How opioid prescriptions are tracked and monitored by law enforcement and health care providers

https://whyy.org/segments/how-opioid-prescriptions-are-tracked-and-monitored-by-law-enforcement-and-health-care-providers/

Medical sociologist Liz Chiarello discusses the effects of prescription drug monitoring programs on both patients and physicians.

Associate Professor of Sociology at Saint Louis University, Liz Chiarello, argues that new drug surveillance programs called Prescription Drug Monitoring Programs (PDMPs) blur the lines between law enforcement and health care. 

In her recently published book, “Policing Patients: Treatment and Surveillance on the Frontlines of the Opioid Crisis,” Chiarello discusses instances of patients being denied care and doctors being prosecuted for overprescribing pain medications. 

PDMPs were put in place as one solution in response to the growing number of opioid-related deaths in the United States. 

A PDMP is a database that tracks prescriptions of controlled substances, like morphine or oxycodone. These programs were made to document and flag doctors who overprescribe opioids to patients and identify patients who visit several doctors to obtain new prescriptions. Law enforcement agents, prosecutors, physicians, and pharmacists all have access to this database and medical information. This brings up questions about privacy, says Chiarello, and whether or not access to this information goes against the privacy rights of the individual or the patient. 

[The PDMP], “undermines the way that we usually think that medicine should work and the privacy protections that are associated with our health data,” says Chiarello.   

PDMPs do not only affect patients. They flag physicians too. 

“If doctors violate the stipulations under which they’re allowed to provide these controlled medications, then they’re extremely vulnerable because you go from being a doctor in the eyes of the law to being a drug dealer in the eyes of the law,” Chiarello says.  

Physicians can face arrest, prosecution, and even jail time if law enforcement notices a pattern of overprescribing opioids to their patients. 

So, what happens when a patient with suspicious opioid-use history goes to the pharmacy to request a new prescription? 

Chiarello says a pharmacist might say, “Well, I looked you up in the database and the database shows me that you just went to two different doctors in the last month. And so, this is too soon for me to dispense this to you.” 

Chiarello says this direct communication from the pharmacist, “says to the patient, I’m looking at you. And I have data about what you’ve been doing when you’re not at my pharmacy. But then it also tells them, you’re not really welcome back here. Like, don’t come back to me because I’m surveilling you.” 

The goal of these programs is to deter people from overusing opioids, and therefore lessen the impact of the opioid crisis. However, people who use opioids, larger amounts that might be flagged by a PDMP, are not all opioid abusers. For example, there are patients with chronic pain who have been living with a certain prescription that allows them to function normally in their daily lives. Without it, they would be living in constant pain. 

Chiarello dives deeper into the topic of PDMPs and how these programs impact patients with chronic pain and the future of drug prescription regulation in a conversation with Maiken Scott, host of The Pulse.

Interview Highlights: 

Doctors’ response to PDMPs

Doctors have had to figure out how to rework their practice to navigate a shifting legal territory. And so what a lot of doctors have done is they just refused to provide opioids. And they feel like that protects them, but it doesn’t necessarily protect their patients. So this is a space where the ethics of medicine and the care for the patient bump up against the fear of law enforcement.

… [Doctors] have patients sign pain contracts, which are these legalistic documents that say things like, I am your only doctor, you’re only going to see me, you are only going to go to this one pharmacy. I’m going to test your urine when I want to. You’re not going to go to the hospital asking for opioids, and if you do any of those things, if you violate the stipulations of our contract, you are no longer my patient. I will cut you off.

What happens to patients who rely on opioid prescriptions to get through the day just because their chronic pain is so terrible?

It’s really devastating what’s happened to those patients. The biggest driver is the CDC guidelines on using opioids to treat pain that came out in 2016 … and they make a lot of suggestions about what dosage patients should be on, when to initiate a dose. And it’s really supposed to be for people who are newly on opioids. But by the time those came out, there were people who had been on opioids for 20 years, who were in chronic pain, who are on very high doses of opioids. And there was a lot of pressure to taper those people down. The measurement is … called a morphine milligram equivalent, an MME. And the CDC guidelines say that people should be under 90. And a lot of people are on 300 or 350. And so a lot of doctors are concerned that that creates a red flag for them to law enforcement. And so they then try to cut those patients down often very quickly and without consent. So you have patients who had been well managed on opioids, who suddenly are not well managed. And, they’re thrust into pain. And then they can’t find another doctor who’s willing to prescribe for them. And so those patients, those patients are really suffering.

Could you see the PDMPs being used in any other way? Could you see their use being expanded?

I have made the argument that the PDMP is a law enforcement surveillance tool. And that, even if it’s in health care, it retains the vestiges of being a law enforcement surveillance tool … And so, we have to rethink whether we think prescription data is private data, or if we think it’s something else, the way that it’s being treated right now. 

But you also asked if I can see it expanding, and you know the saying… matter can be neither created nor destroyed. Well, technology is so easily created and very difficult to destroy. Because once you’ve created the technology, suddenly you realize there are all kinds of different uses for the technology. And so, one of the things that has changed with PDMPs is in a couple of states, they’ve started to put drug arrest data in the PDMP. So, they’re actually combining law enforcement data with health care data in the same system. 

But we can also certainly imagine a lot of other drugs being policed. I’m thinking about drugs used for reproductive health. I’m thinking about drugs used for gender affirming care. Once you have this kind of system, it’s very easy to add other drugs and to track other kinds of drugs. And so, I think they’ve only just barely dipped their toes into what kinds of medications they’re going to surveil.

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More Deception from Express Scripts!

https://pharmacistactivist.com/2024/September_2024.shtml

The lead commentary in the August issue of The Pharmacist Activist was, “Express Scripts Attempts to Change its Identity,” that responds to its full-page advertisement in major newspapers. The PBM has followed that with another full-page ad that continues the deception and lies, but provides no transparency regarding its operations, rebates from pharmaceutical companies, steering patients to its own pharmacies, and other “facts” which they accuse its critics of ignoring. The new ad begins with the following pronouncement in large type.

(Editor’s comment: A majority of the FTC Commissioners approved the report but Express Scripts prefers that the public knows the opinion of the one Commissioner who dissented).

(Editor’s comment: The large increase in drug prices during Express Scripts’ “watch” contradicts any claims of success in achieving affordability).

(Editor’s comment: Express Scripts can provide very specific data when it considers it to be in its own interest to do so. There are some references provided in very small type at the bottom of the advertisement. The two references provided as the source of the two statistics noted are attributed to Evernorth, the parent company of Express Scripts. There is no reason to think that this self-generated report is any more credible than the other claims made by Express Scripts).

(Editor’s comment: The most revealing word in this statement is “nearly.” Express Scripts is able to identify the specific percentage of rebates but refuses to do so. Does 90% qualify as “nearly?” 75%? 51%? The claims processed by the three major PBMs have a cost of billions of dollars. Even if they retain only a small percentage of the fees and rebates, the amount is huge. The rebate game is a self-enrichment contest that creates an incentive for higher drug prices and benefits only the PBMs and pharmaceutical companies. Everyone else loses – it is fraudulent and must be terminated).

(Editor’s comment: “Billions of data points” suggest that the PBMs were responsive to the FTC’s request for information. However, the FTC was delayed and frustrated in addressing concerns about PBMs because they did not respond in providing requested information on a timely basis and most likely are still withholding information needed for a complete analysis of its operations and monopolistic practices. The allegation by Express Scripts that the FTC used “convenient timing” in issuing its report is disingenuous. The FTC had announced its plan to sue Express Scripts and other PBMs. It is actually Express Scripts that is exercising “convenient timing” by suing the FTC as a preemptive action before the FTC filed its lawsuit. Express Scripts is taking a page out of Walmart’s playbook when, several years ago in anticipation of a lawsuit by the federal government for its role in opioid overdosage deaths, Walmart sued the federal government. Walmart’s lawsuit was dismissed and the one filed by Express Scripts should also be dismissed).

(Editor’s comment: PBMs receive larger rebates for the most expensive drugs. More expensive drugs are often placed in the more favorable tiers of their formularies, even when less expensive alternatives are available. Patients, employers, and taxpayers pay more. Pharmacists are also victims of the greed, fraud, and policies of the PBMs, and many pharmacies have closed because they can’t survive financially).

The Express Scripts suit against the FTC seeks to have the agency retract its report that is critical of the PBMs… To challenge the statements in the FTC report, Express Scripts primarily relies on the “research” of an economist who essentially concludes that the FTC’s claims about the PBMs “are not supported by the data.” The economist’s conclusions are strongly refuted in a comprehensive analysis by 46Brooklyn Research in its detailed report of September 20, “Express Scripts, Inc. vs. The Federal Trade Commission.” The CEO of 46Brooklyn Research is Antonio Ciaccia whose investigations exposed the PBM fraud in Ohio several years ago.

The FTC lawsuit

On September 20 the FTC sued the three largest PBMs. The title and subtitle of the FTC press release are noted below:

The FTC press release includes the following allegations:

Rahul Rao, the Deputy Director of the FTC’s Bureau of Competition, notes: “Caremark, ESI, and Optum–as medication gatekeepers–have extracted millions of dollars off the backs of patients who need life-saving medications. The FTC’s administrative action seeks to put an end to the Big Three’s exploitative conduct and marks an important step in fixing a broken system…”

For many years, pharmacists have been victimized by the deception and fraud of the PBMs, and have been very frustrated in not having our important concerns understood and/or effectively addressed by regulators, legislators, and federal agencies. Although there is much still to be accomplished, it is very encouraging that the FTC has investigated and understands the problems, and has taken action to sue the PBMs. The leaders and membership of the National Community Pharmacists Association (NCPA) are to be highly commended for providing numerous specific examples and other information that have exposed the egregious policies and terms of the PBM programs. The American Pharmacists Association (APhA) has also been very active in this regard, and both of the organizations, as well as others, are strongly supporting proposed federal legislation with bipartisan support to accomplish PBM reform. The time to accomplish this is short. Every pharmacist should contact their Senator and Representative to ask them (if it is not already known) if they are supporting the legislative proposals and urge them to support them. The specific legislative proposals are:

Others have also exposed the deceptive actions of the PBMs. Matt Stoller is the Director of Research at the American Economic Liberties Projects, and an expert on monopolies. He is the author of the book Goliath: The Hundred Year War Between Monopoly Power and Democracy, and also writes the Substack publication BIG. His commentary on September 23, “Monopoly Round-Up: Lina Khan, Pharma Middlemen and ‘Tasty Rebates,'” provides excellent coverage of the FTC suit. Using Lantus as an example, he notes that its list price in 2019 was $403 for a one-month supply. During 2019, its manufacturer (Sanofi) was giving OptumRx 80% of the list price to be the preferred insulin for its patients. “That’s just $64 going to Sanofi for the drug, and $339 going to OptumRx as a kickback.” In describing how PBMs work, he states:

“They aren’t just middlemen, they are allocators of what really looks perilously close to organized crime loot to a series of conspirators, from pharmaceutical firms to insurers to benefit consultants to large employers.”

Wall Street Journal editorial

The lead editorial in the September 26 issue of The Wall Street Journal is titled, “Higher Health Premiums for All,” and the subtitle is “Lina Khan piles on the anti-PBM bandwagon, to ill effect for consumers.” I responded with the following letter to the editor:

It is unlikely that my letter will be published, but I couldn’t be silent after reading it. If any readers can use any or all of the content of this letter in your communications with the media, legislators, or others, please feel free to do so in your own message. It is not necessary to identify me as the source.

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Doctors Cut Back on Seeing Medicare Patients as Another Pay Cut Looms

Which – how many politicians – are saying that we all need a single healthcare insurance system? Thru the end of Aug, 2024 we have had abt 30 pharmacies closing their doors – for good – every day. 

https://www.pharmaciststeve.com/2275-pharmacies-have-closed-so-far-in-2024/  So the PBMs are running community pharmacies out of  business and Congress is cutting what practitioners in private practice are getting reimbursed for their services.  Here is a video how  Medicare -C insurance companies are “cooking the books” https://www.pharmaciststeve.com/payvider-health-insurance-payer-and-healthcare-provider-combination-explained/ and being able to almost triple the net profit that they are able to produce while contractually committed to spend 85% of premiums they collect on pt care. Insurance companies are pulling their Medicare-C out of certain market and large healthcare system are refusing to sign on with some particular Medicare-C insurance companies. Medicare Advantage insurers ranked by prior auth denial overturn rates

Those still seeing Medicare patients struggle to stay in private practice

https://www.medpagetoday.com/practicemanagement/reimbursement/112273

Will his independent practice be able to survive another Medicare payment cut? That’s what Terre Haute, Indiana internist Pardeep Kumar, MD, wonders each day as the next round of cuts looms.

“We have to see,” Kumar said in a phone interview. “We have around 40% of the population of patients that are on Medicare … Our overall ability to sustain as a private practitioner is significantly under distress because of these cuts.”

Can We Stay in Business?

Kumar and his wife, who is also an internist, are in private practice together and each has taken on outside work at various points in order to keep the practice viable, he said. “I used to be the director of a hospice company outside the practice, and I also [work at] another hospital for geriatric psychiatric patients. I go and see them so that we have additional revenue to sustain our practice.”

CMS is proposing a 2.8% cut in the Medicare fee schedule for the 2025 fiscal year, which would, if approved by Congress, come on top of a 1.69% cut in 2024. Often, Congress reverses the cuts, although this year they did so only partially. The cut is currently in limbo — along with the rest of the federal budget — now that Congress has passed a short-term budget deal keeping the government funded at current levels through mid-December, after the election.

Doctors’ groups such as the American Medical Association, to which Kumar belongs, argue that instead of cutting doctor pay, CMS should adopt an inflation-adjusted reimbursement model. “When the cost of living goes up, there should be some [similar] adjustment in the physician reimbursement model,” Kumar said. “That will provide sustainability, especially for the private practice.”

Helping private practices stay in business, rather than forcing doctors to close their private practices and work for hospital systems, “will actually eventually lower the cost of care … because reimbursement in private practice is relatively lower than hospital-based [reimbursement] so there’s a cost saving for health insurers,” including Medicare, said Kumar.

Although there is some movement in Congress toward site-neutral payment, in which hospitals would get the same pay as private practices for providing the same outpatient services, “hospitals are fighting that, because they are saying that they are employing more and more physicians now … They’re getting site benefit from that, and they’re able to pay the physicians to keep them employed,” he said. “I also sit on the hospital board here, and they are saying their margins are very shrunken and they will not be able to sustain or at least employ as many physicians if they [institute site-neutral payment].”

Primary Care Shortage Persists

Donaldo Hernandez, MD, a hospitalist in Santa Cruz, California, has seen first-hand how continued Medicare payment cuts are keeping patients from getting care. “Central and northern California can be somewhat expensive places to conduct healthcare business for a number of reasons,” Hernandez said during a telephone interview at which a press person was present. “Even prior to the pandemic … it was really the commercial marketplace that allowed medical practices that have enough money to invest in staff and all the other things that they do to maintain themselves.”

“As we emerged from the pandemic, with the inflationary pressures exerted by the pandemic and the ongoing issues with hiring staff and sundry other things that occurred — such as increases in the cost of electricity, for example, from Pacific Gas & Electric — those pressures really were exerted on medical practices to a much greater extent,” said Hernandez, who is immediate past president of the California Medical Association.

Doctors “really want to see this Medicare population, and yet the economics really forces physicians into sort of a Sophie’s Choice between, ‘Do I see these patients because I want to, and I know they have a need, or do I save my practice from financial uncertainty and the challenges that exist in me being able to hire MAs [medical assistants], back office people and [deal with] all the administrative burdens that are inserted on all medical practices?'” he said.

Hernandez recalled a recent patient he had seen at his hospital for a severe hypoglycemic episode; the patient — who had recently moved to California from Oklahoma to care for her ailing father-in-law — had been in 2 weeks before for a myocardial infarction. “That was treated, managed, and she was placed on some new medications in order to manage that particular medical problem, and was told to follow up with her doctor,” he said. “Well, it turns out she really didn’t have a community doctor that was managing her problems. There was nobody managing those [medication] alterations in an effective way in the outpatient setting … As a consequence, she took her diabetes medications erroneously, and ended up having low blood sugar.”

“The challenge for me was that day and the following day was to try to find her someplace that she could get follow-up,” said Hernandez. “I had two social workers working on it for 48 hours to try to find her a medical home, including within our safety net system, who at this time isn’t taking you Medicare patients because they’re at capacity.” He finally called in a favor with a doctor he knew personally, and was able to get the patient into that practice.

“That’s what we’re seeing throughout the state, is physician practices are just not able to take these new patients on,” he added. “With every subsequent cut or pullback … It continues to be, in my opinion, an ongoing risk factor for these patients moving forward.”

A Personal Effect of the Shortage

For Rene Bravo, MD, a 65-year-old pediatrician in San Luis Obispo, CA, the cumulative effect of the previous Medicare cuts hit him very personally. He had had private health insurance for himself and had gotten care without a problem, “and I finally went on Medicare and tried to find a physician,” Bravo said in a phone interview. “I couldn’t find one — they were all either full up or not available … I finally found an internist who took Medicare, but I had to pull some strings.”

“If I have trouble finding a physician, what’s going on for other folks in the population?” he said. “The fact that these reimbursement cuts are coming — everybody is aware of these things, and it just creates a profound amount of insecurity in the system.”

“This has got to be fixed once and for all,” Bravo said. “The Medicare payment system needs to be significantly revamped because this is creating a lot of stress on healthcare provision for seniors. There’s nothing about this that is right.”

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FTC Sues Top Pharmacy Benefit Managers Over Insulin Prices

https://www.medpagetoday.com/washington-watch/washington-watch/112064

The three companies process about 80% of prescriptions in the U.S.

The federal government is suing three big pharmacy benefit managers (PBMs) over a system of drug rebates that regulators say has made the price of insulin soar for patients with diabetes.

Three companies that process about 80% of prescriptions in the U.S. — Caremark, Express Scripts, and OptumRx — have engaged in anticompetitive practices that spur price increases, the Federal Trade Commission (FTC) alleged in a lawsuit filed Friday.

PBMs run prescription drug coverage  for insurers, large employers, and other clients. They set up formularies, or lists of covered drugs, and negotiate rebates off the drug prices.

The FTC said the rebating practices of the three companies have led to artificially inflated list prices for people. List prices are what a drugmaker initially sets for a product and what people who have no insurance or plans with high deductibles are sometimes stuck paying for prescriptions.

The price of insulin has emerged as a big campaign topic during this year’s presidential election.

For years, PBMs have been the target of ire for politicians, patients, and others, but they have said they play an important role in controlling drug costs and pass along most of the discounts they negotiate to their clients.

Some of the PBMs named by the FTC said in statements that the government’s action showed that it does not understand how drug pricing works.

But the FTC said the current system prioritizes insulins that come with high list prices and excludes lower-priced products. That, the FTC said, helped PBMs and their group purchasing organizations “line their pockets while certain patients are forced to pay higher out-of-pocket costs” for insulin.

Caremark said Friday that it negotiates deep discounts for its clients and helps make insulin affordable for their members.

Express Scripts said the FTC has chosen “to ignore the facts and score political points, rather than focus on its duty to protect consumers.”

Optum called the FTC accusations baseless and said PBMs “are the key counterweight to pharmaceutical companies’ otherwise unchecked monopoly power to set and raise drug prices.”

The FTC started an inquiry more than 2 years ago into PBMs and said it would seek a range of information about how they do business. The Wall Street Journal reported in July that the FTC was planning to sue the three big PBMs over their drug price negotiation tactics.

That same month, the FTC published a report describing PBMs as powerful middlemen who “may be profiting by inflating drug costs and squeezing Main Street pharmacies.” Express Scripts said earlier this week that it wanted that report retracted and was suing the agency.

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I have read some of these small paragraphs several times and I WONDER what the final interpretation of what these small paragraphs are going to end up being what will be applied to many parts of our healthcare system and will that really mean better patient care and outcomes? Why am I skeptical?

White House unveils sweeping healthcare safety efforts: 8 notes

https://www.beckershospitalreview.com/patient-safety-outcomes/white-house-unveils-sweeping-healthcare-safety-efforts-8-notes.html

The Agency for Healthcare Research and Quality, a division of HHS, has partnered with other federal agencies and health systems to

create a national safety alliance as part of broader commitments from the federal government to reduce preventable harm and improve care quality industrywide.

The alliance was among efforts shared at the White House Sept. 17 during a forum on patient safety hosted by the President’s Council of Advisors on Science and Technology — a working group of more than two dozen thought leaders in the academic, government and private sectors. AHRQ first shared the concept of a national safety alliance in 2023, with more details emerging at the forum. 

Eight things to know:

1. The National Action Alliance for Patient and Workforce Safety is a collective of federal agencies, heath systems, medical associations, policymakers and patient groups that will work together to apply evidence-based harm reduction strategies across all populations and settings, according to an AHRQ overview. The first area of focus will be hospital care settings.

2. The alliance will rely on a total-systems approach to safety improvement and align with the  National Action Plan to Advance Patient Safety, which aims to reduce preventable harm by 50% by 2026. Participating systems will conduct a baseline safety assessment to identify priority areas for improvement. Through the alliance, they’ll have access to implementation support, funding opportunities and other resources to support improvement efforts.  

3. On Nov. 1, the alliance will release an initial version of a dashboard to monitor the nation’s progress toward eliminating preventable patient and workplace harms across all settings.

4. As part of the federal government’s broader efforts to improve safety in healthcare, the CDC has also released new guidance to support hospitals in reducing diagnostic errors — which are responsible for nearly 800,000 deaths per year. The CDC will also develop new measures to advance recognition and treatment of sepsis.

5. The White House also secured commitments from 22 national and regional organizations to promote a “whole-of-society approach” to healthcare safety. For example, Press Ganey has committed to building an AI-backed analytics dashboard next year that will integrate key safety data points on patient outcomes, the workforce, safety culture and more. The Association of American Medical Colleges also plans to share a revised set of education competencies that focus on safety and quality improvement skills for physicians. 

6. In addition, the White House said 16 systems have committed to safety improvement actions. Together, these systems provide healthcare to more than 30 million patients and employ hundreds of thousands of workers:

• Ascension (St. Louis)
• Baylor, Scott and White Health (Dallas)
• Beth Israel Lahey Health (Cambridge, Mass.)
• Braden Health (Ave Maria, Fla.)
• CommonSpirit Health (Chicago)
• Highmark Health (Pittsburgh)
• MedStar Health (Columbia, Md.)
• Mercy Health (St. Louis)
• Nemours Children’s Health (Jacksonville, Fla.)
• Novant Health (Winston-Salem, N.C)
• Prisma Health (Greenville, S.C.)
• Sanford Health (Sioux Falls, S.D.)
• SSM Health (St. Louis)
• Trinity Health (Livonia, Mich.)
• University of California Health (Oakland, Calif.)
• University Hospitals (Cleveland)

7. In another initiative, the Veterans Health Administration, a component of the Department of Veterans Affairs, will roll out a new national program next year to prevent falls across care settings. All VA health system leaders will also sign a safety culture commitment by mid-2025.

8. The patient safety alliance’s launch comes a little over a month after CMS added seven new measures to its hospital inpatient quality reporting program as part of its Hospital Inpatient Prospective Payment System final rule released Aug. 1. The patient safety measure will take effect in 2025. The patient safety structural measures assess whether hospitals have a structure and culture that prioritize safety through five domains: leadership committed to eliminating preventable harm; strategic planning and organizational policy; a culture of safety and learning; accountability and transparency; and patient and family engagement, according to a CMS final rule.

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CVS’ Oak Street Health to pay $60M to settle Medicare Advantage kickback allegations

https://www.beckershospitalreview.com/disruptors/cvs-oak-street-health-to-pay-60m-to-settle-medicare-advantage-kickback-allegations.html

CVS subsidiary Oak Street Health has agreed to pay $60 million to settle accusations that it violated the False Claims Act by offering kickbacks to third-party insurance agents in return for referring older adults to its primary care clinics.

The U.S. government claimed that in 2020, Oak Street Health, a primary care provider, launched a program to grow its patient base. According to a Sept. 18 news release from the Justice Department, as part of this program, third-party insurance agents reached out to older adults eligible for or enrolled in Medicare Advantage, promoting Oak Street Health’s services. 

These agents then allegedly connected interested individuals with Oak Street Health staff through a three-way phone call, known as a “warm transfer,” or by submitting their information electronically. In return, Oak Street Health paid the agents $200 for each person it referred. According to the release, these payments encouraged agents to prioritize financial gains for Oak Street Health over the best interests of the older adults. 

The settlement addresses allegations that, between September 2020 and December 2022, Oak Street Health knowingly submitted false claims to Medicare by offering illegal payments to agents, violating the Anti-Kickback Statute.

CVS acquired Oak Street Health for $10.6 billion in May 2023. 

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Texas system shutters Medicare Advantage plan

https://www.beckerspayer.com/payer/texas-system-shutters-medicare-advantage-plan.html

Southwestern Health Resources will not offer Medicare Advantage plans in 2025, D Magazine reported Sept. 17. 

In emails obtained by D Magazine, the company said it decided to sunset its Medicare Advantage plan because of increasing competition and utilization, and regulatory requirements. 

“Medicare Advantage plans continue to face significant headwinds nationally related to challenging regulatory changes and increasing benefit utilization,” a spokesperson for Southwestern Health Resources told Becker’s. “We remain committed to providing high-quality services to our partners and members through this enrollment period. There will be no change for our members in 2024.”

Farmers Branch, Texas-based Southwestern Health Resources operates Care N’ Care, an MA insurer. The company has around 26,000 Medicare Advantage members, according to CMS enrollment data. 

Southwestern Health Resources is a joint venture between UT Southwestern Medical Center and Texas Health Resources. 

In regulatory documents filed Sept. 5, Southwestern Health Resources said it would lay off 129 employees. D Magazine reported 125 health plan employees were notified their jobs would be eliminated. 

“After careful consideration, we adjusted our organizational structure and aligned the staffing model to meet current business needs as the health care landscape continues to evolve. We are working to maximize value, quality, and service for our customers,” a Southwestern Health Resources spokesperson told Becker’s. 

Most of these jobs will end in January, D Magazine reported, with some roles staying on to manage the wind-down of the plan.

“In an effort to give impacted employees the best opportunity to successfully transition to another role, we have provided more than the required 60 day notice, as well as support and resources. In addition, we are working to place them in open roles within the organization,” the spokesperson said. 

Several insurers have cut back on their Medicare Advantage offerings, facing increasing medical utilization and lower reimbursements from CMS. 

Humana, CVS Health and Centene have all said they will exit some markets in 2025. 

In June, Blue Cross and Blue Shield of Kansas City said it would exit the MA market at the end of 2024, also citing increasing regulatory requirements and financial headwinds. 

Other health systems have shut down their affiliated Medicare Advantage plans in recent years. In 2023, Fredericksburg, Va.-based Mary Washington Healthcare ended its MA plan. 

In 2022, Inter Valley Health Plan, affiliated with Pomona Valley Hospital Medical Center, ended its Medicare Advantage operations. 

Read more here. 

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2275 pharmacies have closed so far in 2024

https://benjaminjolley.substack.com/p/2275-pharmacies-have-closed-so-far

“It’s not the way I wanted it to go,” he says sadly. “You do what you’re supposed to do. You go to college, get a doctorate, start a small business in a small town, support the community and it’s not even close to being a viable option.”

“This isn’t because the community didn’t support us. It’s because we lose money on every prescription we fill.”

Those are the words of Tom Wullstein, owner of Brandon Pharmacy. He is talking about his own pharmacy, but the same words could have been said by over a thousand pharmacy owner/operators this year alone.

In pharmacy policy circles, a lot of numbers get thrown around trying to variously prove that a) small business pharmacy is dying and needs change or b) small business pharmacies are doing fine, there’s more of them than ever before! Whenever I see these white papers, especially those put out trying to prove hypothesis b, I feel like the authors are saying “who ya going to believe, me or your lying eyes?” So, I decided to tackle the question myself, recruiting help as I could from like-minded people.

Over the last several weeks, I’ve worked on a dataset of pharmacies that were active in the National Council of Prescription Drug Programs (NCPDP) database on 1/1/2024 and were no longer active on 9/1/2024. Pharmacies can be de-listed in NCPDP for basically 2 reasons:

1. The pharmacy closes
2. The pharmacy comes under new ownership and obtains new numbers (NCPDP, NPI, DEA, state license, etc.)

I wanted to sort out how many of the de-listings from NCPDP were closures and how many were changes of ownership, so here’s what I did (with help from a ton of volunteers):

1. Pull a list from NCPDP of Community/Retail Pharmacy NPIs that were present on 1/1/2024 and were no longer present on 9/1/2024. This yielded a list of 2577 pharmacies.
2. I assumed that CVS/Walgreens/Rite Aid don’t randomly get new NPIs and I assumed that their corporate HQ is competent in maintaining their NCPDP profiles so I just marked all of them as “Chain Closure.”
3. Winn Dixie very publicly closed all of their pharmacies and sold files to CVS/Walgreens in the process of selling their chain to ALDI, so I just marked all of theirs similarly as “Chain Closure”
4. I put out the list to a few groups of pharmacy employees nationally with ~6000 members total, and asked folks to mark stores they knew about from their local area
5. I googled every remaining pharmacy and marked as closed if the Google Maps location was permanently closed or the reviews said it was closed.
6. I ran the remaining phone numbers through a phone number validation service to weed out disconnected numbers, which were marked as closed.
7. I and several other volunteers placed phone calls to the remaining pharmacies. If the person on the other end answered “pharmacy”, I verified that they were still operating at the same address, and if not, I marked as closed — mostly those were scenarios where a location had acquired the records of a nearby pharmacy.

I estimate that in total, about 40 man-hours of effort was put into this project. The results are as follows:

• 1139 chain closures of large chain pharmacies as per my steps 2 and 3.
• 1136 Closures of independents and small to mid-sized chains as per steps 4-8.
• 298 changes of ownership
• 4 records were duplicates1

I’ve created a map here:

The raw spreadsheet where I did this work is available here.

Since starting this project, many people have asked how to interpret this information. To start with, this data shows that nearly 2300 pharmacies’ worth of employees have been laid off. Most pharmacies employ about 10 people, so that’s about 23,000 pharmacy staff laid off. Additionally, about 1100 entrepreneurs have had their dreams of pharmacy ownership crushed just this calendar year, and can probably resonate with Tom Wullstein’s comments.

For context, on 1/1/2024, there were 60,867 active Community/Retail NPIs/locations in NCPDP, and there have been 857 new NPIs added in the relevant time frame23. While I find “netting out” of openings and closures very distasteful, this means that there are 1720 net closures since 1/1/2024, or in other words a 2.8% drop in number of pharmacy locations nationwide. You can also contextualize this information against any number of academic papers on the same topic, Guadamuz, Alexandar, Zenk, et al. in JAMA in 2019, for example, shows that an average of 1631 pharmacies closed each year as reported in NCPDP from 2010 to 2015, with and average of 2435 pharmacies opening each year for a net average figure of 804 openings every year in that period.

To reiterate, on average every day since January 1, 2024:

• ~5 pharmacy owner-operators have closed their businesses permanently
• ~5 chain pharmacy Pharmacists-in-Charge have had their stores closed
• ~11 neighborhoods lost their pharmacy
• ~110 pharmacists and pharmacy technicians have been laid off

For those that have read this blog before, I think this is unnecessary to say, but the root causes of this incredible number of closures are obvious to me:

1. PBM reimbursements are insultingly low – see the bit about “dispense fee” here
2. PBM reimbursements are based on competition on nonexistent prices outside of 340b — AWP minus 26.3% is not reasonable or relevant, kids.
3. PBM reimbursements are unevenly distributed, with the lion’s share of the money going to “specialty drugs” instead of evenly across prescription drugs – see also: every drug that Mark Cuban talks about when he talks about PBMs.
4. The largest wholesalers charge prices to independents that are much higher than the prices charged to chains, which is visible in the NADAC fluctuations over the last 6 months
5. The opioid litigation has put the largest pharmacies into a lot of debt, which combined with 1, 2 and 3, has resulted in mass closures of pharmacies, particularly Rite Aid, which just exited bankruptcy.
6. Our payment system largely pays variable prices for the service of dispensing based on the exact identity of the pills in the bottle, not based on the service rendered. In other words, PBMs are concentrating all of the profit into a small fraction of items, which their integrated mail-service and “specialty” pharmacies can capture the lions share of the volume from.

I don’t know 100% how to solve this problem of pharmacy closures, but I have ideas about some good places to start:

• H.R. 9096, the Pharmacists Fight Back Act, would go a long way to resolving my concerns 1,2,3 and 6 – it would ensure payments to pharmacies be based on actual cost of goods plus a 2% markup plus a cost-of-dispensing based professional dispense fee across all of the major government programs: Medicaid, Medicare, Federal Employees and TRICARE. I think that if anything like this bill becomes law, ACA exchange plans should be included. This bill would make the pharmacy payments system fair and legible, instead of illegible and slot-machine-esque.
• A Glass-Steagall for Healthcare – Glass-Steagall was a New Deal era law that structurally separated community banking and investment banking. Similarly, I think that in healthcare, we desperately need to outlaw “payvidors.” The opportunities to take advantage of your competitors, evade reasonable regulation, and exploit anyone not inside your system are far too numerous and pervasive to continue to allow United Healthcare and OptumRx to own Optum Specialty Pharmacy and Optum Physicians Group, or to allow CVS/Caremark and Aetna to own CVS/Pharmacy. Pharmacies should not own PBMs, PBMs should not own pharmacies. Health Insurers should not own physician practices. In short, if your job is to manage other people’s money to buy healthcare products and services, you should not be ALLOWED to be in the business of selling those same products and services. These vertically integrated companies are simply too big to care.
• Robinson Patman Act enforcement – the existence of thousands of different prices for identical products in the PBM and pharmaceutical wholesaler businesses is proof that the big 3 in each market have far too much power to twiddle, and in a regime with visible and agressive enforcement of the RPA, none of this nonsense would exist.

All of these solutions are centered in government policy, because even the most red-blooded free-market fundamentalist has to recognize that pharmacy as it exists today is a product of government policy. Medicaid, Medicare, ACA, the FEHBP, state public employee plans, and TRICARE together account for somewhere north of 70% of a typical pharmacy’s revenue. My profession as it exists, exists primarily at the behest of and mercy of the folks in Washington DC and in the various State Capitols. The policy choices that have been made over the last 20+ years are why my profession is struggling and dying. We need help. I hope that we’ll be able to make it so that when an entrepreneurial person gets a doctorate, saves some money, opens a pharmacy to serve their community, and the community chooses to support that pharmacy, that pharmacy thrives.

Most likely for incorrectly coded Long Term Care/Retail “Combo Shops” – each of these were places with two discontinued NPIs for identical pharmacy names/addresses/phone numbers. If you run a combo shop, please make your Long Term Care NPI record have a meaningfully different name than your retail NPI, if only for the sake of seniors using Medicare.gov to compare prices at your pharmacy. If you are “Corner Drug” for the retail NPI, can you make the NPI record be “Corner Drug LTC” for your LTC? If this is not possible due to CMS/NPPES regs of some kind, can we please change that? LTC/retail combo shops are more and more common, and differentiating them in medicare.gov is important!

NCPDP is an excellent source of pharmacy OPENINGS, and less reliable for counting closures. This is because a pharmacy MUST be listed in NCPDP to be able to receive e-prescriptions via the Surescripts network. The NCPDP ID number assigned to the pharmacy can be thought of like a routing number for a bank – you want e-prescriptions routed to you, you get an NCPDP ID. Pharmacies are not under the same obligation to de-list their location in NCPDP, and so a decent fraction of pharmacies do not report their closure promptly to NCPDP.

A large fraction of the new pharmacies listed since 1/1/2024 appear to be 340b-covered-entity-owned pharmacies. This is not surprising, as the 340b program represents more than half of all gross margins earned in dispensing pharmacies today. It does, however, mean that the usual definition of “independent” vs. “chain” as “>5 pharmacies under common ownership” becomes a more fraught concept. When I think “independent pharmacy” I usually think of a small business, a mom-and-pop shop owned and operated by the pharmacists. Many 340b covered entity (340b-CE) owned pharmacies are certainly not small businesses by any stretch of the imagination – most frequently they are a relatively small business unit of an entity with hundreds of millions if not billions in revenue annually. In the ongoing argument between PCMA/PBMs and independent pharmacy advocacy organizations like NCPA, these 340b-CE-owned pharmacies are usually counted as “independents” because they may have 5 or fewer pharmacy locations. Additionally, a large and growing fraction of mom-and-pop independents that operate as contract pharmacies for 340b-CEs are being asked to sell to the CE. In some cases, where the pharmacy is co-located, the CE is pushing out the independent when the lease expires (I personally know of 5 such instances). I think that in NCPDP, if it doesn’t already exist, a flag of “is this pharmacy’s owner a 340b-CE” would be very helpful for teasing this out. I will also note here that comparing NPIs to OPAIS data is extremely difficult right now because OPAIS data has no NPIs. HHS’ OPA should include NPI numbers of contract pharmacies and CE-owned locations in OPAIS for a number of reasons beyond my desire to understand how many “independents” are 340b-CE owned, including facilitation of state medicaid programs’ efforts to ensure that FFS medicaid is not illegally a source of 340b discounts.

Filed under: General Problems | 5 Comments »

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