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5 Things to Know About the New Drug Pricing Negotiations

The Biden administration has picked the first 10 high-priced prescription drugs subject to federal price negotiations, taking a swipe at the powerful pharmaceutical industry. It marks a major turning point in a long-fought battle to control ever-rising drug prices for seniors and, eventually, other Americans.

Under the 2022 Inflation Reduction Act, Congress gave the federal government the power to negotiate prices for certain high-cost drugs under Medicare. The list of drugs selected by the Centers for Medicare & Medicaid Services will grow over time.

The first eligible drugs treat diabetes, blood clots, blood cancers, arthritis, and heart disease — and accounted for about $50 billion in spending from June 2022 to May 2023.

The United States is clearly an outlier on drug costs, with drugmakers charging Americans many times more than residents of other countries “simply because they could,” Biden said Tuesday at the White House. “I think it’s outrageous. That’s why these negotiations matter.”

He added, “We’re going to keep standing up to Big Pharma and we’re not going to back down.”

Democratic lawmakers cheered the announcement, and the pharmaceutical industry, which has filed a raft of lawsuits against the law, condemned it.

The companies have until Oct. 2 to present data on their drugs to CMS, which will make initial price offers in February, setting off negotiations set to end next August. The prices would go into effect in January 2026.

Here are five things to know about the impact:

1. How important is this step?

Medicare has long been in control of the prices for its services, setting physician payments and hospital payments for about 65 million Medicare beneficiaries. But it was previously prohibited from involvement in pricing prescription drugs, which it started covering in 2006.

Until now the drug industry has successfully fought off price negotiations with Washington, although in most of the rest of the world governments set prices for medicines. While the first 10 drugs selected for negotiations are used by a minority of patients — 9 million — CMS plans by 2029 to have negotiated prices for 50 drugs on the market.

“There’s a symbolic impact, but also Medicare spent $50 billion on these 10 drugs in a 12-month period. That’s a lot of money,” said Juliette Cubanski, deputy director of KFF’s analysis of Medicare policy.

The long-term consequences of the new policy are unknown, said Alice Chen, vice dean for research at University of Southern California’s Sol Price School of Public Policy. The drug industry says the negotiations are essentially price controls that will stifle drug development, but the Congressional Budget Office estimated only a few drugs would not be developed each year as a result of the policy.

Biden administration officials say reining in drug prices is key to slowing the skyrocketing costs of U.S. health care.

2. How will the negotiations affect Medicare patients?

In some cases, patients may save a lot of money, but the main thrust of Medicare price negotiation policy is to provide savings to the Medicare program — and taxpayers — by lowering its overall costs.

The drugs selected by CMS range from specialized, hyper-expensive drugs like the cancer pill Imbruvica (used by about 26,000 patients in 2021 at an annual price of $121,000 per patient) to extremely common medications such as Eliquis (a blood thinner for which Medicare paid about $4,000 each for 3.1 million patients).

While the negotiations could help patients whose Medicare drug plans require them to make large copayments for drugs, the relief for patients will come from another segment of the Inflation Reduction Act that caps drug spending by Medicare recipients at $2,000 per year starting in 2025.

3. What do the Medicare price negotiations mean for those not on Medicare?

One theory is that reducing the prices drug companies can charge in Medicare will lead them to increase prices for the privately insured.

But that would be true only if companies aren’t already pricing their drugs as high as the private market will bear, said Tricia Neuman, executive director of KFF’s program on Medicare policy.

Another theory is that Medicare price negotiations will equip private health plans to drive a harder bargain. David Mitchell, president of the advocacy group Patients for Affordable Drugs, predicted that disclosure of negotiated Medicare prices “will embolden and arm private sector negotiators to seek that lower price for those they cover.”

Stacie B. Dusetzina, a professor of health policy at Vanderbilt University, said the effect on pricing outside Medicare isn’t clear.

“I’d hedge my bet that it doesn’t change,” she said.

Nonetheless, Dusetzina described one way it could: Because the government will be selecting drugs for Medicare negotiations based partly on the listed gross prices for the drugs — distinct from the net cost after rebates are taken into account — the process could give drug companies an incentive to lower the list prices and narrow the gap between gross and net. That could benefit people outside Medicare whose out-of-pocket payments are pegged to the list prices, she said.

4. What are drug companies doing to stop this?

Even though negotiated prices won’t take effect until 2026, drug companies haven’t wasted time turning to the courts to try to stop the new program in its tracks.

At least six drug companies have filed lawsuits to halt the Medicare drug negotiation program, as have the U.S. Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America, known as PhRMA.

The lawsuits include a variety of legal arguments. Merck & Co., Johnson & Johnson, and Bristol Myers Squibb are among the companies arguing their First Amendment rights are being violated because the program would force them to make statements on negotiated prices they believe are untrue. Lawsuits also say the program unconstitutionally coerces drugmakers into selling their products at inadequate prices.

“It is akin to the Government taking your car on terms that you would never voluntarily accept and threatening to also take your house if you do not ‘agree’ that the taking was ‘fair,’” Janssen, part of Johnson & Johnson, wrote in its lawsuit.

Nicholas Bagley, a law professor at the University of Michigan, predicted the lawsuits would fail because Medicare is a voluntary program for drug companies, and those wishing to participate must abide by its rules.

5. What if a drug suddenly gets cheaper by 2026?

In theory, it could happen. Under guidelines CMS issued this year, the agency will cancel or adjourn negotiations on any drug on its list if a cheaper copycat version enters the market and finds substantial buyers.

According to company statements this year, two biosimilar versions of Stelara, a Johnson & Johnson drug on the list, are prepared to launch in early 2025. If they succeed, it would presumably scotch CMS’ plan to demand a lower price for Stelara.

Other drugs on the list have managed to maintain exclusive rights for decades. For example, Enbrel, which the FDA first approved in 1998 and cost Medicare $1.5 billion in 2021, will not face competition until 2029 at the earliest.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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Exclusive: CMS Study Sabotages Efforts to Bolster Nursing Home Staffing, Advocates Say

The Biden administration last year promised to establish minimum staffing levels for the nation’s roughly 15,000 nursing homes. It was the centerpiece of an agenda to overhaul an industry the government said was rife with substandard care and failures to follow federal quality rules.

But a research study the Centers for Medicare & Medicaid Services commissioned to identify the appropriate level of staffing made no specific recommendations and analyzed only staffing levels lower than what the previous major federal evaluation had considered best, according to a copy of the study reviewed Monday by KFF Health News. Instead, the new study said there was no single staffing level that would guarantee quality care, although the report estimated that higher staffing levels would lead to fewer hospitalizations and emergency room visits, faster care, and fewer failures to provide care.

Patient advocates said the report was the latest sign that the administration would fall short of its pledge to establish robust staffing levels to protect the 1.2 million Americans in skilled nursing facilities. Already, the administration is six months behind its self-imposed deadline of February to propose new rules. Those proposals, which have not been released, have been under evaluation since May by the Office of Management and Budget. The study, dated June 2023, has not been formally released either, but a copy was posted on the CMS website. It was taken down shortly after KFF Health News published this article.

“It’s honestly heartbreaking,” said Richard Mollot, executive director of the Long Term Care Community Coalition, a nonprofit that advocates for nursing home patients in New York state. “I just don’t see how this doesn’t ultimately put more residents at risk of neglect and abuse. Putting the government’s imprimatur on a standard that is patently unsafe is going to make it much more difficult for surveyors to hold facilities accountable for the harm caused by understaffing nursing homes.”

For months, the nursing home industry has been lobbying strenuously against a uniform ratio of patients to nurses and aides. “What is clear as you look across the country is every nursing home is unique and a one-size-fits-all approach does not work,” said Holly Harmon, senior vice president of quality, regulatory, and clinical services at the American Health Care Association, an industry trade group.

Nursing home groups have emphasized the widespread difficulty in finding workers willing to fill existing certified nursing assistant jobs, which are often grueling and pay less than what workers can make at retail stores. Homes say their licensed nurses are often drawn away by other jobs, such as better-paying hospital positions. “The workforce challenges are real,” said Katie Smith Sloan, president and CEO of LeadingAge, an association that represents nonprofit nursing homes.

The industry has also argued that if the government wants it to hire more workers it needs to increase the payments it makes through state Medicaid programs, which are the largest payor for nursing home care. Advocates and some researchers have argued that nursing homes, particularly for-profit ones, can afford to pay employees more and hire additional staff if they forsake some of the profits they give investors.

“Certainly, facilities haven’t put all the dollars back into direct care over the years,” said David Grabowski, a professor of health care policy at Harvard Medical School. “But for certain facilities, it’s going to be a big lift to pay for” higher staffing levels, he said in an interview last week.

The administration last week declined to discuss the status of its rule. “The Centers for Medicare & Medicaid Services (CMS) is committed to holding nursing homes accountable for protecting health and safety for all residents, and adequate staffing is critical to this effort,” CMS press secretary Sara Lonardo said in an email. “We look forward to releasing our proposals, as well as the nursing home staffing study, soon.”

The study has been widely anticipated, both because of the central role the administration said it would play in its policy and because the last major CMS study, conducted in 2001, had concluded that nursing home care improves as staffing increases up to the level of about one worker for every six residents. The formal metric for that staffing level was 4.1 staff hours per resident per day, which is calculated by dividing the number of total hours worked by nurses and aides on duty daily by the number of residents present each day.

CMS never adopted that staffing ratio and instead gave each nursing home discretion to determine a reasonable staffing level. Regulators rarely cite nursing homes for insufficient staffing, even though independent researchers have concluded low staffing is the root of many nursing home injuries. Too few nurse aides, for instance, often means immobile residents are not repositioned in bed, causing bedsores that can lead to infection. Low staffing also is often responsible for indignities residents face, such as being left in soiled bedsheets for hours.

The new research was conducted by Abt Associates, a regular contractor for CMS that also performed the 2001 study. But the report, in an implicit disagreement with its predecessor, concluded there was “no obvious plateau at which quality and safety are maximized or ‘cliff’ below which quality and safety steeply decline.” Abt did not immediately respond to requests for comment on its study.

The study evaluated four minimum staffing levels, all of which were below the 4.1 daily staff hours that the prior study had identified as ideal. The highest was 3.88 daily staff hours. At that level, the study estimated 0.6% of residents would get delayed care and 0.002% would not get needed care. It also said that staffing level would result in 12,100 fewer hospitalizations of Medicare residents and 14,800 fewer emergency room visits. The report said three-quarters of nursing homes would need to add staff to meet that level and that it would cost $5.3 billion extra each year.

The lowest staffing level the report analyzed was 3.3 daily staffing hours. At that level, the report said, 3.3% of residents would get delayed care and 0.04% would not get needed care. That level would reduce hospitalizations of Medicare residents by 5,800 and lead to 4,500 fewer emergency room visits. More than half of nursing homes would have to increase staff levels to meet that ratio, the report said, and it would cost $1.5 billion more each year.

Charlene Harrington, a professor emeritus of nursing at the University of California-San Francisco, said CMS “sabotaged” the push for sufficiently high staffing through the instructions it gave its contractor. “Every threshold they looked at was below 4.1,” she said. “How can that possibly be a decent study? It’s just unacceptable.”

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She Paid Her Husband’s Hospital Bill. A Year After His Death, They Wanted More Money.

Last summer, Eloise Reynolds paid the bill for her husband’s final stay in the hospital.

In February 2022, doctors said that Kent, her husband of 33 years, was too weak for the routine chemotherapy that had kept his colon cancer at bay since 2018. He was admitted to Barnes-Jewish Hospital in St. Louis, not far from their home in Olivette, Missouri.

Doctors discovered a partial blockage of his bowel, Reynolds said, but she remained hopeful that his treatment would soon resume.

“I remember calling our kids and saying, ‘OK, this is all really good news. We just need to get him kind of bolstered back up and feeling well,’” she said.

But years of chemotherapy had taken a toll on his body, and he told his wife that he couldn’t go on any longer.

Kent was discharged and began hospice care at home. He died the next month at age 62.

When Reynolds received the bill for the hospital stay, she paid the $823.15 it said her husband owed. She scribbled “paid” on the bill, memorializing the date, June 30, 2022 — the financial endpoint, she thought, of Kent’s years of treatment.

Then the bill came (again).

The Patient: Kent Reynolds, deceased, had been covered by Blue Cross and Blue Shield of Illinois through his Illinois-based employer.

Medical Service: A 14-day hospital stay related to complications from colon cancer, including a partially blocked bowel.

Service Provider: BJC HealthCare, a tax-exempt health system that operates 14 hospitals, mostly in the St. Louis area, including Barnes-Jewish Hospital.

Total Bill: The hospital charged $110,666.46 for the stay before any payments or adjustments. The insurer negotiated that price down to $60,348.77, and Reynolds paid the $823.15 the hospital said the patient owed. Then, a year after her husband’s death, she received a new version of the bill from the hospital, charging her an additional $1,093.16.

What Gives: Reynolds encountered a perplexing reality in medical billing: Providers can — and do — come after patients to collect more money for services months or years after a bill has been paid.

The new bill said Kent Reynolds had been enrolled in a payment plan and that the first “monthly installment” on the nearly $1,100 balance was soon due.

She said she called both the hospital and Blue Cross and Blue Shield of Illinois in search of answers but didn’t get an explanation that made sense to her.

According to Reynolds, a BJC HealthCare representative told her that the insurer had paid more than it owed, meaning the health system had to reimburse the insurer and charge the patient more.

Reynolds said she grabbed a yardstick to use as a straight edge and went line by line, comparing both bills, to see what had changed, a task that evoked painful memories of her husband’s last days. The amount for each individual charge — medications, lab tests, supplies, and more — was the same on both bills. The total had not changed.

Only three aspects of the bill had changed: the adjustments; the amount paid by the insurance company; and what the patient owed.

Adjustments, or discounts, are amounts that may be subtracted from a medical bill, typically under the provider’s pre-negotiated contract with an insurer. Insurers and providers agree to lower, in-network rates for services provided to patients covered by the insurer.

Reynolds also received an EOB, or “explanation of benefits,” notice showing the insurer reviewed the bill again in February, a year after the hospital stay. The document said the hospital’s charges for her husband’s private room — amounting to nearly $77,000 — were more than his health plan’s negotiated room rates, which did not cover the full cost.

The EOB noted that the patient could still owe the hospital $50,216.31 for the room charges — a startling amount — although Reynolds ultimately received no bill indicating she owed that much.

Reynolds said she spent hours trying to understand the items on the hospital and insurance paperwork, since they used medical abbreviations and were grouped differently on the documents.

“It shouldn’t be this hard for a widow to figure out what the medical bills were,” said Erin Duffy, a research scientist at the University of Southern California’s Schaeffer Center for Health Policy and Economics.

Blue Cross and Blue Shield of Illinois declined to comment despite receiving a signed release from Reynolds waiving federal privacy protections.

The Resolution: Unclear about what had changed and how much she owed, Reynolds held off on paying the second bill. After KFF Health News contacted BJC HealthCare, Laura High, a media relations manager for the system, said the charges were the result of a “clerical error.” Reynolds no longer has a balance, High said in an email in May.

“I was shocked by it,” Reynolds said. “I’m convinced most of the people I know would have paid this.”

High did not answer questions about the cause of the billing error or how often such errors occur.

However, Duffy provided a different explanation for the charges. “This doesn’t seem like an error,” she said. “It seems consistent with their insurance plan design.”

She said it appeared the additional $1,100 charge — assessed a year later — represented Kent’s coinsurance share of the private room charges, which she found as a recurring line item on each page of the bill under the heading “Oncology/PVT.”

While his coinsurance responsibility could have amounted to 10% of what the insurer paid in room charges — potentially a huge amount — Kent had met his out-of-pocket payment maximum for the year, so the charges did not reach the full 10% of the room costs, Reynolds said.

The Takeaway: In the United States, medical bills and insurance statements create a burdensome puzzle for patients to sort through to determine what is actually owed. The first rule of thumb is: “Don’t pay the bill before you’ve gotten the EOB,” which is the insurer’s accounting of what you owe and what the insurer will pay, said Kaye Pestaina, co-director of KFF’s Program on Patient and Consumer Protections.

In addition, ask for an itemized breakdown of charges and compare it against the EOB.

Medical billing experts said standardizing terms and other details on medical bills and EOBs would help patients enormously in this undertaking.

A few states have taken steps toward giving patients more information about health care charges, including by simplifying medical bills. In 2019, New York state lawmakers proposed requiring hospitals to provide patients with bills in plain language, including an itemized list of services labeled as paid by the insurer or owed by the patient. The proposal, which did not advance, required hospitals to send patients a single bill within seven days of leaving the hospital.

Reynolds’ experience highlights the lack of laws and standards around how long providers have to bill — and review bills — for medical services. Insurers may dictate in their contracts how long providers have to submit claims; the Medicare program has a 12-month limit to file claims, for instance. However, Dave Dillon, a spokesperson for the Missouri Hospital Association, said no laws restrict how long providers have to send a bill to patients.

Creditors may seek payment from a deceased person’s estate to collect whatever they can, said Berneta Haynes, a senior attorney at the National Consumer Law Center. In Missouri, a living spouse can be held responsible for a deceased spouse’s medical bills in certain instances, said Terry Lawson, a managing attorney for Legal Services of Eastern Missouri.

Experts said they did not pinpoint anything Reynolds could have done differently, noting that it is the system that needs to change.

“When can she move on from these hospital bills?” Duffy asked.

Stephanie O’Neill Patison reported the audio story.

Bill of the Month is a crowdsourced investigation by KFF Health News and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!

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California’s Medical Board Can’t Pay Its Bills, but Doctors Resist Proposed Fixes

California doctors and state lawmakers are squaring off once again over the future of the Medical Board of California, which is responsible for licensing and disciplining doctors and has been criticized by patient advocates for years for being too lax.

A bill before the legislature would significantly increase the fees doctors pay to fund the medical board, which says it hasn’t had the budget to carry out its mission properly. It would also mandate new procedures for investigating complaints.

Patient advocates say the board, which oversees about 150,000 physicians and surgeons with active licenses in the state, is hamstrung by a lack of funding and clunky processes, and that its shortcomings pose a risk to the public by allowing bad doctors to continue practicing. The board opened only about 1,000 investigations out of nearly 10,000 complaints last year, according to its 2022 annual report.

But the California Medical Association, which represents physicians, is again fighting proposed increases in the fee, which was unchanged for more than a decade before being raised in 2021 after a contentious debate. Now lawmakers want to boost the license renewal fee to $1,289 every two years, up from $863 currently.

The doctors’ lobby largely defeated the 2021 efforts to strengthen the board, and critics say the group is trying to whittle away the board’s power by depriving it of funding.

The legislation, sponsored by Sen. Richard Roth, a Riverside Democrat, would also require board staff to interview patients or families before closing their complaints, create a unit to better facilitate communications, and improve efficiency by changing procedures and adjusting standards of evidence for investigations.

Another provision would allow patients and relatives to make a statement during the investigation about how a doctor’s negligence or misconduct affected them — similar to crime victims speaking during a sentencing hearing in criminal court.

The bill faces a pivotal vote in the state Assembly’s Appropriations Committee this month.

Most California licensing boards are funded through license fees. Currently, dentists pay $668 for a two-year license renewal, plus other permitting fees such as $325 for general anesthesia or $650 for oral surgery. Attorneys actively practicing in California pay $510 annually.

But the medical association insisted in a memo that it “cannot agree to a fee increase of nearly 50% that will primarily go toward building a multimillion-dollar reserve fund and future programs for the Medical Board.”

“If the bill is passed in its current form, it would have vast, negative impacts on the practice of medicine and health care delivery in California,” it added.

George Soares, a legislative advocate for the California Medical Association, told lawmakers last month that the association would be willing to accept a fee increase, but that $1,289 is too much — more than double the national average for state medical licenses. A July working paper from the National Bureau of Economic Research found that physicians’ annual earnings average $350,000 across the U.S.

The medical board supports the bill and says a fee hike is needed to cover operations, repay millions of dollars in loans, and establish a three-month reserve. Over the past two years, the Department of Consumer Affairs, which is responsible for the operations of the medical board and other licensing boards, has had to backfill the board’s $79 million budget, using a total of $18 million in loans from Bureau of Automotive Repair license fees to cover the gap.

“The simple reality is that the board is not able to pay its bills,” a spokesperson for the medical board read from a joint statement from Randy Hawkins, the vice president of the board, and Richard Thorp, a former president of the California Medical Association and current member of the board, at a committee hearing last month.

“We are physicians in private practice, and this fee increase will impact us personally, albeit at an increased cost of less than $20 per month,” the statement read. “We do not see this as a burden but rather as an investment into the organization that helps ensure that physicians have the confidence of the patients that we are privileged to treat.”

Roth points out that the medical board, which is composed of eight physicians and seven members of the public, has little control over staffing costs. Its 169 employees work for the state and are covered by labor agreements negotiated by statewide employee unions.

Consumer advocates say the opposition from the doctors’ lobby is part of a years-long effort to weaken the board and deprive it of adequate funding.

A report about the medical board’s operations conducted by a consulting firm that serves as the enforcement monitor for the board, Alexan RPM Inc., underscored the board’s financial challenges and recommended adopting automatic annual fee increases tied to the consumer price index, or something similar. Some lawmakers suggested the fees could be determined on a sliding scale based on doctors’ income.

Critics have complained for years that the medical board doesn’t hold doctors accountable often enough. Families that file complaints against doctors frequently go years without updates on the status of investigations, and often aren’t told why when their complaints are rejected.

“This is kind of the culmination of two things: patient advocacy trying to make changes and a few years of very recent, direct pushes by the legislature,” said Carmen Balber, the executive director of Consumer Watchdog, a consumer and patient advocacy organization.

The California Medical Association has already blunted some aspects of the bill, including securing the removal of a provision to add two more members of the public to the board, which would have made it a public-member majority instead of its current physician majority.

The association is also opposed to a provision currently in the bill that would lower the standard of proof for disciplining doctors in instances besides those in which they could lose their licenses.

Tracy Dominguez, a Bakersfield resident whose daughter, Demi, and grandson, Malakhi, died in 2019 from complications of severe preeclampsia, is among those advocating for reforms.

One of the physicians who treated Dominguez’s daughter prior to her death had already been accused by the medical board of gross negligence that led to the death of a young mother, according to medical board documents. Advocates at Consumer Watchdog allege his negligence had already caused death or permanent injury of other mothers and babies he treated, and that he was already banned from practicing in some hospitals at the time he treated Demi Dominguez but had been allowed to keep his license.

Tracy Dominguez said she hopes changing evidentiary standards and strengthening the medical board overall “will put dangerous doctors away.”

And a chance to provide a victim impact statement would be important for families hurt by medical neglect, she added. It would be “an opportunity for them to hear from the family, directly — to know that she was a person, not just a number.”

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

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California Offers Lifeline to 17 Troubled Hospitals

Madera Community Hospital in California’s Central Valley, which ceased operations last December and filed for Chapter 11 bankruptcy in March, moved a step closer to reopening Thursday when California’s new fund for troubled hospitals said it was prepared to offer the facility up to $52 million in interest-free loans.

The program is offering an additional $240.5 million in no-interest loans to 16 other troubled hospitals, including Beverly Community Hospital in Montebello and Hazel Hawkins Memorial Hospital in Hollister, both of which filed for bankruptcy earlier this year.

Hazel Hawkins will get a loan of $10 million, and Beverly will get a bridge loan of $5 million while it is being purchased out of bankruptcy by Adventist Health’s White Memorial in Los Angeles, according to the state’s Department of Health Care Access and Information, which unveiled the lending details Thursday.

Adventist Health has also agreed conditionally to manage Madera if it reopens. If all goes well it would take six to nine months to reopen, officials said.

Madera will get a bridge loan of $2 million to cover basic costs while Adventist Health, a large multistate health system with 22 hospitals in California, works on a “comprehensive hospital turnaround plan,” the department said. Once such a plan is approved, Madera “can be eligible for an additional $50 million loan” from the distressed hospital program, it said.

For most of last year, Fresno-based St. Agnes Medical Center, part of the large Catholic hospital chain Trinity Health, appeared poised to rescue Madera Community Hospital from financial ruin in a planned acquisition that was approved by California Attorney General Rob Bonta. But Trinity walked away from the deal at the last minute with scant explanation, infuriating Bonta along with multiple other political leaders, community advocates, and health care officials.

Trinity, which had loaned Madera $15.4 million during their merger talks, became its largest creditor in the bankruptcy that ensued. At the time of its bankruptcy filing in March, Madera reported total debts of just over $30 million.

Adventist Health agreed last month to a nonbinding letter of intent to manage Madera. At the time, Kerry Heinrich, Adventist’s president and CEO, said that if the shuttered hospital got the requisite financing, Adventist Health would use its expertise in “helping to secure a sustainable future for healthcare” in the county.

Adventist Health spokesperson Japhet De Oliveira said Thursday that his organization remains intent on doing so. Reopening Madera “would be a really good thing, and we will put every effort into making that happen,” De Oliveira said. He added: “We will need all parties to be involved in developing the approved plan and negotiating the terms of management services.”

Karen Paolinelli, the CEO of Madera Community Hospital, did not respond to emailed questions by publication time.

State political leaders representing the region expressed satisfaction with Thursday’s news. “It brings me tremendous relief to know that Madera Community Hospital and Hazel Hawkins Memorial Hospital in San Benito County have received grant awards and will be able to ensure that community members can once again receive services in their own communities,” said Sen. Anna Caballero, a Democrat who represents the areas in which those facilities are located.

The Adventist letter of intent for Madera said that in addition to paying off creditors in the bankruptcy, the hospital would need to secure $55 million in the first year to pay for all aspects of reopening, plus an additional $30 million in the second year.

The $52 million the state proposes lending to Madera is significantly short of the $80 million the hospital applied for. Assuming the full $52 million materializes, the total amount loaned to the 17 hospitals would be $292.5 million — nearly the entire $300 million available to the fund for fiscal years 2023 and 2024. The program is scheduled to end after 2031.

With $52 million from the state, Madera Community Hospital would still need to find an additional $33 million. Madera said in a bankruptcy court filing earlier this year that it expects just over $33 million in revenues from “provider fees” and from the Federal Emergency Management Agency.

The law that created the distressed hospital loan fund, AB 112, initially provided for $150 million in lending to help troubled hospitals, mostly rural ones, that faced the risk of closing. Another $150 million was later added to the pot. Small hospitals across the state — and the country — have been buffeted by the ill economic winds of the covid-19 pandemic, which ratcheted up the cost of drugs, supplies, and labor.

Hospital industry officials have also pointed to low payment rates by government programs, especially Medi-Cal, California’s Medicaid program, which they say has saddled many hospitals with financial losses.

Madera made the same argument, but state data shows it received enough supplemental payments to earn nearly $15 million from Medi-Cal in 2021, though it lost over $11 million treating Medicare patients.

The hospitals awarded the largest loans by the distressed hospital fund are Tri-City Medical Center in Oceanside, with $33.2 million; Dameron Hospital Association in Stockton, with $29 million; Pioneers Memorial Healthcare District in Imperial County, with $28 million; and El Centro Regional Medical Center, with $28 million.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

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Dangers and Deaths Around Black Pregnancies Seen as a ‘Completely Preventable’ Health Crisis

HOUSTON — Tonjanic Hill was overjoyed in 2017 when she learned she was 14 weeks pregnant. Despite a history of uterine fibroids, she never lost faith that she would someday have a child.

But, just five weeks after confirming her pregnancy, and the day after a gender-reveal party where she announced she was having a girl, she seemed unable to stop urinating. She didn’t realize her amniotic fluid was leaking. Then came the excruciating pain.

“I ended up going to the emergency room,” said Hill, now 35. “That’s where I had the most traumatic, horrible experience ever.”

An ultrasound showed she had lost 90% of her amniotic fluid. Yet, over the angry protestations of her nurse, Hill said, the attending doctor insisted Hill be discharged and see her own OB-GYN the next day. The doctor brushed off her concerns, she said. The next morning, her OB-GYN’s office rushed her back to the hospital. But she lost her baby, Tabitha Winnie Denkins.

Black women are less likely than women from other racial groups to carry a pregnancy to term — and in Harris County, where Houston is located, when they do, their infants are about twice as likely to die before their 1st birthday as those from other racial groups. Black fetal and infant deaths are part of a continuum of systemic failures that contribute to disproportionately high Black maternal mortality rates.

“This is a public health crisis as it relates to Black moms and babies that is completely preventable,” said Barbie Robinson, who took over as executive director of Harris County Public Health in March 2021. “When you look at the breakdown demographically — who’s disproportionately impacted by the lack of access — we have a situation where we can expect these horrible outcomes.”

In fact, Harris County ranks third, behind only Chicago’s Cook County and Detroit’s Wayne County, in what are known as excess Black infant deaths, according to the federal Health Resources and Services Administration. Those three counties, which also are among the nation’s most populated counties, account for 7% of all Black births in the country and 9% of excess Black infant deaths, said Ashley Hirai, a senior scientist at HRSA. That means the counties have the largest number of Black births but also more deaths that would not occur if Black babies had the same chance of reaching their 1st birthdays as white infants.

No known genetic reasons exist for Black infants to die at higher rates than white infants. Such deaths are often called “deaths of disparity” because they are likely attributable to systemic racial disparities. Regardless of economic status or educational attainment, the stress from experiencing persistent systemic racism leads to adverse health consequences for Black women and their babies, according to a study published in the journal Women’s Health Issues.

These miscarriages and deaths can occur even in communities that otherwise appear to have vast health resources. In Harris County, for example, home to two public hospitals and the Texas Medical Center — the largest medical complex in the world, with more than 54 medical-related institutions and 21 hospitals — mortality rates were 11.1 per 1,000 births for Black infants from 2014 through 2019, according to the March of Dimes, compared with 4.7 for white infants.

The abundance of providers in Harris County hasn’t reassured pregnant Black patients that they can find care that is timely, appropriate, or culturally competent — care that acknowledges a person’s heritage, beliefs, and values during treatment.

Regardless of income or insurance status, studies show, medical providers often dismiss Black women’s questions and concerns, minimize their physical complaints, and fail to offer appropriate care. By contrast, a study of 1.8 million hospital births spanning 23 years in Florida found that the gap in mortality rates between Black and white newborns were halved for Black babies when Black physicians cared for them.

In 2013, Houstonian Kay Matthews was running a successful catering business when she lost the daughter she’d named Troya eight months and three weeks into pregnancy.

Matthews hadn’t felt well — she’d been sluggish and tired — for several days, but her doctor told her not to worry. Not long afterward, she woke up realizing something was terribly wrong. She passed out after calling 911. When she woke up, she was in the emergency room.

None of the medical staffers would talk to her, she said. She had no idea what was happening, no one was answering her questions, and she started having a panic attack.

“It kind of felt like I was watching myself lose everything,” she recalled. She said the nurse seemed annoyed with her questions and demeanor and gave her a sedative. “When I woke up, I did not have a baby.”

Matthews recalled one staffer insinuating that she and her partner couldn’t afford to pay the bill, even though she was a financially stable business owner, and he had a well-paying job as a truck driver.

She said hospital staffers showed minimal compassion after she lost Troya. They seemed to dismiss her grief, she said. It was the first time she could remember feeling as if she was treated callously because she is Black.

“There was no respect at all, like zero respect or compassion,” said Matthews, who has since founded the Shades of Blue Project, a Houston nonprofit focused on improving maternal mental health, primarily for Black patients.

To help combat these high mortality rates in Harris County, Robinson created a maternal child and health office and launched a home-visit pilot program to connect prenatal and postpartum patients with resources such as housing assistance, medical care, and social services. Limited access to healthy food and recreational activities are barriers to healthy pregnancy outcomes. Studies have also shown a connection between evictions and infant mortality.

For Hill, not having insurance was also likely a factor. While pregnant, Hill said, she had had just a single visit at a community health center before her miscarriage. She was working multiple jobs as a college student and did not have employer-provided medical coverage. She was not yet approved for Medicaid, the state-federal program for people with low incomes or disabilities.

Texas has the nation’s highest uninsured rate, with nearly 5 million Texans — or 20% of those younger than 65 — lacking coverage, said Anne Dunkelberg, a senior fellow with Every Texan, a nonprofit research and advocacy institute focused on equity in public policy. While non-Hispanic Black Texans have a slightly better rate — 17% — than that overall state level, it’s still higher than the 12% rate for non-Hispanic white Texans, according to census data. Health experts fear that many more people are losing insurance coverage as covid-19 pandemic protections end for Medicaid.

Without full coverage, those who are pregnant may avoid seeking care, meaning they skip being seen in the critical first trimester, said Fatimah Lalani, medical director at Houston’s Hope Clinic.

Texas had the lowest percentage of mothers receiving early prenatal care in the nation in 2020, according to the state’s 2021 Healthy Texas Mothers and Babies Databook, and non-Hispanic Black moms and babies were less likely to receive first-trimester care than other racial and ethnic groups. Babies born without prenatal care were three times as likely to have a low birth weight and five times as likely to die as those whose mothers had care.

If Hill’s miscarriage reflects how the system failed her, the birth of her twins two years later demonstrates how appropriate support has the potential to change outcomes.

With Medicaid coverage from the beginning of her second pregnancy, Hill saw a high-risk pregnancy specialist. Diagnosed early with what’s called an incompetent cervix, Hill was consistently seen, monitored, and treated. She also was put on bed rest for her entire pregnancy.

She had an emergency cesarean section at 34 weeks, and both babies spent two weeks in neonatal intensive care. Today, her premature twins are 3 years old.

“I believe God — and the high-risk doctor — saved my twins,” she said.

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After Backlash, Feds Cancel Plan That Risked Limiting Breast Reconstruction Options

Federal regulators have abandoned a plan that physicians, patients, and advocacy groups for breast cancer patients feared would limit women’s options for reconstructive surgery.

The controversy centered on how doctors are paid for a type of breast reconstruction known as DIEP flap, in which skin, fat, and blood vessels are harvested from a woman’s abdomen to create a new breast.

Last year, the Centers for Medicare & Medicaid Services decided to eliminate a trio of medical billing codes for breast reconstructive surgery that enabled doctors to collect much more money for DIEP flap operations than for simpler types of breast reconstruction. Some plastic surgeons said the government’s move would limit access and make DIEP flaps available only to those who could afford to pay tens of thousands of dollars out-of-pocket.

Through its coding decisions, the federal government can influence the medical options available to patients, even those with private insurance.

In an Aug. 22 memo, CMS wrote that it received a “substantial number of responses” verbally and in writing asking regulators to keep the “S” billing codes that reimburse doctors more for the surgery. “The majority of the commenters feel their accessibility will be, or has already been, impacted by the decision to eliminate the S codes,” the agency wrote in reversing its earlier plan.

Supporters praised CMS’ latest action. “I’m so grateful to CMS for this decision that is really meaningful,” Elisabeth Potter, a plastic surgeon who specializes in DIEP flap surgeries, said in a social media post.

The agency’s announcement came after it convened a public hearing in June, during which several patients, physicians, and representatives of breast cancer advocacy organizations implored CMS officials to scrap their original plan. Otherwise, they said, access to DIEP flap surgery would diminish.

The DIEP flap procedure has potential benefits over implants and operations that take muscle from the abdomen. For example, although implants are less costly and less time-intensive to perform, they generally need to be replaced every 10 years or so. But DIEP flap surgery is also more expensive. If patients go outside an insurance network for the operation, it can cost more than $50,000. A plastic surgeons’ group argued some in-network doctors would stop offering the surgery if insurers paid significantly less.

“This decision is monumental for breast cancer patients and breast reconstruction,” Christy Huling, who had a double mastectomy and DIEP flap surgery, said during CMS’ June 1 meeting. Through tears, Huling said she is an avid outdoors person and that her life would have changed “drastically” if she’d instead had reconstruction surgery that removed muscle from her abdomen. “This procedure has allowed me to continue to maintain my quality of life,” she said of DIEP flap.

The government’s initial plan was driven by the Blue Cross Blue Shield Association, a major lobbying organization for health insurance companies. In 2021, the group asked CMS to discontinue the three S codes, arguing they were no longer needed, according to a CMS document.

CMS initially decided the codes would expire at the end of 2024; however, even with the delayed effective date, physicians said, the decision was starting to hinder access to DIEP flap surgery and create anxiety for patients. At least two major insurance companies told doctors they would no longer reimburse them under the higher-paying codes.

A bipartisan group of lawmakers also protested, including Rep. Debbie Wasserman Schultz (D-Fla.) and Sen. Amy Klobuchar (D-Minn.), who have both had breast cancer; Rep. James Comer (R-Ky.); and Sen. Marsha Blackburn (R-Tenn.). “This latest CMS decision will provide women with more certainty, and help ensure fair and equitable access to their choice of breast reconstruction techniques,” Wasserman Schultz said in a statement following CMS’ change.

Codes don’t dictate the amounts private insurers pay for medical services; those reimbursements are generally worked out between insurance companies and medical providers. However, using the targeted S codes, doctors and hospitals have been able to distinguish DIEP flap surgeries, which require complex microsurgical skills, from other forms of breast reconstruction that take less time to perform and generally yield lower insurance reimbursements.

CMS’ initial plan would have made it “impossible to continue doing high-volume, high-quality complex breast microsurgery for breast cancer patients,” Dhivya Srinivasa, a plastic surgeon in California who specializes in breast reconstruction, said during CMS’ June 1 hearing. “I am already seeing it, patients who are good candidates who were told ‘no.’ Why were they told no when they’re a good candidate? To say that it has nothing to do with reimbursement, I think, would be foolish.”

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The Painful Pandemic Lessons Mandy Cohen Carries to the CDC

CHARLOTTE, N.C. — As covid-19 devastated communities across the nation in spring 2020, a group of Black ministers in this racially divided city made an urgent plea for more testing in their neighborhoods.

Testing at the time “was outside of communities of color,” said the Rev. Jordan Boyd, pastor of Rockwell AME Zion Church in Charlotte. For Boyd, pandemic losses were personal: Covid-related complications killed a brother-in-law who worked as a truck driver. “We saw what was happening with our folks.”

Mandy Cohen, who led the state’s pandemic response as secretary of North Carolina’s health department, had said widespread testing was one of “our best tools to keep our community safe and to protect our frontline workers.” But the state was failing to get tests to its most vulnerable people, with grim consequences: Black people in North Carolina were getting sick and dying from covid-related causes at far higher rates than white people, data show.

KFF Health News analyzed and confirmed publicly available data, including the location of testing sites that Cohen’s office directed the public to in mid-May 2020 in Mecklenburg County, home to Charlotte, the state’s largest city. Just 1 in 4 fixed sites stood in more disadvantaged areas with significant Black populations, including what is known as the Crescent, neighborhoods reaching west, north, and east of downtown that for generations have had elevated rates of diabetes, high blood pressure, lung disease, and other conditions that can cause life-threatening complications from covid. Far more testing was available in south Charlotte and suburban areas — the whiter, wealthier neighborhoods.

Life in the Crescent is marked by higher rates of poverty, crowded housing, and less access to health care, transportation, and internet service — factors that fueled transmission of the virus and created barriers to testing.

“There were a lot of hurdles that you had to go through,” said Boyd, who helped spearhead the effort to bring testing to Black churches.

President Joe Biden and others in political and health policy circles have praised Cohen’s pandemic leadership in North Carolina. Biden in June cited her “proven track-record protecting Americans’ health and safety” when elevating Cohen to run the Centers for Disease Control and Prevention, the nation’s top public health agency.

Those on the ground in North Carolina’s most vulnerable communities, including Cohen’s admirers, tell another story — about living with the downsides of the state’s emergency response. These include advocates for groups that were disproportionately harmed during the public health crisis, including minority and immigrant communities, people with disabilities, and families of nursing home residents.

Corine Mack, president of the Charlotte-Mecklenburg NAACP, recalled that in late 2020 she and others complained to Cohen about public money going to white-led organizations instead of Black-led ones working in minority neighborhoods.

“I said we had to send resources tomorrow, not next month,” Mack said. “She started crying. I was so passionate about our people dying. Once she understood the severity of the situation, she did what she had to do.”

The challenges Cohen faced in North Carolina were exacerbated by structural inequities in and outside the health care system, problems that are too large for any one person to fix. Still, Cohen now faces the same challenges on a national scale, as she’s charged with fixing the CDC after its pandemic missteps.

Cohen, through her spokesperson at the CDC, declined multiple requests for an interview.

A report in January called “Building the CDC the Country Needs,” which was signed by dozens of health policy experts, urged an agency overhaul. Among the priorities cited: more quickly collecting data on racial, ethnic, economic, and geographic factors that is “foundational to improving equity of access to services.”

For most of the pandemic, Black, Hispanic, and Native Americans fared worse than whites across the country.

In North Carolina, critics and allies alike say Cohen heeded concerns. She relied heavily on data and followed federal guidance closely, they said. And Cohen showed vigilance when she interpreted rules, like those on nursing home visitation and mask mandates, even in the face of criticism.

She also repeatedly urged personal responsibility to contain the spread of the virus, underscoring how public health messaging often focuses on choice rather than societal constraints, said Anne Sosin, a researcher at Dartmouth College who focuses on health equity.

“Many of the people and communities hardest-hit by the pandemic had little choice in their exposure” because they got covid where they lived or worked, Sosin said. “Limiting our focus on the choices that people make — rather than on the broader structural and social forces that shape risk — really will set us up for the same failures in the future.”

With more than 1 million residents, Mecklenburg County has become a symbol both of North Carolina’s economic rise and of its struggles to overcome a long history of racial discrimination and disparities. A short drive from the headquarters of Fortune 500 companies, such as Bank of America and Honeywell, sit minority neighborhoods plagued by poverty. A national study on social mobility found that, among the 50 largest cities, Charlotte was the hardest place for a child to move from poverty to the upper class.

Researchers from North Carolina’s health agency and the University of North Carolina found that access to tests during the first three months of the pandemic — between March and June 2020 — was not evenly distributed across racial and ethnic groups, with inadequate access for Black and Latino residents.

On May 14, 2020 — two months after the national emergency was declared — Cohen’s agency directed clinicians to prioritize testing for people from “racial and ethnic minority groups disproportionately affected by adverse COVID-19 outcomes,” and officials recommended using mobile testing for “vulnerable populations,” documents show.

The disparities persisted. In Charlotte, the difference in testing sites underscored the inequity people of color often face in health care, as they were left to depend on a few mobile units whose routes and hours varied by the day. Meanwhile, wealthier areas had an abundance of well-resourced, fixed sites with regular hours.

Critics say the state was slow to address glaring and predictable problems. Mecklenburg County Commissioner Pat Cotham, a Democrat, said it took authorities precious time to shift testing to the hardest-hit neighborhoods. Cotham said officials should have more quickly enlisted Black ministers and others who had established trust with residents. Instead, she said, even elected representatives of those areas were often locked out. “I remember getting information from press releases or TV,” she said.

North Carolina initially failed to prioritize testing for people who were exposed to covid because of where they live or work, said Jeanne Milliken Bonds, a professor of social impact investing at the University of North Carolina. She co-authored a white paper that criticized the national pandemic response, saying, “We are ignoring the critical impact of systemic racism in vulnerabilities to the deadly virus.”

Black people, immigrants, and ethnic minorities disproportionately hold jobs that governments deemed essential — in food processing plants, retail stores, and nursing homes — and they were unable to isolate and work from home, Milliken Bonds said.

Charlotte had one of the biggest disparities in access to testing in the nation, according to a study of 30 large cities by researchers at Drexel and Temple universities. Only Austin and Houston in Texas fared worse.

In 2020, Black people in North Carolina died from covid at a higher rate than white people, although the disparity was slightly less pronounced than in the U.S. overall. A KFF Health News analysis of CDC data shows that 112 of every 100,000 non-Hispanic Black residents in the state died, compared with 89 per 100,000 non-Hispanic white residents. North Carolina’s death rates for all racial and ethnic groups that year were lower than those nationally.

“The driving factor for testing and vaccination was, ‘Let’s get older people and let’s protect our health care workers,’” Milliken Bonds said. “You end up losing the health equity lens. There was a course correction later in 2020. They looked at the data and said, ‘Oh my God!’ They were missing people of color.”

Tensions Rose

In April 2020, when covid tests were scarce nationally and states had little federal support, Cohen’s Department of Health and Human Services convened a work group to increase testing. The initiative began as Democratic Gov. Roy Cooper indicated he would ease the restrictions he’d put in place in March to limit covid’s spread.

The group included state employees, consultants, local officials, and representatives from major hospital systems, community health centers, and commercial labs, North Carolina HHS news releases and state documents show. Officials set priority groups for testing, including hospitalized patients, health care workers and first responders, and people in long-term care or correctional facilities, according to meeting minutes from April 24. The last item: “additional emphasis on equity and ensuring communities of color have access to testing.”

The state also received guidance from experts focused on equity.

“We know that there’s more covid-19 out in our communities than gets captured by what’s in our lab data,” Cohen said April 30, during one of Cooper’s pandemic briefings.

Of the covid test results reported to North Carolina’s health department at that time, a smaller share were coming back positive relative to prior weeks, and covid hospitalizations were level — developments Cohen hailed as progress. But tensions were brewing.

By May 5, Disability Rights North Carolina filed a civil rights complaint with the U.S. Department of Health and Human Services about a proposed state emergency plan. The advocacy group said the plan — which determined who would get lifesaving treatments in hospitals if supplies were scarce — would put people with disabilities in the “back of the line” and lead to a disproportionate death toll among people of color or with low incomes.

As the state began reopening businesses in early May, officials knew testing levels were not adequate, according to a review of public documents, interviews, and Cohen’s public remarks. Hundreds of sites were up and running, “but there’s more to do,” Cohen said May 20.

In a letter in the North Carolina Medical Journal, North Carolina HHS employees and a consultant with Accenture said “testing was difficult to access outside of a hospital” that month. “Of the tests being performed early in the pandemic, the majority were in White populations even though we could already see differences in poor outcomes in Black/African American, American Indian/Alaskan Native, and Latinx populations infected with the virus around the country,” they wrote.

Kody Kinsley, who worked for Cohen and succeeded her as health secretary, said the state’s response was stymied by factors beyond its control, including supply chain shortages. “We were essentially riding the backbone of the existing health care network with inadequate supplies,” Kinsley said. The department tried to contract with outside firms to boost testing access in historically marginalized communities, but “resources weren’t available.”

Boyd, the pastor, said it was “difficult times.” To reach hard-hit communities across the state, “you have to be able to do that through connections on the ground,” he said. “Otherwise it’s not going to happen. But that takes time.”

In Charlotte, he said, fixed testing sites at hospitals and elsewhere, which required appointments, weren’t as accessible for those in the city’s poorest neighborhoods. “You had to go online and sign up,” he said.

Black residents were desperate for testing: When a mobile van run by Atrium Health, the dominant hospital system in Charlotte, arrived at Boyd’s church in early May, “Cars were lined up around the block at 4 or 5 o’clock in the morning,” he said.

Atrium’s mobile testing started in April, circulating in minority communities where data showed emerging hot spots. While people could walk up to get a test, locations shifted daily, according to internet archives, social media posts, and other announcements. Between mid-April and early July, the units stopped at many Black churches only once.

“We were last on the list. We lost a lot of people,” said Vilma Leake, a Democratic member of the Mecklenburg Board of County Commissioners. Leake said she never received a satisfactory answer when she asked why people of color were not prioritized for testing given the South’s long history of racial exclusion and wide disparities in health, education, and income. “History is repeating itself. It is always a fight for some people,” she added.

Kinsley said the state’s response “was intentionally designed to be conscious of class and race and ethnicity,” which he said informed its guidance for essential workers and efforts to push businesses to provide paid leave and on-the-job covid tests.

By late spring, the state’s testing data, which captured only a fraction of infections, painted a troubling picture. As of May 26, Black residents made up 31% of cases and 35% of deaths despite being 22% of the state’s population. Latinos made up 9.6% of the state’s population and 35% of covid cases.

That same day, Cohen stood at Cooper’s pandemic briefing. While she described the state’s efforts to improve safety for workers at meat processing plants, she again called for personal responsibility.

“Our ability to continue to ease restrictions and get back to work as safely as possible hinges on all of us working together to protect each other,” Cohen said, adding, “We want to save lives. And we can do that with simple individual actions.” By that time, North Carolina had allowed restaurants, pools, and personal care businesses such as barbers to open at 50% capacity.

The state’s response “was not adequate for protecting essential workers,” said the Rev. Rodney Sadler, the director of the Center for Social Justice and Reconciliation at Union Presbyterian Seminary.

“It was targeted toward those who had resources, who had a knowledge base, who had greater freedoms, who had the ability to work from home,” he said, adding that it’s important to “think about how this hits differently for poor Black and brown people in inner-city communities than it does for wealthier, white communities in the suburbs.”

The Rev. Greg Jarrell helps lead QC Family Tree, a social justice organization in Enderly Park, a Black neighborhood near downtown Charlotte that is gentrifying. He said people often waited hours for testing at a site near his neighborhood, even with appointments.

“We saw the severe limitations of the whole system,” he said. “Who has got time to sit in line for three hours? Not an hourly employee.”

If you don’t set up “race-conscious and class-conscious policy,” Jarrell said, “the system is always going to serve people who have more resources.”

Throughout June, as North Carolina’s covid infections and hospitalizations climbed, the state focused more intensely on Black, Latino, and Native American residents. It took until July 7 for officials to announce they would deploy 300 free temporary testing sites in underserved communities across the state.

The state’s covid death toll had reached 1,420 people, and 989 more were hospitalized. The trajectory, Cohen said, was “moving in the wrong direction.”

A Bigger Challenge at the CDC

Political leaders, public health experts, and advocacy groups say Cohen is well suited to run the CDC.

She has navigated vast government agencies — experience her predecessor, Rochelle Walensky, lacked. Cohen has political acumen, having worked effectively in a politically divided state “with a range of views about public health,” said Tom Inglesby, director of the Johns Hopkins Center for Health Security and a former senior White House adviser on covid response. “She is super bright and a very clear communicator about the issues on the table.”

During the Obama administration, Cohen, a physician, climbed the ranks to become chief operating officer and chief of staff at the Centers for Medicare & Medicaid Services, which has more than 6,000 employees and oversees government programs like Medicare and Medicaid that insure millions of Americans. In 2017 Cooper appointed her North Carolina health secretary. She stepped down at the end of 2021.

Cohen’s time “in North Carolina will inform the practical, on-the-ground work that will make a big difference at the CDC,” Kinsley said, citing efforts to minimize racial and ethnic disparities in covid vaccination.

According to CDC data comparing covid mortality rates by state, North Carolina had the 12th lowest age-adjusted death rate in 2020. But the state’s fortunes changed in 2021, when it dropped to 30th place. North Carolinians said Cohen listened to their perspectives, but their calls for help were punctuated by a drumbeat of deaths.

Mecklenburg County Commissioner Mark Jerrell, a Democrat, said the pandemic exposed how North Carolina is still reeling from centuries of racial discrimination. Even as Cohen “became a trusted community voice,” he said, “there was a disconnect between the discussion of equity and the application of equity.”

He worries that painful lessons of those early pandemic months seem forgotten, saying, “We don’t even hear this conversation now.”

Data reporter Hannah Recht contributed to this story.

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Doctors and Patients Try to Shame Insurers Online to Reverse Prior Authorization Denials

Sally Nix was furious when her health insurance company refused to pay for the infusions she needs to ease her chronic pain and fatigue.

Nix has struggled with a combination of autoimmune diseases since 2011. Brain and spinal surgeries didn’t ease her symptoms. Nothing worked, she said, until she started intravenous immunoglobulin infusions late last year. Commonly called IVIG, the treatment bolsters her compromised immune system with healthy antibodies from other people’s blood plasma.

“IVIG turned out to be my great hope,” she said.

That’s why, when Nix’s health insurer started denying payment for the treatment, she turned to Facebook and Instagram to vent her outrage.

“I was raising Cain about it,” said Nix, 53, of Statesville, North Carolina, who said she was forced to pause treatment because she couldn’t afford to pay more than $13,000 out of pocket every four weeks. “There are times when you simply must call out wrongdoings,” she wrote on Instagram. “This is one of those times.”

Prior authorization is a common cost-cutting tool used by health insurers that requires patients and doctors to secure approval before moving forward with many tests, procedures, and prescription medications. Insurers say the process helps them control costs by preventing medically unnecessary care. But patients say the often time-consuming and frustrating rules create hurdles that delay or deny access to the treatments they need. In some cases, delays and denials equal death, doctors say.

That’s why desperate patients like Nix — and even some physicians — say they have turned to publicly shaming insurance companies on social media to get tests, drugs, and treatments approved.

“Unfortunately, this has become a routine practice for us to resort to if we don’t get any headway,” said Shehzad Saeed, a pediatric gastroenterologist at Dayton’s Children’s Hospital in Ohio. In March, he tweeted a photo of an oozing skin rash, blaming Anthem for denying the biologic treatment his patient needed to ease her Crohn’s disease symptoms.

In July, Eunice Stallman, a psychiatrist based in Idaho, joined X, formerly known as Twitter, for the first time to share how her 9-month-old daughter, Zoey, had been denied prior authorization for a $225 pill she needs to take twice a day to shrink a large brain tumor. “This should not be how it’s done,” Stallman said.

The federal government has proposed ways to reform prior authorization that would require insurance companies to provide more transparency about denials and to speed up their response times. If finalized, those federal changes would be implemented in 2026. But even then, the rules would apply only to some categories of health insurance, including Medicare, Medicare Advantage, and Medicaid plans, but not employer-sponsored health plans. That means roughly half of all Americans wouldn’t benefit from the changes.

The 2010 Patient Protection and Affordable Care Act prohibits health insurance plans from denying or canceling coverage to patients due to their preexisting conditions. AHIP, an industry trade group formerly called America’s Health Insurance Plans, did not respond to a request for comment.

But some patient advocates and health policy experts question whether insurers are using prior authorization as “a possible loophole” to this prohibition, as a way of denying care to patients with the highest health care costs, explained Kaye Pestaina, a KFF vice president and the co-director of its Program on Patient and Consumer Protections.

“They take in premiums and don’t pay claims. That’s how they make money,” said Linda Peeno, a health care consultant and retired Kentucky physician who was employed as a medical reviewer by Humana in the 1980s and later became a whistleblower. “They just delay and delay and delay until you die. And you’re absolutely helpless as a patient.”

But there’s reason to hope things may get marginally better. Some major insurers are voluntarily revamping their prior authorization rules to ease preapproval mandates for doctors and patients. And many states are passing laws to rein in the use of prior authorization.

“Nobody is saying we should get rid of it entirely,” said Todd Askew, senior vice president for advocacy at the American Medical Association, in advance of the group’s annual meeting in June. “But it needs to be right-sized, it needs to be simplified, it needs to be less friction between the patient and accessing their benefits.”

Customers are increasingly using social media to air their complaints across all industries, and companies are paying attention. Nearly two-thirds of complainants reported receiving some sort of response to their online post, according to the 2023 “National Consumer Rage Survey,” conducted by Customer Care Measurement & Consulting in collaboration with Arizona State University.

Some research suggests companies are better off engaging with unhappy customers offline, rather than responding to public social media posts. But many patients and doctors believe venting online is an effective strategy, though it remains unclear how often this tactic works in reversing prior authorization denials.

“It’s not even a joke. The fact that that’s how we’re trying to get these medications is just sad,” said Brad Constant, an inflammatory bowel disease specialist who has published research on prior authorization. His work found that prior authorizations are associated with an increased likelihood that children with inflammatory bowel disease will be hospitalized.

Saeed said the day after he posted the picture of the skin rash, the case was marked for a peer-to-peer review, meaning the prior authorization denial would get a closer look by someone at the insurance company with a medical background. Eventually, the biologic medicine Saeed’s patient needed was approved.

Stallman, who is insured through her employer, said she and her husband were prepared to pay out of pocket if Blue Cross of Idaho didn’t reverse the denial for the drug Zoey needed.

Bret Rumbeck, a spokesperson for the insurer, said Zoey’s medication was approved on July 14 after the company consulted an outside specialist and obtained more information from Zoey’s doctor.

Stallman posted details about the ordeal online only after the insurer approved the drug, in part, she said, to prevent them from denying the treatment again when it comes up for a 90-day insurance review in October. “The power of the social media has been huge,” she said.

Nix had been insured by Blue Cross Blue Shield of Illinois through her husband’s employer for almost two decades. Dave Van de Walle, a spokesperson for the company, did not specifically address Nix’s case. But in a prepared statement, the company said it provides administrative services for many large employers who design and fund their own health insurance plans.

Nix said an “escalation specialist” from the insurance company reached out after she posted her complaints on social media, but the specialist couldn’t help.

Then, in July, after KFF Health News contacted Blue Cross Blue Shield of Illinois, Nix logged in to the insurer’s online portal and found that $36,000 of her outstanding claims had been marked “paid.” No one from the company had contacted her to explain why or what had changed. She also said she was informed by her hospital that the insurer will no longer require her to obtain prior authorization before her infusions, which she restarted in late July.

“I’m thrilled,” she said. But “it just should never have happened this way.”

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The CDC Works to Overhaul Lab Operations After Covid Test Flop

In early February 2020, Kirsten St. George and her team at New York state’s public health lab received a test developed by the Centers for Disease Control and Prevention to diagnose people infected with the new, rapidly spreading coronavirus.

But, like many labs around the country, it quickly found the test gave inaccurate results. So test samples had to be sent back to the CDC for processing, wasting time and leaving state officials “sort of blind to what the situation was with the disease,” said St. George, chief of the laboratory of viral diseases at the Wadsworth Center, one of the nation’s largest state public health labs.

“It was extremely unfortunate that it happened at such a critical time, in the early days of this emerging pandemic,” she said.

An independent panel of laboratory researchers, public health and policy experts, and doctors say the CDC’s flawed diagnostic test was one of the “most consequential” of the agency’s pandemic missteps because it stymied national efforts to contain covid-19 as the disease spread.

They blame the test’s shortcomings on a series of problems rooted in how the CDC operated its laboratories: a lack of unified leadership for the labs developing the test; insufficient planning and quality control systems for producing tests for novel pathogens; and ineffective governance that sometimes placed clinical laboratory decisions in the hands of “non-laboratory experts” without diagnostic testing expertise.

The CDC says it’s working to address its liabilities, using the findings of that advisory committee as a guide. It’s a big job — one further complicated by new leadership at the agency, constrained resources, and continued antagonism and threatened budget cuts from members of Congress.

Failure to make sweeping changes could add to a growing lack of trust in the agency post-pandemic and threaten the nation’s preparedness for the next public health threat.

“If the CDC can’t change, their importance in health in the nation will decline,” said Jill Taylor, a senior adviser for the Association of Public Health Laboratories. “The coordination of public health emergency responses in the nation will be worse off.”

The CDC’s original covid test had two key problems, according to an internal analysis in 2021 by a group of agency staff. A design flaw and contamination during production at the CDC led the tests to give false positive results.

The work group that later performed an independent postmortem on the development of the test, using information provided by the CDC, came to the same conclusions.

“It was all surprising to me,” said Joshua Sharfstein, a vice dean at the Johns Hopkins Bloomberg School of Public Health, who co-chaired the panel.

The panel concluded that these failures, fueled by problems within the agency, had human consequences.

“Lacking awareness of how rapidly and widely the virus was spreading, public health agencies were slow to recommend behavior changes or implement protective measures,” its February report said.

A few short weeks after the flawed tests were released, life across the U.S. would grind to a halt, with officials resorting to mass lockdowns to slow the spread of the virus that has killed more than 1.1 million Americans.

The advisory group made 10 recommendations for how the CDC could prevent future failures when developing diagnostic tests, such as consolidating all lab operations into a new center with its own leadership, separating research labs from those that develop clinical tests, and having independent, outside experts review tests made for pathogens with pandemic potential.

The agency began acting on some of those suggestions under the leadership of Rochelle Walensky, before she left her post as director in June, as part of the larger effort to overhaul the CDC. It instituted new agency-wide lab quality standards, started working to improve coordination with state labs, and established an internal review board to approve tests shared outside the CDC.

In July, Mandy Cohen took over as Walensky’s successor. Cohen held top leadership positions at the Centers for Medicare & Medicaid Services during the Obama administration but not within the CDC. Already, she has run into headwinds from Republican members of Congress, who influence the agency’s budget. Still, an agency spokesperson said these won’t be major challenges.

“Improvements to further strengthen CDC’s labs are well underway,” said CDC spokesperson Kevin Griffis. “Reforms will continue to move ahead at full speed.”

Other leaders within the agency said funding could prove a critical obstacle to instituting the recommended changes.

The agency is staring down a cut to one-time funding of more than $1 billion in the wake of this summer’s debt ceiling deal — more than one-tenth of its enacted core operating budget in fiscal year 2023. Republicans in the House are mulling legislation that would cut an additional $1.6 billion in the upcoming fiscal year.

Recommendations for the agency to physically separate its clinical labs from its research labs or to train researchers to uphold new quality standards will be heavy lifts because they require continuous funding, said Jim Pirkle, associate director for laboratory science and safety at the CDC.

“You can’t get one bolus of money, and then say, ‘OK, now that solves it till the end of time,’” he said. “The things that we’re talking about are things that we have to sustain.”

And money is only one piece of the puzzle, said the Association of Public Health Laboratories’ Taylor, who also co-chaired the advisory group.

A culture change will also be required, she said, in which scientists inside the CDC see themselves as part of the larger U.S. laboratory community, subject to the same quality standards.

The advisory group looking at the covid test development found clinical lab decisions were made “by experts in basic science research rather than by certified clinical laboratory professionals.”

In addition, research and clinical work would happen in the same lab space, which made it hard to ensure quality standards for test development and “very easy to cut corners,” Taylor said.

“CDC has considered itself a bit special and not necessarily needing to follow the rules like everyone else does, and that’s a shame,” Taylor said.

Taylor said failure to implement the work group’s recommendations could force the CDC to cede ground to commercial lab companies in developing diagnostic tests for new disease threats.

While commercial labs can operate at larger scales than public health labs can, they are for-profit entities and motivated by the market.

In a recent article, leaders of the American Clinical Laboratory Association, an industry trade group, wrote that some lab companies delayed creating a covid test until “clear signals that a testing market would materialize.”

The CDC does that work without worrying about making money, said Anne Schuchat, former principal deputy director of the agency. In other words, they develop a test “because there’s a new pathogen, and we need to know what’s going on,” she said.

As the covid pandemic has shown, threats that might start small can quickly spread, take millions of lives, and cause years of global disruption.

Schuchat said the ability of the CDC to have the capacity to develop an accurate test to pinpoint novel pathogens and how they’re spreading is critical.

“Our protection depends on it,” she said.

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A Peek at Big Pharma’s Playbook That Leaves Many Americans Unable to Afford Their Drugs

America’s pharmaceutical giants are suing this summer to block the federal government’s first effort at drug price regulation.

Last year’s Inflation Reduction Act included what on its face seems a modest proposal: The federal government would for the first time be empowered to negotiate prices Medicare pays for drugs — but only for 10 very expensive medicines beginning in 2026 (an additional 15 in 2027 and 2028, with more added in later years). Another provision would require manufacturers to pay rebates to Medicare for drug prices that increased faster than inflation.

Those provisions alone could reduce the federal deficit by $237 billion over 10 years, the Congressional Budget Office has calculated. That enormous savings would come from tamping down drug prices, which are costing an average of 3.44 times — sometimes 10 times — what the same brand-name drugs cost in other developed countries, where governments already negotiate prices.

These small steps were an attempt to rein in the only significant type of Medicare health spending — the cost of prescription drugs — that has not been controlled or limited by the government. But they were a call to arms for the pharmaceutical industry in a battle it assumed it had won: When Congress passed the Medicare prescription drug coverage benefit (Part D) in 2003, intense industry lobbying resulted in a last-minute insertion prohibiting Medicare from negotiating those prices.

Without any guardrails, prices for some existing drugs have soared, even as they have fallen sharply in other countries. New drugs — some with minimal benefit — have enormous price tags, buttressed by lobbying and marketing.

AZT, the first drug to successfully treat HIV/AIDS, was labeled “the most expensive drug in history” in the late 1980s. Its $8,000-a-year cost was derided as “inhuman” in a New York Times op-ed. Now, scores of drugs, many with much less benefit, cost more than $50,000 a year. Ten drugs, mostly used to treat rare diseases, cost over $700,000 annually.

Pharmaceutical manufacturers say high U.S. prices support research and development and point out that Americans tend to get new treatments first. But recent research has shown that the price of a drug is related neither to the amount of research and development required to bring it to market nor its therapeutic value.

And selling drugs first in the U.S. is a good business strategy. By introducing a drug in a developed country with limited scrutiny on price, manufacturers can set the bar high for negotiating with other nations.

Here are just a few of the many examples of drug pricing practices that have driven consumers to demand change.

Exhibit A is Humira, the best-selling drug in history, earning AbbVie $200 billion over two decades. Effective in the treatment of various autoimmune diseases, its core patent — the one on the biologic itself — expired in 2016. But for business purposes, the “controlling patent,” the last to expire, is far more important since it allows an ongoing monopoly.

AbbVie blanketed Humira with 165 peripheral patents, covering things like a manufacturing step or slightly new formulation, creating a so-called patent thicket, making it challenging for generics makers to make lower-cost copycats. (When they threatened to do so, AbbVie often offered them valuable deals not to enter the market.) Meanwhile, it continued to raise the price of the drug, most recently to $88,000 a year. This year, Humira-like generics (called biosimilars for its type of molecule) are entering the U.S. market; they have been available for a fraction of the price in Europe for five years.

Or take Revlimid, a drug by Celgene (now part of Bristol Myers Squibb), which treats multiple myeloma. It won FDA approval to treat that previously deadly disease in 2006 at about $4,500 a month; today it retails at triple that. Why? The company’s CEO explained price hikes were simply a “legitimate opportunity” to improve financial “performance.”

Since it must be taken for life to keep that cancer in check, patients who want to live (or their insurers) have had no choice but to pay. Though Revlimid’s patent protection ran out in 2022, Celgene avoided meaningful price-cutting competition by offering generic competitors “volume-limited licenses” to its patents so long as they agreed to initially produce a small share of the drug’s $12 billion monopoly market.

Par Pharmaceutical, another drugmaker, maneuvered to create a blockbuster market out of a centuries-old drug, isoproterenol, through a well-meaning FDA program that gave companies a three-year monopoly in exchange for performing formal testing on drugs in use before the agency was formed.

During those three years, Par wrapped its branded product, Vasostrict, used to maintain blood pressure in critically ill patients, with patents — including one on the compound’s pH level — extending its monopoly eight additional years. Par raised the price by 5,400% between 2010 and 2020. When the covid-19 pandemic filled intensive care units with severely ill patients, that hike cost Americans $600 million to $900 million in the first year.

And then there is AZT and its successors, which offer a full life to HIV-positive people. Pills today contain a combination of two or three medicines, the vast majority including one similar to AZT, tenofovir, made by Gilead Sciences. The individual medicines are old, off-patent. Why then do these combination pills, taken for life, sometimes cost $4,000 monthly?

It’s partly because many manufacturers of the combination pills have agreements with Gilead that they will use its expensive branded version of tenofovir in exchange for various business favors. Peter Staley, an activist with HIV, has been spearheading a class-action suit against Gilead, alleging “collusion.” The negotiated price for these pills is hundreds of dollars a month in the United Kingdom, not the thousands charged in the U.S.

Faced with such tactics, 8 in 10 Americans now support drug price negotiation, giving Congress and the Biden administration the impetus to act and to resist Big Pharma’s legal challenges, which many legal experts view as a desperate attempt to stave off the inevitable.

“I don’t think they have a good legal case,” said Aaron Kesselheim, who studies drug pricing at Harvard Medical School. “But it can delay things if they can find a judge to issue an injunction.” And even a year’s delay could translate into big money.

Yes, American patients are lucky to have first access to innovative drugs. And, sadly, patients in countries that refuse to pay up once in a while go without the latest treatment. But more sadly, polling shows, large numbers of Americans are forgoing prescribed medicines because they can’t afford them.

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