Category: Medicare/Medicaid

Update: Another Wave of ICD Settlements

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By Zack Buck

There has been an update to a story I recently blogged about here.

As announced by the Department of Justice (DOJ) on Wednesday, another 51 hospitals have settled allegations that the hospitals placed implantable cardioverter defibrillators (ICDs) in the chests of patients without complying with Medicare’s mandatory waiting periods.  These 51 settlements amount to $23 million, meaning that the DOJ’s ICD review has now has resulted in settlements with more than 500 hospitals totaling more than $280 million.

According to the DOJ, this is the final stage of the investigation, concluding an initiative that has highlighted the tension that exists between fraud enforcement, medical necessity, and reimbursement standards (recent articles here, here, and here).

President Obama Introduces Evidence Generation Strategy to Reduce High Drug Costs

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By Elizabeth Guo

Addressing the high cost of drugs was at the top of President Obama’s list in his fiscal year 2017 budget, released last week. Many of his proposals were familiar. The President hoped to increase manufacturer contributions to prescription drug coverage under Medicare Part D and wanted to shorten the length of biologic market exclusivity from twelve to seven years. These proposals were also in the President’s fiscal year 2016 budget but were not put into place.

However, the budget also included a number of surprising, new proposals that underscore how post-market evidence might play an increasing role in controlling drug prices in coming years. Rachel Sachs has written about the role that the Centers for Medicare and Medicaid Services (CMS) can play in keeping down drug prices, and it seems like some of these ideas are gaining traction:

Modify reimbursement of Part B drugs. The White House estimates that changes to Medicare Part B payments could save the country $7.75 billion over ten years. Medicare Part B covers drugs and services dispensed in an outpatient setting. Many of the most expensive biologic drugs are currently covered under Medicare Part B. The budget proposal did not elaborate on how the White House hopes to change Part B payments, but the proposal likely refers to recommendations released by the Medicare Payment Advisory Commission (MedPAC) last June. MedPAC’s 2015 report recommended that Congress link Part B payments to clinical effectiveness evidence. For example, the government could group drugs with similar health effects and pay all drugs in each group the rate of least costly product in the group. This approach relies on having reliable clinical effectiveness data so that researchers can easily compare the relative effectiveness of two or more drugs. Read More

Zika Messes with Texas

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Photo: Texas + Fence
Flickr Creative Commons—Adam Simmons

By Gregory M. Lipper

For an ambitious, aggressive disease like Zika, Texas is an ideal home. Earlier this week we learned that Zika—a nasty virus that has spread to over 25 countries—was transmitted by sex to a resident of Dallas. Six more cases of Zika have also been confirmed in Harris County, Texas. The appearance of Zika in Texas may be happenstance, but Texas’s health policies will make it easier for Zika to spread. Among other problems, Texas (1) fails to teach students about safe sex and reduces access to affordable, effective contraceptives; (2) has blocked access to Medicaid for up to 2 million low-income residents; and (3) is trying to restrict if not eliminate access to safe abortion. Not a bad place for a communicable disease that can spread through sex and cause birth defects.

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Why Asset Tests Need Reform

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The penalty for Bostonian jaywalkers can take dollars out of repeat offenders wallets. The $1 fine for jaywalking in the Massachusetts metropolis may be a ridiculous example of statutory dollar figures losing their significance, but the statutory dollar figures associated with Medicaid eligibility are anything but a laughing matter for millions of families.

The eligibility requirements around Medicaid expansion have ended the decades old practice of limiting assets for Medicaid coverage for children and parents. However, in order to qualify for many existing Medicaid programs, the elderly and people with disabilities in many states must still verify that their assets fall below a certain dollar figure. Oftentimes, this dollar figure is statutory and requires state legislatures to act in order to have the figure rise with inflation.

Asset tests were first incorporated into Medicaid law under the original legislation because welfare benefits required strict means and asset tests. These levels were determined at the state level. As eligibility was separated from welfare eligibility, specific dollar figures on assets were added to eligibility criteria and were meant to curb enrollment by “welfare queens” or people that qualify for social assistance fraudulently or with significant assets. President Reagan first campaigned on the concept of “welfare queens” in his failed 1976 bid for the presidency. But these fraudulent cases that the policy is meant to restrict are limited and more often the imposed asset tests prevent working-age adults from reducing dependency on social welfare programs.

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Medicaid and Access to Health Care Services

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Centers for Medicare and Medicaid Services Washington Headquarters
Centers for Medicare and Medicaid Services Washington Headquarters, Hubert H. Humphrey Building

Last week Health Affairs released a new article that surveyed low-income individuals in Kentucky and Arkansas, two states that expanded Medicaid coverage to all people under 138 percent of the federal poverty level in 2014. They survey, led by Harvard professors, Robert Blendon and Ben Sommers, found that people in these states reported lower rates of problems paying medical bills and forgoing care or prescriptions due to cost. Additionally, the number of people that reported seeing a physician for a checkup and management of chronic conditions increased in Kentucky and Arkansas. All of these responses are indicators of having access to health care.

The results seen in Kentucky and Arkansas are in stark contrast to the survey results in Texas, which has elected not to expand Medicaid coverage. Texas has seen no change in an individual’s ability to pay for medical services and an increase in people forgoing health care coverage. This comparison indicates that expanded Medicaid coverage improves a person’s access to medical care.

But this isn’t the first time Medicaid has been shown to score well in measures of access to health care services for low-income individuals. Contrary to the rhetoric of politicians and the logic that Medicaid’s low reimbursement rates mean people have fewer choices of physicians, evidence to date has suggested that some of these arguments may be exaggerated.

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Realizing the Potential of Accountable Health Communities

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Michael Anne Kyle

The recent $157 million commitment from the Centers for Medicare and Medicaid Innovation (CMMI) for a new “Accountable Health Communities” test model is most welcome. This is major step for the agency in recognizing the significance of social determinants of health in improving outcomes and costs. A New England Journal of Medicine article accompanying the funding announcement does an excellent job of highlighting the extent to which social conditions affect health outcomes and costs.

The program will invest in 44 communities over five years in three progressively advancing tracks: “increasing awareness”, “providing assistance” and “aligning partners”. Evaluation (perhaps proof of concept is more apt) is an important aspect of the model: the goal is not only to find out whether social service linkages affect health outcomes, but what types of interventions work. The awareness and assistance tracks each involve randomizing patients to usual care or an intervention; in the case of awareness, this is information about relevant social services, and in the case of assistance, the patient is provided navigation to facilitate the connection. The alignment track provides navigation, and will not involve randomization; instead, outcomes in these communities will be measured against a matched control site.

The CMMI vision of AHCs (another new acronym, gulp!) reflects emerging trends in health care and antipoverty work. The funding announcement credits initiatives like Health Leads for inspiring the low-touch (e.g., awareness) pathways. The alignment track, meanwhile, aligns very nicely with the work of emerging Medicaid Accountable Care Organizations in states like Minnesota, Colorado, and New Jersey.

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Studies Find ACA Did Not Lead to Substantial Increases in Part-Time Employment

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By Katherine Kwong

Analysts from all over the political spectrum have long suggested that the Affordable Care Act’s provisions could lead to a reduction in employment numbers. New research suggests that contrary to these expectations, the available data do not support claims that the ACA would lead to a substantial shift from full-time workers to part-time workers. The current evidence also does not support claims that there would be substantially more part-time workers and people leaving the workforce due to the ACA’s provisions expanding Medicaid eligibility.

Many politicians have specifically expressed concern that the ACA’s requirement that companies with 100 or more employees provide health insurance to employees working 30 or more hours per week would lead to companies shifting employees from full-time work to part-time. Republican presidential candidates including Ted Cruz and Donald Trump have stated that they believe Obamacare makes more workers part-time instead of full-time. While campaigning in Iowa, even Hilary Clinton said she believes the ACA created “some unfortunate disincentives that discourage full-time employment.” Read More

Cost Control’s Growing Complexity

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By Zack Buck

A paper entitled “The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured” has a number of health policy experts talking this week. Authors Zack Cooper, Stuart Craig, Martin Gaynor, and John Van Reenen—as part of the Health Care Pricing Project—present new findings demonstrating that geographic areas with low Medicare costs and geographic areas with low private insurance costs are nearly completely unrelated. That is, locales with comparatively low Medicare costs are not necessarily areas with comparatively low costs for care paid for by private insurers. Though stunning, this lack of relation between the two metrics does make sense; the report notes that Medicare’s costs are largely driven by the amount of provided care and services, whereas care paid for by private insurance is largely affected by the price at which the care is set by each hospital. (Kevin Quealy and Margot Sanger-Katz of the New York Times have a number of interesting graphs and charts that reflect the study’s findings here.)

Indeed, before the study, and because of a dearth of private insurance pricing data, many simply believed that locales that were cheaper for Medicare were cheaper for private insurance—that is, areas that were great stewards of Medicare funds were likely efficient for private insurers as well. But this new paper demonstrates that this is not true. The two metrics are completely separate.

At the risk of overstating it, this finding could drastically change the paradigm for controlling health care costs going forward. The paper got the attention of Atul Gawande, who noted its importance in an article for The New Yorker. There, Gawande revisits the story of McAllen, Texas, which focused on exploding Medicare costs largely driven by large volume. (I even look at the McAllen story in a forthcoming article here because of its fascinating impact on cost control for Medicare.)

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Senator Cruz’s RESULT Act Contains a Particular View of the FDA’s Role – But What About CMS?

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By Rachel Sachs

Last week, I blogged here about the introduction of the Reciprocity Ensures Streamlined Use of Lifesaving Treatments (RESULT) Act (text) by Senators Ted Cruz and Mike Lee. As I noted, the Act would require the FDA to speed review of drugs, devices, and biologics that are already approved for marketing in a particular list of countries, including EU member countries, Japan, and Canada. If the FDA declines to grant reciprocal marketing approval, the Act would permit Congress to override the FDA’s decision through a majority vote via a joint resolution.

My post, and additional commentary from numerous other outlets (including RAPS, Vox, and Marginal Revolution) largely focused on the Act itself – on the merits of the various provisions, and on whether those provisions would be effective at accomplishing the Act’s stated goals. But each commentator’s view of the situation depends in large part on their priors about what the purpose of the FDA is, and relatedly, how it should behave to achieve those purposes. In this post, I want to first briefly explain these different views about the purpose of the FDA before explaining the ways in which our views about pharmaceutical regulators are often tied to our views about public health insurers – a point which has largely gone unmentioned in the debate about the RESULT Act.

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Kentucky Continues to Inform Health Policy

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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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