Hospital Prices Vary Widely, Often Higher With Insurance Than Cash, The New York Times Finds

Why Hospitals and Health Insurers Didn't Want You to See Their Prices - The New  York Times

Source: Fierce Healthcare, by Anastassia Gliadkovskaya

Private insurers sometimes negotiate rates on hospital services that are higher than the cash price, a recent New York Times investigation found, and the same basic service can cost widely varying amounts even at the same hospital.

The Times surveyed 60 major hospitals that are complying with this year’s new Centers for Medicare & Medicaid Services (CMS) rule that requires hospitals to publish their negotiated, cash and chargemaster rates. Compliance has been spotty, and even with some published prices, the data has been difficult to draw meaning from.

Below is a graphic that, using data from the Times story published in August, shows the costs of a service at a hospital from each of the four regions of the U.S.

Fierce Healthcare reached out to all four hospitals included in our review of the Times’ data. In response, Erin Goff, Intermountain Medical Center’s media relations manager, noted a number of factors are considered when negotiating rates with payers that are “common across many industries.” These include “the number of patients the payer will direct to us, scope of facilities the payer includes in their network, and the payer’s demonstrated administrative efficiencies.”

In a statement, Beaumont Health presented similar influencing factors, adding that the severity of a visit also determines price. “Finally, it’s important to note that the published rates often do not reflect what is actually paid by the patient—negotiated rates include both the insurer’s payment to the provider plus patient’s payment,” the statement said.

Penn Medicine said in a statement it’s working to update price information on its sites to be compliant with the regulation and to be “as user-friendly as possible.” It suggested using its price estimator tool in the patient portal to estimate certain out-of-pocket costs. It noted that market position also contributes to the contracting process, and said “although we anticipate some continued variation in payment structures for the vast array of services we provide given the mix of commercial and governmental payors we contract with, we also hope that price transparency efforts will play a role in driving down overall variation across the healthcare industry.”

Wake Forest Baptist declined to comment for this story.

Given the price fluctuations, the Times argued that the data shed a light on how little power the consumer has to shop for insurance plans and for healthcare services.

But experts and hospital advocates caution that the data—payer-negotiated rates made public in the form of machine-readable files or hospital cost estimator tools—are not necessarily an accurate representation of the price a patient might pay.

“Numbers in the spreadsheets do not necessarily reflect the patient experience or their course of treatment,” said Ari Levin, senior associate director for policy at the American Hospitals Association. Since the final amount depends on several factors, including volume discounts, quality bonuses and whether multiple services are provided at once, “there is no way to capture all of those factors in a single ‘negotiated rate,’” Levin said.

Last year, the AHA along with other groups sued the U.S. Department of Health and Human Services (HHS) over the price transparency rule. They lost despite appealing the case.

America’s Health Insurance Plans published a statement saying the attempt to look at the data “spotlights a lot of numbers with little context” and “often compares apples and oranges.”

Because of these complexities, the CMS rule does not help patients “shop for services” as intended, said Delphine O’Rourke, a healthcare attorney and partner at Goodwin Procter. “I, as a consumer, don’t know at the end of the day what I’m going to be responsible for,” she said.

To O’Rourke, it’s not surprising that at times, a hospital’s cash price is lower for a service. Since people paying cash price are generally a small segment of patients, she explained, and tend to be uninsured or undocumented, hospitals structure cash pay anticipating that it will be “challenging to collect,” O’Rourke said. (Earlier this year, the Wall Street Journal found that many times, patients who pay with cash are actually charged the highest price across hospitals.)

Since healthcare is a market, those with hefty bargaining power—whether a hospital or a payer—can leverage better rates for themselves, O’Rourke said. That’s one reason driving provider consolidations, which can increase prices and premiums. “If you want to have a system where every MRI in the country is the same cost, that’s your national healthcare system,” she said.

Another possible reason some payer-negotiated rates are high is that they may be offsetting lower-priced services in a given contract, which can contain thousands of items, Levin added, making it difficult to draw conclusions about insurers and health plans based only on the cost of one service.

Cash pay can be complicated, too. Most hospitals don’t have a set self-pay rate—they negotiate one based on a patient’s financial circumstance, Levin noted.

The Times was not able to obtain some hospitals’ cash rates for this reason, the bottom of the story notes. When an insured patient pays cash, that payment does not count toward their deductible. “When you’re stepping outside of insurance, you’re removing the consumer protections that come with it,” Levin said.

Payers and hospitals can issue gag orders in their contracts, preventing them from disclosing their negotiated rates, even to public officials, the Times noted in its story. “Hospitals and plans negotiate prices for services and medical goods behind closed doors,” said Nisha Kurani, a senior policy analyst at Kaiser Family Foundation. “How price transparency will impact those negotiations remains to be seen.”

recent KFF poll found that most adults are not aware of the rule that requires hospitals to post their prices. The majority (85%) also reported not researching the price of a hospital treatment in the past six months.

“We have found that current implementation of the rule often makes it difficult to estimate the true cost of care,” Kurani said. In April, KFF tracked the negotiated rates for an MRI of the lower spine across 102 hospitals and found that “even when these prices were published, gaps or inconsistencies in data made it difficult to compare prices across hospitals,” according to Kurani.

Part of the rule requires hospitals to provide a patient cost estimator tool with prices for 300 common services; the AHA recommends patients use the tool as one way to get “the most accurate estimate” of their expected costs. But KFF found in its analysis that price estimates for the same service differed between the tool and the hospital’s machine-readable file.

Experts told Fierce Healthcare they would expect stronger compliance with the price transparency rule if providers were not in the middle of dealing with the COVID-19 pandemic. The AHA has urged for extensions to the rule, to allow providers more time to publish prices.

Donald Trump’s 2019 executive order, Levin said, led to the rushed price transparency policy that now burdens hospitals and does not serve patients. The No Surprises Act, which was passed in Congress and is meant to protect patients from surprise billing, has allowed for a more nuanced policy-making process that considers patients, she said. As before, the AHAalong with other groups, requested that HHS delay enforcement of some parts of the No Surprises Act.

Small Businesses Navigate Ever-Changing COVID-19 Reality

Business & Growth | Capital Region Albany New York | Spectrum News 1

Source: Associated Press, by Mae Anderson

For a brief moment this summer, it seemed like small businesses might be getting a break from the relentless onslaught of the pandemic. More Americans, many of them vaccinated, flocked to restaurants and stores without needing to mask up or socially distance.

But then came a surge in cases due to the delta variant, a push for vaccine mandates and a reluctant return to more COVID-19 precautions. Now, small business owners are left trying to strike a balance between staying safe and getting back to being fully open.

Navigating ever-changing coronavirus reality comes with a number of risks, from financial hardship to offending customers to straining workers. Those challenges could intensify as winter approaches and outdoor alternatives become limited. Still, small business owners say the whiplash is worth it to keep customers and employees as safe as possible.

“Just weeks ago, small business owners hoped that a return to normalcy would help jump start our recovery,” said Jessica Johnson-Cope, Chair of Goldman Sachs 10,000 Small Businesses Voices National Leadership Council and owner of a small business herself, Johnson Security Bureau in New York.

New York City ordered a vaccine mandate for customers in August. For Dan Rowe, CEO of Fransmart, which runs the Brooklyn Dumpling Shop, the mandate has been a financial burden, and a headache. Brooklyn Dumpling Shop first opened in May and has six staffers. It’s pandemic-friendly format is contactless and automated.

“It was engineered to be a restaurant with less employees,” Rowe said. Glass separates the kitchen and staff from customers, who order food from an app. When the kitchen is finished making the food, it’s placed an automat-style window, so workers don’t come into contact with customers.

“We’ve engineered this great low labor restaurant, and the government is making us go backward,” he said.

Rowe had to hire another staffer to check vaccine cards at the door, increasing his overhead. His complaint is that retail stores and groceries with prepared foods like Whole Foods don’t face the same restrictions.

“It’s not fair what’s going on and it’s not practical,” he said.

The changing rules can cause customer confusion – and even some resentment. Suzanne Lucey has owned Page 158 Books bookstore in Wake Forest, N.C., for six years. When the pandemic began, the store was closed for three months. Page 158 Books reopened last July, and gradually increased store capacity from 5 to 12, abiding by state guidelines. Capacity limits were lifted ahead of the holidays last year.

When case numbers started crawling up this summer, Lucey’s zip code became the third highest in the state for COVID-19 cases. They have a sign in the window that says a mask is required inside the store, but without state or city rules to back them up, they’re not enforcing it.

Lucey said only about one or two people a month disregard the rule.

“It’s hard. You don’t want to turn people away. But I want my staff to feel secure,” Lucey said, especially since two of her staff have medical conditions that make them more vulnerable. “I don’t want my staff to feel like they have to be combative. So that’s how we’re handling it. Most people are pretty respectful.”

Allison Glasgow, director of operations for McNally Jackson bookstores in New York, echoed Lucey’s sentiment.

Her stores follow state and city rules for restrictions. One store has a cafe, which must follow the New York City mandate for customers being vaccinated. The bookstores also require vaccination proof at events. Otherwise, masks are optional, though recommended, if customers and staff are vaccinated.

“You can seem antagonistic when you’re trying to monitor people’s vaccination status,” she said. “It’s not ‘Hey, welcome in!’ which is what you have always wanted to do — it’s a bit of a roadblock there.”

Although safety is the priority for everyone, the changes can be draining for owners and staff alike. Jennifer Williams, founder and CEO of closet organization company the Saint Louis Closet Co., said the company scrambled at first to implement a COVID-19 plan, including masking and increased sanitization.

“We don’t have the option to ‘work from home,’ our business happens in our manufacturing plant and in our client’s homes, so we had to adjust quickly at the onset of the pandemic with Covid precautions,” she said.

She nixed the mask requirement July 1, after her staff was fully vaccinated, COVID-19 cases were declining and the CDC recommendations changed. But that was short-lived.

In early August, Missouri was one of the top three states of coronavirus cases. Williams re-implemented the mask mandate.

Williams’ staffers can spend up to eight hours a day in a mask installing closet organizing systems in a customer’s home. “The mental drain on employees has been extreme,” Williams said.

Jessica Benhaim, owner of Lumos Yoga & Barre, an independent fitness studio in Philadelphia, gradually increased size limits of classes from late spring into the summer, but capped them at 12, short of pre-pandemic levels of 18 students for yoga and 14 for barre.

Even though the city has lifted capacity restrictions, she’s keeping it capped in case restrictions come back. She lifted mask requirements for vaccinated students on June 15 but reinstated them when Philadelphia implemented a mask mandate in mid-August. Vaccinated students can remove their masks when they reach their mats.

“The constant adjustments over the last 18 months have been draining,” Benhaim said. “More than anything, it’s been stressful balancing making adjustments with trying to keep a sense of normalcy for my staff and clients.”

Teladoc Takes Its Primary Care Service Nationwide With Aetna Slated To Roll Out In Early 2022

Teladoc takes its primary care service nationwide with Aetna slated to roll  out in early 2022 | FierceHealthcare

Source: Fierce Healthcare, by Heather Landi

Teladoc Health is taking its primary care pilot nationwide, expanding it to commercial health plans, employers and other payers.

The telehealth giant piloted its virtual primary care program, called Primary360, in 2019 with the aim of early detection of chronic disease. The service now offers 70 distinct diagnoses such as hypertension and diabetes, Teladoc CEO Jason Gorevic said during a J.P. Morgan virtual presentation in January.

Teladoc says it has signed several Fortune 1000 employers onto the new primary care service, with other large employers and health plans such as Aetna launching nationwide in early 2022.

The company is pitching Primary360 as a way to expand access to primary care in the U.S.

Teladoc’s pilot programs have shown that two-thirds of members previously lacked traditional primary care and are now benefitting from longitudinal relationships with physician-led care teams.

“Primary360 has the unique power to drive the unified health care experience that consumers are demanding by removing longstanding barriers like access, cost and convenience,” said Donna Boyer, chief product officer at Teladoc Health in a statement. “Primary360 gives people greater control over their healthcare experience without losing the personal connection they seek—all from a brand that they trust.”

Through the service, members have access to a Teladoc primary care physician and a care team offering a range of services including guidance for an individual’s care, and navigation to in-person, in-network providers. Users also get a personalized care plan that includes reminders and nudges for follow-ups.

The service provides members with access to prevention and screening, which has helped members to detect earlier and treat previously undiagnosed chronic diseases, according to the company. Early results with year one members show one in four chronic conditions identified for Primary360 members have been new diagnoses of common disorders such as diabetes and hypertension.

Preliminary findings from the first year of the pilot show that more than 50% of Primary360 members take advantage of at least one other Teladoc Health service and nearly 30% use two connected services, like mental health care, urgent care, dermatology and nutrition.

Teladoc says its physicians are currently available within a week for a new patient visit as compared to the average wait time of roughly a month for a new primary care physician.

An Annals of Family Medicine study estimated that if everyone in the United States had a primary care physician, the annual savings would top $62 billion dollars.

Primary care has become a red-hot sector as startups like Carbon Health and VillageMD try to disrupt the traditional primary care model. Tech-enabled providers like One Medical, Oak Street Health, Privia Health and Forward also are looking to shake up the $260 billion market.

Primary care was the second largest sector for venture dollars in healthcare in the first quarter of 2021, according to Rock Health. The companies listed below raised a total of $8.9 billion, including $2.6 billion in 2020, and $1.8 billion in the first half of 2021.

There are also high-profile deals in the market. Health benefits platform Accolade plans to acquire virtual primary care company PlushCare for $450 million.

And payers are jumping into the virtual primary care market as well. In January, UnitedHealthcare launched a new, virtual primary care option as part of an effort to expand access to local clinicians in its employer-sponsored plans.

Employers Anticipate Health Costs Rising 5% In 2022

Employers Expect a 4.7% Increase in Health Benefit Costs for 2022 as They  Focus on Improving Employee Benefits Rather Than Cost-Cutting, Mercer  Survey Finds

Source: Healthcare Finance, by Jeff Lagasse

Due largely to concerns about the COVID-19 pandemic and its continued effects on American healthcare, employers are expecting their health costs to rise more than 5% in 2022, according to a new Willis Towers Watson survey.

Employers expect their costs for medical and pharmacy benefit expenses to increase 5.2% in 2022, even after taking cost management initiatives into account. The increase is slightly lower than the 5.5% increase employers projected for 2021, but sharply higher than the actual 2.1% increase in 2020.

Last year’s increase was the smallest in decades and is seen as an anomaly, because many people deferred non-emergency care and rapidly embraced telemedicine during the pandemic.

With 86% of employers prioritizing employee affordability, employers will take different approaches regarding absorbing a portion of the cost increases or reflecting these fully in the employee cost share.

Ninety percent of respondents said achieving affordable and sustainable costs for the organization was a top priority, while 86% said it was important to achieve affordable costs for employees, especially those who earn lower wages.

Eighty-five percent signaled an intent to enhance employee wellbeing, while 78% said it was a priority to identify programs that support diversity, equity and inclusion, and address the social determinants of health.

WHAT’S THE IMPACT?

The survey identified several measures employers are taking to address affordability, benefit designs and network management issues, including premium contributions based on pay and grade. Nearly a quarter of employers currently structure employee contributions based on pay levels or job grades; another 8% are planning or considering doing so in the next two years.

Another measure is working spouse surcharges. A quarter of employers use spousal surcharges when additional employer coverage is available for the working spouse. Another 9% are planning or considering spousal charges in the next two years.

Meanwhile, about 30% of employers are planning or considering offering a narrow network of higher-quality and/or lower-cost providers. Currently, two in 10 respondents offer narrow networks.

Nearly half of employers, 48%, use centers of excellence within their health plans. Another 23% are planning or considering adding centers of excellence within their health plans. About 31% offer access to concierge services with integrated care management programs, and 25% are planning or considering doing so.

A vast majority of employers, 89%, are offering coverage for behavioral telehealth services, and 7% are planning or considering it. And more than half of employers offer onsite/worksite health promotion activities, while 17% are planning or considering it.

On the pharmacy front, only 13% have plans in place that support medication adherence and improved health outcomes in more vulnerable populations. But nearly 30% are planning or considering changes. And 54% evaluate specialty drug costs and utilization performance through the medical benefit, while another 29% are planning or considering doing so.

THE LARGER TREND

The findings from Wilson Towers Watson show a slightly lower projected increase in employer medical costs than a similar survey published in June by PricewaterhouseCoopers. That survey projected employer health costs will rise 6.5% in 2022, slightly lower than in 2021 and higher than the period from 2016 to 2020.

Like the more recent survey, PwC cited the ongoing COVID-19 pandemic as the primary driver of this projection.

Although health spending is projected to increase, the deflators identified by PwC will likely have a mitigating effect. One is consumerism: More people are shopping around for care, and millions have become more familiar with receiving care in lower-cost and more convenient ways during the pandemic – shifts in behavior that will likely reduce healthcare spending.

As part of this shift, there has been a decrease in emergency department utilization, which has had a significant impact in bending the cost curve for employers. Some ED visits, especially lower acuity ones, may never return to pre-pandemic levels.

90% of Medicare Advantage Enrollees Enrolled in Highest-Quality Plans

A Dozen Facts About Medicare Advantage in 2020 | KFF

Source: Axios, by Bob Herman

Nine out of 10 Medicare Advantage members are enrolled in plans that earned the government’s highest quality marks for 2022, according to new federal data.

Between the lines: Health insurers were quick to tout the quality scores in press releases. But the federal government went easy on the grades during the pandemic, and experts have long considered MA’s quality system to be “flawed and inconsistent.”

Driving the news: Medicare releases MA star ratings every year ahead of the program’s open enrollment window, which starts Oct. 15 and runs until Dec. 7, as a way to help seniors shop for plans (versus enrolling in traditional Medicare).

  • * Using a five-star system, Medicare grades MA plans on things like their customer service, members’ access to drugs and services, and how well they help people get health screenings.
  • * Insurers that attain at least four stars get additional bonus payments from the federal government. Those bonuses have almost quadrupled from $3 billion in 2015 to $11.6 billion in 2021, according to the Kaiser Family Foundation.

The big picture: It was a lot more difficult to be graded as a “high-quality” plan a decade ago.

  • * In 2013, just 38% of MA enrollees were in plans with four or more stars.
  • * A large chunk of that change can be attributed to insurance companies working the system.
  • * Over the past several years, big insurers have merged lower-rated plans into higher-rated ones to get the bonus money, and with no discernible improvement in quality, the Wall Street Journal reported in 2018.

The bottom line: Just because a Medicare Advantage plan gets at least four stars doesn’t mean quality is guaranteed.

Health Industry Wields Power in California’s High-Stakes Battle to Lower Health Care Costs

Health Industry Wields Power in California's High-Stakes Battle to Lower  Health Care Costs | California HealthlineSource: California Healthline, by Angela Hart and Samantha Young

Gavin Newsom put California’s health care industry on notice when he was a candidate for governor, vowing in 2018 to go after the insurance companies, doctors and hospitals that leave many Californians struggling with enormous medical bills and rising insurance premiums.

He pledged to lead California’s single-payer movement, a high-stakes liberal dream that would eliminate private health insurance and slash how much providers are paid. The tough rhetoric continued after he was elected, when Newsom told insurers to “do their damn job” to improve mental health treatment or face fines, and he vowed to cut the health care industry’s soaring revenues.

“We’ve got to get serious about reducing health care costs,” the first-term Democrat said in January 2020 as he unveiled his proposal to establish an Office of Health Care Affordability that would do the unthinkable in a system powered by profits: set caps on health care spending and require doctors and hospitals to work for less money. “We mean business.”

Industry leaders were rattled. But rather than mobilize a full-throttle defense to sink Newsom’s effort to regulate them, they have used their political clout and close ties with the governor to devise a friendlier alternative that doctors, hospitals and insurance companies could live with.

When Newsom ultimately drafted legislation for the office, he took an idea health care executives had pitched and made it his own: Instead of capping prices or cutting revenues, he would allow industry spending to grow — but with limits.

Political infighting killed the legislation this year, but it is expected to come back in January and spark one of next year’s blockbuster health care battles.

“They’re fearful of what might happen to them, and they’re trying to protect their interests because they’re threatened,” David Panush, a veteran Sacramento health policy consultant, said about health care industry players. They know “there’s blood in the water and the sharks are coming.”

If Newsom’s plan to rein in health care spending succeeds, it could provide him some political cover as he campaigns for reelection next year, giving him a major health care win even as he sidesteps progressive demands such as creating a single-payer system.

But it could also cement the power of an industry that continues to wield immense influence — negotiating behind the scenes to protect its massive revenues and secure exemptions and side deals in exchange for its support.

“Every time we try to do something to reduce health care costs, it meets with huge opposition,” said state Assembly member Jim Wood (D-Santa Rosa), head of the Assembly Health Committee who is working closely with the Newsom administration on this proposal.

Industry power players have only pushed back harder as lawmakers have tried to take them on, Wood said. “Anybody or anything that disrupts the status quo is met with huge resistance and huge resources to fight it,” he said.

When Newsom took office in 2019, he knew public sentiment was turning against the health care industry. On average, health care costs were around $11,600 per person that year, up from $4,600 in 1999, according to federal data. In California, hospitals account for the biggest share of spending, nearly one-third, while 20% of health care dollars goes to doctors.

California consumers are demanding action, with 82% of state residents saying it’s “extremely” or “very” important for the governor and legislature to make health care more affordable, according to a 2021 poll from the California Health Care Foundation.

Much of Newsom’s tough talk on industry spending came early in his term. “We’re going to create specific cost targets for all sectors to achieve, and we are going to assess penalties if they don’t achieve those targets,” Newsom said in January 2020. “If that didn’t wake up members of the system, I don’t know what will.”

Newsom’s wake-up call came on the heels of tense legislative debates on bills that would have empowered the state to set health care prices and created a single-payer system. The measures gained surprising momentum but ultimately buckled under opposition from health care giants.

Then the covid-19 crisis hit and propelled the recall effort to oust him from office — and the wake-up call was met with a slap of the snooze button. The governor and his health industry allies nestled closer. Just as he needed them to be the state’s front line of defense, they needed him to keep hospitals from overflowing, to secure protective gear and to push vaccinations.

Health care titans became regular fixtures in Newsom’s orbit. His calendars, obtained by KHN, show that doctors, hospitals and health insurance leaders have routinely received access to the governor.

Carmela Coyle, head of the California Hospital Association, stood beside Newsom at the state emergency operations center in the early days of the covid crisis, and Paul Markovich, CEO of Blue Shield of California, obtained a lucrative no-bid state vaccination contract to implement Newsom’s vaccination effort.

The coziness of the industry’s relationship with Newsom burst into public view in late 2020 when Newsom was photographed dining at the ritzy French Laundry restaurant with Dustin Corcoran and Janus Norman, the CEO and top lobbyist, respectively, of the state doctors’ lobby, the California Medical Association.

“There is no possible way we could have come out of this covid crisis where the health care industry was given so much power without influence coming along with that,” said Carmen Balber, executive director of the advocacy group Consumer Watchdog.

Newsom did not respond to questions about the industry’s influence, but spokesperson Alex Stack said his proposal to regulate health care spending “is a priority for this administration, and we look forward to continuing to work on this issue to get it done.”

Doctors and Blue Shield have given Newsom millions of dollars to support his political career over many years, including a $20 million donation in September 2020 from Blue Shield for his homelessness initiatives.

The recall effort earlier this year only solidified Newsom’s relationship with health care executives. Industry groups wrote checks to the California Democratic Party, which fought to keep Newsom in office. It received $1 million each from Blue Shield and the hospital lobby and $875,000 from the doctors’ lobby, according to state campaign finance records.

Though Newsom vowed to go after industry, he hasn’t aggressively taken it on, and health care executives and lobbyists continue to wield their influence as they shape the debate over the Office of Health Care Affordability.

That could put Newsom in a political bind as he runs for reelection — first in the June 2022 primary and then the November general election — because he will face intense opposing political pressure from liberal Democrats who want him to keep his campaign promise and adopt single-payer.

Health and political experts say Newsom can help alleviate that pressure by adopting a strict law going after spiraling health care spending.

“This issue isn’t going away — it does need to be addressed,” acknowledged Corcoran. The push to control costs “should be uncomfortable for everybody, but not horribly so.”

But it won’t be easy. After powerful industry leaders joined forces with organized labor and consumer advocates to propose a plan to the governor, they jammed negotiations with their demands, splintering the coalition and killing the effort this year.

Coyle, with the hospital association, had left the coalition early out of concern that hospitals were the primary target, and approached the Newsom administration independently. She is also asking Newsom to relax stringent earthquake safety standards for hospitals.

Corcoran wants to exempt “small” doctor practices — which he defines as practices with up to 100 doctors — from regulation, arguing that restrictive government cost controls could put them out of business, leading to increased industry consolidation and higher prices.

“The goal posts were constantly shifting,” said Yasmin Peled, a lobbyist for the advocacy group Health Access California, which was involved in negotiations. “The asks were constantly changing.”

Before negotiations completely broke down, Newsom embraced the idea floated by Coyle: The state should control growth, not impose revenue cuts. And it should not only focus on hospitals, but apply to all health care sectors, including doctors and insurers. (The pharmaceutical industry would not be subject to the cost control provisions of the measure because of restrictions in federal law, according to Wood’s office.)

With battle lines drawn, industry groups are poised for a major fight next year as Newsom and state Democratic lawmakers muscle through legislation. Their primary goal will be to protect their interests, said Mark Peterson, a professor of public policy, political science and law at UCLA.

“There’s no question this industry has power. The real question is what they do with it,” Peterson said. “They’re getting wins, and important ones.”

Biden Touts Vaccine Mandates For Large Businesses: “These Requirements Work”

President Biden News & Videos - ABC News

Source: ABC News, by Justin Gomez

President Joe Biden renewed his call for private employers to require their workers to get vaccinated against COVID-19, saying “we are going to beat this pandemic” if more Americans get their shots.

“Without them, we face endless months of chaos in our hospitals, damage to our economy and anxiety in our schools and empty restaurants and much less commerce,” Biden said during a speech in Elk Grove Village, Illinois, where he toured a construction site overseen by Clayco, which is one of the Midwest’s largest construction companies and announced new vaccination requirements for its employees Thursday.

“I know these decisions aren’t easy, but you’re setting an example and a powerful example,” he said of Clayco’s new requirement.

Biden said that the U.S. is in a position to “leap forward” economically and that businesses “have more power than ever before to change the arc of this pandemic.”

“I know that vaccination requirements are tough medicine, unpopular to some, politics for others, but they’re life-saving, they’re game-changing for our country,” he said.

Biden’s remarks came just hours after the White House released a new report outlining the importance of requirements in driving up vaccination rates and helping Americans return to work.

The 26-page report says more than 185 million Americans are now fully vaccinated and that “the unprecedented pace of the president’s vaccination campaign saved over 100,000 lives and prevented 450,000 hospitalizations.”

“These requirements work,” Biden said. “More people are getting vaccinated. More lives are being saved.”

According to the White House, more than 3,500 organizations have already instituted some form of vaccine requirement, including 25% of businesses, 40% of hospitals, and colleges and universities serving 37% of all graduate and undergraduate students. They said thousands more businesses will institute requirements over the weeks ahead as the Occupational Safety and Health Administration (OSHA) rule for businesses with more than 100 workers is still being finalized.

White House COVID-19 Data Director Cyrus Shahpar also announced on Thursday that 78% of adults in the U.S. have now received at least one vaccine dose.

Biden’s visit, which was rescheduled from last week so the president could focus on infrastructure negotiations in Washington, D.C., comes nearly a month after he laid out a six-point plan to combat the pandemic, which included a vaccination requirement for federal government employees, health care workers and all businesses with more than 100 employees, which he said “wasn’t my first instinct.”

“Vaccination requirements work,” Biden said. “And there’s nothing new about them. They’ve been around for decades. We’ve been living with these requirements throughout our lives.”

The president also met with United Airlines CEO Scott Kirby, who implemented a requirement for employees to be vaccinated in August and now boasts a 99% vaccination rate.

Biden’s visit also comes as the president’s overall approval rating is declining, including his handling of COVID-19. In a Quinnipiac poll among U.S. adults released Wednesday, fewer than four in 10 Americans now say they approve of Biden’s overall job performance, four points lower than Quinnipiac reported in a poll three weeks ago. Meanwhile, 50% disapprove and 48% approve of his COVID-19 response.

Democrats Promised To Slash Drug Prices. Now Internal Clashes Are Standing In The Way.

Elissa Slotkin Braces for a Democratic Civil War - POLITICOSource: The Washington Post, by Mike DeBonis

When House Democrats made their pitch for the majority ahead of the 2018 midterms, party leaders focused their message on “kitchen table” economic issues — and one in particular that, according to polls and focus groups, resonated broadly across America’s political divides.

“The American people deserve A Better Deal on the cost of prescription drugs,” the midterm platform read, promising an end to pharmaceutical industry price gouging and pledging negotiated prices for Medicare.

That plank became the centerpiece of dozens of congressional campaigns — helping Democrats build a robust House majority — and presaged President Biden’s 2020 platform, where he made similar pledges.

Now, with Democrats in control of Washington and in the position to deliver, the promises they made to voters are in serious jeopardy.

A small group of moderate holdouts kept a key House committee earlier this month from advancing drug pricing legislation that largely matched a bill that passed the House in 2019. Meanwhile in the Senate, party leaders have struggled to turn a skeleton framework of drug-pricing principles into a handshake agreement, let alone legislative text.

The internal fight over prescription drug prices has become a microcosm of the challenge the party faces on multiple fronts as Biden and congressional leaders seek to enact their massive domestic policy bill, known as the Build Back Better plan, with razor-thin majorities. Any one senator or any group of three House members can block provisions favored by the vast majority of their colleagues, and those dynamics are playing out on climate, tax policy, immigration and multiple other health-care debates.

But the difficulties on prescription drug prices have created a special level of exasperation — bordering on rage — for many on the party’s left who see the issue as a political no-brainer that is being blocked by intense pharmaceutical industry lobbying. The Democratic holdouts are among the largest recipients of industry campaign contributions, and several — though not all — have a significant pharma footprint in their districts.

Rep. Peter Welch (D-Vt.), a longtime critic of the industry and advocate for aggressive price controls, said his own frustrations at the impasse are “frankly immense.”

“This is one of the biggest ongoing scams that we tolerate at the expense of the American people,” he said, referring to the federal prohibition on negotiating prices for prescription drugs purchased through Medicare.

But Welch said he and the vast majority of Democrats had no choice but to play ball with the holdouts given the massive implications for the party’s agenda. “There is a practical reality that we face as a majority that is paper-thin,” he said. “That means that any three people can derail any element, and it means that there’s got to be enormous effort in building trust and finding the way forward because we don’t want the whole thing to come tumbling down.”

The clash is reminiscent of the difficulties Republicans faced in 2017 after winning the House, Senate and White House after years of promising to “repeal and replace” the Affordable Care Act. But the GOP never coalesced around a workable alternative, and members who voted for prior bills with no chance of becoming law balked when faced with the prospect of thousands of constituents losing health insurance.

The difference is that lowering prescription drug prices, unlike repealing the ACA, is overwhelmingly popular with the public. David Shor, a Democratic consultant whose data analysis is influential with party leaders, said cheaper drugs are overwhelmingly favored by the voting public.

“I think it would be a shame if, for a bunch of internal coalition politics reasons, we ended up not doing the thing that would do the most to help Democrats get elected next year,” he said.

The policy details, meanwhile, are both countless and arcane.

The crux of the Democratic plan is to allow Medicare to bargain prices with drug companies, and even the holdouts say they support some level of negotiation. But the number of drugs that could be subject to bargaining remains an issue, and so are the leverage points the federal government would have to drive prices down.

The 2019 House bill, for instance, gives the federal government the power to sharply penalize companies that refuse to negotiate an acceptable price and limits the costs of many drugs to 120 percent of its average price in six other industrialized countries. The Congressional Budget Office estimates that bill would save the federal government upward of $500 billion over the next decade — savings that Democrats are counting on to offset expensive new spending proposals elsewhere in the Build Back Better bill.

But those savings would come at the expense of pharmaceutical company revenue, and the holdouts — echoing the Republican arguments against the bill — argue that the cuts would not only harm the industry’s bottom line, but lead to inevitable cutbacks in research and development funding.

Rep. Scott Peters (Calif.), one of three Democrats on the House Energy and Commerce Committee who voted against adopting the 2019 approach last month, said the opposition was a matter of innovation and — for him, anyway — a matter of constituent service in a San Diego-based district with tens of thousands of life sciences jobs.

He has proposed an alternative bill — co-sponsored by Reps. Kathleen Rice (D-N.Y.) and Kurt Schrader (D-Ore.), fellow holdouts — that would allow negotiations on a more limited set of prescription drugs while capping out-of-pocket expenses for Medicare. Peters argues that his approach would lower prices for seniors without harming pharmaceutical industry research — but it also is unlikely to deliver the massive savings of the 2019 bill.

“Most people around here understand: Iowa is for corn, Michigan’s for cars and I’m for biotechnology,” he said, citing the hundreds of millions of dollars in private investment his district sees every year. “I don’t want to lose that, because that means we’ll lose cures for patients. We’d certainly lose jobs.”

But those arguments have garnered little sympathy with many of Peters’s colleagues and liberal activists, who have swarmed social media and picketed offices in an attempt to pressure them to toe the Democratic Party line. Those on the left have been even more befuddled by the votes of Rice and Schrader, whose districts do not have a significant industry presence but who have accepted campaign donations from its players.

Adding to the liberal vexation is that all three House Democrats voted for the 2019 House bill. Now, with the party’s agenda on the line, they are opposing it.

Peters said he voted for the earlier bill “to start a conversation” about the best approach to drug pricing. “Of course, nothing happened,” he said.

While the divisions have been in plain view in the House, the clashes in the 50-50 Senate have been largely cloaked since Finance Committee Chairman Ron Wyden (D-Ore.) released a three-page set of drug-pricing principles in June. Despite reporting ongoing progress to reporters on a near-daily basis this month, Wyden has yet to release a consensus framework.

Sen. Robert Menendez (D-N.J.), a senior Finance Committee member who represents the industry’s epicenter and is considered a key player in the talks, said Wednesday that negotiators were “not anywhere near” a deal.

“We need to put some meat on the bones so that we can decide whether it’s acceptable or not or what needs to be changed,” he said. “Right now, what we’re talking about is saving the government a lot of money, which in and of itself isn’t a bad thing. But no one is showing me how we’re going to take that money and give rebates to the consumer at the counter. What we are using it for is a whole host of other things.”

Asked this week about the difficulty of building consensus on the issue, Wyden quipped that he is on the Senate Intelligence Committee and is not in the habit of sharing classified information.

“But it is not exactly an atomic secret that pharma has more lobbyists than anybody in town,” he said. “They’re everywhere. They spend a boatload of money.”

The industry is on track to record its largest annual lobbying expenditure since at least 2009, when Democrats last had unified control in Washington, according to data from the Center for Responsive Politics. Advocacy groups allied with the industry, meanwhile, have blanketed airwaves warning of disappearing cures if Democrats like Welch and Wyden get their way.

Brian Newell, a PhRMA spokesman, said Democratic leaders have run into problems not because of industry lobbying, but because they “ignored concerns within their own party and have persisted in taking a partisan approach” to cutting drug prices.

“We’re flattered that our advocacy team is held in such high esteem, but the real challenge facing lawmakers is an extreme proposal that will limit access to lifesaving treatments and destroy future innovation,” he said.

As Democrats argue among themselves, strategists and activists are warning that the political stakes could not be higher one year before the midterms. Numerous polls show high prescription drug prices as a matter of deep public concern.

Mary Small, the national advocacy director for the grass-roots activist group Indivisible, said Democratic candidates would be “absolutely screwed” in 2022 if the party fails to deliver on one of their central campaign promises.

“There’s just no mincing words about it,” she said. “A ton of volunteers and activists and everyday people all around the country worked their [posteriors] off during a pandemic to deliver a trifecta for Democrats, and for Democrats to take that trifecta and fail to deliver on a core consensus Democratic priority — and also, by the way, one that is wildly popular with the American people across party lines — would be such a catastrophic failure.”

Sen. Ben Ray Luján (D-N.M.), who chaired the Democratic Congressional Campaign Committee in the 2018 election cycle, was not quite so dire. But he said it was “very important” that Democrats deliver on the issue.

“It was part of a commitment that we made,” he said. “There should not be a question of the work that we must do and can do to lower prescription drug prices for the American people . . . I’m confident we’ll get it passed in this Congress.”

CMS: Employer Plans Can’t Deny Benefits To Unvaccinated Customers But Can Offer Premium Discounts

UCHealth stands firm on denying organ transplants to patients, donors who  are unvaccinated for COVID-19 | FierceHealthcareSource: Fierce Healthcare, by Robert King

Employer group health plans cannot deny benefits to customers who have not gotten the COVID-19 vaccine but can offer premium discounts to customers who decide to get the shot, new guidance from the Centers for Medicare & Medicaid Services (CMS) said.

But plans that increase premiums on the unvaccinated will have that increase count toward whether that coverage is affordable under the Affordable Care Act (ACA).

The updated FAQ document, released Monday, comes as some companies such as Delta Airlines have hiked up insurance premiums for unvaccinated workers.

CMS’ FAQ said COVID-19 vaccination can be considered a wellness program that enables a group health plan to offer premium discounts.

Any discount cannot exceed 30% of the total cost of employee-only coverage and “must give individuals eligible for the program the opportunity to qualify for the reward under the program at least once per year,” the FAQ said.

But any group plan or insurer cannot discriminate against any participants based on a health factor.

“Plans and issuers may not discriminate in eligibility for benefits or coverage based on whether or not an individual obtains a COVID-19 vaccination,” the FAQ said.

Plans are required to meet certain affordability requirements under the ACA, meaning they can’t charge employees more than a certain percentage of their household income.

CMS said if a plan reduces a customer’s premium by 25% for getting vaccinated, that reduction doesn’t count toward the ACA’s affordability requirements. But, if there is a 25% increase for an unvaccinated customer, that “surcharge would not be disregarded in assessing affordability,” the FAQ said.

CMS’ notice comes as more and more companies could install insurance penalties for not getting vaccinated. Delta Airlines announced back in August that it will impose a $200 surcharge on any workers’ health plans that don’t get vaccinated.

Limiting Medicare Benefits Deepens Rift Among Hill Democrats

Limiting Medicare benefits deepens rift among Hill Democrats - POLITICO

Source: Politico, by Alice Miranda Ollstein

Means-testing Medicare, a long-running controversy in health policy debates, is re-emerging as a major source of tension for Democrats seeking a path forward on their stalled social spending package.

Centrist lawmakers are demanding that an expansion of the program to cover dental, vision and hearing care be limited to the poorest Americans, to pare the projected cost by as much as half.

But progressive lawmakers and powerful outside groups like AARP are pushing back, saying the move would fundamentally alter the social insurance program and jeopardize Democrats’ slim margins in the House and Senate by alienating wealthy senior citizens.

“People won’t feel that there is any buy-in for them. You create real divisions,” said House Appropriations Chair Rosa DeLauro (D-Conn.).

The idea of means-testing resurfaced this week in a set of demands Sen. Joe Manchin made to Senate Majority Leader Chuck Schumer, in which he outlined his criteria for a $1.5 trillion package. While many Democrats reject the idea, health industry groups like the American Dental Association argue that limiting the scope of the coverage expansion frees up funds for the party’s other health priorities.

“If you have scarce federal dollars, this is where you want to put your money,” said Michael Graham, the dental group’s senior vice president of government affairs, who is pushing Congress to offer the new dental benefit only to people with incomes below 300 percent of the federal poverty line — or around $39,000 a year.

Because traditional Medicare would pay dentists far less for services than private insurance, the group’s members would lose money if Democrats make tens of millions of seniors eligible for a government-sponsored plan.

Medicare premiums already are tied to incomes, with wealthier seniors paying more for Part B and Part D coverage. But critics of Manchin’s approach argue that imposing more income thresholds adds burdens for the middle class and affects more beneficiaries each year. Lawmakers are weighing other cost controls, like funding the new benefits for only a few years or phasing in their rollout.

Loren Adler, associate director of the USC-Brookings Initiative for Health Policy, said while there are valid arguments for not subsidizing wealthier people, means-testing could wind up limiting the new benefit to older, sicker patients — worsening the risk pool and creating new financial stresses on the program. There’s also the added administrative burden of verifying the incomes of seniors each year to determine their eligibility, and the likelihood that some lower-income people may not be aware or able to prove that they’re eligible.

“There’s a simplicity element to just offering the benefit to everyone,” he said. “In retirement your income fluctuates even more than when you’re working, and distributions from retirement accounts can be one-time windfalls. If you kick people out of the program and then allow them to reapply the next year, the amount of money you save could be so low that it wouldn’t outweigh the added complexity.”

The means-testing debate is playing out as Democrats struggle to squeeze a bevy of health care priorities into the social spending bill, H.R. 5376 (117). With the overall cost likely to drop as low as $1.5 trillion over a decade, the centrists’ arguments are getting louder.

“Let’s have a targeted program for those who really need it,” said Rep. Kurt Schrader (D-Ore.), one of several House lawmakers allied with Manchin. “We can’t afford to, and it’s not sensible to, give money to people earning $400,000 or $500,000 bucks a year.”

A means test for Medicare was considered several times during fiscal clashes between former President Barack Obama and GOP congressional leaders, but ultimately rejected. Indeed, no one in the program’s 56 years has ever been excluded from any benefits based on wealth.

Senate Finance Chair Ron Wyden (D-Ore.) confirmed, in the wake of Manchin’s demands, that there’s an active debate among Democrats in the upper chamber who have yet to finalize their own version of the package.

“We’ve got colleagues offering a variety of opinions on when [the dental, vision and hearing benefits] should start, who is covered and the extent of it,” he said.

The American Dental Association is aiming to have a leading role influencing the outcome, buying digital ads, sending tens of thousands of emails to Capitol Hill and holding Zoom meetings with lawmakers and staff.

“We understand where the progressives are, and we’re not likely to move them,” Graham said. “We also understand where the Republicans are: they’re going to vote against [the social spending bill] no matter what. So our focus is the moderate Democrats. They’re telling us our plan makes sense, but they’re also waiting to see what the Senate does.”

Adler compared the dentists’ current fight to the American Medical Association’s failed attempts to block the creation of Medicare more than half a century ago.

“Once a program exists long-term, it becomes part of the status quo,” he said. “This is the same basic premise. If this becomes a popular product for seniors, it will become difficult for dentists to not take Medicare patients.”

Progressive lawmakers who’ve already scaled back their ambitions for the spending bill argue that means testing Medicare would be worse than some of the other cost-cutting ideas under consideration, including phasing in the benefit over several years and requiring seniors to pay a higher percentage of the cost of major dental procedures.

“None of them are good,” said Melissa Burroughs with the advocacy group Families USA. “The program starting later is not ideal, and the cost sharing could be better. But we’re better able to live with that than a terrible precedent of means testing.”

Critics of the idea also argue that limiting the program to poorer seniors makes all of society less invested in maintaining the program, making it more politically vulnerable to getting cut back or eliminated in years to come.

“Certain things in our society should be universal,” Rep. Ro Khanna (D-Calif.), a prominent member of the Progressive Caucus told POLITICO.

Still, some Democrats on the fence may view means-testing as a less painful option than discarding other parts of the social spending package, like extended subsidies for Affordable Care Act coverage.

“We need to make sure that these programs are targeted so that they are helping the people who most need the help,” said Rep. Stephanie Murphy (D-Fla.).

Last Updated 10/13/2021

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