AMA Calls for Ban on Direct to Consumer Prescription Drugs Ads

The AMA is supporting a prescription-drug advertising ban. AMA board chair-elect Patrice Harris, M.D., M.A. said that direct-to-consumer advertising inflates demand for new and more expensive drugs even when these drugs are not appropriate. The AMA is also calling choice and competition in the pharmaceutical industry as well as greater transparency in prescription drug prices and costs.

The United States and New Zealand are the only countries that allow direct-to-consumer advertising of prescription drugs. In the past two years, advertisers have increased spending on prescription drug ads by 30% to $4.5 billion, according to Kantar Media.

The AMA wants federal regulators to limit pharmaceutical companies from manipulating patent protections and abusing regulatory exclusivity incentives in their efforts to reduce competition from generic manufacturers. Patent reform is a key area for encouraging greater market-based competition. Prices on generic and brand name prescription drugs experienced a 4.7% spike in 2015, according to the Altarum Institute Center for Sustainable Health Spending. The AMA will also monitor how pharmaceutical company mergers and acquisitions affect drug prices.

AMA Seeks to Improve Mental Health Coverage

The American Medical Association (AMA) is calling on Medicaid and private health insurers to pay for physical and behavioral health care services provided on the same day. “Treating people with physical and behavioral health conditions can be two to three times higher than caring for those without co morbid conditions. Yet research shows that coordinated care management of mental and physical health conditions can greatly improve health outcomes and could save upwards of $48 billion annually in general health care costs,” said Mary Anne McCaffree, M.D.

The AMA is also encouraging state Medicaid programs to include payment for behavioral health care services in school settings in order to identify and treat behavioral health conditions as early as possible. “Less than half of the 43 million adults identified with a mental illness and the six million children identified as suffering from an emotional, behavioral, or developmental issue get treatment. A key barrier…is cost. If we don’t take the necessary steps to ensure that integrated physical and behavioral health care [are] provided as early as possible, the lack of comprehensive services will continue to have devastating consequences for these people and the health of our society,” she added

WellPoint Dominates the Market

WellPoint Inc. has a bigger geographic footprint than any other private health insurer in the United States, according to a study by the American Medical Association (AMA). WellPoint, soon to be renamed “Anthem,” is the largest health insurer, by market share, in 82 of 388 metropolitan areas examined by the AMA. WellPoint’s commanding position stretches across metropolitan markets in 13 states including: California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, New Hampshire, Nevada, Ohio, Virginia and West Virginia. Health Care Service Corp. was second with a market share lead in 37 metropolitan areas, followed by UnitedHealth Group (UNH) with a market share lead in 35 metropolitan areas.

AMA President Robert M. Wah, M.D. said, “The AMA is greatly concerned that a single health insurer had at least a 50% share of the commercial health insurance market in 41% of metropolitan areas. The dominant market power of big health insurers increases the risk of anti-competitive behavior that harms patients and physicians, and presents a significant barrier to the market success of smaller insurance rivals.” The study also reveals the following:

  • There was a significant absence of health insurer competition in 72% of the metropolitan areas studied.
  • Seventeen states had a single health insurer with a commercial market share of 50% or more.
  • Forty-five states had two health insurers with a combined commercial market share of 50% or more.
  • The 10 states with the least competitive commercial health insurance markets were:
    1. Alabama, 2. Hawaii, 3. Michigan, 4. Delaware, 5. Louisiana, 6. South Carolina, 7. Alaska, 8. Illinois, 9. Nebraska, and 10. North Dakota. Illinois has made its first appearance in the annual AMA list, displacing Rhode Island from last year’s list. Louisiana entered the top 5, moving from 9th on last year’s list.
  • The 10 states that experienced the biggest drop in competition levels between 2011 and 2012 were: 1. Illinois, 2. Louisiana, 3. Indiana, 4. New Jersey, 5. New Hampshire, 6. Vermont, 7. Montana, 8. Wyoming, 9. Idaho, and 10. Tennessee.

What Doctors Want You to Consider Before Choosing a Health Plan

As open enrollment for 2015 exchange plans gets underway, the American Medical Association (AMA) urges patients to review the plans they are considering in order to prevent interruptions in care and higher out-of-pocket costs. Whether it’s a new plan or a renewal, patients should consider deductibles, co-pays, drug costs, which physicians and facilities are covered, and the cost of out-of-network treatment. Patients should ask whether their physicians are participating in plans they are considering. AMA President Robert Wah, MD said, “It is very important that patients look beyond the big print, color-coded plan designations and price of insurance plans and check the small print details before making their selection.” AMA asks patients to consider the following:

1) Are your family’s doctors in the plan? If not, what will you have to pay out-of-pocket for office visits or other services your doctor prescribes? Is the plan’s directory of participating physicians up-to-date and accurate? Are there physicians on the list who are still accepting new patients?

2) What does the plan cover? What percentage of your health care costs will you have to cover? If so, how much and can you afford it? How much will you have to pay out of pocket for the medicines your family needs? Will you be able to use hospitals, labs and other facilities that are convenient to where you live or work? Does the plan provide access to a sufficient number of specialists that you need?

3) Does your primary care physician have to get permission from the insurance company to refer you to a specialist? Does that rule include specialists you see regularly for a chronic condition? Does the insurer use penalties or incentives to induce physicians in the plan to limit referrals in any way?

For more information, visit www.ama-assn.org.

AMA Addresses Problems with Narrow Networks

As open enrollment for the health insurance exchanges gets underway, the American Medical Association (AMA) has adopted a new policy to address inadequate networks. The AMA wants insurers to make provider terminations without cause before the enrollment period begins. The AMA says that inaccurate or late revised provider directories are leaving patients stuck with plans that dropped their physicians after they enrolled. The AMA says that new physicians should be able to be added to a network at any time. Also, health plans need to give patients an accurate, complete directory of participating physicians through multiple media outlets, which includes identifying providers who are not accepting new patients. AMA president Robert Wah, MD said, “Patients who need to seek care out-of-network should not be punished financially. If patients find themselves in networks that are deemed inadequate, there should be adequate financial protection in place to ensure they can access the care they need and deserve…As enrollment opens for health insurance exchanges, patients deserve to have an honest look at their coverage options including the physicians, hospitals and medications they will have access to as well as cost-sharing so that they can make an informed choice.”

The AMA says the following:

  • If the patient’s plan is deemed inadequate, insurers should treat visits to out-of-network physicians the same as visits to in-network physicians.
  • There should be a way for patients to file formal complaints with regulators about network adequacy.
  • The AMA supports regulation and legislation that would require out-of-network expenses to count toward annual deductibles and out-of-pocket maximums when a patient is enrolled in a plan with out-of-network benefits or is forced to go out-of-network based to get care.
  • State regulators should enforce network adequacy requirements so that patients have access to adequate provider networks throughout the plan year.
  • Insurers should submit public reports, at least quarterly, to state regulators on several measures of network adequacy, including the number and type of physicians who joined or left the network,  essential health benefits that are provided, and consumer complaints.

For more information, visit www.ama-assn.org/go/aca.

Patients Are Stuck With a Big Chunk of the Medical Bill

Patients are responsible for nearly one-quarter of their medical bills through copays, deductibles, and coinsurance, according to a study by the American Medical Assn. (AMA). During Feb. and March of this year, patients paid 23.6% of the amount that health insurers set for paying physicians. The AMA is calling on insurers to give physicians the tools to automatically determine a patient’s payment responsibility prior to treatment.

The AMA also unveiled its new Administrative Burden Index (ABI), which ranks commercial health insurers according to how much unnecessary cost they contribute to the billing and payment of medical claims. Avoidable errors, inefficiency, and waste in medical claims resulted in an average ABI cost per claim of $2.36 for physicians and insurers. Cigna had the best ABI cost per claim of $1.25, or 47% below the commercial insurer average.

The AMA estimates that insurers could save the system $12 billion a year if they used automated systems for processing and paying medical claims. This savings represents 21% of total administrative costs that physicians spend to ensure accurate payments from insurers.

Commercial health insurers’ error rates on paid medical claims have dropped significantly – from nearly 20% in 2010 to 7.1% in 2013. While they have made dramatic improvements, commercial insurers could have saved more than $43 billion if they had consistently paid claims correctly since 2010. UnitedHealthcare led commercial health insurers with an accuracy rating of 97.52%.  Medicare led all insurers with an accuracy rating of 98.10%.

Medical claim denials dropped 47% in 2013 after a sharp spike among most commercial health insurers in 2012. The denial rate for commercial health insurers went from 3.48% in 2012 to 1.82% in 2013. Cigna had the lowest denial rate at .54%, while Medicare had the highest denial rate at 4.92%.

Health insurers have improved response times to medical claims by 17% from 2008 to 2013. Humana had the fastest median response time at six days while Aetna had the slowest at 14 days. Medicare’s median response time of 14 days is has not changed from 2008.

Health insurers have improved the transparency of rules used to edit medical claims by 37% from 2008 to 2013. Reducing the use of undisclosed payer-edits reduces the administrative costs of reconciling medical claims. For more information, visit www.ama-assn.org/go/reportcard.

Drug Companies Conspire to Keep Generics Off the Market

If it seems harder to get a generic medication it’s not your imagination. With pay-for-delay tactics, brand prescription drug manufacturers pay generic drug manufacturers for not creating generic versions of their medication. This limits the number of prescription options available to patients and contributes to the growth in health care costs, according to the American Medical Assn. (AMA), which has adopted a policy to work toward ending the practice.

Pay-for-delay agreements are estimated to cost American consumers $3.5 billion per year. The Federal Trade Commission (FTC) has recommended that Congress pass legislation to protect consumers from such – agreements. But www.foxbusinessnews.com reports that Congress has failed to stop pay-for-delay and generic drug makers and big-name pharmaceutical companies have been winning court rulings that allowed it.

The Federal Trade Commission recently filed an amicus brief in the U.S. District Court for the District of New Jersey stating that a branded drug company’s agreement not to launch an authorized generic drug “provides a convenient method for branded drug firms to pay generic patent challengers for agreeing to delay entry.”  The FTC also filed a brief in the case of Lamictal Direct Purchaser Antitrust Litigation.  In the case, the private plaintiffs alleged that GlaxoSmithKline paid Teva Pharmaceuticals to delay entry by promising not to compete with authorized generic versions of the drug Lamictal.

Last Updated 11/1/2017

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