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The Medicare Advantage Influence Machine

Federal officials resolved more than a decade ago to crack down on whopping government overpayments to private Medicare Advantage health insurance plans, which were siphoning off billions of tax dollars every year.

But Centers for Medicare & Medicaid Services officials have yet to demand any refunds — and over the years the private insurance plans have morphed into a politically potent juggernaut that has signed up more than 33 million seniors and is aggressively lobbying to stave off cuts.

Critics have watched with alarm as the industry has managed to deflate or deflect financial penalties and steadily gain clout in Washington through political contributions; television advertising, including a 2023 Super Bowl feature; and other activities, including mobilizing seniors. There’s also a revolving door, in which senior CMS personnel have cycled out of government to take jobs tied to the Medicare Advantage industry and then returned to the agency.

Sen. Chuck Grassley (R-Iowa) said Medicare Advantage fraud “is wasting taxpayer dollars to the tune of billions.”

“The question is, what’s CMS doing about it? The agency must tighten up its controls and work with the Justice Department to prosecute and recover improper payments,” Grassley said in a statement to KFF Health News. “Clearly that’s not happening, at least to the extent it should be.”

David Lipschutz, an attorney with the Center for Medicare Advocacy, a nonprofit public interest law firm, said policymakers have an unsettling history of yielding to industry pressure. “The health plans throw a temper tantrum and then CMS will back off,” he said.

Government spending on Medicare Advantage, which is dominated by big health insurance companies, is expected to hit $462 billion this year.

New details of the government’s failure to rein in Medicare Advantage overcharges are emerging from a Department of Justice civil fraud case filed in 2017 against UnitedHealth Group, the insurer with the most Medicare Advantage enrollees. The case is pending in Los Angeles. The DOJ has accused the giant insurer of cheating Medicare out of more than $2 billion by mining patient records to find additional diagnoses that added revenue while ignoring overcharges that might have reduced bills. The company denies the allegations and has filed a motion for summary judgment.

Records from the court case are surfacing as the Medicare Advantage industry ramps up spending on lobbying and public relations campaigns to counter mounting criticism.

While critics have argued for years that the health plans cost taxpayers too much, the industry also has come under fire more recently for allegedly scrimping on vital health care, even dumping hundreds of thousands of members whose health plans proved unprofitable.

“We recognize this is a critical moment for Medicare Advantage,” said Rebecca Buck, senior vice president of communications for the Better Medicare Alliance, which styles itself as “the leading voice for Medicare Advantage.”

Buck said initiatives aimed at slashing government payments may prompt health plans to cut vital services. “Seniors are saying loud and clear: They can’t afford policies that will make their health care more expensive,” she said. “We want to make sure Washington gets the message.”

AHIP, a trade group for health insurers, also has launched a “seven-figure” campaign to promote its view that Medicare Advantage provides “better care at a lower cost,” spokesperson Chris Bond said.

Revolving Door

CMS, the Baltimore-based agency that oversees Medicare, has long felt the sting of industry pressure to slow or otherwise stymie audits and other steps to reduce and recover overpayments. These issues often attract little public notice, even though they can put billions of tax dollars at risk.

In August, KFF Health News reported how CMS officials backed off a 2014 plan to discourage the health plans from overcharging amid an industry “uproar.” The rule would have required that insurers, when combing patients’ medical records to identify underpayments, also look for overcharges. Health plans have been paid billions of dollars through the data mining, known as “chart reviews,” according to the government.

The CMS press office declined to respond to written questions posed by KFF Health News. But in a statement, it called the agency a “good steward of taxpayer dollars” and said in part: “CMS will continue to ensure that the MA program offers robust and stable options for people with Medicare while strengthening payment accuracy so that taxpayer dollars are appropriately spent.”

Court records from the UnitedHealth case show that CMS efforts to tighten oversight stalled amid years of technical protests from the industry — such as arguing that audits to uncover overpayments were flawed and unfair.

In one case, Jeffrey Grant, a CMS official who had decamped for a job supporting Medicare Advantage plans, protested the audit formula to several of his former colleagues, according to a deposition he gave in 2018.

Grant has since returned to CMS and now is deputy director for operations at the agency’s Center for Consumer Information and Insurance Oversight. He declined to comment.

At least a dozen witnesses in the UnitedHealth case and a similar DOJ civil fraud case pending against Anthem are former ranking CMS officials who departed for jobs tied to the Medicare Advantage industry.

Marilyn Tavenner is one. She led the agency in 2014 when it backed off the overpayment regulation. She left in 2015 to head industry trade group AHIP, where she made more than $4.5 million during three years at the helm, according to Internal Revenue Service filings. Tavenner, who is a witness in the UnitedHealth case, had no comment.

And in October 2015, as CMS department chiefs were batting around ideas to crack down on billing abuses, including reinstating the 2014 regulation on data mining, the agency was led by Andy Slavitt, a former executive vice president of the Optum division of UnitedHealth Group. The DOJ fraud suit focuses on Optum’s data mining program.

In the legal proceedings, Slavitt is identified as a “key custodian regarding final decision making by CMS” on Medicare Advantage.

“I don’t have any awareness of that conversation,” Slavitt told KFF Health News in an email. Slavitt, who now helps run a health care venture capital firm, said that during his CMS tenure he “was recused from all matters related to UHG.”

‘Improper’ Payments

CMS officials first laid plans to curb escalating overpayments to the insurers more than a decade ago, according to documents filed in August in the UnitedHealth case.

In a January 2012 presentation, CMS officials estimated they had made $12.4 billion worth of “improper payments” to Medicare Advantage groups in 2009, mostly because the plans failed to document that patients had the conditions the government paid them to treat, according to the court documents.

As a remedy, CMS came up with an audit program that selected 30 plans annually, taking a sample of 201 patients from each. Medical coders checked to make sure patient files properly documented health conditions for which the plans had billed.

The 2011 audits found that five major Medicare Advantage chains failed to document from 12.3% to 25.8% of diagnoses, most commonly strokes, lung conditions, and heart disease.

UnitedHealth Group, which had the lowest rate of unconfirmed diagnoses, is the only company named in the CMS documents in the case file. The identities of the four other chains are blacked out in the audit records, which are marked as “privileged and confidential.”

In a May 2016 private briefing, CMS indicated that the health plans owed from $98 million to $163 million for 2011 depending on how the overpayment estimate was extrapolated, court records show.

But CMS still hasn’t collected any money. In a surprise action in late January 2023, CMS announced that it would settle for a fraction of the estimated overpayments and not impose major financial penalties until 2018 audits, which have yet to get underway. Exactly how much plans will end up paying back is unclear.

Richard Kronick, a former federal health policy researcher and a professor at the University of California-San Diego, said CMS has largely failed to rein in billions of dollars in Medicare Advantage overpayments.

“It is reasonable to think that pressure from the industry is part of the reason that CMS has not acted more aggressively,” Kronick said.

CMS records show that officials considered strengthening the audits in 2015, including by limiting health plans from conducting “home visits” to patients to capture new diagnosis codes. That didn’t happen, for reasons that aren’t clear from the filings.

In any case, audits for 2011 through 2015 “are not yet final and are subject to change,” CMS official Steven Ferraina stated in a July court affidavit.

“It’s galling to me that they haven’t recovered more than they have,” said Edward Baker, a whistleblower attorney who has studied the issue.

“The government needs to be more aggressive in oversight and enforcement of the industry,” he said.

Senior CMS official Cheri Rice recommended in the October 2015 email thread with key staff that CMS could devote more resources to supporting whistleblowers who report overbilling and fraud.

“We think the whistleblower activity could be as effective – or even more effective – than CMS audits in getting plans to do more to prevent and identify risk adjustment overpayments,” Rice wrote.

But the handful of cases that DOJ could realistically bring against insurers cannot substitute for CMS fiscal oversight, Baker said.

“Unfortunately, that makes it appear that fraud pays,” he said.

Spending Surge

In December, a bipartisan group of four U.S. senators, including Bill Cassidy (R-La.), wrote to CMS to voice their alarm about the overpayments and other problems. “It’s unclear why CMS hasn’t taken stronger action against overpayments, despite this being a longstanding issue,” Cassidy told KFF Health News by email.

In January, Sen. Elizabeth Warren (D-Mass.) and Rep. Pramila Jayapal (D-Wash.) called for CMS to crack down, including by restricting use of chart reviews and home visits, known as health risk assessments, to increase plan revenues.

Cassidy, a physician, said that “upcoding and abuses of chart review and health risk assessments are well-known problems CMS could address immediately.”

Advocates for Medicare Advantage plans, whose more than 33 million members comprise over half of people eligible for Medicare, worry that too much focus on payment issues could harm seniors. Their research shows most seniors are happy with the care they receive and that the plans typically cost them less out-of-pocket than traditional Medicare.

Buck, the spokesperson for the Better Medicare Alliance, said that as the annual open enrollment period starts in mid-October, seniors may see “fewer benefits and fewer plan choices.”

The group has ramped up total spending in recent years to keep that from happening, IRS filings show.

In 2022, the most recent year available, the Better Medicare Alliance reported expenses of $23.1 million, including more than $14 million on advertising and promotion, while in 2023, it paid for a Super Bowl ad featuring seniors in a bowling alley and left viewers with the message: Cutting Medicare Advantage was “nuts.”

Bruce Vladeck, who ran CMS’ predecessor agency from 1993 through 1997, said that when government officials first turned to Medicare managed care groups in the 1990s, they quickly saw health plans enlist members to help press their agenda.

“That is different from most other health care provider groups that lobby,” Vladeck said. “It’s a political weapon that Medicare Advantage plans have not been at all reluctant to use.”

The Better Medicare Alliance reported lobbying on 18 bills this year and last, according to OpenSecrets. Some are specific to Medicare Advantage, such as one requiring insurers to report more detailed data about treatments and services and another to expand the benefits they can offer, while others more broadly concern health care costs and services.

Proposed reforms aside, CMS appears to believe that getting rid of health plans that allegedly rip off Medicare could leave vulnerable seniors in the lurch.

Testifying on behalf of CMS in a May 2023 deposition in the UnitedHealth Group suit, former agency official Anne Hornsby said some seniors might not “find new providers easily.” Noting UnitedHealth Group is the single biggest Medicare Advantage contractor, she said CMS “is interested in protecting the continuity of care.”

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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A Few Rural Towns Are Bucking the Trend and Building New Hospitals

There’s a new morning ritual in Pinedale, Wyoming, a town of about 2,000 nestled against the Wind River Mountains.

Friends and neighbors in the oil- and gas-rich community “take their morning coffee and pull up” to watch workers building the county’s first hospital, said Kari DeWitt, the project’s public relations director.

“I think it’s just gratitude,” DeWitt said.

Sublette County is the only one in Wyoming — where counties span thousands of square miles — without a hospital. The 10-bed, 40,000-square-foot hospital, with a similarly sized attached long-term care facility, is slated to open by the summer of 2025.

DeWitt, who also is executive director of the Sublette County Health Foundation, has an office at the town’s health clinic with a window view of the construction.

Pinedale’s residents have good reason to be excited. New full-service hospitals with inpatient beds are rare in rural America, where declining population has spurred decades of downsizing and closures. Yet, a few communities in Wyoming and others in Kansas and Georgia are defying the trend.

“To be honest with you, it even seems strange to me,” said Wyoming Hospital Association President Eric Boley. Small rural “hospitals are really struggling all across the country,” he said.

There is no official tally of new hospitals being built in rural America, but industry experts such as Boley said they’re rare. Typically, health-related construction projects in rural areas are for smaller urgent care centers or stand-alone emergency facilities or are replacements for old hospitals.

About half of rural hospitals lost money in the prior year, according to Chartis, a health analytics and consulting firm. And nearly 150 rural hospitals have closed or converted to smaller operations since 2010, according to data collected by the University of North Carolina’s Cecil G. Sheps Center for Health Services Research.

To stem the tide of closures, Congress created a new rural emergency hospital designation that allowed struggling hospitals to close their inpatient units and provide only outpatient and emergency services. Since January 2023, when the program took effect, 32 of the more than 1,700 eligible rural hospitals — from Georgia to New Mexico — have joined the program, according to data from the Centers for Medicare & Medicaid Services.

Tony Breitlow is health care studio director for EUA, which has extensive experience working for rural health care systems. Breitlow said his national architecture and engineering firm’s work expands, replaces, or revamps older buildings, many of which were constructed during the middle of the last century.

The work, Breitlow said, is part of health care “systems figuring out how to remain robust and viable.”

Freeman Health System, based in Joplin, Missouri, announced plans last year to build a new 50-bed hospital across the state line in Kansas. Paula Baker, Freeman’s president and chief executive, said the system is building for patients in the southeastern corner of the state who travel 45 minutes or more to its bigger Joplin facilities for care.

Freeman’s new hospital, with construction on the building expected to begin in the spring, will be less than 10 miles away from an older, 64-bed hospital that has existed for decades. Kansas is one of more than a dozen states with no “certificate of need” law that would require health providers to obtain approval from the state before offering new services or building or expanding facilities.

Baker also said Freeman plans to operate emergency services and a small 10-bed outpost in Fort Scott, Kansas, opening early next year in a corner of a hospital that closed in late 2018. Residents there “cried, they cheered, they hugged me,” Baker said, adding that the “level of appreciation and gratitude that they felt and they displayed was overwhelming to me.”

Michael Topchik, executive director of the Chartis Center for Rural Health, said regional health care systems in the Upper Midwest have been particularly active in competing for patients by, among other things, building new hospitals.

And while private corporate money can drive construction, many rural hospital projects tap government programs, especially those supported by the U.S. Department of Agriculture, Topchik said. That, he said, “surprises a lot of people.”

Since 2021, the USDA’s rural Community Facilities Programs have awarded $2.24 billion in loans and grants to 68 rural hospitals for work that was not related to an emergency or disaster, according to data analyzed by KFF Health News and confirmed by the agency. The federal program is funded through what is often known as the farm bill, which faces a September congressional renewal deadline.

Nearly all the projects are replacements or expansions and updates of older facilities.

The USDA confirmed that three new or planned Wyoming hospitals received federal funding. Hospital projects in Riverton and Saratoga received loans of $37.2 million and $18.3 million, respectively. Pinedale’s hospital received a $29.2 million loan from the agency.

Wyoming’s new construction is rare in a state where more than 80% of rural hospitals reported losses in the third quarter of 2023, according to Chartis. The state association’s Boley said he worries about several hospitals that have less than 10 days’ cash on hand “day and night.”

Pinedale’s project loan was approved after the community submitted a feasibility study to the USDA that included local clinics and a long-term care facility. “It’s pretty remote and right up in the mountains,” Boley said.

Pinedale’s DeWitt said the community was missing key services, such as blood transfusions, which are often necessary when there is a trauma like a car crash or if a pregnant woman faces severe complications. Local ambulances drove 94,000 miles last year, she said.

DeWitt began working to raise support for the new hospital after her own pregnancy-related trauma in 2014. She was bleeding heavily and arrived at the local health clinic believing it operated like a hospital.

“It was shocking to hear, ‘No, we’re not a hospital. We can’t do blood transfusions. We’re just going to have to pray you live for the next 45 minutes,’” DeWitt said.

DeWitt had to be airlifted to Idaho, where she delivered a few minutes after landing. When the hospital financing went on the ballot in 2020, DeWitt — fully recovered, with healthy grade-schoolers at home — began making five calls a night to rally support for a county tax increase to help fund the hospital.

“By improving health care, I think we improve everybody’s chances of survival. You know, it’s pretty basic,” DeWitt said.

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Nursing Aides Plagued by PTSD After ‘Nightmare’ Covid Conditions, With Little Help

One evening in May, nursing assistant Debra Ragoonanan’s vision blurred during her shift at a state-run Massachusetts veterans home. As her head spun, she said, she called her husband. He picked her up and drove her to the emergency room, where she was diagnosed with a brain aneurysm.

It was the latest in a drumbeat of health issues that she traces to the first months of 2020, when dozens of veterans died at the Soldiers’ Home in Holyoke, in one of the country’s deadliest covid-19 outbreaks at a long-term nursing facility. Ragoonanan has worked at the home for nearly 30 years. Now, she said, the sights, sounds, and smells there trigger her trauma. Among her ailments, she lists panic attacks, brain fog, and other symptoms of post-traumatic stress disorder, a condition linked to aneurysms and strokes.

Scrutiny of the outbreak prompted the state to change the facility’s name to the Massachusetts Veterans Home at Holyoke, replace its leadership, sponsor a $480 million renovation of the premises, and agree to a $56 million settlement for veterans and families. But the front-line caregivers have received little relief as they grapple with the outbreak’s toll.

“I am retraumatized all the time,” Ragoonanan said, sitting on her back porch before her evening shift. “How am I supposed to move forward?”

Covid killed more than 3,600 U.S. health care workers in the first year of the pandemic. It left many more with physical and mental illnesses — and a gutting sense of abandonment.

What workers experienced has been detailed in state investigations, surveys of nurses, and published studies. These found that many health care workers weren’t given masks in 2020. Many got covid and worked while sick. More than a dozen lawsuits filed on behalf of residents or workers at nursing facilities detail such experiences. And others allege that accommodations weren’t made for workers facing depression and PTSD triggered by their pandemic duties. Some of the lawsuits have been dismissed, and others are pending.

Health care workers and unions reported risky conditions to state and federal agencies. But the federal Occupational Safety and Health Administration had fewer inspectors in 2020 to investigate complaints than at any point in a half-century. It investigated only about 1 in 5 covid-related complaints that were filed officially, and just 4% of more than 16,000 informal reports made by phone or email.

Nursing assistants, health aides, and other lower-wage health care workers were particularly vulnerable during outbreaks, and many remain burdened now. About 80% of lower-wage workers who provide long-term care are women, and these workers are more likely to be immigrants, to be people of color, and to live in poverty than doctors or nurses.

Some of these factors increased a person’s covid risk. They also help explain why these workers had limited power to avoid or protest hazardous conditions, said Eric Frumin, formerly the safety and health director for the Strategic Organizing Center, a coalition of labor unions.

He also cited decreasing membership in unions, which negotiate for higher wages and safer workplaces. One-third of the U.S. labor force was unionized in the 1950s, but the level has fallen to 10% in recent years.

Like essential workers in meatpacking plants and warehouses, nursing assistants were at risk because of their status, Frumin said: “The powerlessness of workers in this country condemns them to be treated as disposable.”

In interviews, essential workers in various industries told KFF Health News they felt duped by a system that asked them to risk their lives in the nation’s moment of need but that now offers little assistance for harm incurred in the line of duty.

“The state doesn’t care. The justice system doesn’t care. Nobody cares,” Ragoonanan said. “All of us have to go right back to work where this started, so that’s a double whammy.”

‘A War Zone’

The plight of health care workers is a problem for the United States as the population ages and the threat of future pandemics looms. Surgeon General Vivek Murthy called their burnout “an urgent public health issue” leading to diminished care for patients. That’s on top of a predicted shortage of more than 3.2 million lower-wage health care workers by 2026, according to the Mercer consulting firm.

The veterans home in Holyoke illustrates how labor conditions can jeopardize the health of employees. The facility is not unique, but its situation has been vividly described in a state investigative report and in a report from a joint oversight committee of the Massachusetts Legislature.

The Soldiers’ Home made headlines in March 2020 when The Boston Globe got a tip about refrigerator trucks packed with the bodies of dead veterans outside the facility. About 80 residents died within a few months.

The state investigation placed blame on the home’s leadership, starting with Superintendent Bennett Walsh. “Mr. Walsh and his team created close to an optimal environment for the spread of COVID-19,” the report said. He resigned under pressure at the end of 2020.

Investigators said that “at least 80 staff members” tested positive for covid, citing “at least in part” the management’s “failure to provide and require the use of proper protective equipment,” even restricting the use of masks. They included a disciplinary letter sent to one nursing assistant who had donned a mask as he cared for a sick veteran overnight in March. “Your actions are disruptive, extremely inappropriate,” it said.

To avoid hiring more caretakers, the home’s leadership combined infected and uninfected veterans in the same unit, fueling the spread of the virus, the report found. It said veterans didn’t receive sufficient hydration or pain-relief drugs as they approached death, and it included testimonies from employees who described the situation as “total pandemonium,” “a nightmare,” and “a war zone.”

Because his wife was immunocompromised, Walsh didn’t enter the care units during this period, according to his lawyer’s statement in a deposition obtained by KFF Health News. “He never observed the merged unit,” it said.

In contrast, nursing assistants told KFF Health News that they worked overtime, even with covid, because they were afraid of being fired if they stayed home. “I kept telling my supervisor, ‘I am very, very sick,’” said Sophia Darkowaa, a nursing assistant who said she now suffers from PTSD and symptoms of long covid. “I had like four people die in my arms while I was sick.”

Nursing assistants recounted how overwhelmed and devasted they felt by the pace of death among veterans whom they had known for years — years of helping them dress, shave, and shower, and of listening to their memories of war.

“They were in pain. They were hollering. They were calling on God for help,” Ragoonanan said. “They were vomiting, their teeth showing. They’re pooping on themselves, pooping on your shoes.”

Nursing assistant Kwesi Ablordeppey said the veterans were like family to him. “One night I put five of them in body bags,” he said. “That will never leave my mind.”

Four years have passed, but he said he still has trouble sleeping and sometimes cries in his bedroom after work. “I wipe the tears away so that my kids don’t know.”

High Demands, Low Autonomy

A third of health care workers reported symptoms of PTSD related to the pandemic, according to surveys between January 2020 and May 2022 covering 24,000 workers worldwide. The disorder predisposes people to dementia and Alzheimer’s. It can lead to substance use and self-harm.

Since covid began, Laura van Dernoot Lipsky, director of the Trauma Stewardship Institute, has been inundated by emails from health care workers considering suicide. “More than I have ever received in my career,” she said. Their cries for help have not diminished, she said, because trauma often creeps up long after the acute emergency has quieted.

Another factor contributing to these workers’ trauma is “moral injury,” a term first applied to soldiers who experienced intense guilt after carrying out orders that betrayed their values. It became common among health care workers in the pandemic who weren’t given ample resources to provide care.

“Folks who don’t make as much money in health care deal with high job demands and low autonomy at work, both of which make their positions even more stressful,” said Rachel Hoopsick, a public health researcher at the University of Illinois at Urbana-Champaign. “They also have fewer resources to cope with that stress,” she added.

People in lower income brackets have less access to mental health treatment. And health care workers with less education and financial security are less able to take extended time off, to relocate for jobs elsewhere, or to shift careers to avoid retriggering their traumas.

Such memories can feel as intense as the original event. “If there’s not a change in circumstances, it can be really, really, really hard for the brain and nervous system to recalibrate,” van Dernoot Lipsky said. Rather than focusing on self-care alone, she pushes for policies to ensure adequate staffing at health facilities and accommodations for mental health issues.

In 2021, Massachusetts legislators acknowledged the plight of the Soldiers’ Home residents and staff in a joint committee report saying the events would “impact their well-being for many years.”

But only veterans have received compensation. “Their sacrifices for our freedom should never be forgotten or taken for granted,” the state’s veterans services director, Jon Santiago, said at an event announcing a memorial for veterans who died in the Soldiers’ Home outbreak. The state’s $56 million settlement followed a class-action lawsuit brought by about 80 veterans who were sickened by covid and a roughly equal number of families of veterans who died.

The state’s attorney general also brought criminal charges against Walsh and the home’s former medical director, David Clinton, in connection with their handling of the crisis. The two averted a trial and possible jail time this March by changing their not-guilty pleas, instead acknowledging that the facts of the case were sufficient to warrant a guilty finding.

An attorney representing Walsh and Clinton, Michael Jennings, declined to comment on queries from KFF Health News. He instead referred to legal proceedings in March, in which Jennings argued that “many nursing homes proved inadequate in the nascent days of the pandemic” and that “criminalizing blame will do nothing to prevent further tragedy.”

Nursing assistants sued the home’s leadership, too. The lawsuit alleged that, in addition to their symptoms of long covid, what the aides witnessed “left them emotionally traumatized, and they continue to suffer from post-traumatic stress disorder.”

The case was dismissed before trial, with courts ruling that the caretakers could have simply left their jobs. “Plaintiff could have resigned his employment at any time,” Judge Mark Mastroianni wrote, referring to Ablordeppey, the nursing assistants’ named representative in the case.

But the choice was never that simple, said Erica Brody, a lawyer who represented the nursing assistants. “What makes this so heartbreaking is that they couldn’t have quit, because they needed this job to provide for their families.”

‘Help Us To Retire’

Brody didn’t know of any cases in which staff at long-term nursing facilities successfully held their employers accountable for labor conditions in covid outbreaks that left them with mental and physical ailments. KFF Health News pored through lawsuits and called about a dozen lawyers but could not identify any such cases in which workers prevailed.

A Massachusetts chapter of the Service Employees International Union, SEIU Local 888, is looking outside the justice system for help. It has pushed for a bill — proposed last year by Judith García, a Democratic state representative — to allow workers at the state veterans home in Holyoke, along with its sister facility in Chelsea, to receive their retirement benefits five to 10 years earlier than usual. The bill’s fate will be decided in December.

Retirement benefits for Massachusetts state employees amount to 80% of a person’s salary. Workers qualify at different times, depending on the job. Police officers get theirs at age 55. Nursing assistants qualify once the sum of their time working at a government facility and their age comes to around 100 years. The state stalls the clock if these workers take off more than their allotted days for sickness or vacation.

Several nursing assistants at the Holyoke veterans home exceeded their allotments because of long-lasting covid symptoms, post-traumatic stress, and, in Ragoonanan’s case, a brain aneurysm. Even five years would make a difference, Ragoonanan said, because, at age 56, she fears her life is being shortened. “Help us to retire,” she said, staring at the slippers covering her swollen feet. “We have bad PTSD. We’re crying, contemplating suicide.”

I got my funeral dress out because the way everybody was dying, I knew I was going to die.
Debra Ragoonanan

Certain careers are linked with shorter life spans. Similarly, economists have shown that, on average, people with lower incomes in the United States die earlier than those with more. Nearly 60% of long-term care workers are among the bottom earners in the country, paid less than $30,000 — or about $15 per hour — in 2018, according to analyses by the Department of Health and Human Services and KFF, a health policy research, polling, and news organization that includes KFF Health News.

Fair pay was among the solutions listed in the surgeon general’s report on burnout. Another was “hazard compensation during public health emergencies.”

If employers offer disability benefits, that generally entails a pay cut. Nursing assistants at the Holyoke veterans home said it would halve their wages, a loss they couldn’t afford.

“Low-wage workers are in an impossible position, because they’re scraping by with their full salaries,” said John Magner, SEIU Local 888’s legal director.

Despite some public displays of gratitude for health care workers early in the pandemic, essential workers haven’t received the financial support given to veterans or to emergency personnel who risked their lives to save others in the aftermath of 9/11. Talk show host Jon Stewart, for example, has lobbied for this group for over a decade, successfully pushing Congress to compensate them for their sacrifices.

“People need to understand how high the stakes are,” van Dernoot Lipsky said. “It’s so important that society doesn’t put this on individual workers and then walk away.”

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States’ Efforts To Alter Arcane Hospital Rules Mix Politics With Drama

Georgia is one of dozens of states that require health-care facilities to ask for permission to build or expand by obtaining “certificates of need.” Basically, state regulators get to decide whether a town needs a new hospital or long-term care center. If the need is deemed real, they’re granted a “CON.”

The intent of the decades-old system is to reduce duplicating medical services in an area, which, supporters argue, drives up health-care spending and reduces quality — an idea generally supported by the hospital industry, especially nonprofits.

But some researchers are skeptical.

“The evidence is pretty darn overwhelming that CON laws don’t achieve the initially stated goals of increasing access, lowering costs and improving quality,” said Matthew Mitchell, a senior research fellow at West Virginia University.

Some researchers argue the rules, which allow health-care organizations to file petitions to block competitors’ projects, are weaponized by powerful health-care interests to assert market dominance. That’s led a swath of states to roll them back in recent years.

In Georgia, lawmakers felt the need to put special exemptions in a certificate of need reform bill earlier this year to make sure the rules weren’t impediments to efforts to revive two recently closed hospitals.

The first exemption involves a shuttered hospital in rural Cuthbert, Ga. The carve-out could help an effort to reopen the facility as a “rural emergency hospital,” which means it would receive more federal money but offer only emergency and outpatient care.

“It’s much needed. People are hoping and praying we get it back,” said Brenda Clark, a local resident.

The second exemption concerns filling the gap left by the recently closed Atlanta Medical Center, one of the city’s two Level 1 trauma centers. That carve-out clears the way for a potential new hospital that would partner with Morehouse School of Medicine, one of the country’s few historically Black medical schools.

“You’ve got a community that is struggling to find care in the wake of the Atlanta Medical Center closure,” said Josh Berlin, CEO of rule of three, an Atlanta-based health-care consulting firm.

Elsewhere in the state, an effort to build a hospital in another rural county showed just how intense debates over CON rules can get, especially when politicians, the health-care industry and communities have conflicting priorities.

This drama involves the state’s powerful lieutenant governor and his wealthy father, who wants to build a hospital in their home county, which both feel is needed.

It calls to mind discussions over certificates of need in recent years in other Southern states, such as Tennessee, South Carolina and Florida, where hospital regulations were eased as lawmakers looked to stoke competition.

“This kind of a regulation is often there because powerful businesses want them,” Mitchell said, “not because they protect consumers.”

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How North Carolina Made Its Hospitals Do Something About Medical Debt

North Carolina officials had been quietly laboring for months on an ambitious plan to tackle the state’s mammoth medical debt problem when Gov. Roy Cooper stepped before cameras in July to announce the initiative.

But as Cooper stood by the stairs of the executive mansion and called for “freeing people from medical debt,” the future of his administration’s work hung in the balance.

Negotiations were fraying between the state and the powerful hospital industry over the plan to make hospitals relieve patient debt or lose billions of dollars of public funding tied to the state’s Medicaid expansion. The federal government hadn’t signed off on North Carolina’s plan, putting funding at risk. And not a single hospital official stood with the governor that day.

Less than six weeks later, the gamble paid off. The state received a federal blessing. And every one of North Carolina’s 99 hospitals agreed to the state’s demands.

In exchange for federal money, hospitals would wipe out billions of dollars of patient debt and adopt new standards to shield patients from crippling bills.

“It’s a model that the rest of the country could adopt,” said Jared Walker, founder of Dollar For, a national nonprofit that helps patients get financial aid from hospitals. “This is what we’ve been fighting for.”

But it was no sure thing. The behind-the-scenes story of North Carolina’s effort — based on hundreds of pages of public records and interviews with state officials and others involved — reveals a months-long struggle as the state went toe-to-toe with its hospitals.

Multibillion-dollar health systems and the industry’s powerful trade group vigorously fought the medical debt plan, records show. They sowed fears of collapsing rural health care. They warned of legal fights and a showdown with the legislature. And they maneuvered to get the federal government to kill the plan.

The Cooper administration had powerful allies in Washington, though. The Biden administration — and Vice President Kamala Harris specifically — had made reducing medical debt a priority. And in the end, the state held the highest card: money.

Building on Medicaid Expansion

North Carolina’s new path was paved by years of frustration.

The state has long had among the highest rates of medical debt in the nation. As many as 3 million adults likely carry such debt, KFF polling and credit bureau data suggest.

Debt is highest in nonwhite communities and in eastern North Carolina, credit bureau data analyzed by the nonprofit Urban Institute shows. And while some debts may be small, the KFF poll found that at least a quarter of people nationally with debt owe more than $5,000.

North Carolina hospitals also have been aggressive debt collectors, taking thousands of patients to court, placing liens on homes, and garnishing tax refunds.

The largest system, Atrium Health — part of Advocate Health, a multistate tax-exempt conglomerate that reported more than $31 billion in revenue and $2.2 billion in profit last year — sued almost 2,500 patients from 2017 to 2022, a report found.

On Thursday, Advocate Health announced that it will cancel the liens it placed on more than 11,000 homes.

Officials from Atrium and 14 other hospital systems declined to be interviewed about the debt plan.

Hospitals have beaten back efforts to restrict their aggressive billing. While an ambitious bill to expand patient protections attracted bipartisan support in the general assembly, it stalled last year in the face of industry opposition.

“Hospitals are good lobbyists,” the governor said in a recent interview. “They’re able to often stop legislation they don’t like.”

In 2023 the health care landscape in the state shifted. After years of resistance, GOP leadership in the legislature agreed to expand eligibility for Medicaid, the safety net insurance program.

The expansion promised to make coverage available to hundreds of thousands of previously uninsured low-income residents and to protect them from going into debt.

But as Cooper, a Democrat, and his top health official, Kody Kinsley, traveled the state to celebrate coverage gains, they saw a gap. The expansion didn’t help people who’d already racked up big bills. “They were still carrying the burden of that debt,” Kinsley said.

With one more year in office, Cooper and Kinsley, whose interest in medical debt was colored by being the child of working-class parents, resolved to take a final shot at the debt problem.

“It’s just a metastasized disease in the health system,” Kinsley said. “And going after it is just a tangle of thorns.”

Medicaid expansion offered a means, albeit untested, to do that, they believed.

The expansion would come with billions of dollars of new federal funding for hospitals through an arcane process known as a state-directed payment. This funding — which many states access to compensate hospitals for treating low-income patients — is criticized by some experts as excessive.

Rather than reject the money, however, Noth Carolina officials believed they could leverage it. Instead of giving it away with no strings attached, they asked, what if they made hospitals protect patients from medical debt in exchange for the funds? If hospitals wouldn’t, the state would dock their money.

“It was a clear tool that we now had on the table,” said Kinsley, who oversaw development of the debt plan and negotiations with hospitals and the federal government.

Many hospital systems in North Carolina stood to get nearly twice as much money by agreeing to participate in the debt relief plan, state figures show. Charlotte-based Atrium, for instance, would get about $1.7 billion next year, compared with roughly $900 million if it didn’t sign on.

But the added money would come with a catch.

Seeking Trusted Partners

Kinsley and his aides quickly settled on two things to demand from health systems.

Hospitals would have to eliminate outstanding debts of their low-income patients. This approach had been pioneered by New York-based nonprofit Undue Medical Debt, which buys old debt for pennies on the dollar and retires it.

Hospitals would also have to change their financial aid policies so more patients could get help with big bills and fewer would go into debt.

Most hospitals already offer discounts to low-income patients. But standards vary, and many hospitals make it difficult to apply for assistance. To address this, some states have imposed uniform standards on hospitals.

North Carolina state officials wanted the same. They knew, however, that threatening hospital money would stir opposition from the industry’s lobbying arm, the influential North Carolina Healthcare Association.

So Kinsley and his aides reached out directly to a handful of hospital systems, including UNC Health, the nonprofit system affiliated with the state’s public university system. “We were essentially road-testing what the actual policies could be and how they would work,” Kinsley said.

Through the first months of 2024, state officials took pains to keep the conversations confidential, emails obtained through a public records request show. When Kinsley’s aides provided drafts to hospital officials, they asked that the proposals be shared “with only a few select colleagues.”

State and hospital officials went back and forth over which patients should qualify for free or discounted care, how to relieve old patient debts, and how to better screen patients for aid.

The process convinced state officials that their plan would work. Some hospitals had already retired patients’ debts. Others had financial assistance policies that paralleled the standards the state was contemplating.

“We had sought out hospitals of different shapes and sizes,” Kinsley said. “We had gleaned from other states what the best practices were and what was really workable.”

‘A Total Explosion’

Then in late April, word of the negotiations between the state and the select group of hospitals leaked.

Kinsley said his cellphone lit up. “Everybody freaked out,” he recalled. “Every lobbyist was coming after me. It was just a total explosion.”

Among them was the North Carolina Healthcare Association and its veteran chief executive, Steve Lawler, who began peppering Kinsley’s office with sharply worded letters attacking the medical debt plan and predicting dire consequences.

Lawler warned that patients would face higher insurance costs. Moreover, he alleged it was illegal to use federal Medicaid dollars to force hospitals to provide widespread debt relief.

“Such a trade-off is not permissible,” Lawler wrote on May 2.

Days later, Kinsley fired back a long letter to Lawler, saying that the plan was a legally sound effort to address a crisis that was “harming our neighbors.”

But the damage had been done. The hospitals working with the state changed their tone, and the industry closed ranks.

Meanwhile the hospital association made plans to convene a meeting with health insurers and business leaders to discuss medical debt, an approach that threatened to slow the state effort to hold hospitals singularly accountable. The group met at Ruth’s Chris Steak House in Raleigh, a restaurant where a steak costs $60 and up.

In a recent interview, Lawler said the hospital group was just trying to build consensus for a different strategy for tackling medical debt. “This was a big enough issue that it just required a bigger-tent conversation,” he said.

To state officials, it looked like an industry play to derail the medical debt plan. “I didn’t know if it was going to fall apart,” Kinsley said.

Pressing Ahead

For lower-income residents, the stakes were high.

The state’s program was designed to erase around $4 billion in hospital debt for nearly 2 million people dating to 2014, according to state estimates.

If approved, the plan would also require hospitals to automatically qualify more patients for charity care, provide discounts to low- and middle-income patients, and stop reporting these patients to credit agencies if they couldn’t pay.

So despite the pushback, state officials kept up their dialogue with hospitals and made revisions to address some concerns, records show.

Among the concessions, the state proposed that hospitals offer debt relief to patients with incomes below 3½ times the federal poverty level, or $109,200 for a family of four. The state had initially sought to mandate aid for people making less than four times the poverty level.

State officials also secured a legal opinion from a Medicaid expert in Washington, D.C., who confirmed that the state’s approach wouldn’t run afoul of federal rules.

But time was running out. The state needed to submit its plan by the end of June or risk losing the federal money. And Cooper and Kinsley still wanted at least a few hospitals on board to build momentum.

“The win here would be hospitals and the department solving a problem that was real and meaningful for people, and we could walk out together and say this is what we got done,” Kinsley said in an interview later.

Email records indicate that some systems, such as Cone Health, considered joining Kinsley and the governor when they announced the plan July 1.

None did. And by the following week, the state was barraged by letters from hospitals across the state lambasting the medical debt plan.

Ken Haynes, a senior Atrium official, wrote that the proposal would set “a dangerous precedent” and warned that insurance companies would raise deductibles, knowing that hospitals would have to forgive bills for many patients.

Novant Health, a large nonprofit system with seven hospitals in and around Charlotte, argued that financial assistance should be limited to uninsured patients and those with Medicaid. “Policies should avoid broad debt relief approaches that divert scarce hospital resources,” wrote Alice Pope, the system’s chief financial officer.

In 2023, Novant posted $8.3 billion in revenue and more than $460 million in profit.

New Bern-based CarolinaEast Health System, insisted the plan would “cripple rural healthcare organizations.” Granville Health System, which runs a community hospital in the center of the state, contended that “hospitals are being used as pawns to achieve preferred political and policy objectives on questionable legal authority.”

In mid-July, Lawler at the North Carolina Healthcare Association wrote directly to the head of the federal Centers for Medicare & Medicaid Services, urging it to reject the state’s plan. Lawler said the plan “set a dangerous precedent” by linking Medicaid funding to medical debt policy.

Dominoes Fall

But North Carolina officials maintained close contact with the federal agency, giving them confidence they’d get the green light, despite hospital opposition.

On July 26, approval came through, a month and a day after North Carolina submitted the plan. Federal review of state plans can often take three or four times as long.

The state gave hospitals until 5 p.m. on Friday, Aug. 9, to accept the new medical debt standards or forfeit billions of dollars.

By Aug. 7, only 37 of the state’s 99 hospitals had signed on.

Then the tide shifted. By Friday evening, state officials had locked in all 99.

Implementing the plan promises to be complicated, with logistical challenges, wary Republicans in the legislature, and hospitals smarting over the showdown. And, as state leaders acknowledge, more action is needed to constrain high prices hospitals still command.

But with taxpayers pumping billions of dollars into health systems nationwide, North Carolina’s gambit offers a potential road map for leveraging public funds to confront a crisis that burdens some 100 million people in the U.S.

“North Carolina has been really strategic in using the lever of its Medicaid payments,” said Christopher Koller, president of the Milbank Memorial Fund, a health policy nonprofit. “The focus of health systems should be caring for patients, not bullying them for every last penny to run their business.”

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Fighting Staff Shortages With Scholarships, California Bill Aims To Boost Mental Health Courts

A seemingly innocuous proposal to offer scholarships for mental health workers in California’s new court-ordered treatment program has sparked debate over whether the state should prioritize that program or tackle a wider labor shortage in behavioral health services.

Nine counties have begun rolling out the Community Assistance, Recovery, and Empowerment Act, which Gov. Gavin Newsom (D) signed into law in 2022 to get people with untreated schizophrenia or other psychotic disorders, many of them incarcerated or homeless, into treatment. But often those skilled clinicians have been pulled by counties from other understaffed behavioral health programs.

“There’s just so much change coming with a limited workforce, limited treatment resources, and high expectations for counties to solve things like homelessness,” said Scott Kennelly, director of the Butte County Behavioral Health Department. “It’s like I’m turning on a fire hose and saying, ‘Start drinking.’”

The bill by state Sen. Tom Umberg would create an annual scholarship fund for students who pursue a mental health profession provided they work for three years with CARE Court. Umberg had requested $10 million for the program, but it’s unclear how many students would receive the scholarship, said Jackie Koenig, a spokesperson for the senator. The bill sailed through the legislature without a single lawmaker voting against it.

Umberg, a Democrat from Orange County, said CARE Court deserves targeted funding because it’s a new program, and he noted other state scholarships are available for students pursuing a behavioral health degree. For instance, the state announced in March 2023 that it would issue $118 million in grants to support behavioral health providers at 134 nonprofit community-based organizations.

“CARE Court is new, and it is in a unique space that requires unique behavioral health skills, dealing with schizophrenics,” Umberg said. “So, we want to encourage folks to go into that space, because it is a challenge.”

But local behavioral health administrators say shifting experts into CARE Court may create shortages in other programs or thrust mental health specialists into multiple demanding programs.

The CARE Act allows patients or others, such as their relatives, behavioral health care providers, or roommates, to petition their county court for help. Individuals who agree to participate can receive up to 24 months of treatment, which can include outpatient substance use disorder treatment, stabilization medication, connection to social services, and housing. It is one of Newsom’s experimental initiatives intended to get some of the state’s 181,000 homeless people off the streets and into housing without resorting to mandatory conservatorships.

Only 7,000 to 12,000 Californians are estimated to be eligible for treatment, according to the Judicial Council, which helps oversee the program.

The state has allocated $251 million to staff and launch the CARE program through the current budget year, including $122 million in grants to counties, according to the state Legislative Analyst’s Office. At the same time, counties have been directed to implement a host of other behavioral health programs, such as mobile crisis teams, and boost mental health services for Medi-Cal patients. Last year, Newsom also signed legislation that broadened the number of Californians who could be involuntarily committed.

“As a high-profile mandate, counties are largely moving existing, skilled, experienced staff over to launch and staff the CARE Court teams,” said Michelle Cabrera, executive director of the County Behavioral Health Directors Association of California, which supports the bill.

It’s why critics, including ACLU California Action, Mental Health America of California, and some counties, say a CARE Court scholarship should also support other county programs that treat individuals with serious mental illness and housing instability.

“Restricting workforce development initiatives solely to one of the many new behavioral health initiatives will not solve the issues of staffing across the continuum of behavioral health services,” said Alexandra Pierce, an assistant director at the Merced County Behavioral Health and Recovery Services Department.

County behavioral health departments are in the midst of a massive behavioral health workforce shortage — running 25% to 30% below full staff capacity, on average, according to an internal 2023 survey conducted by the county behavioral health director association and the University of California-San Francisco’s Healthforce Center, Cabrera said.

More than a dozen rural and urban county behavioral health directors told KFF Health News that hiring challenges are widespread and not unique to CARE Court, pointing to burnout since the start of the covid-19 pandemic and steep competition from schools, correctional facilities, and the private sector, which can offer skilled clinicians higher pay, work-from-home telehealth jobs, and generous vacation.

Michelle Funez, division director of Marin County Behavioral Health and Recovery Services, said a CARE Court scholarship could incentivize students to pursue county jobs that support vulnerable individuals in the community.

Finding the right clinician for CARE Court can be tricky because the job requires skilled individuals to work in homeless encampments and other nontraditional environments, Funez said.

“It can feel like we’re looking for the needle in the haystack,” Funez said, drawing from “an already smaller body of staff who have the requisite skills for this type of work, who are also up for the challenge.”

The nine counties that have launched the specialized courts have received more than 600 petitions in the first 10 months of the program, said Leah Myers, a spokesperson for the state Department of Health Care Services, which helps oversee the program. The remaining 49 counties are slated to launch their programs by Dec. 1.

There have been early successes with the program. A year in, San Diego County is already beginning to “graduate” patients, meaning they have received treatment and have made enough progress to transition out of the court system.

As more counties roll out CARE Courts, they will need more clinicians. A scholarship program, some counties said, could help. But the bill’s price tag could be its downfall. In June, Newsom signed a state budget closing an estimated $46.8 billion deficit, and last year he vetoed hundreds of bills, many of them over cost. Newsom spokesperson Elana Ross declined to comment on the measure.

Newsom has until the end of the month to sign or veto the bill.

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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Abortion Clinics — And Patients — Are on the Move as State Laws Shift

Last month, Planned Parenthood Great Plains opened its newest clinic in Pittsburg, Kan., a city of about 21,000 people mere minutes from the borders of both Missouri and Oklahoma.

It’s the second new clinic the regional affiliate has opened in Kansas in a little over two years, to accommodate the growing number of patients coming from Texas, Missouri, Oklahoma, Arkansas and even Louisiana.

For many people in the South, Kansas is now the nearest place to get a legal abortion.

Fourteen states have enacted abortion bans with few exceptions since the Supreme Court’s Dobbs v. Jackson Women’s Health Organization decision in 2022 left policies on abortion to the states. Many more have limited access.

And yet, the estimated number of abortions in the United States last year rose to over 1 million, the highest number in a decade, according to the Guttmacher Institute, a national nonprofit that supports abortion rights. That’s due in part to the efforts of groups such as Planned Parenthood Great Plains to fill the void left in the states with bans.

Over 170,000 people traveled out of their own state to receive abortion care in 2023, according to Guttmacher. That’s a big jump after Dobbs even though the share of out-of-state patients has been rising since at least 2011.

Not all of the increase in abortions comes from interstate travel, of course. Telehealth has made medication abortions easier to obtain without traveling. The number of self-managed abortions, including those involving the medication mifepristone, has risen.

And Guttmacher data scientist Isaac Maddow-Zimet said the majority of the overall abortion increase in recent years came from those in states without total bans. The increased attention on the issue since Dobbs and efforts to expand access for people in the states with bans bolstered access for people locally as well.

“That speaks, in a lot of ways, to the way in which abortion access really wasn’t perfect pre-Dobbs,” Maddow-Zimet said. “There were a lot of obstacles to getting care.”

Abortion opponents, meanwhile, hailed an estimated drop in the procedure in the 14 states with near-total bans.

“It’s encouraging that pro-life states continue to show massive declines in their in-state abortion totals, with a drop of over 200,000 abortions since Dobbs,” Kelsey Pritchard, a spokeswoman for Susan B. Anthony Pro-Life America, wrote in a statement.

Organizations in states where abortion remains legal feel the ripples of every new ban almost instantly.

One Planned Parenthood affiliate with a clinic in southern Illinois, for example, reported a roughly 10 percent increase in call volume in the two weeks following the enactment of Florida’s six-week abortion ban in May. Both sides now await the next round of policy decisions on abortion, which voters will make in November. Ballot initiatives in 10 states could enshrine abortion rights.

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Cyberattacks Plague the Health Industry. Critics Call Feds’ Response Feeble and Fractured.

Central Oregon Pathology Consultants has been in business for nearly 60 years, offering molecular testing and other diagnostic services east of the Cascade Range.

Beginning last winter, it operated for months without being paid, surviving on cash on hand, practice manager Julie Tracewell said. The practice is caught up in the aftermath of one of the most significant digital attacks in American history: the February hack of payments manager Change Healthcare.

COPC recently learned Change has started processing some of the outstanding claims, which numbered roughly 20,000 as of July, but Tracewell doesn’t know which ones, she said. The patient payment portal remains down, meaning customers are unable to settle their accounts.

“It will take months to be able to calculate the total loss of this downtime,” she said.

Health care is the most frequent target for ransomware attacks: In 2023, the FBI says, 249 of them targeted health institutions — the most of any sector.

And health executives, lawyers, and those in the halls of Congress are worried that the federal government’s response is underpowered, underfunded, and overly focused on protecting hospitals — even as Change proved that weaknesses are widespread.

The Health and Human Services Department’s “current approach to healthcare cybersecurity — self-regulation and voluntary best practices — is woefully inadequate and has left the health care system vulnerable to criminals and foreign government hackers,” Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee, wrote in a recent letter to the agency.

The money isn’t there, said Mark Montgomery, senior director at the Foundation for Defense of Democracies’ Center on Cyber and Technology Innovation. “We’ve seen extremely incremental to almost nonexistent efforts” to invest more in security, he said.

The task is urgent — 2024 has been a year of health care hacks. Hundreds of hospitals across the Southeast faced disruptions to their ability to obtain blood for transfusions after nonprofit OneBlood, a donation service, fell victim to a ransomware attack.

Cyberattacks complicate mundane and complex tasks alike, said Nate Couture, chief information security officer at the University of Vermont Health Network, which was struck by a ransomware attack in 2020. “We can’t mix a chemo cocktail by eye,” he said, referring to cancer treatments, at a June event in Washington, D.C.

In December, HHS put out a cybersecurity strategy meant to support the sector. Several proposals focused on hospitals, including a carrot-and-stick program to reward providers that adopted certain “essential” security practices and penalize those that didn’t.

Even that narrow focus could take years to materialize: Under the department’s budget proposal, money would start flowing to “high-needs” hospitals in fiscal year 2027.

The focus on hospitals is “not appropriate,” Iliana Peters, a former enforcement lawyer at HHS’ Office for Civil Rights, said in an interview. “The federal government needs to go further” by also investing in the organizations that supply and contract with providers, she said.

The department’s interest in protecting patient health and safety “does put hospitals near the top of our priority partners list,” Brian Mazanec, a deputy director at the Administration for Strategic Preparedness and Response at HHS, said in an interview.

Responsibility for the nation’s health cybersecurity is shared by three offices within two different agencies. The health department’s civil rights office is a sort of cop on the beat, monitoring whether hospitals and other health groups have adequate defenses for patient privacy and, if not, potentially fining them.

The health department’s preparedness office and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency help build defenses — such as mandating that medical software developers use auditing technology to check their security.

Both of the latter are required to create a list of “systemically important entities” whose operations are critical to the smooth functioning of the health system. These entities could get special attention, such as inclusion in government threat briefings, Josh Corman, a co-founder of the cyber advocacy group I Am The Cavalry, said in an interview.

Federal officials had been working on the list when news of the Change hack broke — but Change Healthcare was not on it, Jen Easterly, leader of Homeland Security’s cybersecurity agency, said at an event in March.

Nitin Natarajan, the cybersecurity agency’s deputy director, told KFF Health News that the list was just a draft. The agency previously estimated it would finish the entities list — across sectors — last September.

The health department’s preparedness office is supposed to coordinate with Homeland Security’s cybersecurity agency and across the health department, but congressional staffers said the office’s efforts fall short. There are “silos of excellence” in HHS, “where teams were not talking to each other, [where it] wasn’t clear who people should be going to,” said Matt McMurray, chief of staff for Rep. Robin Kelly (D-Ill.), at a June conference.

Is the health department’s preparedness office “the right home for cybersecurity? I’m not sure,” he said.

Historically, the office focused on physical-world disasters — earthquakes, hurricanes, anthrax attacks, pandemics. It inherited cybersecurity when Trump-era department leadership made a grab for more money and authority, said Chris Meekins, who worked for the preparedness office under Trump and is now an analyst with the investment bank Raymond James.

But since then, Meekins said, the agency has shown it’s “not qualified to do it. There isn’t the funding there, there isn’t the engagement, there isn’t the expertise there.”

The preparedness office has only a “small handful” of employees focused on cybersecurity, said Annie Fixler, director at the FDD’s Center on Cyber and Technology Innovation. Mazanec acknowledges the number isn’t high but hopes additional funding will allow for more hires.

The office has been slow to react to outside feedback. When an industry clearinghouse for cyberthreats tried to coordinate with it to create an incident response process, “it took probably three years to identify anyone willing to support” the effort, said Jim Routh, the then-board chair of the group, Health Information Sharing and Analysis Center.

During the NotPetya attack in 2017 — a hack that caused major damage to hospitals and the drugmaker Merck — Health-ISAC ended up disseminating information to its members itself, including the best method to contain the attack, Routh said.

Advocates look at the Change hack — reportedly caused by a lack of multifactor authentication, a technology very familiar in America’s workplaces — and say HHS needs to use mandates and incentives to get the health care sector to adopt better defenses. The department’s strategy released in December proposed a relatively restricted list of goals for the health care sector, which are mostly voluntary at this point. The agency is “exploring” creating “new enforceable” standards, Mazanec said.

Much of the HHS strategy is due to be rolled out over the coming months. The department has already requested more funding. The preparedness office, for example, wants an additional $12 million for cybersecurity. The civil rights office, with a flat budget and declining enforcement staff, is due to release an update to its privacy and security rules.

“There’s still significant challenges that the industry as a whole faces,” Routh said. “I don’t see anything on the horizon that’s necessarily going to change that.”

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Unpacking the FDA’s Non-Recall Recalls

When the Agriculture Department posted a recall of chicken nuggets that might be contaminated, it directed consumers to return them or throw the stuff away.

When the Consumer Product Safety Commission announced that poorly designed baby loungers could suffocate babies, it warned consumers to immediately stop using them.

But when it comes to medical devices, the Food and Drug Administration and manufacturers routinely allow doctors and hospitals to continue using equipment that, as the government sees it, could injure or kill the patients it’s supposed to help. KFF Health News recently highlighted the issue of non-recall recalls in an examination of MitraClip, a cardiac implant.

In 2016, medical device giant Abbott issued a recall for the device — “a Class I recall, the most serious type,” the FDA said. “Use of this device may cause serious injuries or death,” an FDA notice said.

But neither the manufacturer nor the FDA actually recalled the device or suspended its use. They allowed doctors to continue implanting the clips in leaky heart valves.

In a notice, Abbott revised instructions for use and required doctors who implant the clips to undergo training.

The company told KFF Health News that the device has been proved safe and effective “based on more than 20 years of clinical evidence and has profoundly improved the lives of people living with mitral regurgitation,” a condition in which blood flows backward through the heart’s mitral valve. The condition can lead to heart failure and death.

Medical device recalls can include “removals,” in which the device is pulled from where it is used or sold, and “corrections,” which address the problem in the field — for instance, by repairing, adjusting, relabeling or inspecting a device.

“It’s very oxymoronic,” said Rita Redberg, a cardiologist at the University of California at San Francisco and former editor in chief of the journal JAMA Internal Medicine. “A recall makes it sound like it’s recalled. But that is not actually what it means.”

From 2019 through 2023, there were 338 Class I medical device recalls, 164 of which were corrections and 174 of which were removals, FDA spokesperson Amanda Hils said.

Some products undergo multiple recalls while still on the market. Products in the MitraClip line have been the subject of three rounds of recalls, none of which removed devices from use.

“When deciding whether a recall warrants device removal from the field, the FDA considers the frequency and severity of adverse events, effectiveness of the corrective actions that have been executed, and the benefits and risks of preserving patient access to the device,” FDA spokesperson Audra Harrison said.

In some cases, a medical device that is the subject of a recall can remain on the market safely with a simple fix, said Sanket Dhruva, a cardiologist and an associate professor at UCSF who has studied FDA oversight of devices. In other cases, recalls that don’t remove devices can provide unwarranted reassurance and leave the public at risk, Dhruva said.

“Depending on the risks and benefits of the device versus the alternatives, it may be better to actually remove the recalled device from clinical use and the market,” Redberg said.

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Arkansas’ Governor Says Medicaid Extension for New Moms Isn’t Needed

Six weeks after an emergency cesarean section, with her newborn twins still in neonatal intensive care, Maya Gobara went to a pharmacy in West Little Rock, Arkansas, to fill a prescription.

“The pharmacy told me I didn’t have insurance,” Gobara said.

Arkansas is the only state that has not taken the step to expand what’s called postpartum Medicaid coverage, an option for states paid for almost entirely by the federal government that ensures poor women have uninterrupted health insurance for a year after they give birth. Forty-six states now have the provision, encouraged by the Biden administration, and Idaho, Iowa, and Wisconsin either have plans in place to enact legislation or have bills pending in their legislatures.

Federal law requires states to provide pregnancy-related Medicaid coverage through 60 days after delivery. But maternal health advocates say Arkansas often begins the process of moving women out of the program after six weeks, or 42 days.

Gobara said she thinks that’s what happened to her: She was transferred to another health plan with a different slate of doctors, and she didn’t receive notice of the change.

Gobara, who is 38 and a freelance copywriter, said the health plan switch happened to her just as a cascade of previous health problems — an autoimmune disorder, postpartum depression, and rheumatoid arthritis — flared up.

“Everything that I had before hit me like a ton of bricks at once after I had the boys,” she said.

Maternal health advocates say many lower-income women in Arkansas have fallen into that familiar health care gap.

Arkansas is the only state that has not taken the step to expand what’s called postpartum Medicaid coverage, an option for states paid for almost entirely by the federal government that ensures poor women have uninterrupted health insurance for a year after they give birth. Forty-six states now have the provision, and Idaho, Iowa, and Wisconsin either have plans in place to enact legislation or have bills pending in their legislatures.

Arkansas has one of the highest rates of maternal mortality in the nation, a grim tally of women who die from any cause related to pregnancy or childbirth, including weeks after delivery. In Arkansas, 20% to 29% of women are uninsured at some point over the period before they conceive to after they give birth.

In March, Arkansas Gov. Sarah Huckabee Sanders, a Republican, signed an executive order creating a committee of experts charged with improving the state’s dismal maternal health outcomes and better educating women about their health insurance options.

At a press conference announcing the initiative, Gov. Huckabee Sanders said, “This specific group that we’re establishing through the executive order, they’re going to look at every option on the table.”

When asked by reporters at the press conference about whether she would support expanding postpartum Medicaid to 12 months of coverage as other states have done, the answer was a firm “no.”

“I don’t believe creating a duplicative program just for the sake of creating a program is actually going to fix the issue,” she said. “We already have so many women who aren’t taking advantage of the coverage that exists. Creating more coverage doesn’t get more women to the doctor.”

Huckabee Sanders, 42, is the youngest governor currently serving, and she is the parent of three school-age children.

In Arkansas, postpartum women can apply for other insurance coverage in Arkansas six weeks after delivery, but they must send in a paper application, said Zenobia Harris, executive director of the Arkansas Birthing Project, a mentor program that works with pregnant and postpartum women.

“Women get told things like their paperwork got misplaced or lost or they have to resubmit paperwork. They get put on hold when they make phone calls in trying to connect with people,” Harris said. “So, some people, they quit trying.”

Lower-income women, like Maya Gobara, are shifted into ARHOME, a state program touted by Huckabee Sanders, that uses Medicaid funding to buy private health insurance.

The shift to new health coverage happened to Gobara while her twins, Amir and Bryson, were on breathing tubes and needed multiple brain surgeries and she required urgent gallbladder surgery.

“I was supposed to have my gallbladder taken out in one week, but with this new plan I needed a referral for that surgery, but I no longer could see my primary care doctor because she wasn’t under that plan that they put me under,” she said.

Seized with gallbladder pain, Gobara spent days sorting out what had happened to her postpartum Medicaid coverage.

“It felt like the system was set up so I would give up,” Gobara said. “And, honestly, if it was not for my mother sitting next to me and helping me go through step by step by step, I probably would have given up.”

New mothers shouldn’t be shuttled from plan to plan or uninsured when they are dealing with their own health and their newborns, said Camille Richoux, health policy director for Arkansas Advocates for Children & Families, a nonprofit advocacy and policy group. Richoux is part of the governor’s maternal health initiative, a committee tasked with developing recommendations to improve maternal health and increase access to maternal health services.

Richoux said the switch to a new health plan can disrupt the continuity of care when health care is vital. “Especially when so many pregnancy-related deaths occur after that 60-days-postpartum coverage,” she said.

The committees tasked with making recommendations to Gov. Huckabee Sanders have been meeting this summer and recently prepared draft recommendations.

But missing from the list is an expansion of postpartum Medicaid coverage, despite widespread agreement by health organizations and the state’s Maternal Mortality Review Committee that doing so would reduce pregnancy-related deaths.

One of the tasks of the maternal health initiative is “making sure Medicaid does a better job of educating women postpartum on their health insurance options that already exist today, to ensure they get enrolled and have the coverage they need,” said Alexa Henning, communications director for Gov. Huckabee Sanders in an emailed statement last month.

“The data indicates that most women have continuous coverage, they just need to access it,” Henning said. “But if we identify gaps, the Governor is open to all options to help moms and babies.”

The final recommendations are expected to be released this month.

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California May Regulate and Restrict Pharmaceutical Brokers

SACRAMENTO, Calif. — California Gov. Gavin Newsom will soon decide whether the most populous U.S. state will join 25 others in regulating the middlemen known as pharmacy benefit managers, or PBMs, whom many policymakers blame for the soaring cost of prescription drugs.

PBMs have been under fire for years for alleged profiteering and anticompetitive conduct, but efforts to regulate the industry at the federal level have stalled in Congress.

The three largest PBMs are owned by insurers and retail pharmacy chains, and about 80% of prescription drug sales in the United States are controlled by them: OptumRx, owned by UnitedHealth Group; CVS Caremark, owned by CVS Health, which also owns the insurer Aetna; and Express Scripts, owned by The Cigna Group.

The proposed law, spearheaded by state Sen. Scott Wiener of San Francisco, a Democrat, would require PBMs to apply for a license by 2027 and would mandate that licensed PBMs pass along 100% of pharmaceutical manufacturers’ rebates to health plans or insurers. Drug companies often offer substantial discounts on medications to boost demand, and one of the major criticisms of PBMs is that they pocket rebates rather than pass savings along to customers.

The law would also mostly bar PBMs from steering patients to pharmacies they own, which includes the major mail-order pharmacies. And it would prohibit them from giving independent pharmacies lower insurance reimbursements than they offer the big chains — a major issue for the dwindling number of independents around the country.

Wiener said the law aimed to rein in what he called “the worst abuses by PBMs.” Proponents of the legislation say the experiences in the 25 states that require PBM licensing and the 16 that ban steering of patients to preferred vendors show that regulations reduce costs for consumers.

“When they’re licensed like we’re looking at, the cost goes down. States without licensing saw costs go up,” said Assembly member Devon Mathis, one of two Republicans to co-author the bill, citing the National Community Pharmacists Association.

Health insurance premiums increased an average of 16.7% nationwide from 2015 to 2019, the association calculated, with premiums in states that license PBMs increasing 0.3 of a percentage point below the national average and those without, 0.4 above. The association claimed similar benefits from several other reforms affecting pharmacies.

The Pharmaceutical Care Management Association, which represents pharmacy benefit managers, said Wiener’s bill “blatantly” favors independent retail pharmacies over chains.

“This legislation does nothing to lower costs for patients; it simply seeks to financially promote one industry over another with no consumer benefit,” the group said.

Insurance companies argue that the California bill would reduce the PBMs’ ability to negotiate lower drug prices, resulting in higher coverage premiums for everyone. But drugmakers argue that reforms don’t raise premiums.

Supreme Court Decision Looms

States have stepped in to regulate PBMs in the absence of any federal action; Congress has been holding oversight hearings on PBMs, and the Federal Trade Commission in July said PBMs “may be profiting by inflating drug costs and squeezing Main Street pharmacies,” but there has been no new legislation or efforts to crack down based on existing laws barring anticompetitive conduct.

The U.S. Supreme Court could soon weigh in on whether states have the authority to regulate PBMs. A federal appellate court blocked Oklahoma regulations on PBMs on the grounds that federal law held sway, and a group of 35 state attorneys general, including California’s Rob Bonta, have asked the Supreme Court to overturn the ruling.

A central complaint about PBMs is that they take money from pharmaceutical companies, in the form of “rebates,” to give their drugs preferential treatment on health plans’ lists of medications that are covered by insurance, known as formularies. Those rebates may play a role in raising drug prices, found a 2020 paper by the University of Southern California’s Schaeffer Center for Health Policy & Economics.

Under the California bill, those rebates are to be used “for the sole purpose of lowering deductibles and out-of-pocket cost for consumers,” said Assembly member Jim Wood, a Democrat. “There is a perverse incentive by PBMs to choose for their formulary the drugs that will give them the biggest rebate, the largest rebate, even if there are other drugs just as effective and lower-cost. That alone should send shivers down your spine.”

Crackdown in California

California collected more than $215 million last year from the nation’s largest Medicaid insurer, Centene, after it failed to disclose or pass along drug discounts negotiated by its PBM to the state Medicaid agency.

Independent pharmacies say provisions in the proposed California law requiring PBMs to offer them the same pricing as the chains could be a lifeline.

Clint Hopkins, who has co-owned Pucci’s Pharmacy in Sacramento for eight years, said he’s forced to regularly turn away customers rather than lose hundreds of dollars each time he fills their high-cost prescriptions.

For instance, he said his cost for a monthly dose of Biktarvy, used to treat HIV, is $3,881.68. But he said pharmacy benefit managers short him up to $360 on the reimbursement.

“They dictate the rates to us, and they will not negotiate,” said Hopkins, who testified for the bill on behalf of the California Pharmacists Association. “Sometimes I have to say, ‘I’m sorry, I want to help you, but I can’t lose this much money on your prescription.’”

While the bill passed with unusual legislative support, it faces an uncertain future with the Democratic governor, who has until Sept. 30 to sign or veto it.

Newsom vetoed a 2021 bill that would have barred PBMs from steering patients to their own pharmacies, citing potential unintended consequences.

And his Department of Finance said administering the licensing and collecting the data required by the law would cost several million dollars. In vetoing other legislation, Newsom has repeatedly cited costs, as the state struggles with a massive budget deficit.

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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