Kentucky Continues to Inform Health Policy

By Matt Ryan

Following the Supreme Court’s decision in NFIB v. Sebelius, states have had the option whether to expand Medicaid or not. As of this writing, 30 states and the District of Columbia have expanded Medicaid. Kentucky was the only Southern state that decided to expand Medicaid and run their own exchange. The decision brought great success. Under Democratic Governor Steve Beshear, Kentucky saw their uninsured population drop by 10.6% from 2013 to 2014. As Governor Beshear put it, Kentucky was the “poster-child for the implementation of the ACA.”

Last month, Kentucky elected Matt Bevin governor. Mr. Bevin, a Republican, had promised to dismantle Medicaid and the insurance exchange. When asked about Medicaid early in his campaign, Mr. Bevin responded, “No question about it. I would reverse that immediately.” Many feared that Mr. Bevin’s election put Medicaid in critical condition. But since his election, Mr. Bevin has shifted his position.

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Premiums in Medicaid: The (not so) Recent Trend

By Emma Sandoe

Requiring Medicaid beneficiaries to pay premiums and other cost-sharing for medical services is not new to the Medicaid expansion debate. Premiums were introduced as part of the Tax Equity and Fiscal Responsibility Act of 1982. Previously, states were prohibited from imposing enrollment fees, premiums, or deductibles for any categorically eligible individual in the Medicaid program. This law allowed states to implement minimal cost-sharing for waiver demonstrations, but prohibited states from denying medical care due to an inability to pay.

Since this law was passed, the Centers for Medicare & Medicaid Services (CMS) has clarified that certain populations including pregnant women and children were exempt from most cost-sharing. Additionally, certain services are exempt from copayments and coinsurance entirely. The maximum amount that can be charged varies based on wage and type of service and where the beneficiary seeks treatment.

Prior to Indiana’s 1115, approved in 2014, CMS did not allow state waivers to charge premiums to individuals making under 50% of the federal poverty line (FPL). Indiana’s expansion plan is unlike any other state’s waiver plans. It requires individuals to pay a “monthly contribution” of $1 a month or 2% of a family’s income which ever is greater. When a beneficiary that has been paying these monthly contributions uses medical services, they are not required to pay co-payments. Previously, Indiana lowered the income eligibility for premiums during its 2013 waiver when it required premiums for individuals making between 50-100% of FPL. Arkansas and Iowa saw that precedent set by Indiana and lowered their cost sharing levels from 100% of FPL to 50%. Continue reading

CMS Issues Notice Regarding Barriers to HCV Treatment

By Dalia Deak

Yesterday, the Centers for Medicare & Medicaid Services (CMS) issued a notice that affirmed CMS’s commitment to provide prescription drugs to beneficiaries, specifically highlighting beneficiaries suffering from hepatitis C virus (HCV). The notice comes at a moment of heightened interest in the cost of prescription drugs (particularly on the federal level as an inquiry in the Senate has been initiated regarding rising drug prices).

In the statement, CMS:

  • Reminded the states of their obligation, under the terms of the Social Security Act, that Medicaid programs must cover prescription drugs for medically accepted indications if the manufacturer of the drug is a manufacturer with whom they have rebate agreements with;
  • Discussed the concern regarding costs of direct-acting antiviral (DAA) HCV drugs, emphasizing the role of competition and negotiation in bringing down the drugs’ prices;
  • Expressed concern regarding some states’ policies to restrict access to the DAA HCV drugs that may be contrary to their obligations under the Social Security Act;
  • Encouraged states to ensure that their policies do not unreasonably restrict coverage of effective treatment;
  • Reminded states that drugs available under the states’ fee-for-service programs must also be available to beneficiaries of Medicaid managed care organizations; and
  • Indicated that CMS will monitor state Medicaid policies for DAA HCV drug coverage to ensure that they are compliant with approved state plans, statutes, and regulations.

CMS also followed up its notice with a letter to the CEO of AbbVie asking for additional information regarding the types of value-based purchasing arrangements offered to payers and to state Medicaid agencies by December 31, 2015.

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Finally, a Final Rule on Advance Care Planning

In a victory for common sense, good policy, and good care, reimbursement for end-of-life counseling was safely tucked into the 2016 Medicare Payment Rules issued by CMS last Friday. The calm adoption of advance care planning shows welcome progress from the “death panels” hysteria that plagued this sensible policy when it was first proposed six years ago. The list of advance care planning supporters is long, including: numerous physician organizations, the Centers for Disease Control and Prevention, the Institutes of Medicine, the American Hospital Association, and over 80 percent of Americans. So, what is advanced care planning and why does it matter?

Given the circus that originally surrounded it, people may be surprised to learn that this policy simply involves the addition of two billable codes to the Medicare Physician Fee Schedule. The first code, 99497, covers an initial 30-minute consultation on end-of-life planning, with a second, 99498, covering 30 additional minutes, if needed. Importantly, patients do not need to be seriously ill to access this benefit – a consultation can be scheduled at any time, for example, as part of an annual physical. During this meeting, patients discuss the kind of interventions they would want if they become critically ill, or as they approach the end of life. Such conversations enable collaboration between the patient, family, and medical team – it opens the door for an ongoing dialogue about priorities and goals of care (which may evolve over time).

Planning for the end of life matters because advances in medicine have created a dizzying array of interventions and palliative care options for people who are gravely ill. There are many clinical and psychosocial benefits to communicating one’s preferences around end of life care. In a September 2015 Kaiser Family Foundation poll, 89 percent of respondents said doctors should discuss end-of-life plans with patients – but only 17 percent had actually had such a discussion with their doctor. Formal recognition of the value of advance care planning is an important step in encouraging more patients and doctors to initiate the conversation.

The Record-Breaking Resolution of a Groundbreaking Fraud Investigation

By Zack Buck

After more than four years of investigation, and 70 separate agreements, the Department of Justice (DOJ) announced news Friday of a massive $257 million settlement, covering a record-breaking 457 hospitals, for the alleged fraudulent placement of implantable cardioverter defibrillators (ICDs) between 2003-2010. I have previously written about the twists and turns of this particular nationwide investigation—the most prominent example of the medical necessity-based health care fraud investigations—herehere, and here.

Why ICDs initially caught the attention of the DOJ seemed to be the fact that ICDs are highly expensive—costing Medicare about $25,000 per implantation—and, following a whistleblower’s lawsuit in 2008, the DOJ commenced a review of “thousands” of ICD placements nationwide. As I have written about before, hospitals across the country—including renowned hospitals such as the Cleveland Clinic—were included in the initial review, but not all of ended up on the settlement list (a full list of settling hospitals is available here).

Although the full details of the settlement have not yet been made public, there seems to have been a difference between all of the hospitals that placed ICDs outside of Medicare’s timing guidelines and those that the DOJ felt were particularly egregious (apparently less than half of the hospitals on the original investigation list ended up as part of this settlement). This is important because it may indicate a difference—in the DOJ’s thinking—between Medicare’s coverage standard, and its “medical necessity” standard for purposes of fraud enforcement.

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How does the Bipartisan Budget Bill change Social Security Disability Benefits?

On Tuesday, details of the new Bipartisan Budget Bill, a bill negotiated between Congress and the White House, were released. This bill funds the government for two years and extends the debt ceiling, two important budgetary moves Speaker Boehner promised to leave his successor with a clean slate. Less reported is that this bill makes some small but important changes to our nation’s two largest budgetary social programs, Medicare and Social Security. But the changes made to Social Security Disability Insurance eligibility extend beyond that program and will be important for state Medicaid agencies and for low-income people with disabilities.

What is the Social Security Disability Trust Fund?

Not part of the original Social Security Act, the Disability Insurance (SSDI) benefit was added in 1957. As of 2014 there were 10.9 million Americans receiving this benefit totaling $141 billion or 4% of the federal budget. In the last Trustees report for the projected future cost of the SSDI program, the trustees projected the exhaustion of the trust fund in 2016. This would mean that the nearly 11 million beneficiaries would see their benefits cut by 19% next year because incoming tax revenue would only be able to cover about 80% of the benefits.

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Our Curious Medicare Vaccine Reimbursement System

By George Maliha, Harvard Health Law Society

As flu season begins, we are bombarded by ubiquitous reminders to get our flu shot. So, it is a good opportunity to reflect on how we provide vaccines to our fellow citizens 65 and older. By law, Medicare Part B covers 4 preventive vaccines (flu, two pneumococcal, and hepatitis B for medium-to high-risk patients). Part D picks up the rest, namely shingles, TDaP, and any other commercially available vaccine. But, that’s where the trouble begins.

When Congress passed Part D, the vaccines recommended for those 65 or older were basically covered by Part B. Now, they aren’t. In 2006, the zoster (or shingles) vaccine came onto the market. In 2010, the recommendations for the TDaP (the P for pertussis or whooping cough being the most relevant here) changed to include the elderly.

But, so what, they’re still covered, right? Continue reading

Which state will be the next to expand Medicaid?

The last week has yielded significant progress in several states currently debating Medicaid expansion. Thirty-one states and DC have already expanded the program, made an option for states due to the Supreme Court’s NFIB v Sebelius decision. Many state legislatures are coming back into session from summer recesses bringing into focus discussions on the budget implications of Medicaid. Additionally, as we approach a looming Presidential election with expected high voter turnout, politicians have an opportunity to push for the expansion to gain support from certain stakeholders. While significant action is needed in each of these states before any Medicaid expansion legislation is passed or their governors act to implement their plans, it is worth keeping an eye on all of these states in the coming months.

Utah- It has been over a year and a half since Governor Herbert announced his support for Medicaid expansion. This week, details of the new plan, UtahAccess+, have been released. The plan, formulated by the Governor and Republican legislative leaders, is similar to the Healthy Utah plan that was passed the Utah Senate but was struck down in the House with the exception of the financing model which puts the burden on providers that would benefit from additional funds through expansion.

Louisiana- This is one of the more surprising states to appear on a list of upcoming states to expand Medicaid, however the tides may be shifting in this largely conservative state. Louisiana is in the process of electing a new governor as Presidential candidate Bobby Jindal is ineligible due to term limits. All four candidates have indicated some level of support for expansion (to varying degrees) since April. These candidates’ positions reflect the push by business groups in the state which have called for expansion, as well as the recent legislative change that gave the new governor the necessary state authority to expand in the first months in office.

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Medicaid Is Not a Welfare Program

Medicaid is often thought of as a welfare program because of the essential role it plays in providing health insurance for low-income people. However, looks can be deceiving. In terms of scale and scope, Medicaid is rapidly becoming a powerhouse player in health care.

Medicaid enrollment is booming as a result of the Affordable Care Act (ACA): nearly 72 million people are enrolled in Medicaid and the Children’s Health Insurance Program (CHIP). To put this in perspective, about 55 million people are enrolled in Medicare and about 64 million in the UK’s NHS. Medicaid enrollment is likely to continue rising as more states contemplate expansion. As of this month, 30 states and the District of Columbia have expanded Medicaid under the ACA.

Size isn’t the only way Medicaid is changing. Unlike Medicare, Medicaid is a joint state and federal program, which means that states have a lot of latitude to innovate with both delivery and payment. The ACA has enhanced opportunity for reform through planned initiatives like the Center for Medicare and Medicaid Innovation (CMMI), and unexpected pathways, like negotiations around Medicaid expansion – these have yielded some of the most radical departures from the traditional public program paradigm, even in states that have not sought a “private option

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Generic Drug Price Increases: Implications for Medicaid

The internet (not just the health policy part of the internet!) is fascinated by today’s New York Times story about dramatic recent increases in the costs of many decades-old drugs.  The story focuses on the case of Daraprim, the standard of care for treating the parasitic infection toxoplasmosis.  Daraprim was recently acquired by a start-up, which then raised the drug’s price from $13.50 a pill to $750 a pill.  Daraprim has been around for decades, and as the story notes, it’s just one of many recent examples of dramatic price increases for generic drugs, often after their acquisition by other companies (as in this case).

The article raises an enormous number of issues of interest to intellectual property and health policy scholars, both explicitly and implicitly, and other commentators have begun to canvass them.  But I want to spend the rest of this blog post unpacking a single point made in the article, because it actually contains an enormous amount of complexity.  As the author notes, “[the company’s] price increase could bring sales to tens or even hundreds of millions of dollars a year if use remains constant. Medicaid and certain hospitals will be able to get the drug inexpensively under federal rules for discounts and rebates. But private insurers, Medicare and hospitalized patients would have to pay an amount closer to the list price.”

The author is right that there’s one sense in which Medicaid and entities eligible for the 340B program (I assume this is what the author is referring to when he says “certain hospitals”) will be able to obtain this drug “inexpensively” – but there’s another sense in which they won’t be able to.

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Fiduciary Duty and the Payer-Provider Relationship

By Zack Buck

Even though the Centers for Medicare and Medicaid Services (CMS) has set an ambitious goal to move the reimbursement paradigm away from a fee-for-service model for half of all Medicare services by 2018, incentives built into the delivery of American health care that encourage and result in overtreatment remain. One recent illustration of the reimbursement incentives facing physicians to administer either more care, or more expensive care, is the Lucentis-Avastin example I blogged about here earlier this year.

My newest article, forthcoming in the California Law Review in 2016, examines another legal tool that could be employed to recalibrate the incentives in Medicare: fiduciary duty. Others have characterized the patient-physician relationship as being fiduciary in nature; this piece advocates for the extension of the metaphor to the payer-physician relationship. This move would introduce much-needed pressures on providers to limit or avoid excessive or expensive care by placing a duty of loyalty on providers owed to the payers of Medicare’s services–American taxpayers. This move would respect provider autonomy but provide remedies for overtreatment without substantially growing the regulatory scheme or expanding oversight costs. The abstract is available here.

Consolidation vs. Competition

By Michael Anne Kyle

This summer, four of the five largest national health insurance companies proposed mergers – with each other. The acquisition of Cigna by Anthem and Humana by Aetna would reduce the “big five” to three. Provider groups, including the American Hospital Association and American Medical Association are alarmed, citing the potentially anticompetitive nature of these mergers.

It is true that many aspects of the health insurance market are already highly concentrated. In 2013, there were states where the individual and small group markets were dominated by companies with upwards of 70, 80, and even 90 percent market share. The Affordable Care Act introduced health insurance exchanges in an effort to stimulate competition – and it seems to be working. On the Medicare side, a new report by the Commonwealth Fund found that only one (!) of the nation’s 2,933 counties had a competitive Medicare Advantage market. Medicaid has so much going on that it is the subject for another post entirely – but worth noting here that Medicaid managed care is on the rise and projected to cover more than 75 percent of enrollees within the coming year, so the role of private insurers in Medicaid is growing rapidly.

The insurance companies argue that the upside of consolidation is increased bargaining power with providers, enabling them to negotiate better rates and value-based contracts. It’s important at this point to note that while some provider groups are decrying insurance mergers as anticompetitive, there is a tremendous amount of consolidation underway on the provider side, too. A recent analysis finds that half (150/306) of hospital referral regions (HRR) are highly concentrated, and none are highly competitive. There is evidence that concentrated markets reduce price competition, and may also have implications for quality.

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Doubling Down on Prosecutorial Discretion

By Zack Buck

Health care entities should be “on high alert” following the Southern District of New York’s decision in Kane v. Continuum Health Partners that I blogged about here earlier this month.

The case, which serves as the first and most consequential interpretation of when an overpayment is “identified” for purposes of False Claims Act (FCA) liability, provides a measure of much-needed guidance for attorneys and compliance officers in an area that is rife with confusion. But not too much.

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Clarity for an “Unforgiving” and “Potentially Unworkable” Rule

By Zack Buck

In a case previously blogged about here, last week, the Southern District of New York denied Defendants’ motion to dismiss in U.S. ex rel. Kane v. Continuum Health Partners, No. 11-2325, in a major decision for health care entities unclear on the parameters of overpayment liability under the False Claims Act (FCA).

The case centers on Continuum Health Partners, Inc. (Continuum)—which operated three New York City area hospitals—and its erroneous receipt of overpayments from the New York Medicaid program based on a software glitch. The overpayments began in 2009; by September 2010, the New York State Comptroller had notified Continuum. Continuum tapped Robert Kane, an employee, to review the billing data and identify all claims that were incorrect. On February 4, 2011, Kane emailed a spreadsheet to superiors that contained 900 claims that may have been erroneously billed. The spreadsheet was “overly inclusive” and “approximately half of the claims listed therein were never actually overpaid.” On February 8, Kane was terminated.

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A Test For Overpayment Liability

By Zack Buck

The eyes of practitioners, compliance officers, and providers have been trained on the Southern District of New York as many await a decision on a motion to dismiss in Kane v. Continuum Health Partners, No. 11-2325. Kane has grabbed recent attention because of what it could represent: a new era in fraud enforcement.

The facts are straightforward. Throughout 2009 and 2010, three hospitals operating under the Continuum Health Partners umbrella (which is now Mount Sinai Health System) submitted erroneous Medicaid claims seeking reimbursement due to what has been described as a “computer glitch.” The New York Comptroller’s Office notified Continuum of the incorrect claims in the fall of 2010, and Continuum launched an internal investigation.

Relator Robert Kane was asked to investigate any erroneously submitted claims. By early 2011, he had created a spreadsheet containing around 900 claims he thought were erroneously submitted. He emailed the spreadsheet to superiors on February 4, 2011. On February 8, 2011, Kane’s employment was terminated.

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The Robust But Unsatisfying State Of Health Care Fraud Enforcement

By Zack Buck

Earlier this spring, the U.S. Department of Health and Human Services and Department of Justice reported they had recovered nearly $28 billion as a result of anti-health care fraud efforts in FY 2014. The federal False Claims Act played a substantial role in achieving these recoveries: the government recovered $2.3 billion in FCA settlements and judgments, and opened nearly 800 new civil health fraud investigations, in FY 2014 alone. Further, the agencies noted that these anti-fraud efforts—bolstered by increased funding and authority under the Affordable Care Act—are continuing to abandon the “pay and chase” method of fraud enforcement, relying instead on prevention and “real-time data analysis.”

Interestingly, it is no longer just the federal government driving the enforcement regime. Increasingly, facing Medicaid shortfalls, states are getting involved—and, according to practitioners, state enforcement is “exploding.” For example, in New York, its Office of Medicaid Inspector General recovered more than $1.7 billion from FY 2011 to 2013. States have also had success in litigating claims to trial, most recently illustrated by the notable South Carolina Supreme Court verdict against pharmaceutical giant Johnson and Johnson. Further, Vermont is likely to become the newest state to establish its own state false claims act, another wide-ranging and powerful statute that mirrors the federal FCA.

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New Discussion Draft of 21st Century Cures Act Released (Again)

Earlier today, the House Energy and Commerce Committee released the most recent draft of the 21st Century Cures Act, in time for it to be marked up by the Health Subcommittee tomorrow.  At 300 pages, the new draft adds back in a number of provisions that were excised from the previous, 200-page iteration of the draft.  I haven’t had time to uncover all of the new additions just yet, but given that this is my third blog post on the subject, I wanted to highlight some of the ways in which this version differs (and doesn’t differ) from the last draft.

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Exploring The Significant State-To-State Variation In Marketplace Enrollment

This new post by the Petrie-Flom Center’s Academic Fellow Matthew J. B. Lawrence appears on the Health Affairs Blog, as part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015.

What role did geography, advertising, community, Navigators, and the controversy surrounding the Affordable Care Act (ACA) play in consumers’ decisions whether to purchase health insurance in the individual marketplaces? The percentage of potential exchange marketplace enrollees who actually made use of the marketplace to purchase insurance varied widely from state to state for 2014 and 2015.

As of February 22, 2015, for example, there were eight states with enrollment at 50 percent or greater and eight states with enrollment at 25 percent or lower. (Per the Kaiser Family Foundation, the top eight were Vermont, Florida, Maine, DC, Delaware, Pennsylvania, New Hampshire, and North Carolina. The bottom eight were Colorado, Ohio, Alaska, Hawaii, North Dakota, Minnesota, South Dakota, and Iowa).

It would be an interesting and challenging task to explain this variation empirically. Generating reliable statistical inferences from inter-state comparisons is notoriously difficult, and the variables at play here range from the easily measured (percent of population eligible for subsidies, navigator grant amounts, number of participating insurers, premiums) to the not-so-easily measured (enthusiasm for Obamacare, efficacy of state or federal outreach efforts, geography, education, availability and usefulness of charity care and emergency Medicaid, functionality of state exchange website, population health, availability of health services). […]

Read the full post here.

Medicare’s Costly Drug Problem

By Zack Buck

Last week, Dr. Salomon Melgen, an ophthalmologist who practices in North Palm Beach, Florida, was indicted on Medicare fraud charges. Melgen was charged with a variety of crimes, with prosecutors alleging he falsely diagnosed patients and falsified their files. Melgen’s name may be familiar. Last year, he was reported to be the provider with the highest total of Medicare Part B reimbursements in 2012, reportedly reimbursed by Medicare for more than $20 million, a substantial percentage of which was directly based upon his prescriptions for, and administration of, the drug Lucentis.

But the allegations against Melgen highlight a deeper challenge facing Medicare.

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Monday 4/6: HLS Health Law Workshop with Thomas Greaney

HLS Health Law Workshop: Thomas Greaney

April 6, 2015 5:00 PM
Griswold Hall, Room 110 (Harvard Law School)
1525 Massachusetts Ave., Cambridge, MA [Map here.]

Download the paper: “Medicare Advantage, Accountable Care Organizations, and Traditional Medicare: Synchronization or Collision?”

Thomas L. Greaney is Chester A. Myers Professor of Law and Co-Director of the Center for Health Law Studies at St. Louis University School of Law. Greaney joined the faculty at SLU LAW in 1987 after completing two fellowships and a visiting professorship at Yale Law School. He became Chester A. Myers Professor of Law in 2004 and was named Health Law Teacher of the Year by the American Society of Law, Medicine and Ethics in 2007. His academic writing has been recognized six times by the Thompson Coburn Award for SLU Faculty scholarship.

Greaney’s extensive body of scholarly writing on health care and antitrust laws encompasses articles published in some of the country’s most prestigious legal and health policy journals. He has authored or co-authored several books, including the leading health care casebook, Health Law. A frequent speaker in academia and the media, Greaney has also offered expert testimony at hearings sponsored by the Federal Trade Commission on the issues of applying competition law and policy to health care, and submitted invited testimony to the U.S. Senate on competition policy and health care reform.