All posts by Jason White

Consumers Rejected Drug Plan That Mirrors Trump Administration Proposal

Unraveling how much of a prescription drug price gets swallowed by “middlemen” is at the forefront of Tuesday’s drug price hearing in the Senate. One thing bound to come up: rebates.

Both major political parties have shown interest in remedying high drug prices, and drugmakers have bemoaned how rebates to middlemen keep them from reaping every dollar associated with those price tags.

Pharmacy giant CVS Health criticized the Trump administration’s proposal to end these post-transaction discounts as they apply to Medicare. Yet, in January the company rolled out a Medicare drug plan that experts say is similar “in spirit” to the administration’s proposal.

The CVS Caremark plan wasn’t popular with customers, and CVS Health, which owns CVS Caremark, was quick to point this out as evidence that consumers prefer the current rebate system.

“We had a very, I would say, small number of seniors enroll in that program,” Larry Merlo, CVS Health’s CEO said on a February earnings call with investors. “And we think one of the barriers to that was the increase that we saw in the monthly premium.”

The CVS plan’s premium was $80 a month, which is about double the average Medicare Part D monthly charge. But since it is designed to pass on a portion of rebates directly to patients at the pharmacy counter, certain patients would wind up with smaller out-of-pocket costs than they previously paid.

“Even very well-informed consumers would not necessarily understand that a higher premium plan in this case means that they’re incurring smaller amounts at the point of sale,” said Rachel Sachs, an associate law professor at Washington University in St. Louis who specializes in health care.

So why did only 25,000 people sign up for the plan, called SilverScript Allure? Either consumers didn’t want the plan or perhaps they just didn’t understand it.

We’ll break it down for you.

Untangling Jargon: The Way Things Are And How They Could Change

A pharmacy benefit manager, or PBM, handles drug claims for health insurance companies. The big ones are Express Scripts, CVS Caremark and OptumRx. Every time you fill a prescription and use your drug plan, your PBM is involved in paying the claim and determining how much money you owe the cashier.

A rebate is a discount the PBM negotiates with a drug manufacturer off the price the drugmaker sets, which is called a list price. Rebates are not made public, and they typically don’t get passed on to the patient at the pharmacy counter in the form of a lower copayment, experts say.

When the drugmaker eventually pays the rebate back to the PBM, the PBM often uses this money to lower premiums, which are the monthly fees that Medicare Part D plans charge beneficiaries. They differ for each drug plan.

In a way, patients taking drugs with high list prices and big rebates wind up subsidizing other patients’ premiums, said Erin Trish, the associate director of the University of Southern California Schaeffer Center for Health Policy and Economics. Premiums on average haven’t substantially increased in more than a decade, but it may be “unfair” to the patients paying higher prices for drugs at the pharmacy counter.

“Some may argue, ‘They’re sicker… Maybe they should [pay more],’” Trish said. “Look. We decided everyone should pay the same premium in this market. [Rebates] shouldn’t be a roundabout way to make a subset of beneficiaries pay more.”

That could all change under a new Trump administration proposal that would ban rebates as they exist today. The negotiated discounts would be applied at the pharmacy counter, meaning discounts would be passed on to patients as out-of-pocket costs that are calculated based on the discounted price, not the higher list price.

For patients taking drugs with high list prices and large rebates, like insulin, it could mean noticeable savings, Sachs said. For patients taking drugs without big rebates, like generics or brand-name drugs without other branded competition, they’re not likely to see much change at the pharmacy counter.

Everyone, however, will see premiums go up. It’s unclear yet how much, but Trish said the SilverScript Allure plan CVS Caremark is offering isn’t necessarily the best indicator. Consultants hired by the Department of Health and Human Services estimated premiums will go up $3.20 to $5.64 per month if the rule takes effect in 2020. The average Medicare Part D premium for 2019 was $41.21, according to the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

So Why Didn’t Patients Want The CVS Caremark Plan?

It’s not clear how well seniors shopping for drug plans understood the SilverScript Allure plan, among their many options. They could see it had a high premium, but no deductible. They might not have realized it required smaller payments on drugs at the pharmacy counter.

Research shows that the premium is the most important factor seniors consider when choosing a plan, Sachs said.

On top of that, people are unlikely to leave their current plans even if there’s a better one available.

What’s more, we don’t know how well CVS Caremark marketed the plan to seniors who would benefit. They wouldn’t tell us, despite multiple calls and emails.

OptumRx, a competing PBM, started offering customers similar discounts at the pharmacy counter — but for people with commercial insurance, not Medicare or Medicaid. Unlike CVS Caremark, it has a web page with basic language, like “point of sale discounts mean lower costs,” and a link to request more information about switching. OptumRx did not respond to a request for comment.

PBMs: Helping Or Hurting?

Rebates for individual plans and drugs are confidential, but in Medicare Part D, they’ve increased on average from 9.6% of total spending in 2007 to 19.9% in 2016, according to annual reports to the Medicare boards of trustees.

So it’s perhaps unsurprising the brand-name drug trade group, the Pharmaceutical Research and Manufacturers of America, said it “applaud[s]” the proposal to overhaul the rebate system. PhRMA says it pushes them to raise prices in order to offer larger rebates, because drugs with larger rebates often get preferential treatment by PBMs.

Still, PBMs offer the benefit of batting down net prices (the price after rebate), and keeping down drug spending overall.

There are multiple estimates on how much the rebate proposal would cost the Centers for Medicare & Medicaid if it took effect, and they indicate that unless there are other changes to Medicare Part D, it would likely cost more money than the current system, Sachs said.

“It is startling to see the administration moving forward so rapidly with this proposal without a better understanding of how different actors might respond,” she said. As a result, there’s a “huge amount of uncertainty” over how this could all play out.

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Using opioids safely

Using opioids safely

Doctors may prescribe opioids, a class of drugs used to treat pain, after surgery or an injury. Although opioids can be an important part of treatment, they have serious risks like addiction, abuse, and overdose, especially if used continuously.

That’s why Medicare is working with doctors and pharmacists to perform safety checks to help you use opioids safely. Medicare is also using new drug management programs to look for potentially high-risk opioid use.

These checks and programs generally won’t apply to you if you have cancer, are in hospice, get palliative or end-of-life care, or if you live in a long-term care facility.

Safety checks at the pharmacy

When a prescription is filled at the pharmacy, your Medicare drug plan performs additional safety checks and may send your pharmacy an alert to monitor the safe use of opioids and certain other medications.

These safety checks may cover situations like possible unsafe amounts of opioids, first prescription fills for opioids, or use of opioids at the same time with benzodiazepines (commonly used for anxiety and sleep). If your pharmacy can’t fill your prescription as written, the pharmacist will give you a notice explaining how you or your doctor can call or write to your plan to ask for a coverage decision. Visit the Medicare drug plan coverage rules page for more information about safety checks.

Drug management programs

As of January 1, 2019, some Medicare drug plans have a drug management program in place to help you use opioids safely. If you get opioids from multiple doctors or pharmacies, your drug plan may talk with your doctors to make sure you need these medications and are using them safely and appropriately.

Safety checks and drug management programs are just some of the ways that Medicare, Medicare drug plans, and pharmacies are working together to make sure you’re getting the pain relief treatment you need while keeping you safe. Read your Medicare drug plan’s materials for more information on their specific drug coverage rules.


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Thu, 03/28/2019 – 04:01
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Know your diabetes risk—take this quick test!

Know your diabetes risk—take this quick test!

One in three Americans is at risk for developing type 2 diabetes, a serious disease that can lead to complications like kidney disease, blindness, and amputations. But type 2 diabetes doesn’t have to be permanent– you can delay or even prevent it with healthy lifestyle changes. Many people with diabetes don’t know that they have it, but Medicare covers screening tests so you can find out if you do.

Tuesday, March 26 is American Diabetes Association Alert Day, a day that focuses on the seriousness of diabetes and the importance of understanding your risk. It’s also a great time to take the Diabetes Risk Test to find out if you’re at risk for developing type 2 diabetes. Knowing your risk is the first step. Type 2 diabetes develops most often in middle-aged and older adults.

If you have diabetes, Medicare covers many of your supplies, including insulin, test strips, monitors, lancets and control solutions. In some cases, Medicare also covers therapeutic shoes if you have diabetic foot problems. You pay 20% of the Medicare-approved amount for these supplies.

Medicare also covers diabetes self-management training to help you learn how to better manage your diabetes. You can learn how to monitor your blood sugar, control your diet, exercise, and manage your prescriptions. Talk to your doctor about how this training can help you stay healthy and avoid serious complications.

Take control of your health—talk to your doctor today about which screening tests, supplies, and training may help you stay healthy.


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Tue, 03/26/2019 – 04:01
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Health Plans For State Employees Use Medicare’s Hammer On Hospital Bills

States. They’re just as perplexed as the rest of us over the ever-rising cost of health care premiums.

Now some states are moving to control costs of state employee health plans. And it’s triggering alarm from the hospital industry. The strategy: Use Medicare reimbursement rates to recalibrate how they pay hospitals.  If the gamble pays off, more private-sector employers could start doing the same thing.

“Government workers will get it first, then everyone else will see the savings and demand it,” said Glenn Melnick, a hospital finance expert and professor at the University of Southern California. “This is the camel’s nose. It will just grow and grow.”

In North Carolina, for instance, state Treasurer Dale Folwell next year plans to start paying hospitals Medicare rates plus 82 percent, a figure he said would provide for a modest profit margin while saving the state more than $258 million annually.

“State workers can’t afford the family premium [and other costs]. That’s what I’m trying to fix,” he said. The estimated $60 million in savings to health plan members, he said, would mainly come from savings in out-of-pocket costs.

That approach differs from the traditional method of behind-the-scenes negotiating, in which employers or insurers ask for discounts off hospital-set charges that rise every year and generally are many times the actual cost of a service. Private-insurer payments, even with those discounts, can be double or triple what Medicare would pay.

This state-level activity could be a game changer, fueling a broad movement toward lower hospital payments. Montana’s state employee program made the adjustment two years ago; Oregon will start this fall. Delaware’s state employee program is also considering such “Medicare-based contracting” as one of several options to lower spending.

The bold move comes as other factors — notably marketplace competition among hospitals and high-deductible insurance plans aimed at getting consumers to “shop” for lower prices — have largely failed to slow rising health care premiums.

For hospitals, though, it can be viewed as “an existential threat,” said USC’s Melnick.

Indeed, the treasurer’s plan in North Carolina has drawn heated opposition, with a hospital industry-associated group running television ads warning of dire consequences, especially for rural hospitals, some of which they say might be forced to close. When the plan first came out, the state’s hospital association complained it would reduce statewide hospital revenue by an estimated $460 million.

Hospitals in areas with large concentrations of state workers “would be getting reimbursed less than the cost of care,” said Cody Hand, the association’s senior vice president and deputy general counsel. “Our biggest concern is this is not something that we were at the table for in discussion.”

Rural hospitals are particularly at risk, Hand said, because many were already teetering on the brink financially and the payment change would be an additional problem.

After months of acrimony, the North Carolina treasurer in mid-March agreed to grant a 20 percent boost in payment to rural hospitals that would give those hospitals an additional $52 million a year. On average, rural hospitals would be paid 218 percent of the Medicare rate.

Nationwide, hospitals have long complained that Medicare underpays them, and some hospital and business groups have warned employers that tying payments from state workers’ plans more closely to Medicare could result in higher charges to private-sector businesses.

“The result will be a cost shift of tens of millions of dollars to other Oregonians,” wrote the Oregon Association of Hospitals and Health Systems as lawmakers there debated a plan (that eventually became law) paying hospitals 200 percent of Medicare rates.

But policy experts are skeptical.

“Even if Medicare pays a bit below cost, 177 percent of Medicare should be at least 50 percent above cost,” said Mark Hall, director of the health law and policy program at Wake Forest University. “Is that a reasonable margin? I guess that’s up for debate, but to most people 50 percent margin might sound reasonable.”

Another concern some people have raised is that hospitals might refuse to join networks that employ these states’ Medicare-based strategy.

Indeed, Montana officials worked hard to get all hospitals in the state to agree to accept for the state worker program an average of 234 percent of Medicare’s reimbursement rates. A few hospitals held out, right up to the deadline, backing down only after pressure from employee unions.

The risk if hospitals opt to remain out-of-network is that workers could be “balance billed” for the difference between those Medicare-plus rates and their generally much higher charges, amounts that could be hundreds or even thousands of dollars.

To prevent that, Oregon lawmakers set the law’s in-network reimbursement for hospitals at 200 percent of Medicare. But those that opt out would receive only 185 percent.

The measure also bars hospitals from billing state workers for the difference between those amounts and the higher rates they might like to charge.

“Oregon thought it through,” said Gerard Anderson, a professor at Johns Hopkins who researches health care costs. “Hospitals need to go on a diet. The private sector has not put them on a diet, but maybe the state employee plans will.”

And In The Private Sector …

For decades, health insurance costs for employers and workers have risen faster than inflation despite various efforts to rein them in.

Currently, a typical family plan offered by employers tops $19,000 a year in premiums, while the price tag for a single employee is close to $7,000.

To be sure, hospital costs make up just one part of what premiums cover, along with doctor costs, drug payments and other services. Spending on hospital care accounts for about one-third of the nation’s $3.5 trillion health care tab.

“Health care is just becoming unaffordable,” said Cheryl DeMars, president and CEO of The Alliance, a group of 240 private-sector, self-insured employers that directly contract with hospitals in Wisconsin, northern Illinois and eastern Iowa.

In January, The Alliance began what it calls “Medicare-plus” contracting. As new hospitals join and existing contracts come up for renewal, the group is negotiating rates, basing them on what Medicare pays, DeMars said.

And it will likely save money: Under its old method of paying, the group was forking out between 200 to 350 percent of Medicare for inpatient and outpatient hospital services in its network. Two new contracts have been signed so far, averaging 200 percent of Medicare across inpatient, outpatient and physician payments, according to The Alliance.

“We want to pay a fair price and we’re in the process of determining what that should be,” said Kyle Monroe, vice president of network development for The Alliance. “Is it 200 percent? Is it something less?”

Under traditional payment methods, the negotiated prices insurers for public- and private-sector employers pay for hospital care vary widely, by facility, treatment and insurer. But they’re generally above Medicare rates by a substantial margin.

A group of self-insured employers recently commissioned Rand Corp. to study what private insurers pay hospitals in 22 states, compared with Medicare rates.

Initial results found private employers were paying, on average, 229 percent of Medicare rates to hospitals across the states in 2017, according to Chapin White, an adjunct senior policy researcher at Rand who conducted the study.

Economists like Melnick say they would prefer that market competition — consumers voting with their feet, so to speak — would drive business to the highest-quality, lowest-cost providers.

But, so far, hospitals have held the line against this scenario and that’s not likely to change. “They’re going to fight like crazy,” Melnick said.

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Costly Confusion: Medicare’s Wellness Visit Isn’t The Same As An Annual Physical

When Beverly Dunn called her new primary care doctor’s office last November to schedule an annual checkup, she assumed her Medicare coverage would pick up most of the tab.

The appointment seemed like a routine physical, and she was pleased that the doctor spent a lot of time with her.

Until she got the bill: $400.

Dunn, 69, called the doctor’s office assuming there was a billing error. But it was no mistake, she was told. Medicare does not cover an annual physical exam.

Dunn, of Austin, Texas, was tripped up by Medicare’s confusing coverage rules. Federal law prohibits the health care program from paying for annual physicals, and patients who get them may be on the hook for the entire amount. But beneficiaries pay nothing for an “annual wellness visit,” which the program covers in full as a preventive service.

“It’s very important that someone, when they call to make an appointment, uses those magic words, ‘annual wellness visit,’” said Leslie Fried, senior director of the Center for Benefits Access at the National Council on Aging. Otherwise, “people think they are making an appointment for an annual wellness visit and it ends up they are having a complete physical.”

An annual physical typically involves an exam by a doctor along with bloodwork or other tests. The annual wellness visit generally doesn’t include a physical exam, except to check routine measurements such as height, weight and blood pressure.

The focus of the Medicare wellness visit is on preventing disease and disability by coming up with a “personalized prevention plan” for future medical issues based on the beneficiary’s health and risk factors.

At their first wellness visit, patients will often fill out a risk-assessment questionnaire and review their family and personal medical history with their doctor, a nurse practitioner or physician assistant. The clinician will typically create a schedule for the next decade of mammograms, colonoscopies and other screenings and evaluate people for cognitive problems and depression as well as their risk of falls and other safety issues.

They may also talk about advance care planning with beneficiaries to make decisions about what type of medical treatment they want in the future if they can’t make decisions for themselves.

At subsequent annual wellness visits, the doctor and patient will review these issues and check basic measurements. Beneficiaries can also receive other covered preventive services such as flu shots at those visits without charge.

When the Medicare program was established more than 50 years ago, its purpose was to cover the diagnosis and treatment of illness and injury in older people. Preventive services were generally not covered, and routine physical checkups were explicitly excluded, along with routine foot and dental care, eyeglasses and hearing aids.

Over the years, preventive services have gradually been added to the program, and the Affordable Care Act established coverage of the annual wellness visit. Medicare beneficiaries pay nothing as long as their doctor accepts Medicare.

However, if a wellness visit veers beyond the bounds of the specific covered preventive services into diagnosis or treatment — whether at the urging of the doctor or the patient — Medicare beneficiaries will typically owe a copay or other charges. (This can be an issue when people in private plans get preventive care, too. And it can affect patients of all ages. The ACA requires insurers to provide coverage, without a copay, for a range of preventive services, including immunizations. But if a visit goes beyond prevention, the patient may encounter charges.)

And to add more confusion, Medicare beneficiaries can opt for a “Welcome to Medicare” preventive visit within the first year of joining Medicare Part B, which covers physician services.

Meanwhile, some Medicare Advantage plans cover annual physicals for their members free of charge.

Many patients want their doctor to evaluate or treat chronic conditions like diabetes or arthritis at the wellness visit, said Dr. Michael Munger, who chairs the board of the American Academy of Family Physicians. But Medicare generally won’t cover lab work, such as cholesterol screening, unless it’s tied to a specific medical condition.

At Munger’s practice in Overland Park, Kan., staffers routinely ask patients who come in for a wellness visit to sign an “advance beneficiary notice of noncoverage” acknowledging that they understand Medicare may not pay for some of the services they receive.

As long as beneficiaries understand the coverage rules, it’s not generally a problem, Munger said.

“They don’t want to come back for a separate visit, so they just understand that there may be extra charges,” he said.

Beneficiaries may not be the only ones who are unclear about what an annual wellness visit involves, said Munger. Providers may be put off if they think that it’s just another task that adds to their paperwork.

A recent study published in the journal Health Affairs found that in 2015 just over half of practices with eligible Medicare patients didn’t offer the annual wellness visit. That year, 18.8 percent of eligible beneficiaries received an annual wellness visit, the analysis found.

Primary care physicians generally want to see their patients at least once a year, Munger said, but it needn’t be for a complete physical exam.

A wellness visit or even a visit for a sprained ankle could give doctors an opportunity to check in with patients and make sure they’re on track with preventive and other care, Munger said.

When Dunn called the doctor’s office about the $400 bill, she said, the staff told her she had signed papers agreeing to pay whatever Medicare didn’t cover.

Dunn doesn’t dispute that.

“There were lots of papers that I signed,” she said. “But nobody told me I would get a bill for $400. I would remember that.”

In the end, the clinic waived all but $100 of the charge, but warned her that next year she’ll have to pay $300 if she wants an annual physical with that doctor. If she comes in just for an annual wellness visit, she’ll be seen by a physician assistant.

Dunn is considering her options. She would like to stay with her new doctor, who came highly recommended, and she’s worried she might have trouble finding another one just as good who accepts Medicare. But $300 seems steep to her for a checkup.

“This whole thing was so stressful for me,” she said. “I lost sleep for nights. It’s not that I couldn’t afford it, but it didn’t seem right.”

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Knowledge is power when it comes to kidney health

Knowledge is power when it comes to kidney health

Did you know that approximately 90% of people with kidney disease don’t even know they have it? The best treatment is early detection when kidney disease can be slowed or stopped. But, if you’ve already been diagnosed, Medicare is here to help you make informed decisions about your care.

If you have Stage IV chronic kidney disease, Medicare covers up to 6 kidney disease education sessions that teach you how to take the best possible care of your kidneys. Sessions include topics like how to prevent complications of kidney disease, what to eat and drink, and what options you have if your kidneys get worse, like dialysis and kidney transplants.

If you or a loved one has advanced kidney disease requiring dialysis, often known as End-stage Renal Disease (ESRD), you’ll need to find the right care. Dialysis centers can vary in the quality of care and services they provide, so it’s important to understand the differences in dialysis centers in your area before you decide where to go for care. If you’re already on dialysis, it’s also important to understand the quality of care that your dialysis center delivers. Medicare’s Dialysis Facility Compare lets you easily search for dialysis centers, compare them side by side, and find the right one for you. The information includes feedback from patients – you can see how dialysis patients respond to a survey that asked questions about their dialysis center, their kidney doctor, and the center’s staff.

March is National Kidney Month, so there’s no better time to get smart about kidney disease. Learn more about kidney diseaseDialysis Facility Compare, and Medicare-covered kidney services to be sure you’re making educated choices about your kidney health.


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Fri, 03/15/2019 – 00:00
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New Health Plans Expose The Insured To More Risk

One health plan from a well-known insurer promises lower premiums but warns that consumers may need to file their own claims and negotiate over charges from hospitals and doctors. Another does away with annual deductibles but requires policyholders to pay extra if they need certain surgeries and procedures.

Both are among the latest efforts in a seemingly endless quest by employers, consumers and insurers for the holy grail: less expensive coverage.

Premiums are 15 to 30 percent lower than conventional offerings, but the plans put a larger burden on consumers to be savvy shoppers. Even with those concerns, the offerings tap into a common underlying frustration.

“Traditional health plans have not been able to stem high cost increases, so people are tearing down the model and trying something different,” said Jeff Levin-Scherz, health management practice leader for benefit consultants Willis Towers Watson.

New types of insurance plans are sprouting up as employers face rising health care costs and individuals who buy their own coverage without an Affordable Care Act subsidy struggle to pay premiums. That has led some people to experiment with new ways to pay their medical expenses, such as short-term policies or alternatives like Christian sharing ministries, which are not insurance at all, but rather cooperatives where members pay one another’s bills.

Now some insurers — such as Blue Cross Blue Shield of North Carolina and a Minnesota startup called Bind Benefits, which is partnering with UnitedHealth Group — are coming up with their own novel offerings.

Insurers say the two new types of plans meet the ACA’s rules, although they interpret those rules in new ways. For example, the new policies avoid the federal law’s rule limiting consumers’ annual in-network limit on out-of-pocket costs: one by having no network and the other by calling additional charges premiums, which don’t count toward the out-of-pocket maximum.

But each plan could leave patients with huge costs in a system where it is extremely difficult for a patient to be a smart shopper — in part, because they have little negotiating power against big hospital systems and partly because illness is often urgent and unpredicted.

If the plans prompt doctors and hospitals to lower prices, “then that is worth taking a closer look,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. “But if it’s simply another flavor of shifting more risk to employees, I don’t think in the long term that’s going to bend the cost curve.”

Balancing Freedom, Control And Responsibility

The North Carolina Blue Cross Blue Shield “My Choice” policies aim to change the way doctors and hospitals are paid by limiting reimbursement for services to 40 percent above what Medicare would pay. The plan has no network of doctors and hospitals.

This approach “puts you in control to see the doctor you want,” the insurer says on its website. The plan is available to individuals who buy their own insurance and small businesses with one to 50 employees, aiming particularly at those who cannot afford ACA plans, said Austin Vevurka, a spokesman for the insurer. The policies are not sold on the ACA’s insurance marketplace, but can be purchased off-exchange from brokers.

With that freedom, however, consumers also have the responsibility to shop around for providers who will accept that amount. Those who don’t shop, or can’t because it’s an emergency, may get “balance-billed” by providers unsatisfied with the flat amount the plan pays.

“There’s an incentive to comparison shop, to find a provider who accepts the benefit,” said Vevurka.

The cost of balance bills could range widely, but could be thousands of dollars in the case of hospital care. Consumer exposure to balance bills is not capped by the ACA for out-of-network care.

“There are a lot of people for whom a plan like this would present financial risk,” said Levin-Scherz.

In theory, though, paying 40 percent above Medicare rates could help drive down costs over time if enough providers accept those payments. That’s because hospitals currently get about double Medicare rates through their negotiations with insurers.

“It’s a bold move,” said Mark Hall, director of the Health Law and Policy Program at Wake Forest University in North Carolina. Still, he said, it’s “not an optimal way” because patients generally don’t want to negotiate with their doctor on prices.

“But it’s an innovative way to put matters into the hands of patients as consumers,” said Hall. “Let them deal directly with providers who insist on charging more than 140 percent of Medicare.”

Blue Cross spokesman Vevurka said My Choice has telephone advisers to help patients find providers and offer tips on how to negotiate a balance bill. He would not disclose enrollment numbers for My Choice, which launched Jan. 1, nor would he say how many providers have indicated they will accept the payments.

Still, the idea — based on what is sometimes called “reference pricing” or “Medicare plus” — is gaining attention.

North Carolina’s state treasurer, for example, hopes to put state workers into such a pricing plan by next year, offering to pay 177 percent of Medicare. The plan has ignited a firestorm from hospitals.

Montana recently got its hospitals to agree to such a plan for state workers, paying 234 percent of Medicare on average.

Partly because of concerns about balance billing, employers aren’t rushing to buy into Medicare-plus pricing just yet, said Jeff Long, a health care actuary at Lockton Companies, a benefit consultancy.

Wider adoption, however, could spell its end.

Hospitals might agree to participate in a few such programs, but “if there’s more take-up on this, I see hospitals possibly starting to fight back,” Long said.

What About The Bind?

Minnesota startup Bind Benefits eliminates annual deductibles in its “on-demand” plans sold to employers who are opting to self-insure their workers’ health costs. Rather than deductibles, patients pay flat-dollar copayments for a core set of medical services, from doctor visits to prescription drugs.

In some ways, it’s simpler: no need to spend through the deductible before coverage kicks in or wonder what 20 percent of the cost of a doctor visit or surgery would be.

But not everything is included.

Patients who discover during the year that they need any of about 30 common procedures outlined in the plan, including several types of back surgery, knee arthroscopy or coronary artery bypass, must “add in” coverage, spread out over time in deductions from their paychecks.

“People are used to that concept, to buy what they need,” said Bind’s CEO, Tony Miller. “When I need more, I buy more.”

According to a company spokeswoman, the add-in costs vary by market, procedure and provider. Less than 7 percent of members should need add-in services in any given year, Bind estimates.

On the lower end, the cost for tonsillectomy and adenoidectomy ranges from $900 to $3,000, while lumbar spine fusion could range from $5,000 to $10,000.

To set those additional premiums, Bind analyzes how much doctors and facilities are paid, along with some quality measures from several sources, including UnitedHealth. The add-in premiums paid by patients then vary depending on whether they choose lower-cost providers or more expensive ones.

The ACA’s out-of-pocket maximums — $7,900 for an individual or $15,800 for a family — don’t include premium costs.

The Cumberland School District in Wisconsin switched from a traditional plan, which it purchased from an insurer for about $1.7 million last year, to Bind. Six months in, Superintendent Barry Rose said, it is working well.

Right off the bat, he said, the district saved about $200,000. More savings could come over the year if workers choose lower-cost alternatives for the “add-in” services.

“They can become better consumers because they can see exactly what they’re paying for care,” Rose said.

Levin-Scherz at Willis Towers said the idea behind Bind is intriguing but raises some issues for employers.

What happens, he asked, if a worker has an add-in surgery, owes several thousand dollars, then changes jobs before paying all the premiums for that add-in coverage? “Will the employee be sent a bill after leaving?” he said.

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Make Healthy Choices—Medicare can help!

Make Healthy Choices—Medicare can help!

People with diabetes may have heard that carbohydrates aren’t good for them. However, many carbohydrates provide vitamins, minerals, and nutrients for the body, and can be part of a healthful diet for people with or without diabetes. If you need help choosing foods that will support your health goals, Medicare can help.

Medicare covers medical nutrition therapy (MNT) services for people with diabetes or kidney disease. MNT services may include an initial nutrition and lifestyle assessment, individual or group nutritional therapy services, and follow-up visits to check on your progress. Find out if you qualify for these services.

A healthy diet includes a variety of nutritious foods from all the food groups, including carbohydrates. You may choose carbohydrates like fruits, vegetables, beans, whole grains, and dairy products, including low-fat or fat-free milk and yogurt. When you’re eating away from home, pick the healthier options.

If you need help, can help you create a personalized healthy eating plan and find physical activities to enjoy all year long. Also, the resources at EatRight® can help you plan and prepare meals.

Celebrate National Nutrition Month by creating a healthy eating plan and discovering physical activities that you enjoy. Find a combination of good foods and fun activities that fits your lifestyle.


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Fri, 03/08/2019 – 00:00
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As Hospitals Post Price Lists, Consumers Are Asked To Check Up On Them

With much fanfare, federal officials required hospitals nationwide this year to post their “list” prices online. But it’s not yet clear how many are doing it, even as the government has taken the rare step of asking consumers to monitor hospital compliance.

Most hospitals appear to be complying with the rule, according to hospital officials and a small sampling of websites.

However, the feds acknowledge they are not yet enforcing the rule, industry groups are not monitoring compliance, many hospitals are burying the information on their websites, and debate continues about whether the price lists are creating more confusion than clarity among consumers.

The rule took effect Jan. 1, after a year-long controversy about its necessity and usefulness. It requires every hospital in the country — about 6,000 — to post its full price list online.

The lists, known in the industry as “chargemasters,” present prices for the thousands of individual services and products for which a hospital may bill — everything from the price for a bed per day, blood tests and surgical operating room time (billed in 15-minute intervals) to the cost of a single Tylenol tablet.

The problem: Services and products are identified in obscure abbreviations, billing codes and medical terminology that even doctors or nurses often don’t understand.

Additionally, the chargemaster lists only rarely reflect final billed charges because insurers and the government generally negotiate significantly lower prices. In most cases, these posted rates are the highest a hospital would ever charge per service.

Even so, officials at the Centers for Medicare & Medicaid Services (CMS) said full public disclosure was a logical first step in a transparency initiative aimed at eventually encompassing physician and prescription drug prices.

CMS contends the listings will help patients compare facilities, spur competition among hospitals to lower prices and prompt software developers to build tools that consumers can use to comparison shop.

“We think this information will empower patients,” said Seema Verma, the CMS administrator. “And we look forward to seeing consumers continue to drive the demand for hospitals to provide greater price transparency.”

Verma has enlisted the public in an unusual effort to monitor whether hospitals are complying. In appearances, opinion pieces and through social media, she has urged consumers to check their local hospitals’ websites to see if chargemaster lists are posted and let the agency know if they are not.

While putting off enforcing the law, CMS has instead invited hospitals, other health care stakeholders and the public to weigh in on possible enforcement mechanisms, as well as to suggest future price transparency measures. Hundreds of comments have been submitted.

At the agency-initiated Twitter site #WheresthePrice, a dialogue has ensued. In one case, a Texas man, Matt Kleiber, checked 31 hospitals and medical centers in Houston and found one health system, Memorial Hermann, which operates 16 hospitals, not in compliance.

After a reporter’s inquiry, Kathryn Williams, a spokeswoman for Memorial Hermann, said in early February that the hospital system was in compliance. She said they interpreted the government’s rule as allowing a shorter, easier-to-understand price list to be posted.

Subsequently, in late February, the hospital posted its full chargemaster list, as the regulation requires.

“What we posted [initially] was much easier for our patients to understand,” said Williams. “We don’t think the chargemaster list is helpful … and we stand by our position that the information we have had posted on our website since Jan. 1 is consistent with CMS’s guidance.”

Other reports of noncompliance at #WheresthePrice appeared to be the result of incomplete website explorations by consumers. A KHN check of the websites of six cited hospitals showed the price lists were posted. On all but one of the sites, however, the information was not prominently displayed.

About a dozen hospital websites reviewed by KHN included an accompanying — and often prominent — disclaimer saying the information doesn’t reflect typical final charges and is difficult to understand.

Accompanying its chargemaster list, for example, Saline Memorial Hospital in Benton, Ark., states: “The amount listed [for each service] is not necessarily reflective of your actual financial responsibility. … We recommend that all patients contact their insurer or Saline Health System to discuss their individual situations and determine the potential out-of-pocket costs of their care.”

Ariel Levin, senior associate director of state issues at the American Hospital Association (AHA), said hospitals have been reluctant to draw too much attention to their price lists.

“Most hospitals think this information will not help patients,” Levin said. “And many think it only confuses people.”

Levin said the AHA is not monitoring its members’ compliance, and she doesn’t think other hospital trade groups are either.

“But all the hospital websites we have checked so far have been in compliance, and we believe the vast majority are abiding by the rule,” Levin said. Small rural hospitals may take longer to comply, she added.

CMS and the AHA said a few hospitals offer consumer-friendly price transparency that goes significantly beyond the chargemaster price lists.

St. Luke’s University Health Network, a 10-hospital system with 300 outpatient clinics in Pennsylvania and New Jersey, several years ago launched an online tool with two features, “PriceLock” and “PriceChecker.”

Francine Botek, the hospital’s senior vice president for finance, said PriceLock allows patients to get an all-inclusive price for most — 80 percent — of the hospital’s outpatient services even if a patient doesn’t enter insurance information. PriceChecker permits people to enter insurance information and other data to help calculate their out-of-pocket costs.

The tools are only slowly gaining traction among consumers, said Botek. In 2018, 35,200 people used PriceChecker, averaging about 2,500 a month. Over the past three years, about 3,600 have used PriceLock.

The University of Utah, which owns four hospitals, has a similar online out-of-pocket cost estimator for about 600 common (mostly outpatient) services and procedures — giving a single price that rolls up itemized charges for each. People with or without insurance can use the tool. Those without insurance get an across-the-board 30 percent discount off the list price, and deeper discounts are sometimes available.

Kathy Delis, who oversees billing at University of Utah Health, said the hospital system plans this year to market the tool to the public more aggressively.

“It’s going to take time to engage patients,” Delis said. “We have urged CMS to move beyond the chargemaster rule as soon as possible.”

A few states require hospitals to give consumers price estimates. The laws are limited in scope, however. In 2018, Colorado became the latest state to enact such a law. It mandates that hospitals post “self-pay” prices for the 50 conditions that yield the most revenue from Medicare. Doctors must also post prices for their 15 most popular procedures.

An older California law requires hospitals to disclose prices for the top 26 outpatient services by revenue.

A spokesperson for CMS said the agency plans to issue its next regulation on hospital price transparency this year.

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Lawmakers United Against High Drug Prices Bare Partisan Teeth

While the high cost of prescription drugs seems to be a universally agreed-upon trouble spot in the American health system, a House Ways and Means subcommittee hearing Thursday showed that Democrats and Republicans are still miles apart on what to do about it.

The hearing, focused on using Medicare to encourage affordability, competition and access to medicines, marked the first time since Democrats took control of the House that this panel has dug into a drug pricing issue. It is one of many hearings on the subject in both chambers of Congress this year.

Among the topics in play was legislation introduced in February by Rep. Lloyd Doggett (D-Texas), the health subcommittee’s chair, and Sen. Sherrod Brown (D-Ohio). It would allow Medicare to negotiate for lower drug prices by setting a price for the drug based on a number of market-based factors, such as clinical effectiveness and cost.

If a manufacturer of the brand-name drug doesn’t comply, the government may approve a generic manufacturer to compete with it.

Ranking member Devin Nunes (R-Calif.) dismissed the proposal as “the seizure of medicines by an unhappy government.” Such an approach, he said, was “best left to socialist regimes and not the United States of America.”

“On what planet is this a free market?” asked Rep. Earl Blumenauer (D-Ore.) in regards to drug companies that are guaranteed years without competition when they patent a new drug or device.

Rep. Tom Reed (R-N.Y.) countered: “If there’s no free market, then we’re talking about government takeover of the pharmaceutical industry.”

“Poppycock,” Blumenauer responded.

The Doggett-Brown proposal is based on a concept known as compulsory licensing, which would allow the government to use its power to issue patents as a lever if manufacturers are seen as not operating in good faith.

This approach has some precedent in federal policy. During a national anthrax scare in 2001, when doses of Cipro were needed to combat anthrax, the Department of Health and Human Services leveraged the threat of reissuing patents when the drug manufacturer wouldn’t bring down the prices.

Nunes and other conservative Republicans at the hearing maintained that this government market muscle would discourage research and development of new medicines and treatments, echoing industry representatives who say the strategy is not only costly but also doesn’t always lead to a breakthrough.

“The free market system is the tool that should be used to drive prices down,” Reed said. “That is where the solution lies, rather than taking over this space with some kind of government fiat.” Douglas Holtz-Eakin, president of the conservative American Action Forum and one of the witnesses who testified at the hearing, agreed. “Stripping property rights isn’t the solution,” he said.

Witnesses pointed out several times that the government is already intervening in the market by granting numerous long patents to drug companies and fronting the money for research and development through the National Institutes of Health.

“All of the new drugs that come to the market have some basis in government funding,” said Ameet Sarpatwari, the assistant director of the program on regulation, therapeutics and law at Harvard Medical School and a panel witness. “There’s a considerable amount of risk the government assumes.”

For some subcommittee Republicans, the sticking point clearly was that allowing Medicare to negotiate drug prices would lead to too much government intervention, and they stuck to that script. “I’m very wary of increased government control,” said Rep. Tom Rice (R-S.C.). “The answer to high drug prices is to move towards more free market and less government control.”

The Ways and Means Committee isn’t the only panel that can influence drug pricing; arguably it’s one of the committees with the least power in this area. Yet the hearing provided a platform to discuss a number of options.

Democrats advanced issues like limiting patents, increasing transparency, trade reform and examining some of the tax breaks for pharmaceutical companies.

Rep. Judy Chu (D-Calif.) questioned the incentives for drug companies to put direct-to-consumer ads on television, which count as business tax deductions. The companies also get tax breaks for donating to patient advocacy groups and donating portions of their inventory.

“It’s pretty safe to say the pharmaceutical industry is doing quite well that the steady trend of price increases is not creating a lack of revenue,” Chu said. “In fact, there are high salaries, bonuses and many stock buybacks.”

KHN correspondent Shefali Luthra contributed to this report.

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