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The Friday Breeze

Newsletter editor Brianna Labuskes, who reads everything on health care to compile our daily Morning Briefing, offers the best and most provocative stories for the weekend.

From Big Pharma’s tricky PR maneuvering on drug prices to potential purges of non-loyalists at the VA to (my personal favorite) the benefits of a four-day workweek, we have been overrun with health news this week.

Here’s what you need to know and might have missed:

Pharma’s once again grabbing headlines this week, as Novartis and Merck follow in Pfizer’s footsteps in lowering drug prices. But just as with Pfizer, there’s some fine print the companies probably don’t want you to read.

Novartis, for one, is in the middle of a scandal over its contract with President Donald Trump’s personal attorney (and more news just came out over the depth of that connection). So the good PR comes at quite a convenient time. And Merck’s choices of what prices to lower seem very strategic. (For example: It cut the cost of its hep C drug— which had never gained traction in the U.S. anyway. The move could actually boost sales for the company.)

Stat: Novartis Hits the Brakes on Price Hikes As Political Pressure Builds

Stat: Merck Joins the List of Drug Makers Agreeing to Freeze or Lower Some Prices

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A whistleblower (with the FBI code name “Pampers”!) exposes drug companies’ brazen and illegal maneuvering to get on Medicaid’s preferred drug list in this captivating must-read investigation from NPR and the Center for Public Integrity.

NPR/Center for Public Integrity: Drugmakers Exert Influence on Medicaid’s Preferences

Uh, thanks but no thanks? The National Federation of Independent Business, after decades (decades!) of lobbying for association health plans, is now calling Trump’s offering unworkable. Not worth the effort to even set them up, it says.

Politico: Trump Promised Them Better, Cheaper Health Care. It’s Not Happening.

There’s also been some movement that may reveal the administration’s plan to resume those payments to insurers it froze so abruptly recently.

Modern Healthcare: CMS May Propose Restarting $10B Risk-Adjustment Payments

A tidal wave of reassignments and retirements of Veterans Affairs employees perceived as disloyal to Trump is raising eyebrows this week right ahead of nominee Robert Wilkie’s likely confirmation (expected Monday).

Use Our Content This story can be republished for free (details).

The Washington Post: Trump Loyalists at VA Shuffling, Purging Employees Before New Secretary Takes Over

This is going to be a story that keeps cropping up over the next few months, but it’s still worth noting: There’s a health care wedge driving deeper and deeper into the Democratic Party, and it doesn’t seem likely to be resolved anytime soon. Progressives are gung-ho about “Medicare for All,” while moderates insist on sticking with shoring up the health law.

Either choice is a gamble: The GOP is ready to go with counter-rhetoric for the former (like, “It will break Medicare”), while a big part of the Democratic base is tired of baby steps over the health law.

The Associated Press: Democrats Wrestle With Election-Year Message on Health Care

Getting funding for medical research is already a dog-eat-dog process, but with the immigration crisis burning through the Department of Health and Human Services’ money, advocates are worried about what public health programs are losing out because of it.

Politico: Trump’s Migrant Fiasco Diverts Millions From Health Programs

And if all that wasn’t enough news for you, here’s my miscellaneous file for the week: CRISPR gene-editing technology has had people salivating over miracle cures, but new studies are finding that it’s wreaking absolute havoc on patients’ DNA; experts are seeing disturbing parallels between today’s use of anti-anxiety meds and the early days of the opioid epidemic; if a couple who froze fertilized embryos splits up, who gets to make the decision if one of them wants to have the baby?; and there’s been a recent spate of classic psychological experiments that have been overturned. What does that say for the future of the study of the mind?

Stat: Potential CRISPR Damage Has Been ‘Seriously Underestimated,’ Study Finds

Stateline: These Pills Could Be Next U.S. Drug Epidemic, Public Health Officials Say

The Washington Post: Who Gets the Embryos? Whoever Wants to Make Them Into Babies, New Law Says.

The New York Times: Psychology Itself Is Under Scrutiny

Now what you’ve all been waiting for: an experiment testing a four-day workweek has proven so successful, the firm that ran it wants to make the change permanent. Go ahead, send this story around!

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Kaiser Health News | Insurance by Chad Terhune, Kaiser Health News An.. - 2d ago

Premiums in California’s health insurance exchange will rise by an average of 8.7 percent next year, marking a return to more modest increases despite ongoing threats to the Affordable Care Act.

The state marketplace, Covered California, said the rate increase for 2019 would have been closer to 5 percent if the federal penalty for going without health coverage had not been repealed in last year’s Republican tax bill.

The average increase in California is smaller than the double-digit hikes expected around the nation, due largely to a healthier mix of enrollees and more competition in its marketplace. Still, health insurance prices keep growing faster than wages and general inflation as a result of rising medical costs overall, squeezing many middle-class families who are struggling to pay their household bills.

The 8.7 percent increase in California ends two consecutive years of double-digit rate increases for the state marketplace.

“It’s not great that health care costs are still increasing that much, but the individual market is not sticking out like a sore thumb like it has in other years,” said Kathy Hempstead, senior adviser at the Robert Wood Johnson Foundation. “It’s falling back to earth.”

The future may be less bright. An estimated 262,000 Californians, or about 10 percent of individual policyholders in and outside the exchange, are expected to drop their coverage next year because the ACA fines were eliminated, according to the state. Peter Lee, executive director of Covered California, warned that the exodus of healthier consumers will drive up insurance costs beyond 2019 — not just for individual policyholders but for California employers and their workers.

“We are paying, in essence, a surcharge for federal policies that are making coverage more expensive than it should be,” Lee said in an interview. “There will be more of the uninsured and more uncompensated costs passed along to all of us.”

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Critics of the Affordable Care Act say it has failed to contain medical costs and left consumers and taxpayers with heavy tabs . Nearly 90 percent of Covered California’s 1.4 million enrollees qualify for federal subsidies to help them afford coverage.

Foiled in its attempt to repeal Obamacare outright, the Trump administration has taken to rolling back key parts of the law and has slashed federal marketing dollars intended to boost enrollment. Instead, the administration backs cheaper alternatives, such as short-term coverage or association health plans, which don’t comply fully with ACA rules and tend to offer skimpier benefits with fewer consumer protections.

Taken together, those moves are likely to draw healthier, less expensive customers out of the ACA exchanges and leave sicker ones behind.

Nationally, 2019 premiums for silver plans — the second-cheapest and most popular plans offered — are expected to jump by 15 percent, on average, according to an analysis of 10 states and the District of Columbia by the Avalere consulting firm. Prices vary widely across the country, however. Decreases are expected in Minnesota while insurers in Maryland are seeking 30 percent increases.

In California, exchange officials emphasized, consumers who shop around could pay the same rate as this year, or even a little less.

Christy McConville of Arcadia already spends about $2,000 a month on a Blue Shield plan for her family of four, opting for “platinum” coverage, the most expensive type. Her family doesn’t qualify for federal subsidies in Covered California.

She’s worried about further increases and doesn’t want to switch plans and risk losing access to the doctors she trusts. “We’re getting right up to the limit,” McConville said.

Amanda Malachesky, a nutrition coach in the Northern California town of Petrolia, said the elimination of the penalty for being uninsured makes dropping coverage more palatable. Her family of four pays almost $400 a month for a highly subsidized Anthem Blue Cross plan that has a $5,000 deductible.

“I’ve wanted to opt out of the insurance model forever just because they provide so little value for the exorbitant amount of money that we pay,” said Malachesky, who recently paid several hundred dollars out-of-pocket for a mammogram. “I’m probably going to disenroll … and not give any more money to these big bad insurance companies.”

Covered California is aiming to stem any enrollment losses by spending more than $100 million on advertising and outreach in the coming year. In contrast, the Trump administration spent only $10 million last year for advertising the federal exchange across the 34 states that use it.

Also, California lawmakers are looking at ways to fortify the ACA. State legislators are considering bills that would limit the sale of short-term insurance and prevent people from joining association health plans that don’t have robust consumer protections.

Despite the constant uncertainty surrounding the health law, many insurers nationally are posting profits from their ACA business and some plans are looking to expand further on the exchanges.

In California, the same 11 insurers are returning, led by Kaiser Permanente and Blue Shield of California. Together, those two insurers control two-thirds of exchange enrollment. (Kaiser Health News, which publishes California Healthline, is not affiliated with Kaiser Permanente.)

The Covered California rate increases are fairly uniform across the state. Premiums are climbing 9 percent across most of Southern California as well as in San Francisco. Monterey, San Benito and Santa Cruz counties faced the highest increase at 16 percent, on average.

The rates are subject to state regulatory review. Open enrollment on the exchange starts Oct. 15.

The ACA’s expansion of coverage has dramatically cut the number of uninsured Californians. The proportion of Californians lacking health insurance fell to 6.8 percent at the end of last year, down from 17 percent in 2013, federal data show.

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

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Bev Baker-Ajene waited so long to get an adult-sized wheelchair for her teenage daughter, Savitri, that she eventually forgot she’d ordered it.

For the better part of a year, Baker-Ajene pushed Savitri — who has cerebral palsy, spastic quadriplegia and epilepsy — in a child-sized chair that was too small for her. Baker-Ajene said she also has run into problems getting an appropriate shower chair for 17-year-old Savitri. Because of that, she mostly gives her daughter sponge baths in bed.

“It’s ridiculously difficult to get what you need for your child,” said the 62-year-old Clovis, Calif., resident and graphic designer. “I’m tired now. I try not to argue with people anymore, because I need my energy for her.”

Bev Baker-Ajene was frustrated trying to acquire an appropriate wheelchair and shower chair for her teenage daughter, Savitri, who has cerebral palsy, spastic quadriplegia and epilepsy. (Courtesy of Bev Baker-Ajene)

Many California children with serious health care needs often wait months, or even years, before they receive essential medical equipment like custom wheelchairs, shower chairs and hospital beds, according to a recent report.

For some children, these long waits aggravate existing health problems, cause pain and pressure sores, or exacerbate developmental delays, said the report, published in May by the Lucile Packard Foundation for Children’s Health.

“It’s a big bureaucratic mess, and kids are suffering,” said Maryann O’Sullivan, an independent health policy consultant and author of the report.

In one case Sullivan documented, a boy with muscular dystrophy started kindergarten in a stroller because his parents could not get him an appropriate wheelchair in time, in part due to the slow insurance approval process. In another case, a 7-year-old with a serious bone disorder has remained in diapers for years while waiting for a state public health program for children to find a vendor to supply him with a modified commode.

A variety of factors lead to the delays. Families say they are often bounced between private health insurance companies and publicly funded programs such as Medicare, Medi-Cal and California Children’s Services (CCS), which provides coverage for 200,000 children with special health care needs. Once families have navigated that bureaucratic maze to obtain approval for equipment, low reimbursement rates paid by some of the public insurers can make it difficult to find vendors willing to provide the equipment.

Juno Duenas, the executive director of the San Francisco-based Support for Families of Children With Disabilities, said appropriate equipment can be essential to a child’s independence, future job prospects and ability to contribute to society.

Many parents say they struggle to get equipment, in part, because they don’t understand the system. Yuki Baba, a 54-year-old translator who lives in Berkeley, Calif., waited a year to get a hospital bed for her son, Nate, who has cerebral palsy. At 5, Nate was still sleeping in a crib he’d outgrown. Nate is insured by both California Children’s Services and Medi-Cal, the state’s health insurance program for low-income people, and Baba kept calling the wrong program for help.

“Because I didn’t know the system very well, I wasted a lot of energy and time,” she said.

Even when the approval process is smooth, low rates paid by the government-funded programs California Children’s Services and Medi-Cal can mean there are sometimes no outside vendors willing to provide equipment.

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California Children’s Services covers treatments and therapies for children under 21 who meet income guidelines and have a range of eligible serious medical conditions, including cerebral palsy, traumatic injuries and cancer. Many of these children also are insured by Medi-Cal. Others have some private insurance coverage combined with CCS.

Dave Kramer-Urner, CCS administrator for Santa Cruz County, says he has a hard time finding vendors to provide padded bath benches, bidets and certain crutches because reimbursements from the program are low.

CCS rates haven’t changed in 10 years, he said. And the disappearance of small “mom and pop” vendors has exacerbated the problem. The last such vendor in Santa Cruz shut its doors three years ago, he said.

“The big companies have the capacity to say ‘no’ more easily,” he said.

O’Sullivan’s research relied on three existing surveys of parents, advocates and health care providers. She also interviewed dozens of medical therapists, nurses, physicians, vendors, advocates, parents and staff from Medi-Cal managed-care health plans.

O’Sullivan notes in her report that the California Department of Health Care Services, which administers both Medi-Cal and California Children’s Services, doesn’t track wait times for medical equipment and hasn’t set a minimum time frame for the delivery of such equipment.

Tony Cava, a spokesman for the department, said in an emailed statement that it “has been working for several years to improve health care and to emphasize quality and coordination of care for children and youth with special health care needs.”

The department will roll out a program in 21 counties in the coming months to coordinate health care under California Children’s Services and Medi-Cal, Cava said. The program should address many of the issues outlined in O’Sullivan’s report because it will reduce bureaucratic back-and-forth, he added.

However, the majority of children in the CCS program don’t live in those counties, so the changes won’t affect them.

Health Plan of San Mateo, which piloted the integration of Medi-Cal and CCS five years ago, has addressed many of the administrative hurdles detailed in the report, said Sophie Scheidlinger, the plan’s pediatric health manager. However, she continues to see delays due to a shortage of vendors willing to work with the public programs.

In the meantime, many parents fight to find workarounds — or just pay for things themselves.

Alison Beier’s son, Evan, was born two months early with renal failure, a malformed urinary tract and multiple congenital anomalies. While still an infant, Evan was stuck in the hospital for several days after doctors insisted that he needed an automated blood pressure monitor with an infant-sized cuff before they would release him. Neither his public nor private insurers would pay for one.

“Insurance wouldn’t pay for the monitor, we couldn’t afford the monitor, and we didn’t know how to get the monitor,” Beier said.

Eventually, Beier posted her problem on Facebook. A friend of a friend worked at the company that manufactured the monitor and was able to help her.

She feels blessed to have her son, who has gone through 50 surgeries and has battled rejection of his two transplanted kidneys since 2012. She describes him as a brilliant 8-year-old and “the happiest guy on the planet.” Still, advocating for his needs can be overwhelming.

“It’s like I’m always fighting for somebody to cover something,” she said.

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

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If the Affordable Care Act’s protections for people with preexisting medical conditions are struck down in court, residents of the Republican-led states that are challenging the law have the most to lose.

“These states have been opposed to the ACA from the beginning,” said Gerald Kominski, a senior fellow at the UCLA Center for Health Policy Research. “They’re hurting their most vulnerable citizens.”

Twenty Republican state attorneys general and governors challenged the constitutionality of the ACA in federal court in February. Last month, U.S. Attorney General Jeff Sessions and the Department of Justice made the unusual decision not to defend key portions of the law against this legal challenge.

The states’ lawsuit argues that because Congress eliminated the Obamacare tax penalty for not having insurance coverage, effective next year, the entire law is unconstitutional. By extension, the suit calls on federal courts to find the health law’s protections for people with preexisting conditions unconstitutional — and Sessions agrees.

Nine of the 11 states with the highest rates of preexisting conditions among adults under 65 have signed onto the lawsuit to strike down the ACA, according to data from insurance companies and the U.S. Centers for Disease Control and Prevention. The 2015 data, the most recent available, were analyzed by the Kaiser Family Foundation in 2016. (Kaiser Health News, which produces California Healthline, is an editorially independent program of the foundation.)

Those who support the lawsuit contend that there are other means of protecting people with preexisting conditions.

“If a court strikes down the constitutionality of the ACA, there are ways to repeal and replace without Arizonans with preexisting conditions losing their coverage,” said Katie Conner, a spokeswoman for Arizona Attorney General Mark Brnovich.

Conner said her boss, who is party to the lawsuit, believes preexisting conditions should “always be covered.” In Arizona, more than 1 in 4 adult adults under 65 have a preexisting condition, according to the data.

The state with the highest rate of adults with preexisting conditions is West Virginia — 36 percent of those under age 65. That means that about 1 in 3 of them could have a hard time buying insurance through the individual marketplace without the ACA protections.

The office of West Virginia Attorney General Patrick Morrisey, who joined the legal challenge against the ACA, declined to comment. But a spokesman for Morrisey’s re-election campaign told PolitiFact last month that “help should be provided to those who need it most, including those with preexisting conditions.”

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Plaintiffs in the lawsuit “are paying lip service to these critical protections for people, but they are in fact engaged in a strategy that would get rid of those protections,” said Justin Giovannelli, an associate research professor at Georgetown University’s Center on Health Insurance Reforms. “Frankly, it’s hard to square what they’re saying on the one hand and what they’re arguing in the courts on the other.”

According to a poll released in June, also by the Kaiser Family Foundation, three-quarters of Americans say that maintaining protections for people with preexisting conditions is “very important.” This includes majorities of Democratic, Republican and independent voters.

Before the health law was adopted, insurance companies routinely denied coverage to millions of people with preexisting conditions who purchased insurance through the individual marketplace. If they didn’t deny coverage outright, some health plans charged consumers exorbitant premiums, or offered policies that excluded coverage for pricey conditions. (Although many people got insurance through their employers or public plans that covered preexisting conditions, they could have been left vulnerable if their employment status or other circumstances changed.)

The ACA ended those practices.

Common conditions that led insurance companies to deny coverage included high blood pressure, cancer, obesity, diabetes and depression, among many others. Some people were denied for having acne, asthma or for being pregnant.

The KFF analysis estimated that at least 27 percent of adults under 65 — more than 50 million Americans — had at least one preexisting condition that would have jeopardized their coverage pre-ACA. The foundation said its estimates were an undercount because some diseases that insurers cited when declining coverage are not in the survey data. Also, each insurance company set its own rules and conditions for denials, making accurate counts of those who could be affected hard to nail down.

Less precise estimates by other researchers and the Department of Health and Human Services show that up to half of all adults under age 65 have at least one preexisting condition.

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

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Patients whose blood cancers have failed to respond to repeated rounds of chemotherapy may be candidates for a new type of gene therapy that could send their cancers into remission for years.

But the two approved therapies, with price tags of hundreds of thousands of dollars, have roiled the insurance approval process, leading to delays and, in some cases, denials of coverage, clinicians and analysts say.

The therapy involves collecting patients’ own T cells, a type of white blood cell, genetically modifying them, and then infusing them back into patients, where they hunt down and kill cancer cells. Known as CAR T-cell therapy, it has been called a “living drug.”

Two drugs, Kymriah and Yescarta, were approved last year to treat patients whose blood cancers haven’t responded to at least two other rounds of treatment. Kymriah is approved for people up to age 25 with a form of acute lymphoblastic leukemia, the most common cancer in children. Kymriah and Yescarta are both approved for adults with advanced lymphomas.

Researchers report that some critically ill patients who received the therapy have remained cancer-free for as long as five years.

“This is what patients need,” said Dr. Yi Lin, a hematologist who oversees the CAR-T cell practice and research for the Mayo Clinic. “With the likelihood of getting patients into durable survival, we don’t want to deny them the therapy.” She said she receives no personal financial support from the drugs’ makers.

But it comes at a cost. The drugs are hugely expensive. Kymriah and Yescarta cost $373,000 to treat adults with advanced lymphomas, while Kymriah costs $475,000 to treat acute lymphoblastic leukemia in children and young adults. In addition, many patients experience serious side effects that can land them in a hospital intensive care unit for weeks, pushing treatment costs more than $1 million.

All of this gives government and private insurers pause.

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Most commercial insurers are covering CAR-T therapies now, but they do so on an individual basis, writing single-patient agreements each time, said cancer experts. Large insurers that are already familiar with  complicated therapies like stem-cell transplants are getting speedier at handling CAR-T treatment requests, they said. But that’s not always the case at smaller or regional plans, where delays can add weeks to the approval process.

“A request for CAR-T may end up with somebody on the payer authorization team who doesn’t understand the technology or the urgency of the request, when somebody has only weeks or months to live,” said Stephanie Farnia, director of health policy and strategic relations at the American Society for Blood and Marrow Transplantation.

Farnia is in contact with many of the more than 50 medical centers that are authorized to provide treatment. The process of getting to a treatment center and evaluated for therapy is involved, she said, “to then be substantially delayed due to paperwork is incredibly frustrating” for patients.

Medicare and Medicaid often pose greater coverage challenges than do private insurers, according to insurance experts.

Some Medicaid programs don’t cover the treatment, said Dr. Michael Bishop, director of the cellular therapy program in the hematology-oncology section at the University of Chicago. Medicaid, the state-federal health program, covers children in low-income households and some adults.

“Medicaid has been very tough,” he said. “Certain states just deny coverage, even states with balanced budgets.”

Matt Salo, executive director of the National Association of Medicaid Directors, said states have to evaluate the cost as well as the drugs’ effectiveness. “Medicaid is a finite pot of money, and it’s stretched threadbare even on a good day,” he said.

People who are on Medicare, the health insurance program for people age 65 and older and some people with disabilities, typically haven’t faced coverage denials to date, clinicians say. But the government’s reimbursement rates are raising concerns for providers.

Last spring, Medicare announced payment rates for providers who administer Yescarta and Kymriah on an outpatient basis. The payments would more than cover the costs of the drugs. Medicare beneficiaries’ out-of-pocket costs would be capped at $1,340 plus their Part B deductible, if it hasn’t been met, the agency said.

The problem with this plan: Facilities typically provide treatment on an inpatient basis, because of the potential for severe, systemic side effects.

“There’s a lot of toxicity and questions about whether it can even be provided in an outpatient setting,” said Gary Goldstein, the business manager at the blood and marrow transplant program at Stanford Health Care in Stanford, Calif.

For inpatient care, “CAR T-cell therapy … would be paid at a much lower amount compared to outpatient hospital use,” according to officials at the Centers for Medicare & Medicaid Services.

The agency is considering how to handle payment for inpatient CAR-T care for the upcoming fiscal year that starts in October. For now, some medical centers are absorbing whatever Medicare doesn’t pay.

“How can you tell a patient who’s 66, ‘If only you’d gotten lymphoma when you were 64’? Goldstein asked.

But the current approach can’t continue indefinitely, he said.

“Even if there aren’t any centers that are making that decision today, if coverage doesn’t change for Medicare, it absolutely is going to be a problem tomorrow,” said Goldstein.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

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Episode 54: ACA Under Fire. Again. - SoundCloud
(1877 secs long, 1197 plays)Play in SoundCloud

Democrats in the Senate are gearing up to fight President Donald Trump’s nominee to the Supreme Court, U.S. Circuit Judge Brett Kavanaugh. They argue he is not only a potential threat to abortion rights, but also to the Affordable Care Act.

Meanwhile, the Trump administration continues its efforts to undermine the workings of the Affordable Care Act. This week, officials announced a freeze on payments to insurers who enroll large numbers of sicker patients, and another cut to the budget for “navigators” who help people understand their insurance options and enroll for coverage.

This week’s panelists for KHN’s “What the Health?” are:

Julie Rovner of Kaiser Health News

Margot Sanger-Katz of The New York Times

Anna Edney of Bloomberg News

Julie Appleby of Kaiser Health News

Among the takeaways from this week’s podcast:

  • One reason Democrats are rallying around the health issue rather than the abortion issue is that there is more unity in their caucus over health than abortion. Also, the two key Republican senators who support abortion rights — Sen. Susan Collins (R-Maine) and Sen. Lisa Murkowski (R-Alaska) — also voted against GOP efforts to repeal the Affordable Care Act last year.
  • The Trump administration’s action on risk-adjustment payments sent yet another signal to insurers that the federal government does not necessarily have their backs and is willing to change the rules along the way.
  • The Trump administration says it wants to cut to payments for navigators because they are not cost-effective. But the navigator money does not come from taxpayers or government sources. It is paid from insurance industry user fees. These funds also go to support ACA advertising — which has also been cut. However, the user fees have not been reduced. In theory, reducing these fees could provide savings that could be passed on to consumers.
  • After being called out on Twitter by Trump, drugmaker Pfizer this week announced it would delay some already-announced price increases on about 100 of its drugs. It is worth noting that the president used his bully pulpit and gained some success. The six-month delay will mean that consumers will not experience an increase in cost at the pharmacy for at least that time period. But it still raises questions.
  • The Trump administration worked to block a World Health Organization resolution to promote breastfeeding. But while this seemed a clear case of promoting the interests of infant formula companies over public health experts, there was pushback from some women who say they are unable to breastfeed and feel stigma when they opt for formula instead. On the other hand, formula can be dangerous in developing countries without easy access to clean water.
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Plus, for “extra credit,” the panelists recommend their favorite health stories of the week they think you should read, too:

Julie Rovner: Politico Agenda’s “The One Big Winner of the Obamacare Wars,” by Joanne Kenen

Julie Appleby: The New York Times’ “Doctor, Your Patient Is Waiting. It’s a Red Panda,” by Karen Weintraub.

Anna Edney: Politico’s “CMS Quit Test of Pricey Cancer Treatment Amid Concerns Over Industry Role,” by Sarah Karlin-Smith and David Pittman

Margot Sanger-Katz: HuffPost’s “Trump Administration May Be Preparing A New Obamacare Sabotage Effort,” by Jonathan Cohn

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcher or Google Play.

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Despite receiving billions of dollars in taxpayer money, Medicaid insurers are lax in ferreting out fraud and neglect to tell states about unscrupulous medical providers, according to a federal report released Thursday.

The U.S. Health and Human Services’ inspector general’s office said a third of the health plans it examined had referred fewer than 10 cases each of suspected fraud or abuse to state Medicaid officials in 2015 for further investigation. Two insurers in the program, which serves low-income Americans, didn’t identify a single case all year, the report found.

Some health plans terminated providers from their networks for fraud but didn’t inform the state. The inspectors said that could allow those doctors or providers to defraud other Medicaid insurers or other government programs in the same state.

In addition, some insurance companies failed to recover millions of dollars in overpayments made to doctors, home health agencies or other providers. The inspector general said insurers stood to benefit financially from this because higher costs can justify increased Medicaid rates in the future. (The report didn’t name specific insurers or states.)

Medicaid plans “are required by law to find fraud and abuse and to share information with states,” said Meridith Seife, a deputy regional inspector general in New York and a co-author of the report. “We are concerned anytime we see evidence that managed-care organizations are not doing that in a rigorous way. There’s a lot of taxpayer dollars at stake.”

In general, Medicaid has struggled for years with poor oversight and billions lost to improper payments, drawing regular scrutiny from federal auditors but little improvement. Authorities have found clinics overprescribing opioids to Medicaid patients and doctors running pill mills. Hospitals and other providers have falsified Medicaid claims, paid illegal kickbacks for patient referrals and billed for unnecessary services.

Health insurers serve about 55 million Medicaid patients across 38 states, and play an increasingly vital role in running the giant public insurance program. States generally split the cost of Medicaid with the federal government.

One in 5 Americans is on Medicaid and enrollment is poised to rise even further as more states consider expansion under the Affordable Care Act. About 75 percent of Medicaid patients are part of a privatized system in which managed-care companies are paid fixed fees per patient to coordinate their care. Big, publicly traded companies such as UnitedHealth, Anthem and Centene dominate the business. In some states like California, evidence shows the funding often flows to the plans with little oversight, sometimes regardless of their performance.

These companies tout their expertise at spotting suspicious billing patterns and chasing down criminals using sophisticated data mining, but the inspector general found that their fraud-fighting results don’t always match the rhetoric.

Andy Schneider, a former federal health official and now a research professor at Georgetown University’s Center for Children and Families, said the lack of reporting to states is “a big problem.”

“If states don’t know a provider has ripped off the managed-care organization, how can they protect other state programs or insurers from that behavior?” he said.

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Last year, new Obama-era rules went into effect that seek to strengthen fraud-detection efforts in Medicaid managed care. For now, the Trump administration has endorsed those changes.

Last month, the administration said they would monitor state compliance and conduct more audits. 

“With historic growth in Medicaid comes an urgent federal responsibility to ensure sound fiscal stewardship and oversight of the program,” Seema Verma, administrator of the Centers for Medicare & Medicaid Services, said in a statement last month.

In a May 17 response to the inspector general, Verma cited the Obama administration’s managed-care rules and she agreed with nearly all of the recommendations the inspector general made to help remedy the problems.

In the report, the inspector general’s office examined data from the health plan with the largest Medicaid spending in each of the 38 states with managed care. Inspectors also conducted interviews with officials and insurance companies in five states. Among the findings:

  • The 38 plans received $62.2 billion in federal and state money in 2015. That represents about a quarter of the $236 billion Medicaid plans received that year. That figure has grown to nearly $300 billion last year, or about half of Medicaid spending overall.
  • The health insurers identified $57.8 million in overpayments related to fraud or abuse during 2015. Health plans only recovered $12.5 million, or 22 percent, of those overpayments. (Four of the health plans found no such overpayments all year.)
  • Insurers performed better on erroneous billing and other overpayments not related to fraud. Health plans collected 68 percent of the $831.4 million they identified in 2015.

Insurance industry officials say they couldn’t comment specifically on the audit until they had more time to review the findings. They agreed that the number of cases identified and shared with states appeared relatively small in comparison to the Medicaid spending involved.

Jeff Myers, chief executive of Medicaid Health Plans of America, an industry trade group, said state contracts vary widely and may not require health plans to report every questionable provider or billing discrepancy.

“Those numbers do seem low,” Myers said of the fraud instances cited in the report. “If the Trump administration and states decide they need to get more data and do more rigorous analysis, plans will provide it.”

Myers pushed back on the inspectors’ suggestion that insurers are purposely ignoring wasteful spending in order to boost their own revenue and profits from states.

“States look very seriously at ways to reduce Medicaid spending because every dollar spent on Medicaid is a dollar not spent somewhere else,” Myers said.

Some health-policy experts said the federal report reflects the insurance industry’s resistance to what it perceives as meddling in its private business even though plans are participating in a public program. “This kind of behavior, like not reporting bad actors, is totally consistent with their broader philosophy of ‘It’s my money and let me run my business,’” said Schneider, the former federal official.

Christopher Koller, former Rhode Island health insurance commissioner, said states bear the responsibility to address these problems in their contracts with health plans.

“This is one more example of how state oversight can often be insufficient,” said Koller, president of the Milbank Memorial Fund, a foundation focused on health policy. “States who think they can outsource all of the work to the private-sector ‘experts’ are not serving their citizens well.”

In 2015, the 38 health plans examined by inspectors collectively took 2,668 corrective actions, such as payment suspensions, against providers suspected of fraud or abuse, according to the report.

Eighteen health plans canceled contracts for a total of 179 providers “for cause” in 2015. Three of those insurers said they didn’t typically notify the state of provider terminations.

Now the new Medicaid regulations require insurers to notify states about providers’ terminations and other changes in their status, according to the report.

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

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The Trump administration’s decision Tuesday to slash funding to nonprofit groups that help Americans buy individual health insurance coverage sparked outrage from advocates of the Affordable Care Act. Using words like “immoral” and “cold-hearted,” they saw it as the Republicans’ latest act of sabotage against the sweeping health law.

But as the ACA’s sixth open-enrollment period under the health law approaches in November, the lack of in-person assistance is unlikely to be a disaster for people seeking coverage, insurance and health experts say.

“I think alone it will have a very small impact on enrollment for 2019,” said William Hoagland, a senior vice president with the Bipartisan Policy Center in Washington.

But combined with other recent actions by the Trump administration, the decision sets a negative tone, Hoagland said.

“It does send a signal of course that the administration is not promoting enrollment,” he said.

The Centers for Medicare & Medicaid Services announced it is cutting money to the groups known as navigators from $36 million to $10 million for the upcoming 45-day enrollment period.

This reduction comes a year after the Trump administration decreased navigators’ funding by 40 percent from $62.5 million — and cut advertising and other outreach activities.

CMS Administrator Seema Verma said the navigators that operate in the 34 states that use the federal marketplace — including many health and religious organizations — were ineffective and had outlived their usefulness.

She pointed out that they helped with fewer than 1 percent of enrollments in 2017 — though she counts navigators as “helping” only if consumers sign up in their presence.

CMS also notes that after last year’s navigator funding was reduced, the overall enrollment in Obamacare plans increased slightly (when counting people who paid their first month’s premiums) to 10.6 million people.

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Florida Blue, an insurer that enrolls among the largest number of Obamacare consumers nationwide, said it won’t miss the help from the federally funded grass-roots helpers.

“Given our large and unique distribution-channel strategy of utilizing our retail centers along with our telesales efforts, our dedicated field agents and our direct in-market enrollment efforts, we do not depend on navigators to enroll ACA members,” said spokesman Paul Kluding.

Greg Fann, a fellow with the Society of Actuaries, said the role of navigators has been overstated.

“I am a numbers guy, and what really matters to people are the numbers and price of the coverage,” he said. Nearly 9 in 10 people buying coverage on the ACA exchanges qualify for federal subsidies based on their incomes, and the amount those subsidies rose last year because of an increase in silver-plan premiums.

The navigators, Fann added, were needed more in 2013 and 2014 when the marketplaces were in their first years and millions of people who hadn’t bought insurance before were considering the health law’s new options.

Insurers and brokers, Fann said, should step in to make up for navigator funding.

Don’t count on it, said Steve Israel, a Boynton Beach, Fla., insurance agent and past president of the Florida Association of Health Underwriters. He said most independent brokers want nothing to do with ACA plans because insurers have cut their commissions. “We’ve been sending people to navigators,” Israel said.

Some states that operate their own marketplaces, however, are continuing to invest in these grass-roots aides.

Covered California, for example, is holding its navigator funding steady, dedicating $6.5 million to navigators in this year’s budget.

That’s more than half of what healthcare.gov is investing in navigators in 34 states.

California has 1.5 million people in Obamacare plans, second highest in the nation behind Florida, which has 1.6 million.

Death By 1,000 Cuts? 

Trump spent his first year in office trying to repeal the health law and came within one vote in the U.S. Senate of achieving that goal. Immediately after Sen. John McCain (R-Ariz.) cast the deciding vote to block the dramatic repeal effort, Trump implored Republicans to let the law disintegrate.

“Let ObamaCare implode, then deal,” Trump tweeted on July 28, 2017.

But his administration has not stood idly by.

The Republican-controlled Congress in December passed a law that next year will eliminate the requirement that most Americans have insurance, a move likely to drive healthier people out of insurance market and lead to higher prices for those who are left.

Just last week, CMS said because of a pending lawsuit it was suspending a program created by the law to even out the burden on health insurers whose customers are especially unhealthy or sick. That could take millions of dollars away from some insurers, causing them to hike prices or abandon markets.

The Trump administration also issued new rules to try to make it easier for individuals and small businesses to buy health plans that cost less than ACA coverage because they cover fewer medical services. These plans would bypass the law’s protections that prevent companies from charging higher prices to women, older people and those with preexisting medical conditions.

Critics deride such plans as “junk insurance.”

CMS now wants the navigators to promote these policies in addition to steering people toward ACA-compliant plans and Medicaid.

This adds to the concern about the lack of navigator funding.

The availability of such new types of coverage will increase consumer demand for specially trained navigators, said Elizabeth Hagan, a senior consultant with Transform Health, a consulting firm.

She said the problem with reducing consumer assistance is not so much that fewer people will buy coverage but that people will buy policies that don’t fit their needs.

Jodi Ray, who leads the University of South Florida’s navigator program — the largest one in the state — said her staffers do much more than help with enrollment. They also help consumers file appeals with insurers.

“This is how health care disparities are exacerbated — we will be put in the awful position of pitting populations that need assistance against each other in order to prioritize how we can use the resources,” she said.

California Healthline reporter Ana B. Ibarra contributed to this report.

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Senate Democrats, who are divided on abortion policy, are instead turning to health care as a rallying cry for opposition to President Donald Trump’s Supreme Court nominee.

Specifically, they are sounding the alarm that confirming conservative District Court Judge Brett Kavanaugh could jeopardize one of the Affordable Care Act’s most popular provisions — its protections for people with preexisting health conditions.

“Democrats believe the No. 1 issue in America is health care, and the ability of people to get good health care at prices they can afford,” said Senate Minority Leader Chuck Schumer (D-N.Y.).

The Kavanaugh nomination, he added, “would put a dagger” through the heart of that belief.

Democratic senators spent Tuesday trying to connect the dots between potential threats to health care and Trump’s high court pick.

“President Trump as a candidate made it very clear that his priority was to put justices on the court who would correct for the fatal flaw of John Roberts,” said Sen. Chris Murphy (D-Conn.) on the Senate floor Tuesday. Chief Justice Roberts was the decisive fifth vote to uphold the ACA in a key case in 2012. “[Republicans’] new strategy is to use the court system to invalidate the protections in the law for people with preexisting conditions,” Murphy said.

Murphy — and many of his Democratic colleagues — are referring to a case filed in Texas in February by 20 Republican state attorneys general. The AGs charge that because the tax bill passed by Congress last year eliminated the tax penalty for not having health insurance, it rendered the entire health law void.

Their reasoning was that Roberts based his opinion upholding the ACA on Congress’ taxing power. Without the tax, the AGs argue, the law should be held unconstitutional.

The Trump administration, which would typically defend the ACA because defending federal law is part of what the Justice Department is tasked to do, opted to follow a different course of action.

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In a response filed in June, political appointees in the department said eliminating the penalty should not invalidate the entire law. But it should nullify provisions that prevent insurers from refusing to sell insurance to people with preexisting conditions or charging them higher premiums.

If this argument were to be upheld by a newly reconstituted Supreme Court, the health law would be dealt a serious blow.

The lawsuit, however, is only in its earliest stages. And many legal scholars on both sides doubt it will get very far.

In an amicus brief filed with the court in June, five liberal and conservative legal experts who disagreed on previous ACA cases argued that both the Republican attorneys general and the Justice Department are wrong — that eliminating the mandate penalty should have no impact on the rest of the law.

Their position is rooted in something called “congressional intent.” When a court wants to invalidate a portion of a law, it usually also has to determine whether Congress would have considered other aspects of the law unworkable without it.

But that is not a problem in this case, the legal experts argued in their brief. “Here, Congress itself has essentially eliminated the provision in question and left the rest of a statute standing,” they wrote. “In such cases, congressional intent is clear.”

The merits of the lawsuit notwithstanding, the issue works well for Democrats.

For one thing, the health law’s preexisting condition protections are among its most popular parts, according to public opinion polls.

And unlike abortion, defending the health law is something on which all Senate Democrats agree. That includes some vulnerable senators in states that voted for Trump in 2016, including Sens. Joe Manchin (D-W.Va.), Heidi Heitkamp (D-N.D.) and Joe Donnelly (D-Ind.). None are strong supporters of abortion rights. But all have stood firm against GOP efforts to take apart the Affordable Care Act.

Manchin, for example, said in a statement about the nomination, “The Supreme Court will ultimately decide if nearly 800,000 West Virginians with preexisting conditions will lose their health care.”

Manchin’s opponent in November is Republican Attorney General Patrick Morrisey. He is one of the officials who filed the suit against the health law.

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Chad Terhune, a senior correspondent at California Healthline and Kaiser Health News, discussed the latest move by the Trump administration and the potential impact in California with A Martinez, host of the “Take Two” show on Southern California Public Radio.

https://californiahealthline.files.wordpress.com/2018/07/kpcc-07092018.mp3
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Health insurers and Covered California officials are facing another curveball from the Trump administration on the Affordable Care Act that could rattle the insurance market.

Over the weekend, Seema Verma, administrator for the federal Centers for Medicare & Medicaid Services, said she was suspending a $10 billion program that helps stabilize the insurance markets created under the health law.

She said the “risk-adjustment” payments and collections had to be halted in response to a New Mexico court ruling in February that said elements of the program were flawed. Another court in Massachusetts had upheld the program in January.

The risk-adjustment program doesn’t involve taxpayer money. Instead, the federal government collects money from some insurers that enrolled healthier patients and then transfers money to other insurers who had sicker enrollees.

Because the Affordable Care Act requires insurers to accept all people regardless of their medical history or preexisting conditions, architects of the law created the risk-adjustment program to prevent insurance companies from cherry-picking the healthiest people.

Nationally, insurance industry officials quickly denounced the Trump administration’s move and warned that the decision would drive up premiums.

The news comes at a critical time for the Covered California exchange, which was set to announce rates for 2019 this month. State officials indicated that decision could be delayed to allow more time to assess the situation.

There have been winners and losers in risk adjustment. Blue Shield of California has been a major beneficiary since Covered California and other ACA exchanges launched in 2014.

The San Francisco insurer received $582 million in risk-adjustment compensation for its participation in the individual market in 2014-2016, the second-highest amount nationally. It stood to receive an additional $556 million for 2017 alone, according to federal data released Monday. But that payout is now frozen.

Meantime, other insurers in California, such as Kaiser Permanente and Molina Healthcare, regularly owed money under the federal program. (Kaiser Health News is not affiliated with Kaiser Permanente.)

For years, Molina and other insurers have complained that the risk-adjustment program unfairly rewarded many Blue Cross Blue Shield plans that had excess administrative costs and higher premiums.

Blue Shield, the second-largest insurer on the Covered California exchange, declined to comment on the suspension of risk adjustment. Instead, the insurer referred to a statement from the Blue Cross Blue Shield Association.

“Without a quick resolution to this matter, this action will significantly increase 2019 premiums for millions of individuals,” the trade association said.

Critics said it was just the latest example of the Trump administration undermining the ACA and harming consumers who purchase individual policies. California Insurance Commissioner Dave Jones said the “Trump administration has just taken another step to sabotage the nation’s health insurance market.”

The Republican-led Congress failed last year to repeal and replace the ACA. However, Republican lawmakers and the Trump administration have made a series of moves intended to weaken the health law, such as halting subsidies that covered some consumers’ out-of-pocket costs and eliminating the penalty for not having insurance.

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

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