Can a Former Pharma Insider Solve Sky High Rx Costs?

HHS Secretary Alex Azar talked a good game in a Rose Garden ceremony and subsequent press conference—held Friday, May 11—on Trump Administration efforts to lower prescription drug costs for American patients.

Azar is, of course, a former executive of Eli Lilly. Can he be trusted to champion the interests of everyday Americans?

We will soon find out.  President Trump stated that Sec. Azar’s insider knowledge about the complex schemes to raise prices, perpetrated by industry middlemen, is exactly what makes him the right person for the job.

Watch the video of the Rose Garden Ceremony:

Although groups like Physicians Against Drug Shortages have been sounding the alarm for years, industry-led smoke and mirrors have, until recently, largely flown under the radar of the main-stream-media. Thankfully, respected outlets like the Wall Street Journal and Washington Times are now beginning to shine needed light on this malfeasance.

As these articles explain, a safe harbor to Medicare anti-kickback law is the major policy failure enabling the bad actors to line their pockets by driving up costs. The safe harbor legalizes kickbacks paid by manufacturers to Pharmacy Benefit Managers (PBMs) and their cousins-in-crime Group Purchasing Organizations (GPOs).

TownHall.com reports: Repealing the GPO/PBM safe harbor to Medicare anti-kickback law “would open the drug and medical supply segment of healthcare to free market competition and foster innovation. In addition, it would result in cost reductions estimated at $100 billion [actually more like $200 billion], including savings for the Medicare and Medicaid programs.”

Congress initially enacted the GPO safe harbor in 1986. Then in 1987 Congress reaffirmed the measure, instructed HHS to implant the the safe harbor into regulation, and granted HHS authority to create additional safe harbors. In 2003 HHS OIG issued guidance clearing the way for PBMs to piggyback on the GPO safe harbor. Such guidance could theoretically be revised or rescinded by the HHS Secretary, without needing action by Congress.

And in their remarks today, both Trump and Azar mentioned that they will be looking at reining in such abusive practices.

Later in the press room, Azar explained that there are perverse incentives at play: “These big price increases are actually a good deal for pharmacy benefit managers, who are supposed to keep prices down.”

Video of White House Press Conference With Sec. Azar:

What is HHS going to do? They put out a 44-page blueprint of their plan:

https://www.hhs.gov/sites/default/files/AmericanPatientsFirst.pdf

One step HHS announced it will implement immediately is a prohibition of Part D gag clauses, “preventing pharmacists’ telling patients when they could pay less out-of-pocket by not using insurance.”

Great words but let’s hope HHS doesn’t stop there. The blueprint is less clear about other action HHS will take related to PBMs, although it states HHS is considering:  “Measures to restrict the use of rebates, including revisiting the safe harbor under the Anti-Kickback statute for drug rebate.”

Rebates? Why does CMS use that euphemism? They are not rebates, they are legalized kickbacks.  Furthermore, rebates do not go to the patients, they flow to the PBM and insurance companies.

Unfortunately, HHS has a poor track record when it comes to using it’s existing authority to stop PBM abuse. The Government Accountability Office reports: “since 2004, [HHS] has not routinely exercised its authority to request and review disclosures” that PBMs are required to make available to comply with the safe harbor.

HHS promises there will be an opportunity for the public to comment through a “Request for Information.”

HHS appears to be asking the right questions, including:

“Do PBM rebates and fees based on the percentage of the list price create an incentive to favor higher list prices (and the potential for higher rebates) rather than lower prices?”

and

“Should PBMs be obligated to act solely in the interest of the entity for whom they are managing pharmaceutical benefits? Should PBMs be forbidden from receiving any payment or remuneration from manufacturers, and should PBM contracts be forbidden from including rebates or fees calculated as a percentage of list prices? What effect would imposing this fiduciary duty on PBMs on behalf of the ultimate payer (i.e.,
consumers) have on PBMs’ ability to negotiate drug prices?”

When details become available about the comment opportunity we will ask that all patients and doctors demand that HHS take strong action to stop the PBM and GPO kickbacks.

Ultimately, as Trump stated in his comments, Congress will need to do it’s part in concert with administration actions.  One priority for Congress must be to repeal the GPO/PBM safe harbor and end legalized kickbacks.

In the meantime HHS can lead the way to educate Americans on how such repeal will save $200 billion dollars/year and prevent dangerous drug shortages.

Americans are depending on you to do the right thing, Secretary Azar.

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Insurance denials must stop!

To: Lily Tyson, Chief Health Insurance Bureau
NJ Department of Banking and Insurance

Re: Horizon BCBS discrimination

Dear Chief Tyson,

This letter is to make you aware that Horizon BCBS and its affiliates are harming a patient with their precertification, prior authorization, appeal and denial of services processes. The patient indicated below has diabetes and multiple medical conditions, which he diligently and routinely follows up at our office. For the past three months, the patient and I have aggressively pursued a continuous glucose monitoring device to assist both of us in getting his blood glucose under best control.

Despite the fact that the patient and I agree on this, Horizon BCBS and its affiliates have denied the patient this medically necessary item. Further, while the Endocrinology Society, The American Association of Clinical Endocrinologists and the American diabetes association clinical societies all recommend continuous glucose monitoring for best management of diabetes Horizon BCBS and its affiliates insist on harming the patient by denying him this medically necessary tool.

Furthermore, Horizon BCBS medical directors have denied this patient the necessary medical monitoring device, thereby potentially causing their insured harm, and may be liable as they are making care decisions and denial of care decisions for the patient.

I ask:

  1. Do they have the patient’s informed consent to make care decisions?
  2. Are they licensed physicians in NJ?
  3. What is their malpractice coverage for this activity?
  4. Are they specialty trained in endocrinology?
  5. As employees of Horizon BCBS, do they have a conflict of interest?

Horizon BCBS precertification, prior authorization, appeal and denial of service processses are harmful to both patients and physician providers of medical services.  Please put Horizon BCBS on notice to case and desist making clinical care decisions for patients through their onerous and harmful money making processes. This is especially critical in light of the pending NJ law that would mandate the purchase of insurance products like those offered by Horizon BCBS.

Sincerely,

Craig M. Wax, DO, Family Physician

CEO Pay Watch: United Health CEO $27 Million in 2017

$27 Million earned in one year for UnitedHealth’s outgoing CEO, reports the Star Tribune. That’s a lot of moohlah, right?

In the big picture it’s chump change. Get your barf bag ready:

The CEOs of 70 of the largest U.S. health care companies cumulatively have earned $9.8 billion in the seven years since the Affordable Care Act was passed, and their earnings have grown faster than most Americans’ during that time, according to an Axios analysis of federal financial documents.

https://www.axios.com/the-sky-high-pay-of-health-care-ceos-1513303956-d5b874a8-b4a0-4e74-9087-353a2ef1ba83.html

And the above numbers don’t even include 2017.

$10 Billion would pay for a year of Direct Primary Care memberships for over 11 million Americans; that’s almost everyone enrolled in an ACA plan on the individual market.

Anyone wonder where your healthcare dollar and Obamacare ACA tax money is going?

Call your congressman and demand the repeal of ACA Obamacare and let’s let the free market bring up quality and prices down! Capitol Hill Switchboard: (202) 224-3121.

 

Washington State Passes Bill Outlawing MOC for Licensure

Friend of IP4PI, Ken Lee, MD writes in:

There is some good news from WA state. The Legislature just passed with NO opposition in either house HB 2257 that outlaws MOC for MD /DO licensure. It is veto proof. It sits on the Governor’s desk and in my state of WA if he does not sign it in a few days it becomes law automatically. Click here for the bill. The next step would be to do the same for insurance payments, hospital privileges. Several years ago I had my state medical association adopt my resolution to ban MOC for MD licensure; the state medical licensing body agreed to this idea but it was never made into law until now.  Fight on ! The impossible only seems that way.

Congress Can End Corrupt PBM Kickbacks as A Step to True Healthcare Reform

It’s past time for Congress to undo the damage it created back in the 80’s when it exempted hospital group purchasing organizations from anti-kickback rules intended to curb Medicare fraud and abuse. Hospitals claimed this exemption would lower their costs but in reality it created a loophole that ended up increasing costs for patients and lowering quality.  TownHall.com recently published an expose of the scam: “The Multi-Billion Dollar Solution: Repeal Safe Harbor”:

History is rife with examples of government applying band-aid on top of band-aid to fix problems that arise from earlier legislative failures. The problem is, each fix tends to create a new problem or even exacerbate existing problems.

It’s time to rip this particular band-aid right off.

The roots of this particular saga can be traced back to the passage of Medicare and Medicaid.  With patients no longer in charge of the health care dollar — and a third party managing most of of bills — schemes were hatched to bilk Uncle Sam and taxpayers for  medical costs that were either unneeded or not-provided at all.  Congress passed a number of rules to stop kickbacks that helped facilitate fraud and abuse.  Usually the fix came with unintended consequences precipitating even more rules and regulations.

Ending the GPO kickback scheme is a great start. But lasting and meaningful change will also require a hard look at the underlying disease behind higher costs and lower quality. To quote The CATO Institute,”As for socialist economics, it has always resulted in shortages, inefficiency, poverty, and desperation.”

The simple truth is this: Government intervention disrupts the free market forces that weed out bad actors while rewarding entrepreneurs who give customers the best products at the lowest possible cost.

Making high-quality care available to the greatest number of patients requires putting this truth into practice. There are thousands of middlemen who make literal fortunes from the broken status quo and will fight to keep this from happening.

The good news is that they are outnumbered by the hundreds of millions of patients who will benefit from a return to sound free market principles. Making sure Americans understand this truth is a challenging task, but one at which we must succeed.

More Fed carrots? Or just a different stick? #MACRA #MIPS

Secretary Azar says HHS may cease reporting requirements for MIPS “value-based” care. Perhaps you’re beginning to think that they are finally hearing us, right?

However reading further, things get murky fast:

Instead of requiring physicians who participate in MIPS to submit patient data, the proposal suggests having the government use claims data and patient surveys to grade doctors in the program. “We would be able to independently look at data ourselves to decide their compliance with the quality programs rather than their having to even report anything,” Azar said at Thursday’s hearing.

Here’s what some physicians are saying about this “new direction” from HHS:

  • I’m not going to celebrate just yet. Think of how often HHS/CMS have replaced a bad idea they had, with an even worse idea. If they begin using patient surveys (Press Gainey, etc.) to determine whether or not physicians are given a bonus or penalty, I think that could actually make this awful MIPS experiment even worse.
  • We must be careful what we ask for- and we must control the conversation. There is no reason the government needs to be involved at all – that’s the beautiful thing about the free market – the patient receiving the service determines the value – but the patient must have an  appreciable fiduciary responsibility and they vote with their wallet – good restaurants are busy – bad restaurants are closed – really quite simple.
  • MACRA/MIPS  is fatally flawed.  Patients are individuals and cannot be reduced to an algorithm.
  • There is nothing salvageable or workable in the MIPS system. There is no way on paper and with claims that physician skill, judgement or even outcomes can be legitimately assessed. Further, major institutions are rethinking patient evaluations of physicians, realizing that it is a one way system-i.e. there is no way to evaluate the validity of the patient evaluation and no way for the physician to respond.
    In my opinion our best/only meaningful way of reform is to condemn the entire MACRA/MIPS construct as wasteful and invalid without adding anything to patient care. In fact a point can be made that it detracts from actual care.
  • We should have a say in the type of patient survey they set up. And this should decide only incentives not penalties. The only difference between this and MIPS is that with MIPS we can lose money after spending it on data collection, whereas here we avoid double jeopardy because they do their own data collection and we don’t have to attest to anything. Overall I think what they have suggested is better than MIPS.
  • I just had a very cranky daughter complain about the resident who called her sister rather than her when her mother took a turn for the worst. She would give that resident a failing grade. So much subjectivity makes those evaluation meaningless. Also, when grading a physician on outcomes, which physician can take credit for which specific outcome? Many physicians are often involved. This evaluation scheme is totally unworkable.

I think you’ll agree there is more than a bit of skepticism that CMS is going to meaningfully change things for the better. Tell us what you think!

It is not only Aetna, but every major health insurer.

To: Mr. David Jones
Insurance Commissioner of California

Dear Mr. Jones:
I and many of my physician colleagues were gratified to learn in the news this week that you are opening an investigation into Aetna’s ‘prior auth’ practices. I share this little story from today, just so you know it is not only Aetna, but every major health insurer. This is a major reason why our country’s health care is the most expensive, and among the least productive in the developed world (the reverse of just a few years ago), and why U.S. life expectancy has now declined for the second year in a row. I have cc some great physician leaders that I have worked with in California.
Thanks,

Michael Strickland, MD
letmydoctorpractice.org

This is how tests were ordered 10 yrs ago:

Dr to staff: Get a Cat scan (CTPA) of the chest scheduled asap on this patient with recurrent chest pain (who called me last night with worsening pain), now coughing up small amounts of blood (which could become large amounts, at any time, until we know what is causing it), with abnormal fluid collection (pleural effusion).
Minutes later:
Staff: CT scheduled for 9 a.m. tomorrow.
Dr : Great. Next patient..

In 2018:

Tues afternoon:
Dr. to staff (above)
Wed. a.m., I haven’t heard when scheduled. Ask staff. “Hasn’t been scheduled yet. Anthem says it will take a couple of days for them to decide if this test is necessary.” (Note that if the patient gets CT done today and we find a problem, we still have time to do something about it. If Anthem approves it for Friday at 4 pm, there will likely be nothing we can do until Monday..assuming it has not become an emergency, during the delay.)
I call Anthem at 888-224-4902. Get transfer to “provider svcs” 800-345-4344. Get told I need to hang up and call ‘peer to peer line’ at 866-876-3184.

When I call, get voice mail that says “leave your information, and someone will get back to you WITHIN 30 DAYS” !!!!! (I left some information alright).

Call 1st no. back, tell them I want this test approved NOW, or get a Dr. or RN on the phone with me now, or I will send the patient to the ER, and Anthem can pay $5000 to get this done. (Then I remember, the patient has a $12,000 deductible. So, why is Anthem even involved?? “Oh, we still have to approve.”) An RN comes on the line. After a few moments, she says, “Well, a ‘case’ hasn’t been started yet. Your staff will need to call 800-554-0580.” I thank her for her help, tell her this is why I practice direct patient care and do not accept insurance, and ask if she’s seen the news this week that the state of California is investigating Anthem (oops, Aetna. Same thing) over its prior authorization practices.

Give staff above no. She calls and gets CT scan “approved”.

I spent 25 min total on phone w Anthem, plus 15 min w patient and staff, plus documenting (in case of bad outcome, d/t delay), i.e. about one hour of my (doctor’s) time, and staff tells me she spent about an hour on this as well, so 2 hours of the clinic’s time to get “approval” for a test that any 4th year med student would immediately know needs done, and needs done now. And 2 hours we did not do anything remotely resembling anything productive to patient care.

If you wonder why you can’t get into your doctor for days or weeks, and why it costs a fortune, look no further. This happens all day, every day, in every doctor’s office across America.

Next patient…never mind, I’m going to take an aspirin and lie down for a few minutes.