DCMedical News: Wednesday November 17, 2021
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
THE BIG STORY Wednesday November 17, 2021
Gathering Storm in the U.S.: Deaths, Infections and Money
More than one thousand COVID-19 deaths a day and almost 85,000 new infections a day continue in the U.S. (e.g., New York Times report, here) as the holiday season and cold weather approach.
Graves and colleagues in JAMA (here) call attention to less well recognized financial aspects of the pandemic, including: “As for uninsured individuals, HRSA continues to pay out claims for COVID-19 care. By late August 2021, HRSA had reimbursed $5.9 billion for testing, $3.6 billion for treatment, and $573 million in vaccine administration claims . . . by May 2021 only $25 billion remained in unallocated funds (down from $178 billion in March 2020) in the federal Provider Relief Fund. Hospitals also have reported challenges in receiving relief payments tied to the winter 2020-2021 COVID-19 wave. In response, in September 2021 the Department of Health and Human Services allocated an additional $25.5 billion allotment of relief funds, although these funds only cover revenue losses and operating expenses incurred through March 31, 2021. At present, no relief funds are allocated toward care provided during the recent Delta variant surge, which has pushed facilities in heavily affected states well beyond previous peak patient volume and hospitalization levels set in January and February 2021 . . . recipients of relief funds are only prohibited from billing patients on an out-of-network basis until those funds are exhausted. Thus, once relief payments are exhausted, out-of-network bills may become a frequent responsibility for patients with COVID-19 in surge regions.”
DOCTORS, NURSES AND OTHER HEALTH CARE PROFESSIONALS
Study of State Laws Against Surprise Medical Bills, Focus on Anesthesiologists
A study by Casalino and colleagues in JAMA Internal Medicine (here) on the “Association of Surprise-Billing Legislation with Prices Paid to In-Network and Out-of-Network Anesthesiologists in California, Florida, and New York” found that “prices paid to in-network and out-of-network anesthesiologists in hospital outpatient departments and ambulatory surgery centers decreased after the introduction of surprise-billing legislation, providing early insights into how prices may change under the federal No Surprises Act and in states that have recently passed their own legislation.”
Another “surprise bill” target is the air ambulance, subject of a study (here) by the HHS Assistant Secretary for Planning and Evaluation, who found “Patients typically do not have a choice in air ambulance providers, and providers often do not inquire about insurance, leading to the potential for large out-of-pocket costs for privately insured or uninsured patients. Air ambulance providers are not allowed to send balance bills (when an out-of-network provider bills an individual for the difference between the billed charge and the amount paid by their plan or insurance) to Medicaid or Medicare patients but privately insured individuals do not have the same protections against balance bills for air ambulance transports.”
The differential between Medicare and Medicaid payments, and commercial health insurance payments, lacking the “same protections,” is detailed in a report on air ambulance claims 2017-2020 by Fair Health (here): “The average charges associated with fixed-wing air ambulance transports rose 27.6 percent, from $19,210 in 2017 to $24,507 in 2020. The average estimated allowed amounts rose 76.4 percent, from $8,855 to $15,624. The average Medicare reimbursements rose 4.7 percent, from $3,071 to $3,216. The average charges associated with rotary-wing air ambulance transports rose 22.2 percent, from $24,924 in 2017 to $30,446 in 2020. The average estimated allowed amounts rose 60.8 percent, from $11,608 to $18,668. The average Medicare reimbursements rose 4.7 percent, from $3,570 to $3,739.”
HOSPITALS AND OTHER HEALTH CARE FACILITIES
Milton Roemer and His Law Remembered in Analysis of Pricey Massachusetts Hospital Building Projects
A feature on expensive hospital building projects in the Boston Business Journal (here) notes the conundrum that, in that state, a Health Policy Council studies the cost of hospitals, but has no direct influence over those costs, including large building, equipment and expansion projects. “A 2001 study by Milton Roemer out of UCLA School of Public Health also showed a connection between expansion and higher utilization, showing that regions with a high number of hospital beds per capita correlated to a high number of days the patients used those beds. Roemer went so far as to declare that, in an insured population, a hospital bed built is a hospital bed filled.”
Hospital Error (Adverse Events, Patient Safety Events), Increasing
A study in the Journal of Patient Safety (here) attempts to quantify adverse events (AE) compromising patient safety in hospitals. “Hospital AEs are common, and reported rates are increasing in the literature . . . It is estimated that 9% of patients experience an AE, and hospital AEs contribute substantially to hospital mortality. The report To Err Is Human estimated that 98,000 deaths a year occurred due to AEs.”
DRUGS & DEVICES
Immediate Medicare Coverage for “Innovative” and “Breakthrough” Treatments: a Bad Idea, Says CMS, Now Dead
CMS has published a final regulation in the Federal Register (here) ending the prospect of immediate Medicare coverage for “Breakthrough” medical devices, once those devices had secured FDA approval. The history: Under the previous administration, and in the week prior to the inauguration of the current President, CMS’ then-leaders had published a rule entitled “Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of `Reasonable and Necessary'”(86 FR 2987, referred to as the “MCIT/R&N final rule”).” The rule compelled Medicare payment for newly authorized medical devices designated as “Breakthrough” by the Food and Drug Administration (FDA). This regulation would have given the medical device four years of Medicare coverage before any information would be required to demonstrate clinical effectiveness. The new history: CMS under the current administration says “The rule [as originally proposed] may provide coverage without adequate evidence that the Breakthrough Device would be a reasonable and necessary treatment for the Medicare patients that have the particular disease or condition that the device is intended to treat or diagnose. We have had a growing concern that the provisions that we established in the MCIT/R&N final rule to protect Medicare patients may not have been sufficient.”
The conclusion: Therefore, CMS now writes, “While the FDA reviews a device to ensure it meets the applicable safety and effectiveness standard, there is often limited evidence regarding whether the device is clinically beneficial to Medicare patients.” The lesson: “Since we issued the MCIT/R&N final rule, we have a better understanding and a growing realization of the consequences of incorporating FDA standards into Medicare decision making to the degree stated in the final rule.” 48 pages, total. InsideHealthPolicy (here) reports that “The agency [CMS] plans to hold at least two public meetings next year to explore alternative ways to speed up coverage of medical devices that would benefit Medicare patients. CMS plans to work with FDA, the Agency for Healthcare Research and Quality, medical device manufacturers, and others to put together a new expeditious process to cover innovative devices.”
More than Half of Insulin Expenditures Going to Middlemen, New USC Schaeffer Study Finds
New research published in JAMA Health Forum (here) from Schaeffer Center researchers Karen Van Nuys, Neeraj Sood, Rocio Ribero and Martha Ryan analyzed the flow of money across all distribution system participants—manufacturers, wholesalers, pharmacies, pharmacy benefit managers (PBMs), and health plans. Middlemen in the distribution process receive approximately 53% of the net proceeds from the sale of insulin, up from 30% in 2014. Meanwhile, the share going to manufacturers has decreased by 33%.
READINGS & REFERENCES
Drug Channels Publishes 2021-22 Report on Pharmacy Wholesalers and Specialty Distributors
The report, here, finds “Overall demand for prescription drugs has remained robust throughout the pandemic period . . . wholesalers’ retail pharmacy customers are undergoing a shakeout that is reducing the number of U.S. pharmacy locations and further concentrating wholesalers’ revenues . . . Specialty drugs account for nearly 40% of outpatient prescription revenues—and an even greater share of payers’ net prescription costs. Payers and PBMs continue to tighten their management of specialty drugs, thereby pressuring independent specialty pharmacies, physician practices, and hospitals. These actions have further consolidated the specialty pharmacy industry . . . List prices for brand-name drugs—which directly impact wholesalers’ revenues and profits—continue to grow more slowly than they have historically.”
Select Coronavirus Public Health Resources and References may be found here.
2021 CQ Congressional Calendar here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
November 18, 30
December 1, 2, 3, 6, 7, 8, 9, 10
Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org