House committee hears from FTC commissioners on PBM report

https://ncpa.org/newsroom/qam/2024/07/11/house-committee-hears-ftc-commissioners-pbm-report

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If you have traditional Medicare, the vendor is required to notify the pt up front that Medicare is not expected to pay for the product/procedures, and the pt understands that they are responsible for costs associated with the product/procedure provided.  That is called an Advance Beneficiary Notice of Non-coverage, https://www.medicare.gov/basics/your-medicare-rights/your-protections  if the pt was not notified upfront and did not sign such a form. The pt is not required to pay for the products/services not covered and paid for.

However, since Medicare Part-C (Advantage) prgms are provided by for-profit private insurance companies, this policy & form may or may not apply. I guess that insurance companies are moving from using the prior authorization process to being able to deny care. To give the vendor a prior authorization approval upfront and then come back after the product/procedure was provided to “question” if the product/service was medically necessary and try to claw back the monies paid to the vendor or deny to pay the vendor.

ASCs see post-procedure payer clawbacks intensify

https://www.beckersasc.com/asc-coding-billing-and-collections/ascs-see-post-procedure-payer-clawbacks-intensify.html

As scrutiny increases on payer prior authorizations, health plans are using a new tactic to disrupt provider cash flows: post-procedure clawbacks.

ASCs in some markets have noticed insurance companies scrutinizing even previously approved claims post-procedure and denying care or re-evaluating circumstances of the case to recover funds.

“All the insurance carriers are now hiring companies to look at a post-procedure type of prior authorization, or post-authorization,” said Adam Bruggeman, MD, a spine surgeon at San Antonio-based Texas Spine Care Center and chief medical officer of MPOWERHealth, during a June 21 panel at the 21st Annual Spine, Orthopedic & Pain Management-Driven ASC + The Future of Spine Conference in Chicago. “Essentially you’d perform the procedure and then after the procedure, using all the same data they asked for going into surgery, they’re now asking hospitals, surgery centers and doctors again to confirm that they really should have approved the surgery the first time and then they’re clawing back the money, or not paying the money as a result.”

To combat the clawbacks, Dr. Bruggeman’s team has identified the information payers ask for post-procedure and gathering it from physician offices before surgery.

Columbia (Mo.) Orthopaedic Group has seen similarly aggressive tactics by local payers and built a whole department focused on preauthorizations and post-surgery payer requests. The group spends hundreds of thousands of dollars per year to maintain the department, which is a heavy lift for an independent organization. But so far, the investment has paid off.

“Our physicians feel the pain in the clinic, but they haven’t felt it in their wallets yet because our departments are really, really good at making sure we get the money that’s theirs,” said Andrew Lovewell, CEO of Columbia Orthopaedic Group. “We have a lot of robust processes ahead of time where the doctors know the day before surgery exactly what codes are approved. They have to email if they do anything differently in the case. They have to tell us immediately or they face a penalty inside of our own group. We take both sides of it, not only to educate our providers but then go directly after the payers.”

Mr. Lovewell’s center does around 2,000 total joint replacements per year and a big payer has taken aim at the procedures.

“They’re going back and retro trying to deny implants we put in from six months ago. They’re doing a huge sweep,” said Mr. Lovewell. “They’ve hired a third party and then we’re spending money and time sending all these records back to them and they approve every single one of them. It’s just a nuisance headache.”

The payer requested almost 6,000 patient records on implants over a two-year period after approving everything upfront. Mr. Lovewell asked for an increase in rates because the business office will spend significant time pulling those records. He also threatened to go out of network and send those procedures back to the hospital.

“What I think we’re going to see, as more light gets focused on prior authorization, they’re going to shift to post-procedure techniques to try and extract the same amount of money and reduce the same payments,” said Dr. Bruggeman.

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Back in the day… before there was NO PBM industry. I remember it being reported that Rx costs were about 6% of total healthcare expenditures.

The PBM industry was a result of an AUW contract at the end of 1969.  I don’t remember, but probably the effective date was the first of 1970.

Back then, the average Rx price was $4 to $5 each. Brand name meds were 90% to 95% of all Rxs. There was also no DEA. There was no PDMP, No prior authorizations, no mandatory generic substitution, no step therapy, no days supply limitations, and on and on that the PBM industry & DEA gave us.

According to this question, I asked perplexity.ai. The cost of medication today is upwards of 20% of total medical/healthcare expenses. Today 90% of Rxs are paid for by one of the 60 PBMs, and the top 3 PBMs control 80%-90% of all Rxs paid for by the PBMs. 85%-90% of prescriptions are now filled with generics.

I suggest that you watch this blog post from two months ago by Senator Elizabeth Warren, ripping the President of United Health a “new one”. https://www.pharmaciststeve.com/warren-blasts-united-health-ceo-for-monopolistic-practices-that-harm-patients/

The same United Health that is endorsed by AARP and sells its Medicare programs to AARP members

Then there is this video by Dr. Eric Bricker, he demonstrates how Medicare Advantages sort of “cooks the books” so that they are technically not spending as much on pt care as their contract with Medicare/Feds they agreed to pay on pt care.

https://www.ahealthcarez.com/

Dr. Bricker also has this website where he has created videos that describe what he has uncovered about how our healthcare system is not much more than your basic for-profit corporations

https://www.ahealthcarez.com/

what percentage of total medical expenses is total prescription costs?

Based on the search results provided, prescription drug costs represent a significant portion of total medical expenses in the United States. Here are the key points:

1. In 2021, the U.S. health care system spent $603 billion on prescription drugs, before accounting for rebates. Of this amount, $421 billion was spent on retail drugs[2].

2. Total inflation-adjusted expenditures on prescription drugs grew from $520 billion in 2016 to $603 billion in 2021, a 16 percent increase[2].

3. In 2016, prescription drug costs accounted for $329 billion out of $3,337 billion (17.9% of GDP) spent on national health expenditures[1].

4. As of 1998, prescription drugs accounted for almost 16 percent of total health care expenditures[3].

5. Specialty drugs, which are typically high-cost medications, represented 50% of total drug spending in 2021[2].

While the exact percentage for the most recent year is not explicitly stated in the search results, we can infer that prescription drug costs continue to represent a substantial portion of total medical expenses. Based on the trend from 1998 to 2016 and the continued growth in drug spending, it’s likely that prescription drugs currently account for somewhere between 15-20% of total medical expenses in the United States.

It’s important to note that these figures can vary depending on factors such as whether retail or non-retail drugs are included, and whether rebates and discounts are accounted for in the calculations.

Citations:
[1] https://www.actuary.org/content/prescription-drug-spending-us-health-care-system
[2] https://aspe.hhs.gov/sites/default/files/documents/88c547c976e915fc31fe2c6903ac0bc9/sdp-trends-prescription-drug-spending.pdf
[3] https://hpi.georgetown.edu/rxdrugs/
[4] https://www.cbo.gov/publication/57772
[5] https://www.healthsystemtracker.org/chart-collection/health-expenditures-vary-across-population/

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Thinking Out Loud: The Chevron Doctrine

https://www.acsh.org/news/2024/07/03/thinking-out-loud-chevron-doctrine-48846

AI image

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FTC Releases Interim Staff Report on Prescription Drug Middlemen

https://www.ftc.gov/news-events/news/press-releases/2024/07/ftc-releases-interim-staff-report-prescription-drug-middlemen

The Federal Trade Commission today published an interim report on the prescription drug middleman industry that underscores the impact pharmacy benefit managers (PBMs) have on the accessibility and affordability of prescription drugs.

The interim staff report, which is part of an ongoing inquiry launched in 2022 by the FTC, details how increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95 percent of all prescriptions filled in the United States.

This vertically integrated and concentrated market structure has allowed PBMs to profit at the expense of patients and independent pharmacists, the report details. 

“The FTC’s interim report lays out how dominant pharmacy benefit managers can hike the cost of drugs—including overcharging patients for cancer drugs,” said FTC Chair Lina M. Khan. “The report also details how PBMs can squeeze independent pharmacies that many Americans—especially those in rural communities—depend on for essential care. The FTC will continue to use all our tools and authorities to scrutinize dominant players across healthcare markets and ensure that Americans can access affordable healthcare.”

The report finds that PBMs wield enormous power over patients’ ability to access and afford their prescription drugs, allowing PBMs to significantly influence what drugs are available and at what price. This can have dire consequences, with nearly 30 percent of Americans surveyed reporting rationing or even skipping doses of their prescribed medicines due to high costs, the report states.

The interim report also finds that PBMs hold substantial influence over independent pharmacies by imposing unfair, arbitrary, and harmful contractual terms that can impact independent pharmacies’ ability to stay in business and serve their communities. 

The Commission’s interim report stems from special orders the FTC issued in 2022, under Section 6(b) of the FTC Act, to the six largest PBMs—Caremark Rx, LLC; Express Scripts, Inc.; OptumRx, Inc.; Humana Pharmacy Solutions, Inc.; Prime Therapeutics LLC; and MedImpact Healthcare Systems, Inc. In 2023, the FTC issued additional orders to Zinc Health Services, LLC, Ascent Health Services, LLC, and Emisar Pharma Services LLC, which are each rebate aggregating entities, also known as “group purchasing organizations,” that negotiate drug rebates on behalf of PBMs.

PBMs are part of complex vertically integrated​ health care conglomerates, and the PBM industry is highly concentrated. As shown in the below image, this concentration and integration gives them significant power over the pharmaceutical supply chain. The percentages reflect the amount of prescriptions filled in the United States.  ​

Image

The interim report highlights several key insights gathered from documents and data obtained from the FTC’s orders, as well as from publicly available information:

• Concentration and vertical integration: The market for pharmacy benefit management services has become highly concentrated, and the largest PBMs are now also vertically integrated with the nation’s largest health insurers and specialty and retail pharmacies.
  • The top three PBMs processed nearly 80 percent of the approximately 6.6 billion prescriptions dispensed by U.S. pharmacies in 2023, while the top six PBMs processed more than 90 percent.
  • Pharmacies affiliated with the three largest PBMs now account for nearly 70 percent of all specialty drug revenue.
• Significant power and influence: As a result of this high degree of consolidation and vertical integration, the leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.
  • The largest PBMs often exercise significant control over what drugs are available and at what price, and which pharmacies patients can use to access their prescribed medications.
  • PBMs oversee these critical decisions about access to and affordability of life-saving medications, without transparency or accountability to the public.
• Self-preferencing: Vertically integrated PBMs appear to have the ability and incentive to prefer their own affiliated businesses, creating conflicts of interest that can disadvantage unaffiliated pharmacies and increase prescription drug costs.
  • PBMs may be steering patients to their affiliated pharmacies and away from smaller, independent pharmacies.
  • These practices have allowed pharmacies affiliated with the three largest PBMs to retain high levels of dispensing revenue in excess of their estimated drug acquisition costs, including nearly $1.6 billion in excess revenue on just two cancer drugs in under three years.
• Unfair contract terms: Evidence suggests that increased concentration gives the leading PBMs leverage to enter contractual relationships that disadvantage smaller, unaffiliated pharmacies.
  • The rates in PBM contracts with independent pharmacies often do not clearly reflect the ultimate total payment amounts, making it difficult or impossible for pharmacists to ascertain how much they will be compensated.
• Efforts to limit access to low-cost competitors: PBMs and brand drug manufacturers negotiate prescription drug rebates some of which are expressly conditioned on limiting access to potentially lower-cost generic and biosimilar competitors.
  • Evidence suggests that PBMs and brand pharmaceutical manufacturers sometimes enter agreements to exclude lower-cost competitor drugs from the PBM’s formulary in exchange for increased rebates from manufacturers.

The report notes that several of the PBMs that were issued orders have not been forthcoming and timely in their responses, and they still have not completed their required submissions, which has hindered the Commission’s ability to perform its statutory mission. FTC staff have demanded that the companies finalize their productions required by the 6(b) orders promptly. If, however, any of the companies fail to fully comply with the 6(b) orders or engage in further delay tactics, the FTC can take them to district court to compel compliance.

The FTC remains committed to providing timely updates as the Commission receives and reviews additional information.

The Commission voted 4-1 to allow staff to issue the interim report, with Commissioner Melissa Holyoak voting no. Chair Lina M. Khan issued a statement joined by Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya. Commissioners Andrew N. Ferguson and Melissa Holyoak each issued separate statements.  

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If “we” end up with “Medicare for all” or some form of “universal healthcare system”  Could this be the template for such a program? Does anyone believe that our private health insurance industry would be against that or would they throw untold $$$ into hiring lobbyists to help ensure that Congress goes down the path to create such a “healthcare for all”

Insurers brought in $50B through ‘questionable’ Medicare Advantage coding: WSJ

https://www.beckerspayer.com/payer/insurers-brought-in-50b-through-medicare-advantage-coding-wsj.html

Medicare Advantage plans received $50 billion in payments between 2018 and 2021 for “questionable diagnoses” insurers added to medical records, a Wall Street Journal investigation published July 8 has found. 

The Journal investigated billions of Medicare Advantage records and found that some conditions were diagnosed at a much higher rate among Medicare Advantage beneficiaries than among traditional Medicare beneficiaries. For example, diabetic cataracts were diagnosed much more often among Medicare Advantage beneficiaries than among traditional Medicare beneficiaries, the Journal found. 

The federal government pays Medicare Advantage plans a rate per beneficiary based on their diagnoses.  

CMS does not reimburse MA plans for beneficiaries with non-diabetic cataracts, a common condition among older adults, according to the Journal. The government does reimburse for diabetic cataracts. CMS paid Medicare Advantage plans more than $700 million for diabetic cataracts diagnoses between 2018 and 2021, the investigation found. 

A spokesperson for UnitedHealth, the largest Medicare Advantage insurer, told the Journal its analysis was “inaccurate and biased.” Medicare Advantage plans code diagnoses more completely and ensure diseases are caught earlier, the spokesperson told the outlet. 

The Journal’s investigation also found some Medicare Advantage beneficiaries were diagnosed with serious diseases in their medical records, but no evidence of treatment for the disease appeared in these patients’ records. Among beneficiaries who had a diagnosis of HIV added to their record by their insurer, just 17% received treatment for the disease, according to the investigation. Among beneficiaries who were diagnosed with HIV by their physician, 92% received treatment. 

The Journal’s investigation is the latest examining upcoding by MA plans. A 2022 report in The New York Times alleged some insurers incentivized employees or physicians to add diagnoses to patients’ reports. Nearly every major payer has been accused of overbilling by a whistleblower, the federal government or an investigation by HHS’ Office of Inspector General. 

MedPAC, which advises the government on Medicare issues, estimates the federal government will spend $83 billion more on Medicare Advantage beneficiaries than if they were enrolled in fee-for-service Medicare. Coding intensity in MA will be 20% higher than in fee-for-service in 2024, according to the commission. 

Read the Journal’s full report here. 

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I don’t agree with this author’s opinion of what the overturning of Chevron doctrine is going to do to necessarily harm our society’s health. One of the biggest generators of CO2 is the biological functions of most organisms’ metabolism.

One thing that appears that could happen is that the DEA will have its hands tied in generating new interpretations of the CSA. I doubt that anyone within the chronic pain community believes that there is anyone working in the DEA who is an expert on controlled substances’ appropriate use in treating chronic pain and other appropriate uses for controlled meds?  Does anyone think that anyone within the DEA has a clue about the underlying causes of addiction and substance abuse, nor have a working knowledge about how to help those who are labeled as a addict and wish to get sober?

Then there is this little law that has been “on the books” since 1935

42 USC 1395: Prohibition against any Federal interference

https://uscode.house.gov/view.xhtml?req=(title:42%20section:1395%20edition:prelim)

With the End of Chevron, Health and Environmental Experts’ Hands Are Tied

We need the rule of law to protect public health

https://www.medpagetoday.com/opinion/climate-checkup/110995

The irony of a jubilant Fourth of July parade I attended with my kids last week — with marching bands, people in costume, and colorful floats — is that the U.S. government has never been more chaotic. The fragility of our democracy has been thrown into sharp relief over the past few months with a partisan Supreme Court placing a heavy finger on rightward leaning scales and the great unknown of November elections. The legislative branch of government, with all its foibles, then becomes the most secure path forward for those of us who like to breathe air, drink water, and not overheat.

The Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo on June 27 overturning what’s known as “Chevron deference” prioritizes business interests over public health in a decision that weakens the ability of agencies to enforce regulations, such as restricting power plant pollution It says that agencies like the Environmental Protection Agency (EPA) are actually not the experts in environmental protection, but rather judges are. Now, agencies must go to court with industries that dump pollutants into the water or that poison our air because their right to make money precedes everyone’s right to breathe.

There is an obvious problem with this: judges are not experts in everything, only the law. When I take care of patients, I don’t present a variety of therapeutic approaches to a judge so they can adjudicate what I should prescribe. I work with my patient to find the right treatment for them. Similarly, I don’t want a judge and an oil company deciding how much environmental damage is just enough because they are decidedly not experts in environmental or public health protection, nor do they necessarily have the public interest at heart.

The downstream consequences of the ruling are broad. Anything that requires regulation could be affected: from publicly funded health insurance programs (CMS) to the food and drug review systems (FDA) to our environment. For decades, Chevron deference has protected programs like Medicare and Medicaid, with expert federal agencies like CMS being charged with interpreting and implementing the regulations. Issues related to environmental, public, and individual health are extremely complex and should be in the hands of experts, but after this Supreme Court ruling, experts’ hands are tied.

Those of us working to protect public health have supported regulations to advance air quality standards and to limit toxic substances like PFAS. Environmental regulations form a bulwark, checking the potential unregulated greed of industries whose corporate goals are profit and not public health (not even the public health of their shareholders). The hostility to government regulation also comes at the expense of the lives of the hostile: overturning rules that protect all of us will harm the entire country. It amounts to shooting ourselves in the foot, with the caveat that insurance companies can argue in court if they want to cover the doctor bills.

Many medical societies came together to draft an amicus brief  from which Justice Elena Kagan drew on in her dissent as she highlighted the “judicial hubris that the court has demonstrated in its overreaching power play. The long-standing rule of Chevron deference has allowed agencies to protect and advance the public’s health and has ensured that healthcare laws are interpreted and implemented appropriately. Since the Supreme Court’s conservative majority seeks to up end  the power of administrative agencies to do their jobs, legislation appears to be one of our few options to protect public health from climate and environmental degradation.

For example, one legal theory that has come up time and again is a carbon price that would function independently of a biased judiciary and would nudge the economy toward clean energy options and thus a healthier planet. Such federal legislation would acknowledge the health costs of climate change and fossil fuel pollution and be an effective means to reduce climate pollution. Congressional authority to cap carbon dioxide emissions was even noted by Chief Justice John Roberts to be a “sensible solution,” although the Chevron ruling curtails EPA’s ability to engage in cap-and-trade systems. Federal legislation that places a steadily increasing carbon fee at the source (where coal, oil, or gas comes out of the ground or into the country), rather than cap-and-trade, may circumvent those limitations while at the same time catalyzing the predictable transition to healthy non-carbon forms of energy throughout the country.

What we have seen the Supreme Court do is the exact opposite of democracy. It pins the biases of a minority against the welfare and well-being of the majority. With a judicial branch in the pocket of big business and fossil fuel, it becomes even more important to support legislation that cannot be so easily undone. Putting a price on carbon pollution is one example of commonsense and economically feasible legislation that has a chance to extend the environmental protections our communities deserve.

I waved my flags with everyone else at that July 4 parade, but that doesn’t mean I’m satisfied with the current state of the government. I want our leaders to do better to support us and our health.

Elizabeth Cerceo, MD, is an associate professor, academic hospitalist, and director of climate health at her medical school. Cerceo also co-chairs the Education Committee and Climate-Smart Health Care Committee for the Medical Society Consortium on Climate and Health. Her views do not necessarily reflect the views of her employer.

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Two dozen members of Congress sent a letter recently to the assistant secretary of defense for health affairs and the director of the Defense Health Agency regarding concerns about Express Scripts and how it’s running the Tricare pharmacy program. Led by Sen. Elizabeth Warren (D-Mass.) and Rep. Buddy Carter (R-Ga.), the letter highlights that the second largest PBM in the nation is both administering the program and participating in it, raising the bipartisan concern that it’s using this exclusive contract to overcharge taxpayers and drive out competition at the expense of our service members. It also quotes Hugh Chancy, NCPA’s immediate past president, who spoke at a House Oversight Committee hearing in September 2023 and described the harms of ESI’s steering practices on one of his patients, helping to illustrate the problems people are experiencing as a result. We applaud the legislators for holding the Department of Defense and ESI accountable and pushing to preserve patient access to medications and pharmacies.

https://ncpa.org/newsroom/qam/2024/07/09/icymi-legislators-slam-express-scripts-re-tricare-pharmacy-program

you will have to CLICK  ONCE OR TWICE TO GET GRAPHIC TO BE READABLE

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