way into all things health care.

Amazon has big ambitions for its devices. It thinks Alexa, the virtual assistant inside them, could help doctors diagnose mental illness, autism, concussions and Parkinson’s disease. It even hopes Alexa will detect when you’re having a heart attack.

At present, Alexa can perform a handful of health care-related tasks: “She” can track blood glucose levels, describe symptoms, access post-surgical care instructions, monitor home prescription deliveries and make same-day appointments at the nearest urgent care center.

Amazon has partnered with numerous health care companies, including several in California, to let consumers and employees use Alexa for health care purposes. Workers at Cigna Corp. can manage their health improvement goals and earn wellness incentives with Alexa. And Alexa helps people who use Omron Healthcare’s blood pressure monitor, HeartGuide, track their readings.

But a flood of new opportunities are emerging since Alexa won permission to use protected patient health records controlled under the U.S. privacy law known as the Health Insurance Portability and Accountability Act (HIPAA).

Before, Alexa had been limited to providing generic responses about medical conditions. Now that it can transmit private patient information, Amazon has extended its Alexa Skills Kit, the software development tools used to add functions. Soon, the virtual assistant will be able to send and receive individualized patient records, allowing health care companies to create services for consumers to use at home.

Amazon’s efforts in this domain are important because, with its 100 million smart devices in use worldwide, it could radically change the way consumers get health information and even treatment — and not just tech-savvy consumers. Analysts expect 55% of U.S. households will have smart speakers by 2022.

Some of Alexa’s new skills depend on a little-understood feature of the devices: They listen to every sound around them. They have to in order to be ready to respond to a request, like “Alexa, how many tablespoons in a half-pint?” or “Put carrots on the shopping list.”

University of Washington researchers recently published a study in which they taught Alexa and two other devices — an iPhone 5s and a Samsung Galaxy S4 — to listen for so-called agonal breathing, the distinct gasping sounds that are an early warning sign in about half of all cardiac arrests. These devices correctly identified agonal breathing in 97% of instances, while registering a false positive only 0.2% of the time.

Earlier research had shown that a machine learning system could recognize cardiac arrest during 911 emergency calls more accurately and far faster than human dispatchers could.

Amazon, which declined to comment for this article, holds a patent on an acoustic technology that recognizes and could act on significant audio interruptions. Combined with patented technology from the University of Washington that differentiates coughs and sneezes from other background noises, for example, Alexa could discern when someone is ill and suggest solutions.

Because Amazon also holds patents on monitoring blood flow and heart ratethrough an Alexa-enabled camera, Alexa could send vitals to a doctor’s office before you head to your appointment and continue to monitor your condition after you get home.

“It opens possibilities to deliver care at a distance,” said Dr. Sandhya Pruthi, lead investigator for several breast cancer prevention trials at the Mayo Clinic, which has been on the front lines of using voice assistants in health care. “Think about people living in small towns who aren’t always getting access to care and knowing when to get health care,” she said. “Could this be an opportunity, if someone had symptoms, to say, ‘It’s time for this to get checked out’?”

A growing number of clinics, hospitals, home health care providers and insurers have begun experimenting with products using Alexa:

  • Livongo, a Mountain View, Calif.-based startup focused on managing chronic diseases, sells an Alexa-connected blood glucose monitor that can help diabetes patients track their condition.
  • Home health care provider Libertana Home Health, based in Sherman Oaks, Calif., created an Alexa skill that lets elderly or frail residents connect with caregivers, set up reminders about medications, report their weight and blood pressure, and schedule appointments.
  • Cedars-Sinai Medical Center in Los Angeles put Amazon devices loaded with a plug-in called Aiva into more than 100 rooms to connect patients with staff and to provide hands-free television controls. Unlike a static call button, the voice-controlled device can tell nurses why a patient needs help and can then tell the patient the status of their request.
  • Boston Children’s Hospital, which offered the first Alexa health care software with an educational tool called Kids MD, now uses Alexa to share post-surgical recovery data between a patient’s home and the hospital.

Many medical technology companies are tantalized by the possibilities offered by Alexa and similar technologies for an aging population. A wearable device could transmit information about falls or an uneven gait. Alexa could potentially combat loneliness. It is learning how to make conversation.

“Alexa can couple a practical interaction around health care with an interaction that can engage the patient, even delight the patient,” said elder care advocate Laurie Orlov.

It and other voice assistants might also help bring some relief to doctors and other medical practitioners who commonly complain that entering medical information into electronic health records is too time-consuming and detracts from effective interactions with patients.

This technology could work in the background to take notes on doctor-patient meetings, even suggesting possible treatments. Several startup companies are working on such applications.

One such company is Suki, based in Redwood City, Calif., which bills itself as “Alexa for doctors.” Its artificial intelligence software listens in on interactions between doctors and patients to write up medical notes automatically.

Amazon devices will need to excel at conversational artificial intelligence, capable of relating an earlier phrase to a subsequent one, if it is to remain dominant in homes.

In a 2018 interview on Amazon’s corporate blog, Rohit Prasad, a company vice president who is head scientist for Amazon Alexa, described Alexa’s anticipated evolution using “federated learning” that lets algorithms make themselves smarter by incorporating input from a wide variety of sources.

“With these advances, we will see Alexa become more contextually aware in how she recognizes, understands and responds to requests from users,” Prasad said.

Medical Group Deals Face Growing Antitrust Scrutiny as Price Worries Rise

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Recent actions by antitrust enforcers and courts to block or regulate purchases of physician practices by hospitals and insurers may signal increasing scrutiny for such deals as policymakers intensify their focus on boosting competition to reduce healthcare prices.

Last month, the Federal Trade Commission announced a settlement with UnitedHealth Group and DaVita unwinding United’s acquisition of DaVita Medical Group’s Las Vegas operations.

At the same time, Colorado Attorney General Phil Weiser separately reached a deal imposing conditions on UnitedHealth’s acquisition of DaVita’s physician groups in Colorado Springs.

Also in June, the 8th U.S. Circuit Court of Appeals upheld a District Court ruling blocking Sanford Health’s proposed 2015 acquisition of the multispecialty Mid Dakota Clinic in the Bismarck, N.D., area. That antitrust case originally was filed by the FTC and North Dakota Attorney General Wayne Stenehjem in 2017.

And in May, Washington Attorney General Bob Ferguson settled an antitrust lawsuit with CHI Franciscan setting conditions on the health system’s 2016 affiliation with the Doctors Clinic, a multispecialty group, and its purchase of WestSound Orthopaedics, both in Kitsap County. CHI Franciscan will pay up to $2.5 million, distributed to other healthcare organizations to increase access to care.

The cases represent the most significant antitrust developments involving physician acquisitions since federal and state antitrust enforcers won a 9th U.S. Circuit Court of Appeals ruling in 2015 upholding a lower-court decision forcing Idaho’s St. Luke’s Health System to unwind its 2012 acquisition of Saltzer Medical Group.

The agreements with UnitedHealth in Nevada and Colorado show a new willingness by federal and state antitrust enforcers to use seldom-cited vertical merger theory. Under that theory, acquisitions of physician groups by insurers or hospitals may foreclose competition by making it more difficult or costly for rivals to obtain physician services.

“I am concerned about the state of consolidation,” Weiser said in an interview. “Healthcare costs in Colorado have risen at an alarming rate. Protecting competition needs to be a central part of our strategy to provide affordable and quality healthcare.”

These recent antitrust actions come as concerns mount over the growing consolidation of hospitals and physician practices and the impact on prices and total health spending. Sixty-five percent of metropolitan statistical areas are highly concentrated for specialist physicians, while 39% are highly concentrated for primary-care doctors, according to Martin Gaynor, a health economist at Carnegie Mellon University.

Hospital acquisitions of physician practices have led to higher prices and health spending, researchers have found. Average outpatient physician prices in 2014 ranged from 35% to 63% higher, depending on physician specialty, in highly concentrated California markets compared with less-concentrated markets, according to a 2018 study by researchers at the University of California at Berkeley. The link between physician market concentration and prices is similar across the country, experts say.

That’s why some elected officials and antitrust attorneys say it’s past time to step up oversight of physician practice acquisitions by hospitals, insurers and private-equity firms. These deals traditionally have received less scrutiny than hospital and insurance mergers, partly because they are smaller transactions that federal and state antitrust enforcement agencies may not have known about beforehand.

The recent cases suggest state attorneys general may play a growing role in policing physician acquisition deals by hospitals and insurers, given that they are in a better position than the feds to find out about brewing local deals. Most of the growth in physician group size has come from piecemeal acquisitions of small group practices, a Health Affairs study found last year.

Washington and at least two other states have passed laws requiring healthcare providers to give state officials advance notice before finalizing a merger or acquisition. That gives state AGs another advantage over the FTC, which under federal rules only must receive advance notice of deals exceeding $78.2 million in value. Few physician acquisitions meet that threshold.

Others worry, however, that the absence of clear federal guidelines for challenging vertical mergers between hospitals and physicians has made the FTC and the courts overly cautious, and that it now may be too late because many physician markets are already highly concentrated. In March, the FTC and the Justice Department said they were working on new vertical merger guidelines, which were last updated in 1984.

“The horse may be out of the barn in a number of markets where there have been very large acquisitions of physician practices,” said Tim Greaney, a visiting professor at the University of California Hastings College of Law. “It’s not clear what you can do about that.”

But hospitals, insurers and other physician aggregators argue that making it harder to buy physician groups would hamper their ability to establish cost-saving, high-quality delivery models emphasizing care coordination.

That’s how Sanford Bismarck President Dr. Michael LeBeau responded to last month’s 8th Circuit ruling against his organization’s merger with Mid Dakota Clinic. “Sanford continues to believe that combining with Mid Dakota Clinic would lead to the enhanced provision of and access to healthcare for patients in central and western North Dakota,” he said in a written statement.

Researchers have raised doubts, however, about whether hospital acquisitions of medical practices have truly achieved efficiencies and cost savings, and whether any cost savings have been passed on to payers and patients.

Going forward, hospitals, insurers and other healthcare organizations need to prepare themselves for an era of closer state and federal examination of physician acquisition deals, antitrust experts agree. That also may apply to private-equity firms, which have accelerated their investment in physician groups and have sought to build market power in particular specialties.

The FTC did not respond to requests for an interview.

Healthcare organizations pursuing physician deals must be ready to cite circumstances where competition continues to thrive following a merger. But that may not be easy, conceded Lisa Gingerich, an antitrust attorney at Michael Best & Friedrich.

“The challenge now is there has been so much consolidation that it’s harder and harder to find those circumstances,” she said.

Scaling back integration in Nevada and Colorado

The UnitedHealth Group-DaVita case may present the clearest warning shot to organizations contemplating large physician acquisitions, attracting both federal and state attention.

The FTC argued that the proposed acquisition by United’s OptumCare of DaVita’s HealthCare Partners of Nevada would result in a near-monopoly controlling more than 80% of the market for services delivered by managed-care provider organizations to Medicare Advantage plans.

The merger would be both horizontal—combining OptumCare’s and DaVita’s competing physician groups—and vertical, as it would combine a Medicare Advantage insurer and a physician group. That, the FTC said, would increase costs and decrease competition on quality, services and amenities by forcing rival Medicare Advantage plans to pay more for physician services.

Under the FTC settlement, UnitedHealth agreed to sell DaVita’s Nevada medical group to Intermountain Healthcare, which offers a Medicare Advantage product in Las Vegas through its SelectHealth insurance arm.

Colorado’s terms

Meanwhile, under a separate consent judgment with Attorney General Phil Weiser in Colorado, UnitedHealth will lift its exclusive contract with Centura Health for at least 31/2 years, expanding the provider network available to other Medicare Advantage plans. In addition, DaVita Medical Group’s agreement with Humana, United’s main competitor in Colorado Springs, will be extended through at least 2020.

All four FTC commissioners approved the enforcement action in Nevada. But the two Republican-appointed commissioners and the two Democratic-appointed commissioners disagreed on whether to ask a judge to block United’s acquisition of DaVita’s medical group in Colorado, a purely vertical merger. The 2-2 split meant no federal action was taken.

The Democratic commissioners. Rebecca Kelly Slaughter and Rohit Chopra, said the merger would harm competition and consumers, and welcomed the Colorado attorney general’s remedial conditions. “We hope all state attorneys general actively enforce the antitrust laws to protect their residents from harmful mergers and anticompetitive practices,” they wrote.

But the Republican commissioners, Noah Joshua Phillips and Christine Wilson, opposed action in Colorado on the grounds that the law on vertical mergers is “relatively underdeveloped” and that there was mixed evidence on whether the Colorado merger was pro- or anti-competitive.

Weiser said his office had to intervene to protect the ability of Humana and other Medicare Advantage insurers to compete with United by having access to physicians and hospitals. “State attorneys general will be a critical part of protecting competition, both because we’re close to our citizens and because of a lack of action by the federal government,” he said.

To other observers, the Nevada and Colorado agreements were notable because they invoked seldom-used vertical merger theory, which the FTC has been reluctant to use because it generally saw vertical mergers as helping reduce costs and increase competition.

“This shows that in the proper case, the FTC won’t hesitate to pursue vertical theory to reverse the course of” a physician group acquisition, said Douglas Ross, a veteran antitrust attorney at Davis Wright Tremaine in Seattle.


A muddier outcome in Washington state

Washington Attorney General Bob Ferguson’s settlement of his antitrust case against CHI Franciscan was less definitive than the outcomes in the other recent cases.

He had accused the hospital system of engineering the purchase of WestSound Orthopaedics and the affiliation with the Doctors Clinic to capture a large share of orthopedists and other physicians in Kitsap County, fix prices at a higher level, and shift more services to its Harrison Medical Center in Bremerton. But the settlement left in place CHI Franciscan’s purchase of WestSound and its tight professional services agreement with the Doctors Clinic, while placing relatively modest conditions on joint contracting by the hospital system and the clinic.

Ferguson’s bargaining position was weakened by a federal District Court decision in March granting CHI Franciscan’s motion to summarily dismiss his allegation that the acquisition of WestSound reduced competition and violated antitrust law. That may be the first time since the 1990s that a defendant won summary judgment on a horizontal merger claim in an antitrust case, one expert said.

In addition, the judge required the parties to go to trial on whether the transaction between CHI Franciscan and the Doctors Clinic was a true merger, as the two organizations claimed, or whether they remained two competing provider groups. If Ferguson lost on that issue, his antitrust case would be dead because a merged entity cannot be cited for price-fixing.

The attorney general settled that claim with CHI Franciscan and the clinic by requiring a $2.5 million payment to other healthcare providers and expanding the types of value-based contracts they could participate in. But the two sides differed sharply in their characterization of the settlement.

“This was a matter where we identified anticompetitive effects and ongoing harm to consumers and saw a need to act quickly,” said Jonathan Mark, senior assistant attorney general in Washington. “We believe the remedies in the consent decree are sufficient to address the anticompetitive effects we alleged.”

For its part, CHI Franciscan said there never was any court judgment or admission that it engaged in anticompetitive conduct, noting that the settlement preserved its deals with WestSound and the Doctors Clinic. It was particularly important for hospitals all over the country that Ferguson failed to establish that a professional services agreement with a physician group constituted price-fixing, an attorney for the hospital system said.

“The AG lost this lawsuit and is now twisting the facts to match his baseless allegations,” said Cary Evans, the hospital system’s vice president for government affairs. “Had we not affiliated, the closing of the Doctors Clinic and WestSound would have resulted in less choice, decreased access, and high costs for residents.”

A classic example in North Dakota

The outcome in the North Dakota case was more conventional than the others.

There, the 8th U.S. Circuit Court of Appeals affirmed the District Court’s preliminary injunction blocking Sanford Health’s acquisition of Mid Dakota Clinic as a horizontal merger.

That was fairly predictable because of the huge physician market share Sanford—whose physician group competed with the clinic—would capture if it completed the deal, experts said.

Sanford would control 99.8% of general surgeon services, 98.6% of pediatric services, 85.7% of adult primary-care services, and 84.6% of OB-GYN services in the Bismarck-Mandan market, the 8th Circuit panel found.

The appeals court also upheld the lower court’s finding that a competitor, Catholic Health Initiatives’ St. Alexius Health, would not be able to enter the market quickly after the merger, at least partly because it faced difficulty recruiting physicians in the Bismarck-Mandan area.

“That case really seemed like a no-brainer to me,” said Tim Greaney, a visiting professor at the University of California Hastings College of Law.

A key takeaway was the 8th Circuit’s rejection of Sanford’s “powerful buyer” defense. Sanford had argued that Blue Cross and Blue Shield of North Dakota, the state’s dominant insurer, had enough market power to resist any price increases sought by the newly merged entity.

But analysis of claims data and testimony by a Blues plan representative demonstrated that the merged provider would have the market power to force the insurer to raise prices or leave the market, the 8th Circuit panel wrote.

“If antitrust authorities see someone getting more bargaining power and being able to charge higher prices, that’s something they’ll worry about, even if the (payer) has significant bargaining power as well,” said Debbie Feinstein, a former top Federal Trade Commission official who heads Arnold & Porter’s global antitrust group.

Sanford didn’t say whether it planned to abandon the deal.

Broker Comp Disclosure Bill Flies Through Senate CommitteeBroker Comp Disclosure Bill Flies Through Senate Committee

Image result for Broker Comp Disclosure Bill Flies Through Senate Committee images

Source: BenefitsPRO

Members of the U.S. Senate Health, Education, Labor and Pensions (HELP) Committee voted 20-3 to support S. 1895 — a health care cost bill that includes a health insurance producer compensation disclosure provision.

The provision, Section 308, would require agents, brokers and consultants in the group market to send detailed compensation disclosure statements to plan sponsors. The provision would require health insurers to take charge of sending policyholders producer compensation statements in the individual market.

S. 1895 includes many provisions that would affect drug price disclosures and health care services price disclosure, especially for patients who are seeking emergency care, or ordinary care at in-network hospitals, and may be at risk of having to pay out-of-network prices.

The most visible opposition to the bill from parties other than health insurance producers and producer groups has come from providers of emergency medical services.

The only committee members to vote against the bill today were Sen. Rand Paul, a Kentucky Republican, and Elizabeth Warren and Bernie Sanders.

Warren is a Democrat from Massachusetts who is running for president.

Sanders is an independent from Vermont who’s running for president.

Rand — a board-certified ophthalmologist — blasted many provisions, and especially provisions that were included in an effort to keep insured patients seeking medical services from getting “surprise medical bills.”

The current version of the bill could, in some situations, require providers at a hospital that’s in an insured patient’s provider network to provide care at an in-network rate, even if the provider is not in the patient’s health plan network.

Rand said the provision would have a much broader effect than drafters expect.

“This is going to affect hundreds and hundreds of thousands of transactions,” Paul said.

Rand called the provision a form of cost control.

“If you fix the price that emergency room doctors work at, you will get a shortage,” Rand said.

Rand said drafters should replace the provision with efforts to improve health savings accounts and to give patients new ways to join together to negotiate for lower prices.

Health Agents for America (HAFA), a group that’s been fighting S. 1895, said in an alert sent to members that the committee vote in favor of the bill is “a bump in the road.”

“Don’t give up,” HAFA told its members.

HAFA said Sen. Lamar Alexander, R-Tenn., the chairman of the Senate HELP Committee, wants to have S. 1985 on the Senate floor by the end of July.

“Time to lobby the entire Senate and look for friends of our industry,” HAFA said in the alert. “Please ask other associations to step up.”

New Trump Order May Make More Health Care Prices Public

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Source: New York Times

The White House released an executive order Monday afternoon intended to require insurance companies, doctors and hospitals to give patients more information about precisely what their care will cost before they get it.

President Trump announced the new policy at a signing event, flanked by doctors and patients who had been hit by unexpected medical bills. The event came a week after the official launch of his re-election campaign, and it allows the president to make a claim that he is pursuing a far-reaching health reform plan, his answer to voter concerns about the high costs of care.

“We’re taking power away from bureaucrats, we’re taking it away from insurance companies and away from special interests, we’re giving that power back to patients,” he said, adding that the proposal would bring health care costs “way, way down.”

“We’re taking one more giant step towards a heath care system that is really fantastic.”

Mr. Trump was elected on a promise to repeal the Affordable Care Act, and he has continued to suggest that a plan to repeal the 2010 health law is around the corner, even after Republicans failed to pass several replacement bills in 2017. His attorney general is arguing in court that the entire law should be invalidated. But at Monday’s event, he sounded a more conciliatory note and said he had instructed the Health and Human Services secretary, Alex M. Azar II, to do “a great job” administering the Affordable Care Act.

The transparency order could upend the traditional business practices of major players in the health care industry by revealing price negotiations that have typically been kept secret. Insurers and medical providers negotiate discounted prices in private, and neither party wants competitors to know the details of the deals they’ve struck. The result is a market that can be opaque, with consumers frequently shocked at the prices of their care. President Trump and Mr. Azar say patients could avoid such unpleasant surprises if they could find out the cost of medical services in advance.

But the wording of the order, which delegates the details to regulators, also leaves ample room for modest forms of transparency that might rankle industry officials less.

There had already been strong pushback by industry groups over any proposal that would have forced them to detail all of their negotiated prices. Exactly what information hospitals and insurers will have to disclose is not specified in the executive order, which has no force of law on its own. White House officials said the details would be worked out during the rule-making process.

“It could have been much more aggressive,” said Paul Keckley, a health policy analyst and managing editor of the Keckley Report. “This reflects a lot of behind-the-scenes work by the trade groups.”

Hospitals and insurers have both argued that forcing them to disclose negotiated prices could distort rather than improve existing markets for health care. Many economists have raised similar concerns. “We would be very much opposed to disclosure of privately negotiated rates,” said Tom Nickels, an executive vice president at the American Hospital Association, in an interview before the executive order was issued.

Forcing the hospitals and insurers to disclose their agreements “has a chilling effect on negotiation — it could create a race to the top,” he said.

In an interview after the president issued the order, Mr. Nickels said the decision to go through rule making was “a positive move,” indicating that the administration was listening to concerns from the industry and others. “They have clearly invited or encouraged stakeholders to weigh in,” he said


The president became interested in the issue after hearing stories from patients whose finances were upended by high medical bills. And he sold the idea in populist terms, saying that increased transparency could help protect patients from a predatory health industry. He has also called for legislation to ban so-called surprise medical bills, when patients receive care from a doctor in the hospital who is not covered by their insurance; Congress is moving to answer that call.

Administration officials say they believe the order could result in substantial decreases in the cost of medical care. “Prices will go down, and patients will win,” Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, said in an interview. Ms. Verma emphasized that the order “specifically mentions negotiated rates,” rejecting criticism that the order was watered down.

The executive order will follow earlier administration actions to improve the transparency of health pricing data, including new requirements that drug companies disclose their list prices in consumer advertisements and that hospitals publish on their websites the prices they charge uninsured patients. (The drug companies are fighting the advertising rule in court.)

The data described in the executive order is different from hospital list prices made public earlier this year. Currently, hospitals must disclose what they charge, which represents the price they would like to receive.

But the executive order asks for disclosure of the actual prices insurance companies have agreed to pay health care providers for care. In many cases, patients themselves don’t pay that amount directly. But as health plans with high deductibles have become more common, more patients must pay these negotiated prices until their insurance kicks in.

Hospital executives say making information about how much the insurer pays for the care will not help people figure out how much they may owe. Requiring hospitals to disclose what they are paid by individual insurers would require an “incredible lift,” said Chip Kahn, the chief executive of the Federation of American Hospitals, which represents investor-owned systems. The executive order calls for patients to also get an estimate of their out-of-pocket costs before they get care.

It remains unclear how far the administration will go in making negotiated prices public. A senior administration official said that whether patients would have access to a full database of specific prices or something closer to a range of prices would be decided during the regulatory process. But both insurers and hospitals have objected to having what they describe as proprietary information made public, and they are expected to mount legal challenges to any mandated disclosure. In Ohio, a state law requiring price transparency remains mired in the courts two years after its passage.

How successful the administration will be may depend on what legal authority it can claim to make the changes. “No one should get credit for doing this until it gets done,” said Frederick Isasi, the executive director for Families USA, a consumer group.

The order will also ask government agencies to simplify the system of measuring and publicly reporting the quality of care provided by hospitals, doctors and others, enabling patients to more easily compare the performance of different doctors and hospitals alongside their prices.

Enthusiasts for greater price transparency say that making cost information public could increase market — and social — pressure on health care providers to lower prices. Some patients might be able to use the information to shop for their own care, when seeking a blood test or an X-ray, for example.

“I really firmly believe that once we get this transparency in place, the dominoes will fall for better quality, better price and better access,” said Cynthia Fisher, a health care entrepreneur and the founder of the group Patient Rights Advocate, who became interested in the issue after learning about friends and acquaintances who were harmed by high medical bills. Her group has produced videos of their stories, which the president has watched.

But others are more skeptical about whether pricing information alone will drive down overall costs. “Despite the tremendous bipartisan enthusiasm for the idea, price transparency has unfortunately not achieved the promise of helping patients price-shop or save money,” said Dr. Ateev Mehrotra, an associate professor at Harvard Medical School, who has studied earlier experiments.

Government officials also hope the data will be useful to employers, who typically rely on insurance companies to arrange their benefits without knowing all the details of the deals those insurance companies have cut. Even large employers with many workers have said that their insurance contracts have made it hard for them to see detailed pricing information or to be able to steer their workers to doctors and hospitals that are of high quality but cost less.

“The purchaser community has been pushing for transparency for years,” said Michael Thompson, the chief executive of the National Alliance of Healthcare Purchaser Coalitions, who praised the president’s actions. “The lack of transparency is a root cause of higher health care costs.”

Poll: 1 in 4 Americans Say Cost Led to Skipping Medical Care

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Source: The Hill

More than 1 in 4 Americans say they or a family member went without needed health care in the past two years because they felt they could not afford it, according to a new poll.

The survey from Monmouth University released Monday finds that 27 percent of adults say they or a member of their household have avoided necessary medical care in the past two years because of cost. That figure is down slightly from 2017, when 31 percent said they had skipped care.

In addition, 45 percent of the public says it is difficult to pay their deductibles and other out-of-pocket health care expenses.

Relieving the burden of health care costs has been a major driver of the debate over “Medicare for All,” with proponents saying that generous government-run insurance is needed to make health care affordable for more people, while opponents argue there are other, more market-based ways to bring down health costs while building on the current system.

Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) are currently working on a bipartisan package aimed at lowering health care costs, including protecting patients from surprise medical bills that they get when a doctor is outside their insurance network.

The poll finds that 20 percent of adults say they have thought about getting a new job or starting a business in the past 10 years but did not pursue it because of the need to maintain their health coverage.

Proponents of Medicare for All say that reducing this “job lock,” or the need to stay in a job to keep the employer-provided health insurance, is a benefit of government-run insurance. Opponents say people often like their employer-sponsored coverage and do not want to be forced to give it up.

California Names Former Google Scientist as the State’s ‘Mental Health Czar’

Image result for California Names Former Google Scientist as the State’s ‘Mental Health Czar’ images

Source: Stat

Noted psychiatrist and former Verily leader Dr. Tom Insel is going to be the “mental health czar” for the state of California, Democratic Gov. Gavin Newsom announced Tuesday.

Insel, the former National Institute of Mental Health director, will also continue his work with Mindstrong, a startup that is working on a mental health app, a company spokesperson confirmed. Insel joined the company in 2017 after leaving Verily, Google’s life sciences arm.

Insel’s new job will be to “inform the state’s work as California builds the mental health system of tomorrow, serving people whether they are living in the community, on the streets or if they are in jails, schools or shelters,” according to a press release from the governor’s office.

In a press conference, Newsom said Insel was “volunteering” his time as an adviser. “I’m calling him the mental health czar in the state of California,” he said.

Mindstrong, which is focused on using data on how people use their smartphone to detect trends in their mental health, already has a relationship with public officials in California. One of Mindstrong’s first large-scale rollouts was slated to happen in the state through county-level public mental health systems, STAT reported in October.

A spokesperson for Mindstrong said that Insel would recuse himself from conversations about the company, and noted that he will have “no fiscal or regulatory authority and will have no oversight of current programs in this voluntary role.”

The spokespeople for Newsom and for California Health and Human Services Secretary Mark Ghaly, with whom Insel will be working, did not immediately reply to a request for comment.

Mindstrong raised $31 million in an expanded Series B round in January led by General Catalyst, bringing the company’s total funding to about than $60 million.

“Our excitement over Mindstrong’s technology is bolstered by our inspiration in the core founding team,” an associate and the managing partner of General Catalyst wrote in a blog post in January about the investment.

In Its Fight to Keep Drug Prices High, Big Pharma Leans on Charities

Image result for In Its Fight to Keep Drug Prices High, Big Pharma Leans on Charities images

Source: Los Angeles Times

The U.S. Rural Health Network has a slogan on its website that seems obvious: “We’re fighting for rural health.” But it’s not that simple.

The 2-year-old nonprofit organization hasn’t had much impact in rural health circles, where experts say they’ve never heard of it. It’s also active in a different area: fighting proposals that would cut the cost of prescription drugs. This year, it joined scores of other groups to oppose letting Medicare negotiate prices with drugmakers.

The network, which declines to disclose who funds its work, is part of a gaggle of self-styled patient-advocacy groups with murky origins or hidden funders that have cropped up since 2017. With names like the Doctor-Patient Rights Project or the Defenders Coalition, such groups pursue various policy aims that include effectively aiding pharmaceutical companies’ efforts to defeat drug-price proposals.

The nonprofits take public positions in newspaper op-eds and letters to Congress while drugmakers — beset by years of negative publicity over price hikes — tend to remain in the background. The groups say they’re independent.

That’s not true for all of them, said Marc Boutin, the chief executive of the National Health Council, which has more than 50 patient groups and dozens of drugmakers as members.

“There are a number of groups created by pharma companies that look and act like patient organizations, but they’re 100 percent funded by industry,” said Boutin, who didn’t name any specific examples. “They sound and look like patient organizations, but they take positions that industry wants.”

Boutin said he’s trying to dissuade pharma companies from getting involved in such efforts.

These newer nonprofits often join issue-oriented coalitions alongside established, bona fide patient groups, amplifying their message. Some experts fear they provide a way for drugmakers to influence policy without any disclosure of such efforts.

Typically, the newer groups are created and operated by public-relations or marketing firms with extensive ties to the pharmaceutical industry. They generally refuse to discuss their funding, but Bloomberg News documented that at least one got its seed money from Amgen Inc., whose most lucrative drug, the arthritis medicine Enbrel, has tripled in price since 2010, according to data from IBM Watson Health.

While its funding is unclear, the U.S. Rural Health Network has an illustrative origin story.

It was registered in 2017 by the general counsel of Moore Communications, a Tallahassee, Fla.-based marketing firm. Moore Communications has worked for the drugmakers’ industry group, Pharmaceutical Research and Manufacturers of America, or PhRMA, since at least 2001, including on a national ad campaign in 2014. The firm has also built websites for at least three other patient-focused groups with opaque industry connections.

The rural-health network is a family affair. Its executive director is the sister of Karen Moore, Moore Communications’ chief executive. One of the group’s directors is the mother of a Moore Communications vice president. And the lawyer who registered it is Richard Moore, Karen’s husband and the marketing firm’s general counsel.

The charity’s headquarters, located behind an unmarked door in a building owned by Richard and Karen Moore, was locked on a recent weekday morning.

Across a parking lot, in Moore Communications’ corporate office, Richard Moore described the nonprofit as separate from the marketing company and said he helped launch the organization because “we saw a particular need regarding health issues with rural areas of the country.”

(Four directors of other rural health centers say they’ve never heard of the group. “I don’t know anything about them,” said Alan Morgan, CEO of the 21,000-member National Rural Health Assn., which holds the nation’s largest annual conference on rural health issues.)

Asked to name the nonprofit’s funders, Richard Moore said he’d have to ask some colleagues for the information. Neither the nonprofit nor the marketing firm responded to follow-up requests, but Cheryl Elias, the Rural Health Network’s executive director, said in a written statement that the group takes its positions “independent of outside influence.”

A spokesman for PhRMA, the drugmakers’ industry group, declined to say whether it has funded the nonprofit.

Nonprofits aren’t required to publicly disclose their donors. Some pharmaceutical companies voluntarily disclose at least some of their funding for patient groups, but the full scope of their giving is far from transparent.

Even among long-established patient organizations — founded years ago to address specific diseases or conditions — disclosure is spotty. Matthew McCoy, a University of Pennsylvania professor who teaches medical ethics, found in a 2017 study of 104 patient-advocacy groups that 83% reported receiving money from drugmakers, but only 5% disclosed the exact dollar amounts.

Kaiser Health News reported last year that 14 major drug companies gave a combined $116 million to patient groups in 2015, far more than the $63 million they spent on federal lobbying.

Much of that money benefits disease sufferers or society at large. Patient groups run support networks for those who’ve received life-altering diagnoses. Some support research to develop new treatments for particular diseases. They also create communities of patients from whom drug companies can learn more about particular ailments and how treatments affect people.

But those communities are also stocked with potential policy advocates. And with no disclosure requirements, it’s often impossible to know whether drugmakers’ contributions are shaping the patient groups’ policy stances, said Susannah Rose, associate chief of patient experience at the Cleveland Clinic.

“We need much greater transparency, not only in funding, but also how the money is used,” Rose said.

Long-established groups bristle at the suggestion that the drug industry sways their positions. “There are times when what’s best for the patient aligns with what industry wants,” said Claire Gill, chief mission officer for the 35-year-old National Osteoporosis Foundation. “And there are times when it doesn’t.”

With regard to Medicare and drug prices, the foundation recently aligned with the industry in an unusual way.

In 2017, the group began running an informal coalition called the Protect Medicare Part D Working Group. It organized a January letter that called on Congress to reject plans for letting Medicare negotiate on drug prices; some 200 organizations signed it, including the U.S. Rural Health Network.

The negotiation issue has a tortuous history. When Medicare was expanded to cover prescription drugs in 2003, it became the single-biggest buyer of medicines in the U.S. But while other federal agencies, such as the Department of Veterans Affairs, can use their market clout to seek better deals on drug prices, Congress prohibited Medicare from doing so. Instead, the scores of private insurance providers that offer Medicare plans are left to negotiate individually with drugmakers, with significantly less power.

Now several Democrats, including Sen. Amy Klobuchar of Minnesota, have proposed legislation to let the sprawling health program bargain on behalf of its 43 million beneficiaries.

Gill said the osteoporosis foundation took a leadership role in opposing that plan—not because of any drugmakers’ contributions, but rather the fear that such legislation would eventually force Medicare to cut its coverage of certain high-priced drugs, including some needed by osteoporosis patients. (The foundation gets about $1 million a year, or 20% of its budget, from drugmakers.)

“We support lower prices, but we want to make sure that whatever is proposed actually makes the system better,” Gill said.

Klobuchar’s proposal doesn’t get to that level of detail, but the group’s concern stems from previous research: The Congressional Budget Office has said that Medicare negotiations would yield significant savings only if the program is given the authority to restrict coverage of certain medicines.

Lobbyists with pharmaceutical industry ties have worked behind the scenes with the Medicare Part D Working Group as it attempts to transition to a new, catchier name: the Defenders Coalition. The osteoporosis foundation won’t be running the new version. Instead, initial work on the changeover was done by a Washington-based lobbying firm called NVG Group, which has worked recently for drugmakers such as Merck & Co. Inc., Sanofi and Pfizer Inc., as well as the trade group PhRMA.

The transition also got an assist from lobbyist and former Democratic Sen. Blanche Lincoln. According to a written summary of a January conference call, Lincoln urged members to stick with the coalition and keep fighting “drastic changes” to Medicare. Her company, Lincoln Policy Group, has worked for drugmakers, including AbbVie Inc. and Pfizer, as well as insurers such as Aetna Inc.

Were the lobbying firms paid to help organize the coalition?

“You’d have to ask them,” Gill said of the osteoporosis foundation.

Irene Bueno, a co-founder of NVG, said in an email that her firm is no longer involved in the effort; she didn’t answer questions about who funded her work. Lincoln Policy Group didn’t respond to several telephone calls and emails seeking comment.

The coalition’s January letter against Medicare negotiations appears to have benefited in part from a bandwagon effect. One patient group that signed it was the National LGBT Cancer Project — though its director said in an interview that he really doesn’t know enough about the issue to form an opinion on it. Darryl Mitteldorf, who runs the cancer-patient support group under an umbrella organization called Malecare, said he gets an avalanche of requests to sign policy letters, so he’ll sometimes sign on if he sees other groups he trusts.

Drug companies supply about half of Malecare’s annual operating budget of $209,000, and Mitteldorf calls them “heroes” — “they make the molecules that save lives” — but he’s wary of their influence all the same. He said he turns down drugmakers’ money when their agenda doesn’t fit his organization’s mission, but not every group does that.

“It’s no surprise who’s going to get a favorable response to a grant proposal,” Mitteldorf said, “if you’re licking the boot of pharma.”

Another patient group that popped up in 2017 shows how one pharmaceutical company tried to downplay its involvement.

The Doctor-Patient Rights Project lists 18 members — including the U.S. Rural Health Network and the drugmaker Amgen — and describes itself as a “nonprofit coalition of doctors, patients, caregivers, companies and advocates.” It publishes detailed policy papers and places scores of op-eds in newspapers around the country, mostly criticizing insurance companies for interjecting themselves into medical decisions and steering patients to cheaper therapies.

The group’s website provides scant clues about who operates and funds the coalition — no names or addresses — but there is a phone number. It goes to a voicemail account that doesn’t give a name. After Bloomberg News left a message, a person who called himself “Eli” responded via email and said the group is funded by “private companies, grants, educational institutions and non-profit organizations.” He didn’t reply to a request for actual names.

“DPRP was founded on the idea that medical decision-making should be based on science, not economics,” said Dr. Theresa Rohr-Kirchgraber, a member of the group, in an emailed statement. “The idea that any single entity unduly influences our agenda is categorically false,” said Rohr-Kirchgraber, a past president of the American Medical Women’s Assn.

An Amgen spokeswoman described an organic beginning for the group. The company heard from physicians and patient groups about people who were unable to get the medicines their doctors prescribed, she said.

“As a result, Amgen and other founding members … came together to address the importance of the physician and patient relationship,” she said in a written statement. These founding members, Amgen said, agreed to select a public-relations agency to run the coalition.

But that’s not exactly how it happened. In reality, the Doctor-Patient Rights Project began after a New York-based public-affairs firm called Marathon Strategies pitched the idea to Amgen, according to two people familiar with the group’s beginnings.

Amgen put up the initial money, while Marathon helped recruit other members, built the website, wrote the reports and placed the op-eds in newspapers. The marketing company declined to comment.

Questioned about this timeline, Amgen provided an updated statement, saying the company — and not the coalition’s member groups — selected Marathon based on their past relationship. It added that while Amgen provided the “seed money” to launch the group, other groups and companies have contributed since.

It declined to name them.

Last Updated 09/12/2019

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