Becerra Says Surprise Billing Rules Force Doctors Who Overcharge to Accept Fair Prices

Source: California Healthline, by Michael McAuliff

Overpriced doctors and other medical providers who can’t charge a reasonable rate for their services could be put out of business when new rules against surprise medical bills take effect in January, and that’s a good thing, Health and Human Services Secretary Xavier Becerra told KHN, in defending the regulations.

The proposed rules represent the Biden administration’s plan to carry out the No Surprises Act, which Congress passed to spare patients from the shockingly high bills they get when one or more of their providers unexpectedly turn out to be outside their insurance plan’s network.

The law shields patients from those bills, requiring providers and insurers to work out how much the physicians or hospitals should be paid, first through negotiation and then, if they can’t agree, arbitration. Doctor groups and medical associations, however, have lashed out at the interim final rules that HHS unveiled last month, saying they favor insurance companies in the arbitration phase. That’s because, although the rules tell arbiters to take many factors into account, they are instructed to start with a benchmark largely determined by insurers: the median rate negotiated for similar services among in-network providers.

The doctor groups say giving the insurers the upper hand will let them drive payment rates down and potentially force doctors out of networks or even out of business, reducing access to health care.

The department has heard those concerns, Becerra said, but the bottom line is protecting patients. Medical providers who have taken advantage of a complicated system to charge exorbitant rates will have to bear their share of the cost, or close if they can’t, he said.

“I don’t think when someone is overcharging, that it’s going to hurt the overcharger to now have to [accept] a fair price,” Becerra said. “Those who are overcharging either have to tighten their belt and do it better, or they don’t last in the business.”

“It’s not fair to say that we have to let someone gouge us in order for them to be in business,” he added.

Nonetheless, Becerra said he did not foresee a wave of closures, or diminished access for consumers. Instead, he suggested that a competitive, market-driven process will find a balance, especially when consumers know better what they are paying for.

“We’re willing to pay a fair price,” he said. But he emphasized that “I’ll pay for the best, but I don’t want to have to pay for the best and then three times more on top of that and get blindsided by the bill.”

Becerra also pointed to a report on surprise medical bills that HHS released Monday and that was provided to KHN in advance, highlighting the impacts of negotiation and arbitration laws already in effect in 18 states.

The report, which aggregates previous research, found people getting hit with surprise bills averaging $1,219 for anesthesiologists, $2,633 for surgical assistants, $744 for childbirth and north of $24,000 for air ambulances.

In the states that use benchmarks similar to what doctors are suggesting HHS use, such as New York and New Jersey, the report found costs rising. New York has a “baseball-style” system in which the arbiter chooses between the offers presented by the provider and the insurer, although the arbiter is told to consider the offer closest to the 80th percentile of charges. “Since the amount providers charge is typically much higher than the actual negotiated rate, this approach risks leading to significantly higher overall costs,” the report found. In New Jersey, billed charges or “usual and customary” rates are considered.

“When the arbitration process is wide open, no boundaries, at the end of the day health care costs go up, not down,” Becerra said of the methods doctors prefer. “We want costs to go down. And so we want to set up a system that helps provide the guideposts to keep us efficient, transparent and cost-effective.”

The system chosen by the Biden administration was expected to push insurance premiums down by 0.5% to 1%, the Congressional Budget Office estimated.

“Everyone has to give a little to get to a good place,” Becerra said. “That sweet spot, I hope, is one where patients … are extracted from that food fight. And if there continues to be a food fight, the arbitration process will help settle it in a way that is efficient, but it also will lead to lower costs.”

While the administration chose a benchmark that physician and hospital groups don’t like, the law does specify that other factors should be considered, such as a provider’s experience, the market and the complexity of a case. Becerra said those factors help ensure arbitration is fair.

“What we simply did was set up a rule that says, ‘Show the evidence,’” Becerra said. “It has to be relevant, material evidence. And let the best person win in that fight in arbitration.”

The interim final rules were published Oct. 7, giving stakeholders 60 days to comment and seek changes. More than 150 members of Congress, many of them doctors, have asked HHS and other relevant federal agencies to reconsider before the law takes effect Jan. 1. The lawmakers charge that the administration is not adhering to the spirit of the compromises Congress made in passing the law.

Rules that are this far along tend to go into effect with little or no changes, but Becerra said his department was still listening. “If we think there’s a need to make any changes, we are prepared to do so,” the secretary said.

The HHS report also noted that the law requires extensive monthly and annual reporting to regulators and Congress to determine if the regulations are out of whack or have undesirable consequences like those the physicians are warning of.

Becerra said he thinks the rules strike the right balance, favoring not insurers or doctors, but the people who need medical care.

“We want it to be transparent, so we can lead to more competition, and keep costs low — not just for the payer, the insurer, not just for the provider, the hospital or doctor, but for the patients especially,” he said.

Drug Companies Plan Tax Breaks To Offset $26 Billion Opioid Settlement

Drug Companies Plan Tax Breaks To Offset $26 Billion Opioid Settlement : NPR

Source: NPR, by Brian Mann

Four of America’s biggest healthcare companies are close to a $26 billion settlement for their role making and distributing highly addictive opioid medications.

But critics in Congress say corporate tax breaks could slash the value of the deal by more than $4 billion.

“If they get away with it, that means less money going into the treasury, less money for programs that would help deal with the fallout for the opioid crisis,” said Rep. Jimmy Gomez (D-CA).

Public filings by AmerisourceBergenCardinal HealthJohnson & Johnson, and McKesson show they all plan to write off future opioid payouts as operating losses, meaning they would pay far less in corporate income taxes.

At least one of the firms said it will also use a new corporate tax break created last year as part of the CARES Act meant to help companies struggling during the pandemic.

During a call with investors, Cardinal Health chief financial officer Jason Hollar estimated the provision would allow the firm to recoup roughly $420 million in taxes paid as far back as 2015.

In an email statement to NPR, a Cardinal spokesman said the plan to make use of the CARES Act tax provision complies with “current federal law” which allows the firm to “recover previously paid federal taxes.”

Some lawmakers are outraged by the strategy. A letter sent to Cardinal Health last week by the House Committee on Oversight and Reform said the company doesn’t appear to need financial relief.

“Cardinal Health is seeking to exploit the CARES Act provision despite being fiscally healthy during the pandemic,” lawmakers wrote.

Rep. Gomez told NPR he feared the CARES Act tax break would be misused by some corporations, but did not foresee it being used to offset opioid payouts.

“I never thought it would get to the point where they would try to skirt their responsibility to pay…for an opioid crisis that they caused,” he said.

The committee sent letters to all four companies ordering them to answer questions about their opioid-related tax strategies by March 18.

Lawmakers estimated opioid settlements could produce corporate tax benefits on a massive scale, with AmerisourceBergen recouping $1.1 billionCardinal health $974 millionJohnson & Johnson $1.1 billion and McKesson $1.4 billion.

It’s unclear whether anger over corporate tax breaks will complicate already sensitive opioid settlement talks with counties and cities which continue behind closed doors.

Speaking last month, Cardinal Health CEO Mike Kaufman described efforts to reach a deal as “complex negotiations with a lot of moving parts” but said “we’re continuing to make progress there.”

If the deal is finalized, the four companies are not expected to admit wrongdoing. This comes at a moment when many of America’s largest corporations face legal, financial and public relations peril for their role in the opioid industry.

According to the Centers for Disease Control and Prevention, nearly 450,000 people have died since the opioid epidemic began, with many of those deaths linked to prescription medications.

Biden Is Changing PPP Rules. For 2 Weeks, Only Businesses With Fewer Than 20 Employees Can Claim Pandemic Relief Loans.

Biden is changing PPP rules. For 2 weeks, only businesses with fewer than  20 employees can claim pandemic relief loans. | Business Insider IndiaSource: Business Insider, by Kate Duffy and ReutersPresident Joe Biden is set to change the main US coronavirus aid program for small businesses on Monday to try to reach smaller, minority-owned businesses and sole proprietors left behind in previous rounds of aid.

Biden administration officials said that for two weeks starting on Wednesday, the Small Business Administration would accept applications for forgivable Paycheck Protection Program loans from only firms with fewer than 20 employees, to ensure that they are not crowded out by larger firms.

Experts have said that demand for the loans is slowing as firms reopen.

When the program was launched in April, its initial $349 billion ran out in two weeks. Congress approved another $320 billion in May, but the program expired in August with about $130 billion in unused funds.

The program was relaunched in January with $284 billion in new funds from a coronavirus aid bill enacted at the end of December. A Biden administration official said that about $150 billion of PPP money was still available.

But administration officials said many minority-owned and very small businesses in low-income areas had not been able to receive aid.

The changes are designed to make it easier for businesses with no employees — sole proprietors, independent contractors, and self-employed people such as house cleaners and personal care providers — that previously could not qualify because of business cost deductions.

The Small Business Administration is set to revise the rules to match the approach used to allow small farmers and ranchers to receive aid.

The officials said the program would also set aside $1 billion for businesses without employees in low- and moderate-income areas, mostly owned by women and people of color.

The SBA plans to provide new guidance making it clear that legal US residents who are not citizens, such as green-card holders, cannot be excluded from the program. The Biden administration said it would eliminate exclusions that prohibit a business owner who is delinquent on student loans from participating in the program.

Business owners with non-fraud felony arrests or convictions in the previous year are excluded from the program, but Biden administration officials said they would adopt bipartisan Senate proposals to remove this restriction, unless the applicant is currently incarcerated.

Now that Trump’s Forced Drug Prices Into Ads, What’s Next? Lawsuits and Compliance, for Two

Image result for Now that Trump’s Forced Drug Prices Into Ads, What’s Next? Lawsuits and Compliance, for Two images

Source: Fierce Pharma

Sorry, pharma. Self-policing didn’t fend off an official rule requiring drug prices in TV ads. And now that the requirement is coming, response from the industry ranges from challenging to cheering—with a few potential lawsuits in the mix.

Last week, the Trump administration said it would in fact require drugmakers put list prices into TV ads, and followed up by publishing the rule Friday in the Federal Register. It’s set to go into effect July 9.

No organization has sued—not yet, at least, because several haven’t ruled it out. The Association of National Advertisers is “seriously considering trying to find a way to block what we think is an unconstitutional proposal by the HHS,” said Dan Jaffe, who heads up ANA’s government relations.

The association is talking to other groups in the industry as it considers a next move, he said, and will likely know which direction they’re going to pursue “in the next week or so.”

The trade group PhRMA is still weighing its options, too. The organization put out an initial statement that echoed its previous stance, saying the rule “could be confusing for patients and may discourage them from seeking needed medical care.” When asked whether the group is considering legal action, Holly Campbell, deputy vice president in public affairs, said, “We are still reviewing the rule, so this is all I can share at the time.”

At least one pharma marketing expert took PhRMA’s confused-patient tack to another level. “Drug prices in TV ads don’t mean a damn thing and may scare patients away from needed prescription drugs to treat health problems. Until we address the lack of transparency around drug costs, adding the list price to ads is like trying to nail jello to the wall,” wrote consultant Richard Meyer on his World of DTC Marketing blog.

GlobalData senior pharma analyst James Mather also cited the murky nature of drug costs and spending as he picked apart the logic of the bill. While it seems to be a sensible approach, he said, the numbers don’t translate into true drug pricing and will cause confusion instead of clarity.

“The intention behind this announcement is clear,” he said. With the move, “Trump is aiming to increase the awareness of high drug prices with the public and apply pressure to companies to lower prices. This short-sighted policy completely ignores one of the core underlying causes of high U.S. drug prices, which is the complex structure of the U.S. healthcare system.”

Meanwhile, the American Medical Association, which has called for a ban on DTC ads in the past, said the rule is “a step in the right direction.”

“This small dose of transparency will help patients have a more complete picture when faced with prescription drug ads,” AMA president Barbara McAneny said in a release. “Patients—especially those who pay a drug’s list price or whose cost-sharing is based on the list price—will now have another tool in their toolbox as they work with their physicians to determine their prescription drug regimens.”

One usually conflicted group that’s largely in favor of the new rule was Congress. Sen. Dick Durbin, D-Illinois, and Sen. Chuck Grassley, R-Iowa, released a bipartisan statement in favor, while a variety of senators and congressional representatives on both sides of the aisle tweeted support for the new rule. Durbin also noted on Twitter that he and Grassley worked to get a similar bill through the Senate in 2018 and will jointly introduce a bill Monday to codify it.

Pharma and healthcare ad agencies will likely bear the brunt of deciphering the new rule and complying with it in creating TV ads.

For instance, one specific detail requires that the price disclosure be in text and use this format: “The list price for a [30-day supply of ] [typical course of treatment with] [name of prescription drug or biological product] is [insert list price]. If you have health insurance that covers drugs, your cost may be different.”

But pharma agencies are used to the highly regulated industry’s requirements and periodic changes to them, and as Leo Tarkovsky, president, McCann Health New York, said, will “do what we need to do for clients.”

“I don’t think we’re fazed or confused or shocked, because if you’re in this business at this particular point in time, you expect that you have to respond to certain developments whether those are regulatory changes, client changes or public discussions,” he said. “It’s our job to figure out communication solutions for our clients and to me that falls squarely in the same bucket.”

Some pharma marketers had already started including list prices and/or links to pricing information. PhRMA members agreed last month to start adding links in ads that would lead to list prices and other detailed cost information, as agreed in the PhRMA DTC Principles announced in October.

Johnson & Johnson was first to add list prices to drug TV ads in February, while Eli Lilly was first to add links to list prices and other detailed cost information in January.

Insurers Focus on Off-Exchange individual Market








Many health insurers are turning their attention to off-exchange individual plan membership as more consumers withdraw from the exchanges, according to a report by Mark Farrah Associates. Although 4.9 million new members enrolled the exchanges in 2016, individual market enrollment declined 1%. Anthem, UnitedHealth, Aetna, Health Care Service Corporation (HCSC), Humana and Kaiser lead the industry in this segment. Each had more than a million individual medical covered lives in the first quarter of 2016.


Growing concerns about sustainability have motivated some insurers to pull out of the exchanges. Citing high medical costs, Unitedhealth said it would operate in only a handful of exchanges in 2017. In June, Humana announced that it would pull out of many exchanges after a year of seeing nearly $1 billion in losses. In August, Aetna announced that it would sharply reduce its participation in the public Marketplaces next year. Several Blue Cross Blue Shield plans and regional competitors have also announced intentions to scale back. Insurers lost almost $6 billion in the segment last year. Sixty-nine percent of the 194 companies that filed the 2015 Supplemental Health Care Exhibit had aggregate net losses in the individual, non-group segment. Factors include high medical claims, adverse selection, challenges with reinsurance, risk corridors, and risk adjustment, immature risk pools, and under-enrollment of younger, healthier individuals.

Still, Marketplace advocates maintain that the ACA is in its formative years and that new companies will enter markets as others exit. The Marketplace shakeout will continue as companies withdraw and enter new exchange markets. Meanwhile, insurers are working to firm up rates for 2017 individual plans and gear up for open enrollment beginning November 1, 2016.

Sixty-three percent of the 20.2 million individual medical members were enrolled through the Marketplace as of March 2016. The remaining 37% were enrolled in off-exchange plans, according to the Centers for Medicare & Medicaid Services (CMS) reports and data from Mark Farrah Associates. As for the future of Obamacare. Some say that the program is unsustainable and will collapse while others say the program can learn from its mistakes and secure a solid footing. The upcoming presidential and congressional elections will strongly influence Obamacare’s future, according to the report.

Many Americans Would Rather Pay the Fine Than Get Coverage

Thirty-eight percent of Americans would rather pay a fine than buy health insurance, according to a survey by The survey reveals the following:
• 65% of Americans from 18 to 29 would buy health insurance versus 57% of Americans 30 and older.
• 78% of African Americans would buy health insurance versus 61% of Hispanics and 56% of Caucasians.
• 74% of Democrats would buy health insurance versus 40% of Republicans and 56% of independents.

The results reflect Americans’ responses to a hypothetical scenario (a 45-year-old who earns $50,000 a year). A typical health plan would cost this person $3,000 a year. If this person did not buy health insurance, the fine would be $400.

Laura Adams,’s senior analyst said, “One of the key questions surrounding the Affordable Care Act is whether young Americans — especially healthy young Americans — will sign up for health insurance. This research sheds a positive light on that segment of the population, but it’s concerning that about three in 10 Americans still don’t know about the possible fines.”

Most Americans are confused about the penalty amounts. The penalty would be $200 for a person who earns $30,000 a year. Only 21% of Americans who know that uninsured people will be fined correctly pegged the amount at $100 to$250 (38% overestimated and 36% underestimated). The penalty would be $650 for a person who earns $75,000 a year. Only 21% of Americans who know about fines correctly pegged the amount at $500 to $1,000 (46% underestimated and 29% overestimated).

Almost eight in 10 Americans who know about fines incorrectly think that children under the age of 18 are exempt from fines. Six in 10 falsely believe that senior citizens over the age of 65 are exempt. Only 64% correctly said the fine would come from their federal income tax refund. For more information, visit

Will Medicare Cuts Reduce the Quality of Hospital Care?

The Affordable Care Act (ACA) permanently slows the growth of Medicare payment rates for inpatient hospital care, raising concerns that hospitals will raise prices for private payers in order to offset lower Medicare revenue. But if history holds true, nonprofit hospitals will reduce operating expenses instead, according to a study by the Center for Studying Health System Change (HSC).

The claim that the ACA will drive large numbers of hospitals to insolvency appears to only hold true with for-profit hospitals. For-profit hospitals, which tend to have lower operating costs, will see profits decline.

But not-for-profit hospitals will adjust their operating expenses to match lower revenues. Hospitals will offset about 90% of lost revenues by through savings on personnel and non-personnel costs. Hospitals will also delay or forgo capital improvements. According to researchers, “Newhouse (1970) describes the hospital industry as aspiring to a Cadillac level of quality. Our results suggest that hospitals, if forced to, will instead turn out Buicks.” If hospitals can maintain or improve their quality of care, the result will be improved efficiency. For more information, visit

Americans Divided Over Repealing Obamacare

Americans are evenly divided about whether the Affordable Care Act should be repealed, according to a report. This deadlock among Americans (46% on both sides of the issue) mirrors the divisions in Congress. Americans’ opinions of Obamacare differ greatly with age. Americans 18 to 29 are most likely to be uninsured (22%). They also respond most favorably to Obamacare, with 51% against repealing it. Americans 65 and older are the least likely to be uninsured (3%) and the most likely to object to Obamacare, with only 32% against repeal.

Sixty-four percent of rural residents would vote to repeal Obamacare versus 31% of urban residents and 48% of suburban residents. The Midwest is most in favor of repealing Obamacare (55%) while the Northeast is most in favor of keeping it (just 38% would vote to repeal). Not surprisingly, 74% of Democrats would vote to keep Obamacare and 79% of Republicans would vote to repeal. Independents sided with repealing, 49% to 41%.

Thirty-one percent of Americans say they are more negative about the Affordable Care Act compared to 12 months ago while 11% say they are feeling more positive. Upper-middle-income households (annual income $75,000 and up) are the most likely to feel worse about their health insurance situation compared to  year ago. Twenty-five percent say it’s harder to handle medical expenses while 75% say it is easier). For more information, visit

The Evolution of ACO Partnerships in California

Unique market factors in California are driving interest in commercial accountable care organizations (ACO), according to a study by the Center for Studying Health System Change (HSC) on behalf of the California HealthCare Foundation. (ACOs are groups of providers that take responsibility for the cost and quality of care of a defined patient population.)

In California, large physician organizations are experienced in managing financial risk for patient care. Also, the growing dominance of Kaiser Permanente Health Plans has put more competitive pressure on insurers and providers.

Hospitals, physicians, and other providers are collaborating with public and private TPAs on reforming delivery and payment systems to slow health care spending growth and improve the quality of care. Medicare initiatives to develop ACOs have spurred interest in commercial ACO contracting arrangements among private insurers and providers.

On a national basis, most commercial ACO initiatives focus primarily on new provider payment approaches with existing insurance products. In contrast, California ACO collaborations have combined payment changes with new limited-network ACO insurance products. These limited-network products include financial incentives for enrollees to use ACO providers. They are usually structured as health HMO products that provide access only to ACO providers. Also, PPO products provide reduced patient cost sharing for using ACO providers.

Initial experiences reveals that some significant savings are possible. But ACO efforts require intensive collaboration and investment to support care management and exchange of sensitive performance data. These commitments present challenges even in California communities where market conditions are more favorable for ACOs. For more information, visit

Insurers Face Challenges in Attracting Consumers to Exchanges

Carriers will face significant challenges and new competition in attracting and retaining customers in the exchanges, according to a study by PwC’s Health Research Institute. “Large national insurers and new players, some from other industries, are jockeying for position in the new exchange market,” said Ceci Connolly, managing director, PwC’s Health. New exchange entrants will include Medicaid managed care companies, new health plans run by large provider systems, healthcare start-ups, and non-insurer players, such as web brokers and tax preparers. Their participation won’t come without challenges, as many will need to learn how to operate in the new exchange market and manage the needs of a largely unknown population.

It will be crucial for insurers to invest in retention programs to gain the loyalty of a new crop of technologically savvy buyers. Companies should think beyond initial implementation challenges and focus on building a meaningful customer experience, with an eye on cost reduction and personalized communication, said Connolly.

For the study HRI interviewed insurance executives, consumer experts, and health policy leaders about exchange strategies. The following are some key results:

  • 69% plan to offer coverage on the exchanges, reflecting the rising significance of this new business opportunity
  • Ten of 18 national health insurer executives say their companies won’t offer exchange coverage in all the states where they have business, and 50% expect to enter additional states after 2014.
  •  63% say technology integration is a major barrier to implementation; and 61% cite coordination of subsidies.
  • Only 34% say understanding newly eligible customers is a major barrier to implementation, suggesting they may not thoroughly understand the challenges.
  • 91% expect premium costs and total out-of-pocket costs to be what consumers care about most. Yet, industry and consumer experts expect the ultimate differentiators to be factors, such as personalized communication, tangible rewards and health management programs, and brand recognition.

Sandra Hunt, principal with PwC’s Health Industries practice said, “Organizations that are planning to offer coverage on the exchanges should prepare to compete in new ways to earn consumers’ business and loyalty. Transparency around pricing, quality, and customer satisfaction should be foremost in their minds as consumers become much more aware of the cost of healthcare and how to access it.” For more information, visit

Last Updated 12/01/2021

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