For an ambitious, aggressive disease like Zika, Texas is an ideal home. Earlier this week we learned that Zika—a nasty virus that has spread to over 25 countries—was transmitted by sex to a resident of Dallas. Six more cases of Zika have also been confirmed in Harris County, Texas. The appearance of Zika in Texas may be happenstance, but Texas’s health policies will make it easier for Zika to spread. Among other problems, Texas (1) fails to teach students about safe sex and reduces access to affordable, effective contraceptives; (2) has blocked access to Medicaid for up to 2 million low-income residents; and (3) is trying to restrict if not eliminate access to safe abortion. Not a bad place for a communicable disease that can spread through sex and cause birth defects.
The penalty for Bostonian jaywalkers can take dollars out of repeat offenders wallets. The $1 fine for jaywalking in the Massachusetts metropolis may be a ridiculous example of statutory dollar figures losing their significance, but the statutory dollar figures associated with Medicaid eligibility are anything but a laughing matter for millions of families.
The eligibility requirements around Medicaid expansion have ended the decades old practice of limiting assets for Medicaid coverage for children and parents. However, in order to qualify for many existing Medicaid programs, the elderly and people with disabilities in many states must still verify that their assets fall below a certain dollar figure. Oftentimes, this dollar figure is statutory and requires state legislatures to act in order to have the figure rise with inflation.
Asset tests were first incorporated into Medicaid law under the original legislation because welfare benefits required strict means and asset tests. These levels were determined at the state level. As eligibility was separated from welfare eligibility, specific dollar figures on assets were added to eligibility criteria and were meant to curb enrollment by “welfare queens” or people that qualify for social assistance fraudulently or with significant assets. President Reagan first campaigned on the concept of “welfare queens” in his failed 1976 bid for the presidency. But these fraudulent cases that the policy is meant to restrict are limited and more often the imposed asset tests prevent working-age adults from reducing dependency on social welfare programs.
Last week Health Affairs released a new article that surveyed low-income individuals in Kentucky and Arkansas, two states that expanded Medicaid coverage to all people under 138 percent of the federal poverty level in 2014. They survey, led by Harvard professors, Robert Blendon and Ben Sommers, found that people in these states reported lower rates of problems paying medical bills and forgoing care or prescriptions due to cost. Additionally, the number of people that reported seeing a physician for a checkup and management of chronic conditions increased in Kentucky and Arkansas. All of these responses are indicators of having access to health care.
The results seen in Kentucky and Arkansas are in stark contrast to the survey results in Texas, which has elected not to expand Medicaid coverage. Texas has seen no change in an individual’s ability to pay for medical services and an increase in people forgoing health care coverage. This comparison indicates that expanded Medicaid coverage improves a person’s access to medical care.
But this isn’t the first time Medicaid has been shown to score well in measures of access to health care services for low-income individuals. Contrary to the rhetoric of politicians and the logic that Medicaid’s low reimbursement rates mean people have fewer choices of physicians, evidence to date has suggested that some of these arguments may be exaggerated.
Michael Anne Kyle
The recent $157 million commitment from the Centers for Medicare and Medicaid Innovation (CMMI) for a new “Accountable Health Communities” test model is most welcome. This is major step for the agency in recognizing the significance of social determinants of health in improving outcomes and costs. A New England Journal of Medicine article accompanying the funding announcement does an excellent job of highlighting the extent to which social conditions affect health outcomes and costs.
The program will invest in 44 communities over five years in three progressively advancing tracks: “increasing awareness”, “providing assistance” and “aligning partners”. Evaluation (perhaps proof of concept is more apt) is an important aspect of the model: the goal is not only to find out whether social service linkages affect health outcomes, but what types of interventions work. The awareness and assistance tracks each involve randomizing patients to usual care or an intervention; in the case of awareness, this is information about relevant social services, and in the case of assistance, the patient is provided navigation to facilitate the connection. The alignment track provides navigation, and will not involve randomization; instead, outcomes in these communities will be measured against a matched control site.
The CMMI vision of AHCs (another new acronym, gulp!) reflects emerging trends in health care and antipoverty work. The funding announcement credits initiatives like Health Leads for inspiring the low-touch (e.g., awareness) pathways. The alignment track, meanwhile, aligns very nicely with the work of emerging Medicaid Accountable Care Organizations in states like Minnesota, Colorado, and New Jersey.
Analysts from all over the political spectrum have long suggested that the Affordable Care Act’s provisions could lead to a reduction in employment numbers. New research suggests that contrary to these expectations, the available data do not support claims that the ACA would lead to a substantial shift from full-time workers to part-time workers. The current evidence also does not support claims that there would be substantially more part-time workers and people leaving the workforce due to the ACA’s provisions expanding Medicaid eligibility.
Many politicians have specifically expressed concern that the ACA’s requirement that companies with 100 or more employees provide health insurance to employees working 30 or more hours per week would lead to companies shifting employees from full-time work to part-time. Republican presidential candidates including Ted Cruz and Donald Trump have stated that they believe Obamacare makes more workers part-time instead of full-time. While campaigning in Iowa, even Hilary Clinton said she believes the ACA created “some unfortunate disincentives that discourage full-time employment.” Continue reading
By Zack Buck
A paper entitled “The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured” has a number of health policy experts talking this week. Authors Zack Cooper, Stuart Craig, Martin Gaynor, and John Van Reenen—as part of the Health Care Pricing Project—present new findings demonstrating that geographic areas with low Medicare costs and geographic areas with low private insurance costs are nearly completely unrelated. That is, locales with comparatively low Medicare costs are not necessarily areas with comparatively low costs for care paid for by private insurers. Though stunning, this lack of relation between the two metrics does make sense; the report notes that Medicare’s costs are largely driven by the amount of provided care and services, whereas care paid for by private insurance is largely affected by the price at which the care is set by each hospital. (Kevin Quealy and Margot Sanger-Katz of the New York Times have a number of interesting graphs and charts that reflect the study’s findings here.)
Indeed, before the study, and because of a dearth of private insurance pricing data, many simply believed that locales that were cheaper for Medicare were cheaper for private insurance—that is, areas that were great stewards of Medicare funds were likely efficient for private insurers as well. But this new paper demonstrates that this is not true. The two metrics are completely separate.
At the risk of overstating it, this finding could drastically change the paradigm for controlling health care costs going forward. The paper got the attention of Atul Gawande, who noted its importance in an article for The New Yorker. There, Gawande revisits the story of McAllen, Texas, which focused on exploding Medicare costs largely driven by large volume. (I even look at the McAllen story in a forthcoming article here because of its fascinating impact on cost control for Medicare.)
Last week, I blogged here about the introduction of the Reciprocity Ensures Streamlined Use of Lifesaving Treatments (RESULT) Act (text) by Senators Ted Cruz and Mike Lee. As I noted, the Act would require the FDA to speed review of drugs, devices, and biologics that are already approved for marketing in a particular list of countries, including EU member countries, Japan, and Canada. If the FDA declines to grant reciprocal marketing approval, the Act would permit Congress to override the FDA’s decision through a majority vote via a joint resolution.
My post, and additional commentary from numerous other outlets (including RAPS, Vox, and Marginal Revolution) largely focused on the Act itself – on the merits of the various provisions, and on whether those provisions would be effective at accomplishing the Act’s stated goals. But each commentator’s view of the situation depends in large part on their priors about what the purpose of the FDA is, and relatedly, how it should behave to achieve those purposes. In this post, I want to first briefly explain these different views about the purpose of the FDA before explaining the ways in which our views about pharmaceutical regulators are often tied to our views about public health insurers – a point which has largely gone unmentioned in the debate about the RESULT Act.
By Matt Ryan
Following the Supreme Court’s decision in NFIB v. Sebelius, states have had the option whether to expand Medicaid or not. As of this writing, 30 states and the District of Columbia have expanded Medicaid. Kentucky was the only Southern state that decided to expand Medicaid and run their own exchange. The decision brought great success. Under Democratic Governor Steve Beshear, Kentucky saw their uninsured population drop by 10.6% from 2013 to 2014. As Governor Beshear put it, Kentucky was the “poster-child for the implementation of the ACA.”
Last month, Kentucky elected Matt Bevin governor. Mr. Bevin, a Republican, had promised to dismantle Medicaid and the insurance exchange. When asked about Medicaid early in his campaign, Mr. Bevin responded, “No question about it. I would reverse that immediately.” Many feared that Mr. Bevin’s election put Medicaid in critical condition. But since his election, Mr. Bevin has shifted his position.
By Emma Sandoe
Requiring Medicaid beneficiaries to pay premiums and other cost-sharing for medical services is not new to the Medicaid expansion debate. Premiums were introduced as part of the Tax Equity and Fiscal Responsibility Act of 1982. Previously, states were prohibited from imposing enrollment fees, premiums, or deductibles for any categorically eligible individual in the Medicaid program. This law allowed states to implement minimal cost-sharing for waiver demonstrations, but prohibited states from denying medical care due to an inability to pay.
Since this law was passed, the Centers for Medicare & Medicaid Services (CMS) has clarified that certain populations including pregnant women and children were exempt from most cost-sharing. Additionally, certain services are exempt from copayments and coinsurance entirely. The maximum amount that can be charged varies based on wage and type of service and where the beneficiary seeks treatment.
Prior to Indiana’s 1115, approved in 2014, CMS did not allow state waivers to charge premiums to individuals making under 50% of the federal poverty line (FPL). Indiana’s expansion plan is unlike any other state’s waiver plans. It requires individuals to pay a “monthly contribution” of $1 a month or 2% of a family’s income which ever is greater. When a beneficiary that has been paying these monthly contributions uses medical services, they are not required to pay co-payments. Previously, Indiana lowered the income eligibility for premiums during its 2013 waiver when it required premiums for individuals making between 50-100% of FPL. Arkansas and Iowa saw that precedent set by Indiana and lowered their cost sharing levels from 100% of FPL to 50%. Continue reading
By Dalia Deak
Yesterday, the Centers for Medicare & Medicaid Services (CMS) issued a notice that affirmed CMS’s commitment to provide prescription drugs to beneficiaries, specifically highlighting beneficiaries suffering from hepatitis C virus (HCV). The notice comes at a moment of heightened interest in the cost of prescription drugs (particularly on the federal level as an inquiry in the Senate has been initiated regarding rising drug prices).
In the statement, CMS:
- Reminded the states of their obligation, under the terms of the Social Security Act, that Medicaid programs must cover prescription drugs for medically accepted indications if the manufacturer of the drug is a manufacturer with whom they have rebate agreements with;
- Discussed the concern regarding costs of direct-acting antiviral (DAA) HCV drugs, emphasizing the role of competition and negotiation in bringing down the drugs’ prices;
- Expressed concern regarding some states’ policies to restrict access to the DAA HCV drugs that may be contrary to their obligations under the Social Security Act;
- Encouraged states to ensure that their policies do not unreasonably restrict coverage of effective treatment;
- Reminded states that drugs available under the states’ fee-for-service programs must also be available to beneficiaries of Medicaid managed care organizations; and
- Indicated that CMS will monitor state Medicaid policies for DAA HCV drug coverage to ensure that they are compliant with approved state plans, statutes, and regulations.
CMS also followed up its notice with a letter to the CEO of AbbVie asking for additional information regarding the types of value-based purchasing arrangements offered to payers and to state Medicaid agencies by December 31, 2015.
In a victory for common sense, good policy, and good care, reimbursement for end-of-life counseling was safely tucked into the 2016 Medicare Payment Rules issued by CMS last Friday. The calm adoption of advance care planning shows welcome progress from the “death panels” hysteria that plagued this sensible policy when it was first proposed six years ago. The list of advance care planning supporters is long, including: numerous physician organizations, the Centers for Disease Control and Prevention, the Institutes of Medicine, the American Hospital Association, and over 80 percent of Americans. So, what is advanced care planning and why does it matter?
Given the circus that originally surrounded it, people may be surprised to learn that this policy simply involves the addition of two billable codes to the Medicare Physician Fee Schedule. The first code, 99497, covers an initial 30-minute consultation on end-of-life planning, with a second, 99498, covering 30 additional minutes, if needed. Importantly, patients do not need to be seriously ill to access this benefit – a consultation can be scheduled at any time, for example, as part of an annual physical. During this meeting, patients discuss the kind of interventions they would want if they become critically ill, or as they approach the end of life. Such conversations enable collaboration between the patient, family, and medical team – it opens the door for an ongoing dialogue about priorities and goals of care (which may evolve over time).
Planning for the end of life matters because advances in medicine have created a dizzying array of interventions and palliative care options for people who are gravely ill. There are many clinical and psychosocial benefits to communicating one’s preferences around end of life care. In a September 2015 Kaiser Family Foundation poll, 89 percent of respondents said doctors should discuss end-of-life plans with patients – but only 17 percent had actually had such a discussion with their doctor. Formal recognition of the value of advance care planning is an important step in encouraging more patients and doctors to initiate the conversation.
By Zack Buck
After more than four years of investigation, and 70 separate agreements, the Department of Justice (DOJ) announced news Friday of a massive $257 million settlement, covering a record-breaking 457 hospitals, for the alleged fraudulent placement of implantable cardioverter defibrillators (ICDs) between 2003-2010. I have previously written about the twists and turns of this particular nationwide investigation—the most prominent example of the medical necessity-based health care fraud investigations—here, here, and here.
Why ICDs initially caught the attention of the DOJ seemed to be the fact that ICDs are highly expensive—costing Medicare about $25,000 per implantation—and, following a whistleblower’s lawsuit in 2008, the DOJ commenced a review of “thousands” of ICD placements nationwide. As I have written about before, hospitals across the country—including renowned hospitals such as the Cleveland Clinic—were included in the initial review, but not all of ended up on the settlement list (a full list of settling hospitals is available here).
Although the full details of the settlement have not yet been made public, there seems to have been a difference between all of the hospitals that placed ICDs outside of Medicare’s timing guidelines and those that the DOJ felt were particularly egregious (apparently less than half of the hospitals on the original investigation list ended up as part of this settlement). This is important because it may indicate a difference—in the DOJ’s thinking—between Medicare’s coverage standard, and its “medical necessity” standard for purposes of fraud enforcement.
On Tuesday, details of the new Bipartisan Budget Bill, a bill negotiated between Congress and the White House, were released. This bill funds the government for two years and extends the debt ceiling, two important budgetary moves Speaker Boehner promised to leave his successor with a clean slate. Less reported is that this bill makes some small but important changes to our nation’s two largest budgetary social programs, Medicare and Social Security. But the changes made to Social Security Disability Insurance eligibility extend beyond that program and will be important for state Medicaid agencies and for low-income people with disabilities.
What is the Social Security Disability Trust Fund?
Not part of the original Social Security Act, the Disability Insurance (SSDI) benefit was added in 1957. As of 2014 there were 10.9 million Americans receiving this benefit totaling $141 billion or 4% of the federal budget. In the last Trustees report for the projected future cost of the SSDI program, the trustees projected the exhaustion of the trust fund in 2016. This would mean that the nearly 11 million beneficiaries would see their benefits cut by 19% next year because incoming tax revenue would only be able to cover about 80% of the benefits.
By George Maliha, Harvard Health Law Society
As flu season begins, we are bombarded by ubiquitous reminders to get our flu shot. So, it is a good opportunity to reflect on how we provide vaccines to our fellow citizens 65 and older. By law, Medicare Part B covers 4 preventive vaccines (flu, two pneumococcal, and hepatitis B for medium-to high-risk patients). Part D picks up the rest, namely shingles, TDaP, and any other commercially available vaccine. But, that’s where the trouble begins.
When Congress passed Part D, the vaccines recommended for those 65 or older were basically covered by Part B. Now, they aren’t. In 2006, the zoster (or shingles) vaccine came onto the market. In 2010, the recommendations for the TDaP (the P for pertussis or whooping cough being the most relevant here) changed to include the elderly.
But, so what, they’re still covered, right? Continue reading
The last week has yielded significant progress in several states currently debating Medicaid expansion. Thirty-one states and DC have already expanded the program, made an option for states due to the Supreme Court’s NFIB v Sebelius decision. Many state legislatures are coming back into session from summer recesses bringing into focus discussions on the budget implications of Medicaid. Additionally, as we approach a looming Presidential election with expected high voter turnout, politicians have an opportunity to push for the expansion to gain support from certain stakeholders. While significant action is needed in each of these states before any Medicaid expansion legislation is passed or their governors act to implement their plans, it is worth keeping an eye on all of these states in the coming months.
Utah- It has been over a year and a half since Governor Herbert announced his support for Medicaid expansion. This week, details of the new plan, UtahAccess+, have been released. The plan, formulated by the Governor and Republican legislative leaders, is similar to the Healthy Utah plan that was passed the Utah Senate but was struck down in the House with the exception of the financing model which puts the burden on providers that would benefit from additional funds through expansion.
Louisiana- This is one of the more surprising states to appear on a list of upcoming states to expand Medicaid, however the tides may be shifting in this largely conservative state. Louisiana is in the process of electing a new governor as Presidential candidate Bobby Jindal is ineligible due to term limits. All four candidates have indicated some level of support for expansion (to varying degrees) since April. These candidates’ positions reflect the push by business groups in the state which have called for expansion, as well as the recent legislative change that gave the new governor the necessary state authority to expand in the first months in office.
Medicaid is often thought of as a welfare program because of the essential role it plays in providing health insurance for low-income people. However, looks can be deceiving. In terms of scale and scope, Medicaid is rapidly becoming a powerhouse player in health care.
Medicaid enrollment is booming as a result of the Affordable Care Act (ACA): nearly 72 million people are enrolled in Medicaid and the Children’s Health Insurance Program (CHIP). To put this in perspective, about 55 million people are enrolled in Medicare and about 64 million in the UK’s NHS. Medicaid enrollment is likely to continue rising as more states contemplate expansion. As of this month, 30 states and the District of Columbia have expanded Medicaid under the ACA.
Size isn’t the only way Medicaid is changing. Unlike Medicare, Medicaid is a joint state and federal program, which means that states have a lot of latitude to innovate with both delivery and payment. The ACA has enhanced opportunity for reform through planned initiatives like the Center for Medicare and Medicaid Innovation (CMMI), and unexpected pathways, like negotiations around Medicaid expansion – these have yielded some of the most radical departures from the traditional public program paradigm, even in states that have not sought a “private option”
The internet (not just the health policy part of the internet!) is fascinated by today’s New York Times story about dramatic recent increases in the costs of many decades-old drugs. The story focuses on the case of Daraprim, the standard of care for treating the parasitic infection toxoplasmosis. Daraprim was recently acquired by a start-up, which then raised the drug’s price from $13.50 a pill to $750 a pill. Daraprim has been around for decades, and as the story notes, it’s just one of many recent examples of dramatic price increases for generic drugs, often after their acquisition by other companies (as in this case).
The article raises an enormous number of issues of interest to intellectual property and health policy scholars, both explicitly and implicitly, and other commentators have begun to canvass them. But I want to spend the rest of this blog post unpacking a single point made in the article, because it actually contains an enormous amount of complexity. As the author notes, “[the company’s] price increase could bring sales to tens or even hundreds of millions of dollars a year if use remains constant. Medicaid and certain hospitals will be able to get the drug inexpensively under federal rules for discounts and rebates. But private insurers, Medicare and hospitalized patients would have to pay an amount closer to the list price.”
The author is right that there’s one sense in which Medicaid and entities eligible for the 340B program (I assume this is what the author is referring to when he says “certain hospitals”) will be able to obtain this drug “inexpensively” – but there’s another sense in which they won’t be able to.
By Zack Buck
Even though the Centers for Medicare and Medicaid Services (CMS) has set an ambitious goal to move the reimbursement paradigm away from a fee-for-service model for half of all Medicare services by 2018, incentives built into the delivery of American health care that encourage and result in overtreatment remain. One recent illustration of the reimbursement incentives facing physicians to administer either more care, or more expensive care, is the Lucentis-Avastin example I blogged about here earlier this year.
My newest article, forthcoming in the California Law Review in 2016, examines another legal tool that could be employed to recalibrate the incentives in Medicare: fiduciary duty. Others have characterized the patient-physician relationship as being fiduciary in nature; this piece advocates for the extension of the metaphor to the payer-physician relationship. This move would introduce much-needed pressures on providers to limit or avoid excessive or expensive care by placing a duty of loyalty on providers owed to the payers of Medicare’s services–American taxpayers. This move would respect provider autonomy but provide remedies for overtreatment without substantially growing the regulatory scheme or expanding oversight costs. The abstract is available here.
This summer, four of the five largest national health insurance companies proposed mergers – with each other. The acquisition of Cigna by Anthem and Humana by Aetna would reduce the “big five” to three. Provider groups, including the American Hospital Association and American Medical Association are alarmed, citing the potentially anticompetitive nature of these mergers.
It is true that many aspects of the health insurance market are already highly concentrated. In 2013, there were states where the individual and small group markets were dominated by companies with upwards of 70, 80, and even 90 percent market share. The Affordable Care Act introduced health insurance exchanges in an effort to stimulate competition – and it seems to be working. On the Medicare side, a new report by the Commonwealth Fund found that only one (!) of the nation’s 2,933 counties had a competitive Medicare Advantage market. Medicaid has so much going on that it is the subject for another post entirely – but worth noting here that Medicaid managed care is on the rise and projected to cover more than 75 percent of enrollees within the coming year, so the role of private insurers in Medicaid is growing rapidly.
The insurance companies argue that the upside of consolidation is increased bargaining power with providers, enabling them to negotiate better rates and value-based contracts. It’s important at this point to note that while some provider groups are decrying insurance mergers as anticompetitive, there is a tremendous amount of consolidation underway on the provider side, too. A recent analysis finds that half (150/306) of hospital referral regions (HRR) are highly concentrated, and none are highly competitive. There is evidence that concentrated markets reduce price competition, and may also have implications for quality.
By Zack Buck
The case, which serves as the first and most consequential interpretation of when an overpayment is “identified” for purposes of False Claims Act (FCA) liability, provides a measure of much-needed guidance for attorneys and compliance officers in an area that is rife with confusion. But not too much.