Novel Plan to Curb Drug Costs

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This is about consumer-friendly ratings regarding the benefits of new drugs, the limits on what patients pay for drugs, and requiring drug companies to disclose how much they actually spend on research.

With the public concerned about the high cost of new medications, these are some of the proposals offered today [September 18, 2015] by a policy center often aligned with the Obama administration.

The multistep plan from the Center for American Progress aims to get the attention of the 2016 Democratic presidential candidates. Hillary Rodham Clinton and Vermont Senator Bernie Sanders are both on record advocating action against overpriced medications.

In a break from standard liberal solutions, the proposal refrains from urging that the government be empowered to negotiate drug prices for Medicare patients. By law, Medicare’s prescription drug program can’t do that now. Topher Spiro, the center’s health policy expert, said he hopes the new emphasis on paying for value and consumer education will attract at least some Republican support.

“We’ve been talking about Medicare negotiation … for many, many years and gotten nowhere,” said Spiro. “We wanted to change the dynamic.” While some of the proposals require legislation, others could be green-lighted by the administration.

But the Pharmaceutical Research and Manufacturers of America strongly criticized the plan, saying in a statement it would impose “arbitrary caps” on prices, “thwart innovation, impede the development of new medicines for patients and cost countless jobs.” Industry says the cost of drugs reflects investment in research as well as the uncertainties of developing a new medication.

Nevertheless, insurers, employers, and state and federal policymakers may be interested in the new proposals. A poll this summer found that 72 percent of Americans think the cost of prescription drugs is unreasonable. The outcry gained momentum after the introduction last year of a $1,000-a-pill cure for hepatitis C.

The 45-page plan seeks to rein in the overall cost of drugs while ensuring that patients get to share in the savings.

Among its recommendations:

—Requiring drug companies to disclose how much they spend on research and development, production, and sales and marketing. If a manufacturer fails to meet a threshold for research spending, it could be required to make payments to a new fund to support the National Institutes of Health. Taxpayer-funded NIH research provides the springboard for some new drugs.

—Commissioning an independent research organization to evaluate new drugs for effectiveness. In a strategy similar to safety testing of cars, patients and doctors would get easy-to-understand ratings of whether a new drug provides no added benefit, minor added benefits or significant added benefits when compared to existing medications. The ratings would be included in advertising and would become the basis for pricing recommendations from the independent evaluator. The price guidelines would not be arbitrary, but based on evidence, said Spiro.

—If a new drug is priced more than 20 percent above the recommended price, and if the manufacturer relied on taxpayer-funded research to develop it, the government would be allowed to license that medication’s patent to generic competitors. The center claims a 1980 federal law known as Bayh-Dole provides this authority.

—Protecting people covered through employer plans and other private insurance by capping cost-sharing for drugs at $3,250 annually and setting monthly limits as well.

—Granting exemptions from antitrust laws so insurers and pharmacy benefit managers together could negotiate prices for the highest cost drugs with manufacturers.

—Changing Medicare’s payment policy for medications administered in a doctor’s office, including many cancer drugs. Physicians currently get an added administrative fee of 6 percent of the drug’s price. Critics say that creates financial incentives to prescribe the most expensive medication.

A prominent doctor and researcher said the plan has the potential to shift drug company pricing from a hunt for profits to a search for value.

The pharmaceutical industry is currently enjoying “a rising tide in prices that is carrying everything along,” said Dr. Peter B. Bach of Memorial Sloan-Kettering Cancer Center in New York City.

“But the bull’s eye we want them to be aiming at is higher,” added Bach. Under the plan “you would maximize your profits by winning on creating the best medicine.”

When Your Health Insurance Won’t Pay

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The solution may be as simple as a phone call or as complicated as an appeal. Either way, you can win. When you are dealing with a medical condition or disease, you want to find the best treatment without a lot of hassle from your insurer. But insurers may deny coverage for the specialist your doctor recommended or send you a bill for care you thought was covered.

One way to avoid surprises is to choose a policy during open enrollment that covers the care you’re likely to need and review the list of in-network specialists and participating hospitals which doesn’t mean you’ll never run into roadblocks. If you do, these steps can save you thousands of dollars while helping you get the care you need.

Lock in a specialist

Getting approval for care up front usually means you won’t have to fight for coverage later. But winning that sign-off can be tricky if your doctor recommends a specialist who isn’t in your insurer’s network. Some health plans don’t cover out-of-network providers at all. Others may provide limited coverage for out-of-network care but at a much higher cost, perhaps significantly doubling your deductible and boosting your co-payment or coinsurance.

Before stretching to pay for the out-of-network specialist, ask your insurance company about your options. Generally, they will try to find an in-network doctor. Contact the doctors the insurer recommends and ask about their credentials, experience and proposed course of treatment. (You might also run their names past your primary-care doctor who recommended the out-of-network specialist in the first place.) Keep track of the doctors you call and what they say. Proving that you’ve covered the bases can be helpful later if you have to make a case for out-of-network coverage.

Even if you hope to work with another doctor, it’s a good idea to visit the specialist recommended by the insurer. “If nothing else, you get a second opinion,” says Tom Bridenstine, the managed-care ombudsman for Virginia, who helps state residents with coverage questions and appeals. You could decide to work with the in-network specialist after all, or the specialist might agree to write a letter explaining that you have a condition that he or she can’t adequately treat, Bridenstine says.

That happened to Robin Mullins, 51, from Clintwood, Virginia. She had surgery and her insurer paid the claims. But she ended up with an infection and developed a hernia. The hernia surgery was complicated because of the infection, so her doctor recommended a surgeon in Greenville, South Carolina, who specialized in the procedure. “I loved the doctor in South Carolina and felt comfortable with him,” she says.

When she tried to get preapproval for the surgeon in Greenville, Robin was denied coverage. She appealed and lost. Eventually, she got a recommendation from her insurer for an in-network surgeon in Richmond but went to Tom Bridenstine for help anyway. He suggested she at least meet with the surgeon in Richmond. “He was fantastic,” she says of her decision to go with him. Robin’s advice: “Communicate with the physician and don’t be timid about asking questions.” Another piece of advice: Keep an open mind.

Search further 

If you can’t find a doctor in your network with whom you’re comfortable, have your insurer cast a wider net, says Denise Sikora, president of DL Health Claim Solutions, in Woodbridge, New Jersey.  She recently helped a client who needed a specific type of brain surgery but couldn’t find an in-network doctor in New Jersey with the experience. Sikora kept asking the insurer for more in-network candidates and finally found a specialist in Pennsylvania.

If no in-network solution exists, the insurer may consider your situation a “network adequacy gap” and cover an out-of-network provider as if he or she were in network. At one insurance company, for example, a precertification nurse researches the options and, if there are no in-network providers in the area who can supply the service you need, the insurer will authorize the coverage.

You don’t have to stand by while someone else makes this decision. Ask the insurer what information you can provide to strengthen your case. For instance, your insurer might be receptive to a statement from your primary-care doctor saying that he has studied the case and, for this condition, he believes you are justified in seeking treatment out of network.

Some people choose to go to the out-of-network specialist despite the out-of-pocket costs. In that case, try to negotiate a deal. Some plans may agree to pay a portion of the bill at the in-network rate and have the patient pay the balance. It can help to have the physician’s office call and explain that the doctor is willing to accept in-network payment and get a preapproval or you can ask the provider for a cash discount.

Review the bill

You may think that all of your care was approved, only to receive a surprise bill from the insurance company. Don’t pay it until you get the explanation of benefits to find out why your claim was denied. The doctor may have billed with the wrong tax ID, or you may have used an old insurance card. In such cases, an appeal usually isn’t necessary, says Patrick Shea, a claims specialist and director of MedicalClaimsHelp.org, in Green Bay, Wisconsin. “You can get the errors reprocessed with a phone call.”

Coding mistakes can also cause problems. The provider’s office may have input the wrong code for the procedure or the diagnosis. Sometimes the doctor can resubmit it with a different diagnosis and procedure code, and the charge will be paid.

To spot mistakes from the start, get an itemized bill that breaks down each cost separately, especially for complex procedures and hospital stays. “Anytime you receive a bill from a facility, you should ask for a detailed, itemized bill to know exactly what you’re being charged for,” says Pat Palmer, CEO of Medical Billing Advocates of America, in Roanoke, Virginia. You may have been charged for services you didn’t receive, in which case you can usually fix the error with a phone call or by providing the medical records.

Investigate two fronts

Kim Jacobs of Lakeville, Minnesota, had both authori­zation issues and clerical errors. Two years ago, she underwent an outpatient procedure. She had been told by the doctor’s office that the procedure was authorized, so she was surprised to receive a bill for nearly $10,000. “The doctor’s office said they got the approval, but I didn’t think to double-check it,” says Kim. Her doctor has since written letters to the insurer explaining why the procedure was medically necessary, in hopes of overturning the denial.

In the meantime, Kim contacted Palmer and her colleagues for help. They asked the hospital for an itemized bill and successfully disputed several of the charges, bringing the bill down by nearly $4,000. Disputing errors on the bill is a good strategy for trimming down the cost while you’re undergoing the more complicated process of appealing. Kim continues to pursue her appeal with help from Palmer and her colleagues.

Win an appeal

If you decide to appeal, your case will likely go through several layers of review—first within the insurance company, then from outside doctors, and finally from the state insurance department (or through the Department of Labor, if you’re covered by an employer’s self-funded plan). Your explanation of benefits and your insurance policy should spell out the procedure and deadlines for appeals. Sometimes you can conduct the appeal via a conference call with your physician, the insurance person who made the claims decision, and your claims advocate, says Palmer.

No matter how you do it, build a strong case. You have to do the research and pull it all together. The first step, is to find out why the claim was denied. Then gather evidence and focus your appeal specifically on that reason.

If your insurer denies your appeal, you can generally file one with your state insurance department. Find your state insurance department at www.naic.org.

The last step? Be patient. It can take several months to go through all the levels of appeal. “I usually keep the provider in the loop and ask him to keep the bill from collection while we’re working on this,” says Sikora. Keep in mind that it’s difficult to get money back once you’ve paid it. Hold out while the appeal works through the system.

Where to get help

A medical claims specialist can help you decipher your bills and appeal denials at www.claims.org (Alliance of Claims Assistance Professionals). Most offer a free initial meeting to review the bills and complexity of the case, after which they generally charge $75 to $120 per hour. You can meet in person, or e-mail your bills and give the specialist permission to access your insurance-claim files online.

New Regulations: Modernizing Nursing Home Care

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After nearly 30 years, the Obama administration wants to modernize the rules nursing homes must follow to qualify for Medicare and Medicaid payments. There are hundreds of pages of proposed changes that cover everything from meal times to the use of anti-psychotic drugs to staffing.

Some are required by the Affordable Care Act and other recent federal laws, as well as the president’s executive order directing agencies to simplify regulations and minimize the costs of compliance.

“Today’s measures set high standards for quality and safety in nursing homes and long-term care facilities,” said Health and Human Services Secretary Sylvia M. Burwell. “When a family makes the decision for a loved one to be placed in a nursing home or long-term care facility, they need to know that their loved one’s health and safety are priorities.”

Officials announced the update at the recent White House Conference on Aging.  The once-a-decade [10 years ago] conclave set the agenda for meeting the diverse needs of older Americans, including long-term care options. July 30, 2015, also marked the 50th anniversary of the Medicare and Medicaid programs, which cover almost 125 million older, disabled or low-income Americans. Medicare and Medicaid beneficiaries make up the majority of residents in the country’s more than 15,000 long-term care facilities.

“The existing regulations do not even conceive of electronic communications the way they exist today,” said Dr. Shari Ling, Medicare’s deputy chief medical officer. “Also there have been significant advances in the science and delivery of health care that just weren’t imagined at the time the rules were originally written. For example, the risks of anti-psychotic medications and overuse of antibiotics are now clearly known, when previously they were thought to be harmless.

The proposed regulations include a section on electronic health records and measures to better ensure that patients or their families are involved in care planning and in the discharge process. The rules would also strengthen infection control, minimize the use of antibiotic and anti-psychotic drugs and reduce hospital re-admissions.

Revised rules would also promote more individualized care and help make nursing homes feel more like home.  For example, facilities would be required to provide “suitable and nourishing alternative meals and snacks for residents who want to eat at non-traditional times or outside of scheduled meal times.”

Residents should also be able to choose their roommates.  “Nursing facilities not only provide medical care, but may also serve as a resident’s home,” the proposed rules say. “Our proposed provision would provide for a rooming arrangement that could include a same-sex couple, siblings, other relatives, long term friends or any other combination” [as long as nursing home administrators] “can reasonably accommodate the arrangement.”

Consumer advocates are likely to be disappointed that officials are not including recommendations to set a federal nurse-to-resident ratio.

However, the proposed changes would require that nurses be trained in dementia care and preventing elder abuse to better meet residents’ needs.

“We believe that the focus should be on the skill sets and specific competencies of assigned staff,” officials wrote in the proposed rules, “to provide the nursing care a resident needs rather than a static number of staff or hours of nursing care that does not consider resident characteristics.”

Nursing homes will be required to report staffing levels, which Medicare officials said they will review for adequacy.

“It’s a competency approach that goes beyond a game of numbers,” said Ling. “If residents appear agitated, figure out why, get at the cause of the problem,” she said, instead of resorting to drugs to sedate residents.

Advocates for nursing home residents argue that because of inadequate staffing, residents with dementia are often inappropriately given anti-psychotic drugs, even though that can be dangerous for them. The new rules would help control the use of these drugs by requiring the facility’s pharmacist to monitor drugs that are prescribed for excessive periods of time or other irregularities and require the resident’s physician to address the problem or explain in the resident’s medical record why the medication is necessary.

“We don’t have enough nursing staff,” Toby Edelman, a senior policy attorney at the Center for Medicare Advocacy, said before the rules were released.  Federal law requires only one registered nurse on the day shift for a 20-bed facility or for a 500-bed facility, licensed practical nurses around the clock and sufficient staff to meet residents’ needs, she said.

“We don’t look at the specific staffing positions per se,” said Greg Crist, a spokesman for the American Health Care Association, which represents 11,000 skilled nursing facilities. “We look at the needs of the individuals when determining staff levels, and that is best addressed in the resident’s care plan.”

Although there are also no provisions addressing enforcement in the proposed rule, Ling said  it “will permit detection of violations to enable enforcement by lessening the noise.”

“The biggest problem is that the rules we have now are not enforced,” said Edelman.  “We have a very weak and timid enforcement system that does everything it can to cajole facilities into compliance instead of imposing penalties for noncompliance.”

A report by the Center for Medicare Advocacy found last year that often some serious violations were not penalized.

“Once the new rules are finalized, they will be added to the items nursing home inspectors check,” Ling said.

Meet the Family Who Made Health Policy its Business

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Lee, Peter and familyIf there is such a thing as the first family of health care, it may be the Lees of California. Five decades ago, two brothers helped start Medicare. Their father inspired them and they, in turn, have inspired the next generation.

To mark the anniversary of President Lyndon Johnson signing Medicare into law on July 30, 1965, three Lees sat down to reflect on the U.S. health care system.

It can be hard now to imagine a time when Medicare met serious opposition. But 92-year-old Dr. Peter Lee, a founder of the family medicine department at the University of Southern California, remembers that time well.

“I was one of the people who was supporting the idea,” he says. “And in response to that some people from the USC alumni association wanted me fired because they thought that was socialized medicine.”

The Los Angeles County Medical Association, too, called for Lee’s ouster. While Lee didn’t get fired, he did get called a lot of names. The same thing happened to his now 91-year-old brother, Dr. Phillip Lee, who helped implement Medicare in the Johnson administration.

“They called me a socialist more often than a communist, but occasionally they referred to me as a communist,” he recalls.

Among those who did that, he says, was former President Ronald Reagan, who lent his voice to an ad by one of Medicare’s biggest opponents, the American Medical Association.

“One of the traditional methods of imposing state-ism or socialism on a people has been by way of medicine,” Reagan says in the ad.

The AMA opposed Medicare out of fear the government would become too deeply involved in the practice of medicine. But that didn’t sway the Lee brothers. Their work as ardent foot soldiers for Medicare, was borne in part from family legacy of health policy started by their father, Dr. Russell Lee, says his grandson Peter Lee.

“One of the things my grandfather did is that he was involved in the Truman Commission, which in the 1940s was one of the early reports generated to say we need national health care,” says the younger Peter Lee.

He went into the family business when he became a health policy expert. And he now runs Covered California, overseeing the largest expansion of insurance coverage in California since Medicare. His father, the elder Peter Lee, says the passage of Medicare changed the game. Before the law, the medical center where he worked was overflowing with elderly patients who had been discharged but needed some interim care before going home.

“So we always had patients in the hall,” he says. “Then Medicare was passed and then the halls were all empty.”

His son, Peter, explains, “They were empty because seniors all of a sudden had someone that would pay for recovery care that wasn’t there before. And it was a dramatic overnight change that affected millions of Americans.”

That’s because Medicare paid for, transitional nursing home care and other treatments for those 65 and older, no matter their income. Today Medicare provides health care for nearly every American 65 and older.

And the law prompted something else: the desegregation of hospitals. Among those at the front line of that battle, the elder Peter Lee’s brother, Philip.

“Desegregation was critical,” says Philip Lee. “You couldn’t have a segregated medical care system.”

Philip Lee was sent to the South to make sure hospitals didn’t discriminate. He says it took the threatened loss of federal Medicare dollars to overcome resistance by many hospitals that ultimately integrated. And integration meant everyone and everything — from patients and staff all the way to the blood supply.

“And we made a lot of progress, even if it wasn’t perfect,” he says.

Today, both of the elder Lees say the biggest issues facing the nation’s health care system is making sure everyone gets medical care.

It’s a job that the younger Peter Lee says he’s taken on with inspiration from his family legacy and support from his father and uncle. And, he says, they set a high bar.

“It take persistence. It takes hard work. But change happens,” he says.