Despite Criticism and Concerns, FDA Approves A New Opioid 10 Times More Powerful than Fentanyl

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Source: STAT

In a highly controversial move, the Food and Drug Administration approved an especially powerful opioid painkiller despite criticism that the medicine could be a “danger” to public health. And in doing so, the agency addressed wider regulatory thinking for endorsing such a medicine amid nationwide angst about overdoses and deaths attributed to opioids.

The drug is called Dsuvia, which is a tablet version of an opioid marketed for intravenous delivery, but is administered under the tongue using a specially developed, single-dose applicator. These “unique features” make the medicine well-suited for the military and therefore was a priority for the Pentagon, a point that factored heavily into the decision, according to FDA Commissioner Scott Gottlieb.

Although an FDA advisory committee last month recommended approval, the agency was urged by critics not to endorse the drug because it is 10 times more powerful than fentanyl, a highly addictive opioid. Among those who opposed approval were four U.S. senators and the FDA advisory panel chair, who could not attend the meeting, but took the rare step of later writing a letter to the agency.

The objections included complaints that Dsuvia has no unique medical benefits and might be easily diverted by medical personnel, despite a risk mitigation plan the manufacturer, AcelRx Pharmaceuticals, must maintain. There was also criticism the FDA failed to convene the Drug Safety and Risk Management Advisory Committee, not just the Anesthetic and Analgesic Drug Products Advisory Committee. Last year, the FDA refused to approve the medicine over concerns about usage directions and a need for additional safety data.

“The lack of efficacy data and the (manufacturer’s) inadequate response to safety concerns have not been addressed since the FDA’s complete response letter was sent in 2017. Clearly the issue of the safety of the public is not important to the commissioner, despite his attempts to obfuscate and misdirect,” said Dr. Raeford Brown, the FDA panel chair and a professor of anesthesiology and pediatrics at the College of Medicine at the University of Kentucky. “I will continue to hold the agency accountable for their response to the worst public health problem since the 1918 influenza epidemic.”

In discussing the rationale for the approval, however, Gottlieb argued that the different formulation and battlefield needs made it possible for the FDA to have Dsuvia fit into the “overall drug armamentarium.” And while he acknowledged the criticism, he insisted the risk management program, known as a REMS, will ensure the drug is only used in a medically supervised settings.

“The FDA has made it a high priority to make sure our soldiers have access to treatments that meet the unique needs of the battlefield, including when intravenous administration is not possible for the treatment of acute pain related to battlefield wounds. The military application for this new medicine was carefully considered in this case,” he said in a statement.

In fact, the FDA and the Department of Defense on Friday formalized a collaboration for approving new drugs and devices. AcelRx, by the way, worked with the Defense Department to develop Dsuvia.

“There are very tight restrictions being placed on the distribution and use of this product. We’ve learned much from the harmful impact that other oral opioid products can have in the context of the opioid crisis. We’ve applied those hard lessons as part of the steps we’re taking to address safety concerns for Dsuvia,” he said.

Nonetheless, Gottlieb also acknowledged the episode triggered a broader discussion about FDA policy toward opioid approvals and whether additional opioid painkillers are necessary. In the 12-month period ending in March 2018, the Centers for Disease Control and Prevention reported a decline of 2.8 percent in the number of overdose deaths, to an estimated 71,073 people, which is still a large number.

Toward that end, he mentioned the FDA is undertaking a “comprehensive process” to develop a formal benefit and risk framework for how the agency evaluates the safety and efficacy of opioid medicines. Gottlieb also vowed that the FDA is re-evaluating how it considers individual and public health impacts of new opioids as they are reviewed for approval.

“I recognize that the debate goes beyond the characteristics of this particular product or the actions that we’re taking to mitigate this drug’s risks and preserve its differentiated benefits. We won’t sidestep what I believe is the real underlying source of discontent among the critics of this approval — the question of whether or not America needs another powerful opioid while in the throes of a massive crisis of addiction,” he said.

Among the questions Gottlieb said need to be answered: How does the availability of an additional opioid drug benefit the public health through its ability to, for example, provide therapeutic differentiation, promote more appropriate access, or advance safer use of these medicines? Does the approval of an additional opioid drug create added risks for diversion, accidental overdose, abuse and misuse, or other concerns?

“If the approval of an additional opioid will create such added risks, will the new drug provide sufficient clinical differentiation that can benefit certain groups of patients, or offer other important clinical benefit, such that the benefits to patients of introducing the additional opioid outweigh the risks? And can the implementation of REMS help mitigate some of these risks?”

Critics were not appeased.

“More than a year ago Commissioner Gottlieb endorsed a National Academy of Sciences report that called on FDA to overhaul its opioid policies. In particular, NAS urged FDA to utilize a new risk vs benefit analysis for opioid approval AND removal decisions,” said Dr. Andrew Kolodny, who heads the Opioid Policy Research Collaborative at Brandeis University and is executive director of Physicians for Responsible Opioid Prescribing, an education and advocacy group.

“If Gottlieb meant business when he endorsed the report — if he was speaking truthfully when he promised Congress that he would fix FDA’s past mistakes — then he would not have allowed this product on the market. Rather than approving new exceptionally dangerous opioid formulations, he would be pulling the most dangerous opioids off the market.”

“There is absolutely no need for this product,” Kolodny concluded. “Claiming we need it on the market to help soldiers on the battlefield is ridiculous. We already have sublingual fentanyl product available for use on the battlefield.”

“It is certain that Dsuvia will worsen the opioid epidemic and kill people needlessly,” said Dr. Sidney Wolfe, senior adviser at Public Citizen Health Research Group. “It will be taken by medical personnel and others for whom it has not been prescribed. And many of those will overdose and die.”

Health Coverage Disparities Eliminated Under ACA for Most Racial Groups, Report Finds

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Source: California Health Report

African Americans, Asians and Pacific Islanders living in California are just as likely to have health insurance as whites, marking a significant turnaround from five years ago, new data shows.

The report, based on survey data from the UCLA Center for Health Policy Research, shows the uninsured rate for all racial and ethnic groups other than Latinos hovering between 4 and 7 percent in 2017, a statistically insignificant difference. That compares to 2013, when African Americans, Asians and Pacific Islanders were almost a third more likely than whites to be uninsured.

Analysts attributed the change to California’s implementation of the Affordable Care Act in 2014, which has expanded health care coverage to more people, largely by widening eligibility for Medi-Cal and providing insurance subsidies for people with low to moderate incomes.

“This is a level of equity in terms of health insurance coverage that we haven’t seen before, so it really does represent tremendous progress for California,” said Amy Adams, a senior program officer with the California Health Care Foundation. “At the same time we need to address the lagging uninsured rate among Latinos.”

Although the uninsured rate for Latinos has dropped by half since 2013, this population is still almost twice as likely to be without health insurance as other ethnic and racial groups. In 2017, more than 12 percent of Latinos were uninsured, compared to 8.5 percent of the state’s population as a whole.

UCLA researcher Tara Becker said the disparity is likely because a greater proportion of Latinos are non-citizens and don’t qualify for Medi-Cal or insurance subsidies. Language difficulties may also play a role, she said, possibly leading more Latinos to lack awareness of the benefits available to them.

Expanding Medi-Cal eligibility to undocumented adults would help bring the uninsured rate down among Latinos, Becker said. The state already allows undocumented children to enroll in Medi-Cal as of 2016.

Adams said decreasing the uninsured rate among Californians benefits the entire state.

“It means fewer Californians die early, fewer Californians miss work due to illness, go bankrupt or have to forgo other necessities because of medial bills,” she said. “People who are covered are more likely to get their care earlier so their medical conditions don’t become more serious and expensive. And in terms of thinking about how insurance works, having as many people covered as possible helps keep premiums down for everyone.”

Overall, the uninsured rate stayed constant at 8.5 percent from 2016 to 2017. That’s down from almost 16 percent in 2013. Becker said the leveling off could be due to public uneasiness and confusion over the future of the Affordable Care Act amid federal efforts to undermine it.

“It could be that the uncertainty of the policy environment slowed gains we would otherwise have had,” Becker said. “It also might be that we’re reaching the maximum of what the Affordable Care Act can do on its own.”

Still, expanding Medi-Cal eligibility and providing more financial assistance to moderate-income people buying private health insurance plans could further help coverage rates, Becker and Adams agreed.

“In 2017, what we saw in the report was that the one group that does seem to be seeing slight increases from year to year is the sort of higher-income population, those whose incomes make them ineligible for subsidized coverage and for Medicaid,” Becker said. “Any increases in premiums are going to be disproportionately felt by that group. So efforts to reduce costs would obviously help them, as would expanding subsidized coverage or something like that to that population.”

Healthcare Waste is Costing Billions – and Clients Aren’t Doing Anything About It

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Source: Employee Benefit Adviser

Providing the workforce with healthcare coverage is expensive, but a new survey of 126 employers suggests a large chunk of that cost is being wasted by the healthcare industry on treatments patients don’t need.

The healthcare industry wastes $750 billion per year on unnecessary tests and treatments, according to a survey from the National Alliance of Healthcare Purchaser Coalitions and Benfield. Some 60% of employers don’t take steps to manage their healthcare plan’s wasteful spending, despite the fact that the same percentage of employers view it as a problem, the survey says.

“While waste has long been identified as a key concern and cost contributor, employers are operating blind and need to look at a more disciplined approach to address top drivers that influence waste,” says Michael Thompson, National Alliance president and CEO.

Employers are under the impression that prescription drugs are the culprit behind the spending waste, and they are, just not as much as other services. Around 54% of health spending waste is caused by unnecessary medical imaging tests, such as MRIs and X-rays, the survey says. Specialty drugs, unnecessary lab tests and specialists referrals are also major money pits.

However, the survey data isn’t suggesting these procedures and treatments shouldn’t be covered by employer health plans. The tests and treatments are potentially life-saving, they’re just used more than they should be. Sometimes previous test results can help with a current diagnosis, but medical staff don’t always check patient files before ordering new tests.

Most employers don’t monitor unnecessary healthcare spending. The 34% of employers who do rely entirely on their healthcare vendors to do it for them, trusting that it’s being taken care of.

“The idea of reducing waste in the healthcare system can be overwhelming,” says Laura Rudder Huff, senior consultant for Benfield. “While employers ask themselves: ‘Where to start?’ this is an issue where even small steps matter. Employers can begin by collecting data to identify where the inefficiencies are in their workforce and community and use assets such as vendors and organizations like coalitions to realize market improvements.”

The survey also recommends employers enlist the services of Choosing Wisely, an organization that counsels patients and employers on healthcare plans and medical treatments.

Congressional Report Says Insulin Market Benefits Drugmakers and Insurers, Not Patients

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Source: The Hill

“Perverse” incentives in the insulin supply chain lead to artificially high prices, as well as limited competition in the markets, according to a bipartisan report released Thursday by two lawmakers.

The report from Reps. Diana DeGette (D-Colo.) and Tom Reed (R-N.Y.), co-chairs of the Congressional Diabetes Caucus, took more than a year to complete and concluded that several factors drive insulin prices up, while forces that would typically drive prices down are “blunted.”

“Many cannot live without it, but countless patients struggle to afford it,” DeGette and Reed said in a statement.

“As their out-of-pocket costs continue to rise, the current system is unfairly putting insulin out of reach – placing millions of lives at risk.”

The price of insulin has doubled since 2012, after nearly tripling in the previous 10 years, the lawmakers say, despite no recent major breakthroughs that warrant the increases. Only three companies in the U.S. manufacture insulin, and they repeatedly get extended patents to keep cheaper generics out of the marketplace.

In their recommendations, DeGette and Reed said any legislative response to the rising prices of insulin should focus on generating more competition and creating price transparency.

They also recommend reforming the convoluted rebate system, in which manufacturers give discounts to wholesalers and insurers in exchange for a larger market share over their competitors and more favorable terms with insurers that encourage patients’ to use their products.

This system artificially raises the prices of insulin, and the prices are rarely passed on to consumers, they said.

These rebates are based on the drug’s list price, and when wholesalers and middlemen push for larger rebates, manufacturers often raise their list prices.

This most impacts patients who don’t have insurance and have to pay the full list price for insulin.

In their recommendations of how to drive down insulin costs, the lawmakers said Congress could introduce legislation requiring that wholesalers use standardized fees instead of rebates based on list prices.

They also recommend Congress require drug plans in federal health insurance programs disclose how much money they get from rebates. This information is closely held by the middlemen who manage prescription drug benefits for insurers, drugmakers and insurers, and was not even provided to DeGette and Reed’s offices, the report said.

Creating more transparency surrounding rebates could drive down prices, the lawmakers said.

Additionally, the amount patients’ pay out of pocket for insulin should be linked to the negotiated prices health plans get, not the list price, they argue.

“Some patients’ out-of-pocket costs are based on insulin’s list price,” the report says.

“As a result, patients do not benefit from the discounts and negotiated prices generated by rebates.”

In challenging the limited competition there is in the insulin marketplace, the lawmakers recommend Congress pursue legislation cracking down on “evergreening,” a process in which drug manufacturers get extend patents on their drugs by claiming innovations in their formulas.

But these innovations appear to be more incremental compared to past breakthroughs, the report says.

Allowing manufacturers to repeatedly extend their patents keeps cheaper generic competitors out of the markets, and keeps insulin prices high, the report says.

The report notes that, since the discovery of insulin in the 1920s, three manufacturers have produced brand-name formulations without generic competition.

To address this, Congress could introduce legislation requiring drug makers show that new formulations of insulin result in improved disease management.

Congress could also introduce legislation banning “pay-for-delay agreements,” in which brand- name insulin manufacturers pay generic manufacturers not to produce older, off-patent formulations of insulin.

Manufacturers could also be required to disclose how they set their insulin prices, the report says, placing downward pressure on prices.

Billions In Questionable Medi-Cal Payments

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Source: Kaiser Health News

California’s Medicaid program made at least $4 billion in questionable payments to health insurers and medical providers over a four-year period because as many as 453,000 people were ineligible for the public benefits, according to a state audit released Tuesday.

In one case, the state paid a managed-care plan $383,635 to care for a person in Los Angeles County who had been dead for more than four years, according to California State Auditor Elaine Howle.

She said she found “pervasive discrepancies” in Medicaid enrollment in which state and county records didn’t match up from 2014 to 2017, leading to other errors that persisted for years. The bulk of the questionable payments, or $3 billion, went to health plans that contract with the state to care for 80 percent of enrollees in California’s Medicaid program, known as Medi-Cal.

The program for low-income residents is the nation’s largest and funded by both the federal and state governments. The state findings echo similar problems cited by federal officials and come at a time when the Trump administration has applied extra scrutiny to California’s spending on Medicaid.

In the report, the state auditor said it’s critical for the state to have accurate information on eligibility “because it pays managed care plans a monthly premium for an increasing number of Medi-Cal beneficiaries regardless of whether beneficiaries receive services.”

California’s Medicaid program has 13.2 million enrollees, covering about 1 in 3 residents. It has an annual budget of $107 billion, counting federal and state funds. Nearly 11 million of those enrollees are in managed care plans, in which insurers are paid a monthly fee per enrollee to coordinate care.

The state’s Medicaid enrollment soared by more than 50 percent since 2013 due to the rollout of the Affordable Care Act and the expansion of Medicaid. Enrollment grew from 8.6 million in December 2013 to more than 13 million in December 2017, according to the audit report.

In the case of the dead patient, a family member had notified the county of the enrollee’s death in April 2014. However, the person’s name remained active in the state system, and California officials assigned the patient to a managed-care plan in November of that year.

From then on, the state kept making monthly payments of about $8,300 to the health plan until August 2018, shortly after the auditor alerted officials of the error. Auditors didn’t identify the health plan.

There also were costly mistakes in cases in which Medi-Cal pays doctors and hospitals directly for patient care – a program known as “fee for service.”

For instance, the state auditor found that Medi-Cal paid roughly $1 million in claims for a female patient in Los Angeles County from June 2016 to December 2017 even though the county office had determined in 2016 that she was ineligible.

In a written response to the auditor, the California Department of Health Care Services said it agreed with the findings and vowed to implement the auditor’s recommendations. However, the agency warned it may not meet the auditor’s timeline, which called for the main problems to be addressed by June 2019.

In a statement to California Healthline, the agency said it is implementing a quality control process and “where appropriate, DHCS will recover erroneous payments.”

Early on in 2014, as the ACA rolled out, the state struggled to clear a massive backlog of Medi-Cal applications, which reached about 900,000 at one point. There were widespread computer glitches and consumer complaints amid the increased workload at the county and state level.

In addition to questionable payments for care of ineligible enrollees, Howle and her audit team also discovered some patients who may have been denied benefits improperly. The state auditor identified more than 54,000 people who were deemed eligible by county officials but were not enrolled at the state level. As a result, those people may have had trouble getting medical care.

In February, a federal watchdog estimated that California had signed up 450,000 people under Medicaid expansion who may not have been eligible for coverage.

The inspector general at the U.S. Department of Health and Human Services said California made $1.15 billion in questionable payments during the six-month period it reviewed, from Oct. 1, 2014, to March 31, 2015.

In August, Seema Verma, administrator of the U.S. Centers for Medicare and Medicaid Services, told a U.S. Senate committee that she was closely tracking California to ensure the state “returns a significant amount of funding owed to the federal government related to the state’s Medicaid expansion.”

Verma expressed concern that states had overpaid managed-care plans during the initial years of Medicaid expansion, resulting in “significant profits for insurance companies.” By year’s end, she said she expects the federal government to recoup about $9.5 billion from California’s Medicaid program, covering overpayments from 2014 to 2016.

Tony Cava, a spokesman for Medi-Cal, said the state has already returned about $6.9 billion to the federal government and expects more than $2 billion more to be sent back by December.

Hello? It’s I, Robot, And Have I Got An Insurance Plan For You!

Source: California Healthline

“Anna” will not stop calling. She really, really wants to sell you health insurance.

What a lot of consumers really, really want is to smack Anna upside her robocalling head.

As health insurance open-enrollment season gets underway in California and nationwide, automated phone calls offering Affordable Care Act or other health plans are spiking — and driving many consumers to the brink. California residents may have it worst, because its open-enrollment period is twice as long as in other parts of the country.

“It’s at epidemic levels at this time of year,” said Aaron Foss, founder of Nomorobo, who estimates his spam call-blocking service, based in Long Island, N.Y., headed off more than 850,000 health-related robocalls in October alone — nearly five times their interceptions for September, Foss said.

Nomorobo tracked about 820 different robocall pitches for health insurance in the last week of October. More than 100 of them were from the robot Anna.

Almost all of these calls are illegal, according to rules published by the Federal Trade Commission in 2009. Many offer skimpy health plans that don’t cover what you might need, insurance regulators and consumer advocates say. Others, they say, are downright fraudulent, with unscrupulous insurance “brokers” taking payment and promising insurance that never comes through.

Alice Cave, 62, a retired data analyst from Alexandria, Va., who spends winters in Tucson, said she’s gotten so many of these calls that she typically won’t answer her phone unless she recognizes the number. On Monday, expecting a call from a California reporter, she answered her cellphone.

It was “Anne.” (Anna’s robot cousin? Other relatives include “Jordan,” “Allison” and “Mandy,” though variants on Anna remain most prevalent.)

“She was saying, ‘I really need to talk to you — we’ve got deals on health insurance.’ I thought, ‘God, what a crock,’” Cave said. “If it’s too good to be true, it probably is. Anything that comes in on the phone, I’m going to be skeptical. Why would they offer me this deal? I already have great insurance. It’s crazy.”

Some fed-up consumers try to stymie robocallers, with amusing results. Twitter user Jon Heise in June confounded his robot by insisting, after whatever it said, that he was a “meat popsicle.” Eventually, it hung up.

It’s not all fun and games. In California, the Department of Insurance is investigating health insurance robocalls, said Janice Rocco, deputy commissioner for health policy and reform. In late August, the agency filed a court order against Health Plan Intermediaries Holdings LLC, accusing the Florida company of deceptive and misleading practices in selling “Obamacare” plans that didn’t comply with the health law. The company could face fines of up to $10,000 per violation, Rocco said.

In this case, the company’s robocalls featured “Anne,” according to the court order. In its legal response, the company did not admit to the agency’s allegations and denied responsibility. A hearing date has not yet been set, Rocco said. (Arkansas’ insurance commissioner issued a cease and desist order against the company in 2016.)

Under federal law, calls using prerecorded messages are legal only for such things as doctor appointment reminders, flight cancellations, credit card fraud alerts and political candidates. Calls to sell products and services are not.

In a typical robocall sales pitch, a friendly female voice comes on the line. Sometimes the call appears to originate from major insurers like Blue Cross Blue Shield or Aetna or from a local number a caller might suppose is a school or neighbor.

Often, the voice will ask the consumer to dial “1” to enroll or “2” to opt out of future calls. Both options can be a trap, experts say.

“If you pick up, you become a lead that’s sent to health insurance agents or brokers,” Nomorobo’s Foss said. And option 2 doesn’t put you on a do-not-call list; it merely lets the spammers know they’ve hit a working number, he added.

A reporter from Kaiser Health News connected with one of the insurance brokers behind one of these robocalls by pressing the dreaded “1.”

A man identifying himself as “Ray Khan” said he’s a licensed insurance broker and provided a National Insurance Producer Registry number. The reporter was unable to locate Khan in that national registry with that number, which was not assigned to anyone.

Khan asked for the reporter’s Social Security number and other personal information. He said he did not have an office and that enrollment needed to be done over the phone. He referred the caller to a website that does not provide information about plans offered but is a platform for consumers to be contacted by brokers.

“It’s a legitimate company. We work for different insurance carriers,” Khan said. “You have to trust someone if you want to do it.”

That’s exactly what you shouldn’t do — trust folks who call you out of the blue, according to the Department of Insurance’s Rocco. “Someone selling a comprehensive medical plan is not going to be reaching you via a robocall,” Rocco said.

Most of what’s sold through these automated calls are so-called skinny plans that don’t comply with Affordable Care Act requirements, or are short-term insurance plans, which typically offer coverage for only a few months and often don’t cover preexisting conditions or prescription drugs. Such plans have been outlawed in California, starting Jan. 1.

Despite state and federal crackdowns — some involving multimillion-dollar fines — robocalls aren’t going away anytime soon. So the best thing for consumers to do when they receive one is to just hang up or, like Virginia resident Cave, not respond to unfamiliar numbers, advises the Federal Communications Commission.

Booming Economy Helps Flatten Medicaid Enrollment And Limit Costs, States Report

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Source: Kaiser Health News

Medicaid enrollment fell by 0.6 percent in 2018 — its first drop since 2007 — due to the strong economy and increased efforts in some states to verify eligibility, a new report finds.

But costs continue to go up. Total Medicaid spending rose 4.2 percent in 2018, same as a year ago, as a result of rising costs for drugs, long-term care and mental health services, according to the study released Thursday by the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

States expect total Medicaid spending growth to accelerate modestly to 5.3 percent in 2019 as enrollment increases by about 1 percent, according to the annual survey of state Medicaid directors.

About 73 million people were enrolled in Medicaid in August, according to a federal report released Wednesday.

Medicaid, the state-federal health insurance program for low-income Americans, has seen its rolls soar in the past decade — initially as a result of massive job losses during the Great Recession and in recent years when dozens of states expanded eligibility using federal financing provided by the Affordable Care Act. Thirty-three states expanded their programs to cover people with incomes under 138 percent of the federal poverty level, or an income of about $16,750 for an individual in 2018.

Medicaid spending and enrollment typically rise during economic downturns as more people lose jobs and health benefits. When the economy is humming, Medicaid enrollment flattens as more people get back to work and can get coverage at work or can afford to buy it on their own. The national unemployment rate was 3.7 percent in September, the lowest since 1969.

The falling unemployment rate is the main reason for the drop in Medicaid enrollment, but some states have reduced their rolls by requiring adults and families to verify their eligibility. Arkansas, for example, has cut thousands of people after instituting new steps to confirm eligibility.

The brightening economic outlook for states has led many to increase benefits to enrollees and payment rates for health providers.

“A total of 19 states expanded or enhanced covered benefits in fiscal 2018 and 24 states plan to add or enhance benefits for the current fiscal year, which for most states started in July,” the Kaiser report said. “The most common benefit enhancements reported were for mental health and substance abuse services. A handful of states reported expansions related to dental services, telehealth, physical or occupational therapies and home visiting services for pregnant women.”

A dozen states increased pay to dentists and 18 states added to primary care doctors’ reimbursements for fiscal year 2019.

Medicaid covers about 20 percent of U.S. residents and accounts for nearly one-sixth of health care expenditures. Nearly half of enrollees are children.

Overall, the federal government pays about 62 percent of Medicaid costs with state’s picking up the rest. Poorer states get a higher federal match rate.

Seventeen Republican-controlled states have not expanded Medicaid. For individuals accepted into the program as part of the ACA expansion, the federal government paid the full cost of coverage from 2014 through 2016. It will pay no less than 90 percent thereafter.

In 2018, the states’ share of spending rose 4.9 percent. This was the first full year that states were responsible for part of the cost of the expansion. States expect their spending will grow about 3.5 percent in 2019.

Robin Rudowitz, one of the authors of the study and associate director of the Kaiser Program on Medicaid and the Uninsured, said the survey found many states were using Medicaid to address the opioid crisis by expanding benefits for substance disorders and also by implementing tougher restrictions on prescriptions.

“Almost every governor wants to do something, and Medicaid is generally a large part of it,” she said.

While the Trump administration’s approval of work requirements for some adults on Medicaid has generated controversy over the past year, the report shows that states are making many other changes to the program, such as increasing benefits and changing how it pays providers to get better value.

In California, Novel Initiatives test Cities’ Power – And Will – To Tame Health Costs

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Source: Kaiser Health News

At a time of mounting national anger about rising health care prices, the country’s largest union of health workers has sponsored ballot measures in two San Francisco Bay Area cities that would limit how much hospitals and doctors can charge for patient care.

The twin measures in Palo Alto and Livermore, sponsored by the Service Employees International Union-United Healthcare Workers West, take aim primarily at Stanford Health Care, which operates Stanford Hospital and Clinics, the facility with the third-highest profits in the country from patient care services, according to a 2016 study.

The union also is sponsoring Proposition 8, a statewide measure that would impose a cap on profits for dialysis clinics. Together, the state and local measures seek to draw on public outrage over sky-high medical prices. And, for municipalities, they amount to a novel and untested effort to rein in those prices through the ballot box.

“I’ve been in this field almost 50 years, and I’ve never seen a local government regulating hospital prices,” said Paul Ginsburg, director of public policy at the Schaeffer Center for Health Policy & Economics at the University of Southern California. A number of states set hospital rates in the 1970s, and two states, Maryland and West Virginia, do so today, he said.

Opponents question the legal authority of cities to regulate health care pricing, and they predict a flood of litigation against the measures if they pass. The city councils of both cities oppose the proposals, arguing that local officials with no expertise in health care costs would be required to create a new bureaucracy to regulate them.

Stanford Health Care officials say the measures could undermine quality. “It would threaten [the system’s] ability to provide top-quality health care to patients from Palo Alto and across the region,” according to a September statement from the system.

Ginsburg expressed skepticism. “Of course, you could cut rates too much and harm hospitals financially,” he said. “But if done with intelligence, you could accomplish some price reduction without harming quality.”

For the union, the ballot measures could help it gain leverage in future bargaining or organizing efforts with Stanford and other hospitals. Stanford Health Care operates the largest hospital system in both cities where the price cap proposal is on the ballot. Stanford has opened, has acquired or is building health care centers with clinics and specialty services in Emeryville, Pleasanton and Redwood City — Bay Area cities where the SEIU-UHW tried but failed to place similar price-control measures on local ballots.

But union officials say their motive is simply to rein in prices. “Stanford Health is nonprofit. They don’t pay property taxes or incomes taxes,” said Sean Wherley, an SEIU-UHW spokesman. “Taxpayers are subsidizing their operations and getting wrung out by over-the-top prices.”

Stanford and other health systems have been on a buying spree in recent years acquiring hospitals and physician practices, and this concentration of ownership has stifled market competition and further boosted prices for insurers and patients.

The Palo Alto and Livermore initiatives, which also affect other medical systems in the cities, would cap prices charged by hospitals and other health care providers at 115 percent of “the reasonable cost of direct patient care.”

And there, some experts say, lies the rub.

“What is a seemingly simple idea — limiting prices to 115 percent of ‘costs’ — is neither simple in execution, nor concept,” said Benedic Ippolito, a research fellow at the American Enterprise Institute who studies health care financing. “What costs are acceptable? How will we stop providers from increasing costs as much as possible” to compensate for the cap?

Stanford estimates that Proposition F, the Palo Alto measure, would reduce the health system’s budget by 25 percent, forcing it to make cutbacks and possibly end essential services, said David Entwistle, the health system’s president and chief executive officer.

Livermore would need to spend $1.9 million a year on the staff required to implement Measure U — its version of the proposal — and would likely incur another $750,000 to $1 million in legal and startup costs, according to an analysis conducted for the city by Henry Zaretsky, a health economist who has worked for the state and the California Hospital Association.

Patients in the wealthy region expect high-quality services but also can be savvy consumers and passionate voters. It is an open question whether the measures would pass.

Industry consolidation is far more pronounced in Northern California than in Southern California, according to a recent study from the University of California-Berkeley. As a result, inpatient hospital prices in the north were 70 percent higher and outpatient costs as much as 55 percent higher than in the south. The price disparities, even within the Northern California region, can be dramatic.

For instance, independent doctors in the Bay Area are reimbursed, on average, a median $2,408.45 for a routine vaginal delivery, which includes prenatal and postnatal visits, according to a 2017 Kaiser Health News analysis of claims data from Amino, a health cost transparency company. That compares with $5,238.13 for the same bundle of services for Stanford physicians (and $8,049.84 for doctors employed by the University of California-San Francisco).

The higher cost of medical care also pushes up insurance premiums for patients. Health plans purchased on the state insurance exchange were 35 percent higher in Northern California than in Southern California, the 2018 UC Berkeley study showed.

Earlier this year, California Attorney General Xavier Becerra took aim at medical industry consolidation and the high prices associated with it. He sued Sutter Health, one of the nation’s largest health systems, saying it was systematically overcharging patients and illegally driving out competition in Northern California.

To C. Duane Dauner, a former president and CEO of the California Hospital Association, the ballot proposals are “a power play by SEIU-UHW to put pressure on Stanford Health Care.” The union wants Stanford “to be neutral when they try to organize employees in Redwood City, Emeryville, Pleasanton and Livermore,” said Dauner, who heads the campaign committee opposing both measures.

Larry Tramutola, a veteran campaign consultant who is not involved on either side, agrees.

“I don’t think it has anything to do with controlling health care prices,” said Tramutola, who recently managed successful local initiatives to tax sodas and ban menthol cigarettes. “It’s about bargaining. Win or lose on this, other hospitals in other places will take notice and realize that SEIU is a formidable foe.”

Protect Our Local Hospitals and Health Care, the campaign committee opposing the measures, has raised $4.2 million so far this year. The union’s political action committee has spent $1.5 million in support of the initiatives.

Health-Care Companies Pour $46.7 Million Into Midterm Vote

Image result for Health-Care Companies Pour $46.7 Million Into Midterm Vote images

Source: Bloomberg

The health-care industry has given $46.7 million to candidates in the midterm elections this year, according to the Center for Responsive Politics, pouring money into a tightly fought battle between Democrats and Republicans over control of Congress.

Of the money given by health-care political action committees — the official political arms of companies and industry or professional associations — 57 percent went to Republicans.

When contributions from employees are included, the total given by industry PACs and individual employees rises to almost $200 million — more than for any other midterm election dating back to 1990, according to the Center for Responsive Politics.

Midterm voting takes place on Nov. 6., and the totals include donations given through Oct. 16. It doesn’t count money that industry groups give to other political committees that ends up in candidates’ campaign coffers, or their independent spending on issue ads. Nor does it include state ballot measures, including a California proposal that affects the dialysis industry and has attracted tens of millions of dollars in spending.

The 2018 election is projected to be the most expensive midterm in history, with $5 billion expected to be spent by candidates, parties, PACs and outside groups, according to the Center for Responsive Politics, a nonprofit that compiles data on campaign contributions and lobbying.

About 45 percent of America’s $3.3 trillion in annual health care spending comes from government, so the industry has a lot riding on decisions in Congress. The health-care industry has spent less on the election than finance and some other industries, but more than defense, labor groups, and tech companies.

Brendan Fischer, director of federal reform at the Campaign Legal Center, a nonpartisan expert and watchdog for campaign finance, said the money spent each election cycle has consistently escalated over the past decade.

“Our system is increasingly tilted towards the interest of wealthy donors because of the amount of money it takes to mount a legitimate campaign,” Fischer said.

The highest donations from health-care groups and individuals went to races where senators are raising historic amounts of money. The top recipients are Democratic senators Claire McCaskill of Missouri, with $1.85 million from health groups; Bob Casey of Pennsylvania with $1.76 million; and Sherrod Brown of Ohio with $1.74 million. Each has sparred with Republican opponents over the Affordable Care Act and the law’s protections for people with pre-existing conditions.

While much of the health-care debate in this election has focused on drug prices, physician groups have contributed more to congressional campaigns than pharmaceutical companies. Their PACs contributed $20.6 million to federal candidates.

The American Association of Orthopaedic Surgeons spent the most of the provider PACs, giving $1.37 million to federal candidates. The group, which gave money to both parties, made its largest single expenditure of $250,000 to the Congressional Leadership Fund, a GOP super PAC.

“Like many other health-care groups, we’re having to contribute more this cycle while health care remains a central issue and competitive races are occurring across the country,” said John Gill, chair of the orthopedic surgeons’ PAC, in a statement.

Advocates for lower drug prices are also spending heavily. Patients for Affordable Drugs Action, a super PAC backed by the foundation of billionaire John and Laura Arnold, has received almost $10 million in contributions, and spent more than $9 million.

The group has spent $3.3 million against Republican Bob Hugin, the former chairman of drugmaker Celgene Corp. who is running for U.S. Senate in New Jersey. One ad from the PAC claims that Hugin made about $100 million overcharging cancer patients for their medicine.

Nick Iacovella, a spokesman for Hugin’s campaign, denied the allegations by Patients for Affordable Drug Action. “Under Bob Hugin’s leadership, Celgene put in place the most compassionate patient assistance program in the world,” affording most patients copays under $50, he said in a statement.

UnitedHealth Group Inc. spent the most among the major insurers, with a slight preference for Republican candidates. Anthem Inc., the second-largest spender, gave slightly more to Democrats. Among major insurers, the two companies also gave the most to leadership PACs and campaign committees that the parties use to fundraise. The amounts were split fairly evenly between the parties, according to data compiled by Washington-based GovPredict, a nonpartisan political research firm.

Andrew Mayersohn, a researcher at the Center for Responsive Politics, said the distribution of health-care contributions is almost “squarely in the middle” between typically conservative sectors like construction and more liberal sectors like the media.

“Are they spending because they feel like they need to shape whatever kind of health reform a Republican congress passes?” said Mayersohn. “When those are your considerations, you’re not thinking too hard about which party you’re giving to. You just want to make sure you have a seat at the table when the bills are being written.”

Spending Against Dialysis Ballot Measure In California Breaks Record

Source: Kaiser Health News

With the midterm election less than two weeks away, the dialysis industry has made Proposition 8 the most expensive on the California ballot this year — and has broken the record for spending by one side on any statewide ballot measure.

As of Oct. 25, dialysis companies had contributed more than $110 million to the “Vote No on 8” committee, which is encouraging voters to reject the union-backed measure to limit dialysis company profits. Industry giants DaVita and Fresenius Medical Care, which operate nearly three-quarters of the chronic dialysis clinics in California, are responsible for more than 90 percent of that total.

The $110 million figure comes to about $1,700 for each of the roughly 66,000 dialysis patients in California who the industry warns could be harmed by the measure.

The Service Employees International Union-United Healthcare Workers West, which represents more than 95,000 health care workers in California and sponsored the initiative, has spent more than $17 million to support the proposition. That’s the most the union has ever spent on a California ballot measure, said Sean Wherley, a union spokesman.

Still, the union is being outspent by more than 6-to-1.

“When you see this much money in play, it indicates there’s a lot of money at stake,” said Kati Phillips, spokeswoman for California Common Cause, a nonprofit organization that calls for tighter campaign finance limits. She warned that this level of spending can discourage voters, because “they can feel their voices being drowned out by wealthy special interests.”

Proposition 8, or the “Fair Pricing for Dialysis Act,” would cap dialysis clinic profits at 115 percent of the costs of patient care, with revenue above that amount to be rebated primarily to insurers. Medicare and other government programs, which pay significantly lower prices for dialysis, would not receive rebates.

Until now, the pharmaceutical industry held the record for spending by one side of a ballot measure since 2001, the earliest year for which data are available online, according to MapLight, a nonprofit that tracks money in politics. In 2016, the industry contributed more than $109 million to defeat Proposition 61, which would have prohibited state agencies from paying more for medicines than prices negotiated by the U.S. Department of Veterans Affairs. The measure failed.

The money for the “No on 8” campaign has primarily come in large installments from the biggest for-profit dialysis companies in the country, which are concerned that this measure would harm their bottom line.

Most of the money raised by both sides is being poured into ads that are playing on heavy rotation around the state — and more recently, the nation. The dialysis industry ran several spots against the initiative during major league baseball’s National League Championship Series last weekend.

In television, radio and online advertisements airing around the state, the “No on 8” campaign warns that its passage could lead to “hundreds of millions in higher health care costs” and that dialysis companies might close some of their clinics in response.

Supporters of the measure argue in one of their TV ads that “dialysis corporations make a killing” and that limiting what dialysis clinics charge insurance companies could bring down health care costs across the board.

While the money for the “No on 8” campaign has come exclusively from the dialysis industry, many organizations also oppose the measure, including the California Medical Association, the American Nurses Association and the California Chamber of Commerce.

The “Yes on 8” campaign is funded almost exclusively by SEIU, but the California Democratic Party contributed more than $50,000. Other groups that support the measure include the California Alliance for Retired Americans, California’s public employee benefits and retirement system (CalPERS) and various labor groups.

Last Updated 11/07/2018

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