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Biden Plan to Save Medicare Patients Money on Drugs Risks Empty Shelves, Pharmacists Say

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Susan Jaffe
Tue, 11 Jun 2024 09:00:00 +0000

Months into a new Biden administration policy intended to lower drug costs for Medicare patients, independent pharmacists say they're struggling to afford to keep some prescription in stock.

“It would not matter if the governor himself walked in and said, ‘I need to get this prescription filled,'” said Clint Hopkins, a pharmacist and co-owner of Pucci's Pharmacy in Sacramento, California. “If I'm losing money on it, it's a no.”

A regulation that took effect in January changes prescription prices for Medicare beneficiaries. For years, prices included pharmacy performance incentives, possible rebates, and other adjustments made after the prescription was filled. Now the adjustments are made first, at the pharmacy counter, reducing the overall cost for patients and the . But the new system means less money for pharmacies that acquire and stock medications, pharmacists say.

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Pharmacies are already struggling with staff shortages, drug shortages, fallout from opioid lawsuits, and rising operating costs. While independent pharmacies are most vulnerable, some big chain pharmacies are also feeling a cash crunch — particularly those whose parent firms don't own a pharmacy benefit manager, companies that negotiate drug prices between insurers, drug manufacturers, and pharmacies.

A top official at the Centers for Medicare & Services said it's a matter for pharmacies, Medicare insurance plans, and PBMs to resolve.

“We cannot interfere in the negotiations that occur between the plans and pharmacy benefits managers,” Meena Seshamani, director of the Center for Medicare, said at a conference on June 7. “We cannot tell a plan how much to pay a pharmacy or a PBM.”

Nevertheless, CMS has reminded insurers and PBMs in several letters that they are required to the drugs and other benefits promised to beneficiaries.

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Several independent pharmacists told KFF News they'll soon cut back on the number of medications they keep on shelves, particularly brand-name drugs. Some have even decided to stop accepting certain Medicare drug plans, they said.

As he campaigns for reelection, has touted his administration's moves to make prescription drugs more affordable for Medicare patients, hoping to appeal to voters troubled by rising costs. His achievements include a law, the Inflation Reduction Act, that caps the price of insulin at $35 a month for Medicare patients; caps Medicare patients' drug spending at $2,000 a year, beginning next year; and allows the program to bargain down drug prices with manufacturers.

More than 51 million people have Medicare drug coverage. CMS officials estimated the new rule reducing pharmacy costs would save beneficiaries $26.5 billion from 2024 through 2032.

Medicare patients' prescriptions can account for at least 40% of pharmacy business, according to a February survey by the National Community Pharmacists Association.

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Independent pharmacists say the new rule is causing them financial trouble and hardship for some Medicare patients. Hopkins, in Sacramento, said that some of his newer customers used to rely on a local grocery pharmacy but came to his store after they could no longer get their medications there.

The crux of the problem is cash flow, the pharmacists say. Under the old system, pharmacies and PBMs reconciled rebates and other behind-the-scenes transactions a few times a year, resulting in pharmacies refunding any overpayments.

Now, PBM clawbacks happen immediately, with every filled prescription, reducing pharmacies' cash on hand. That has made it particularly difficult, pharmacists say, to stock brand-name drugs that can cost hundreds or thousands of dollars for a month's supply.

Some patients have been forced to choose between their pharmacy and their drug plan. Kavanaugh Pharmacy in Little Rock, Arkansas, no longer accepts Cigna and Wellcare Medicare drug plans, said co-owner and pharmacist Scott Pace. He said the pharmacy made the change because the companies use Express Scripts, a PBM that has cut its reimbursements to pharmacies.

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“We had a lot of Wellcare patients in 2023 that either had to switch plans to remain with us, or they had to find a new provider,” Pace said.

Pace said one patient's drug plan recently reimbursed him for a fentanyl patch $40 less than his cost to acquire the drug. “Because we've had a long-standing relationship with this particular patient, and they're dying, we took a $40 loss to take care of the patient,” he said.

Conceding that some pharmacies face cash-flow problems, Express Scripts recently decided to accelerate payment of bonuses for meeting the company's performance measures, said spokesperson Justine Sessions. She declined to answer questions about cuts in pharmacy payments.

Express Scripts, which is owned by The Cigna Group, managed 23% of prescription claims last year, second to CVS Health, which had 34% of the market.

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In North Carolina, pharmacist Brent Talley said he recently lost $31 filling a prescription for a month's supply of a weight control and diabetes drug.

To try to cushion such losses, Talley's Hayes Barton Pharmacy sells CBD products and specialty items like reading glasses, bath products, and books about local history. “But that's not going to come close to making up the loss generated by the prescription sale,” Talley said.

His pharmacy also delivers medicines packaged by the dose to Medicare patients at assisted living facilities and nursing homes. Reimbursement arrangements with PBMs for that business are more favorable than for filling prescriptions in person, he said.

When added drug coverage to Medicare in 2003, lawmakers privatized the benefit by requiring the government to contract with commercial insurance companies to manage the program.

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Insurers offer two options: Medicare Advantage plans, which usually cover medications, in addition to hospital care, doctor visits, and other services; as well as stand-alone drug plans for people with traditional Medicare. The insurers then contract with PBMs to negotiate drug prices and pharmacy costs with drug manufacturers and pharmacies.

The terms of PBM contracts are generally secret and restrict what pharmacists can tell patients — for example, if they're asked why a drug is out of stock. (It took an act of Congress in 2018 to eliminate restrictions on disclosing a drug's cash price, which can sometimes be less than an insurance plan's copayment.)

The Pharmaceutical Care Management Association, a trade group representing PBMs, warned CMS repeatedly “that pharmacies would likely lower payments under the new Medicare Part D rule,” spokesperson Greg Lopes said. His group opposes the change.

Recognizing the new policy could cause cash-flow problems for pharmacies, Medicare officials had delayed implementation for a year before the rule took effect, giving them more time to adjust.

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“We have heard pharmacies saying that they have concerns with their reimbursement,” Seshamani said.

But the agency isn't doing enough to now, said Ronna Hauser, senior vice president of policy and pharmacy affairs at the National Community Pharmacists Association. “They haven't taken any action even after we brought potential violations to their attention,” she said.

——————————
By: Susan Jaffe
Title: Biden Plan to Save Medicare Patients Money on Drugs Risks Empty Shelves, Pharmacists Say
Sourced From: kffhealthnews.org/news/article/biden-medicare-dir-fees-reform-pharmacy-cash-flow/
Published Date: Tue, 11 Jun 2024 09:00:00 +0000

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Indiana Weighs Hospital Monopoly as Officials Elsewhere Scrutinize Similar Deals

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Samantha Liss
Fri, 14 Jun 2024 09:00:00 +0000

TERRE HAUTE, Ind. — Locals in this city of 58,000 are used to having to wait at railroad crossings for one of the dozens of daily cargo trains to pass through.

But a proposed merger between the two hospitals on either side of the city could exacerbate the problem in emergencies if the hospitals shut down some services, such as trauma care, at one site, which the proposal cites as a possibility. Tom High, fire chief of a nearby township, said some first responders would be forced to transport critical farther, risking longer delays, if they become what locals call “railroaded” by a passing train.

That's just one of the fears in this community as Indiana officials whether to allow Union Hospital, licensed as a 341-bed facility, to purchase the county's only other acute care hospital, the 278-bed Terre Haute Regional Hospital. The proposed deal also raises concerns about reduced tax revenue, worsening care, and higher prices.

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Within the next few months, the Indiana Department of Health must find “clear evidence” that the proposed merger would improve health outcomes, access, and the quality of care. Those benefits must “outweigh any potential disadvantages.”

As the nation's health care industry has become more concentrated amid a steady clip of mergers in recent decades, it's common for one large system to dominate a market. In this case, the deal would be Indiana's first merger under the COPA law, short for Certificate of Public Advantage, that the enacted in 2021. Such laws allow deals that the Federal Trade Commission otherwise considers illegal because they reduce competition and often create monopolies. To mitigate the negative effects of a monopoly, the merged hospitals typically agree to conditions imposed by state regulators.

Union Hospital leaders said it's time to move “beyond competition” for the sake of the region, which has struggled to keep jobs and raise expectancy rates. Hospital spokesperson Neil Garrison said the merger would ultimately improve care, increase access, and cut costs. Leaders of Regional Hospital, which is owned by for-profit chain HCA Healthcare, did not respond to questions about the proposal.

One unusual implication arises, though: If the merger is approved, the surrounding county would lose tax revenue from one of its larger businesses. Union Hospital, which as a nonprofit is exempt from paying taxes, would be acquiring tax-paying Terre Haute Regional, which paid roughly $508,000 in county taxes for 2023, said Vigo County Auditor Jim Bramble. That's the equivalent of the starting salaries of about nine sheriff's deputies, per the county's $83 million 2024 budget.

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Garrison said the hospital system is aware of the tax implications for the county and is “exploring opportunities” to address it.

Meanwhile, Roland Kohr, formerly a pathologist at Regional and a county coroner, frets about erasing competition that forced the hospitals to add services or match the other. “The push to introduce new technologies, to recruit more physicians, that may not happen,” he said.

The FTC has urged states to avoid COPAs, pointing to research that found they “have resulted in significant price increases and contributed to declines in quality of care.” The fallout of similar mergers has triggered federal sanctions in North Carolina and pushback from locals and legislators in Tennessee.

“A merged hospital system that faces little remaining competition after the merger usually has little incentive to follow through with its promises because patients have no other choice,” wrote Chris Garmon, a of Missouri-Kansas City economist who has studied COPA mergers, in a warning to Indiana health officials about the proposed merger.

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Indiana already has among the highest hospital prices in the country, according to a study by the Rand Corp. research organization. The Indiana Legislature spent the past year to rein in prices. Gloria Sachdev, CEO of Indianapolis-based Employers' Forum of Indiana, which pushed for those pricing limits on behalf of frustrated business leaders, is worried a Union-Regional merger would undo those gains and raise prices further.

Indiana's COPA restricts how much the hospital could increase charges, Garrison said.

Elsewhere, the largest COPA-created hospital system in the country, Ballad Health, has reported that the time patients spend in its ERs in Virginia and Tennessee before being hospitalized has more than tripled, reaching nearly 11 hours, in the six years since that monopoly of 20 hospitals formed. Still, Tennessee has awarded Ballad top marks even when certain quality metrics, its ER speed, fall below established benchmarks.

Ballad Health spokesperson Molly Luton said the system's performance has improved since those statistics were gathered.

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Last fall, some Tennesseans unsuccessfully urged a county board to call on the state to better regulate the hospital system. This spring, state lawmakers refused to hear testimony from who drove five hours to Nashville to testify for a bill that sought to limit future COPA mergers in the state — which ultimately didn't make it to a full vote.

Problems have also occurred when a COPA — and its oversight — are removed, leaving the merged hospital system as an “unregulated monopoly.” After North Carolina repealed its COPA in 2015, a subsidiary of HCA Healthcare bought Mission Health, a COPA-created monopoly in Asheville, for $1.5 billion in 2019. The monopoly in Asheville remained but none of the COPA's conditions applied to the new owner.

Last year, government inspectors found “deficiencies” at Mission Health that contributed to four patient deaths and posed an “immediate jeopardy” to patients' health and safety, according to the 384-page federal inspection report. North Carolina Attorney General Joshua Stein sued HCA's subsidiary last year, alleging the ER was “significantly degraded,” and that the company failed to maintain certain critical services, including oncology care, a violation of a purchase agreement Stein's office negotiated with it because the company acquired a nonprofit.

HCA said it promptly addressed the issues and denied Stein's allegations in its legal response to the ongoing lawsuit, arguing it has expanded services since its purchase. HCA also argued that the agreement is silent about maintaining the quality of care.

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Back in Indiana, Union Hospital laid the groundwork for its merger more than three years ago when its leaders provided the language for COPA legislation to then-state Sen. Jon Ford, a Republican in Terre Haute, believing he would be “the best champion for this proposal,” according to legislative testimony from Taylor Hollenbeck, an RJL Solutions consultant on the merger. Ford, listed on the legislature's site as the bill's co-author, did not respond to requests for comment.

Union CEO Steve Holman testified in the bill's hearings that the county's public health rankings — with an average life expectancy ranking 68th out of 92 counties in the state — should be a “call to action” to do something “big and bold.”

Terre Haute Mayor Brandon Sakbun agrees the merger could what he called the county's “abysmal” public health statistics. Last year, he was elected the city's youngest mayor at age 27 on a promise to “turn Terre Haute around.” The region's workforce has steadily declined and local leaders have pinned their hopes on a new casino and a manufacturer of battery parts for electric vehicles to reverse this trend.

Sakbun's father is an OB-GYN at Union, but the mayor said that doesn't color his opinion and that he supports the hospital merger despite the loss of the tax base. He believes it will help recruit medical and other professionals to an area that has struggled to attract top talent.

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“Do I believe that this is the one that bucks the research?” Sakbun said. “I truthfully do.”

KFF Health correspondent Brett Kelman contributed to this article.

——————————
By: Samantha Liss
Title: Indiana Weighs Hospital Monopoly as Officials Elsewhere Scrutinize Similar Deals
Sourced From: kffhealthnews.org/news/article/indiana-copa-hospital-monopoly-scrutiny/
Published Date: Fri, 14 Jun 2024 09:00:00 +0000

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California Lawmakers Preserve Aid to Older, Disabled Immigrants

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Vanessa G. Sánchez
Fri, 14 Jun 2024 09:00:00 +0000

California lawmakers on Thursday passed a 2024-25 budget that rejected Gov. Gavin Newsom's proposal to cut in-home supportive services for low-income older, blind, and disabled immigrants lacking legal residency. However, the Democratic governor has not said whether he'll use his line-item veto authority to help close the 's $45 billion deficit.

The , controlled by Democrats, passed a $211 general fund spending plan for the fiscal year starting July 1 by drawing more from the state's rainy-day fund and reducing corporate tax deductions to prevent cuts to and social services.

“Our legislative budget plan achieves those goals with targeted, carefully calibrated investments in safety-net programs that protect our most vulnerable,” said Assembly member Jesse Gabriel, chair of the Assembly's budget committee, following in Sacramento.

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Newsom and lawmakers are expected to continue talks.

“What was approved represents a two-house agreement between the Senate and the Assembly – not an agreement with the governor,” said state Department of Finance spokesperson H.D. Palmer. “We've made good progress, but there's still more work to do.”

Newsom had proposed eliminating the new in-home benefit for qualified immigrants to save nearly $95 million in the next fiscal year, with no plans to bring it back. Lawmakers not only rejected Newsom's cut to the in-home services program; they also refused the governor's proposal to slash $300 million a year from public health agencies. However, they accepted delaying food assistance to low-income older immigrants without legal residency.

The In-Home Supportive Services program helps low-income older, blind, and disabled individuals receive care in their homes, which helps keep them out of more costly nursing and residential facilities. The program works by paying $16 to $21 an hour to caregivers, many of them family members.

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Advocates applauded lawmakers for rejecting the cut. They had urged the governor to adopt the legislature's budget, arguing the state could end up paying more in the long run as Medi-Cal recipients tap nursing services. The state has estimated the annual per-person cost of nursing homes is $124,189, compared with the roughly $28,000 average cost for people without legal residency in the in-home services program.

“These individuals would need to essentially go into costly hospital or nursing care,” said Ronald Coleman Baeza, managing policy director at the California Pan-Ethnic Health Network. “It's not only cruel for undocumented immigrants, but it doesn't make sense as a fiscal decision either.”

The governor has said he's trying to maintain fiscal discipline while preserving Medi-Cal benefits for immigrants. California was the first state to expand eligibility to all qualified immigrants regardless of legal status, phasing it in over several years: children in 2016, adults ages 19-26 in 2020, people 50 and older in 2022, and all remaining adults this year.

“It's a core of I think who we are as a state, and we should be as a nation,” Newsom said in May.

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As part of the Medi-Cal expansion, the state authorized nearly 3,000 older, blind, and disabled immigrants without legal residency to access paramedical services and care, meal preparation, bathing, feeding, and transportation to medical appointments. Advocates estimate 17,000 immigrants qualify.

“Fixing California's deficit means making tough choices, so the Assembly came to these negotiations focused on preserving programs that matter most to Californians,” said Assembly Speaker Robert Rivas, a Central Coast Democrat, in an earlier statement.

Lawmakers did agree to Newsom's proposal to delay around $165 a month in food assistance to low-income immigrants without legal residency ages 55 and older. Lawmakers had approved the benefit two years ago, but the governor proposed delaying it by two fiscal years to 2027.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

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——————————
By: Vanessa G. Sánchez
Title: California Lawmakers Preserve Aid to Older, Disabled Immigrants
Sourced From: kffhealthnews.org//article/california-lawmakers-aid-immigrants-in-home-services-budget-newsom/
Published Date: Fri, 14 Jun 2024 09:00:00 +0000

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KFF Health News’ ‘What the Health?’: SCOTUS Rejects Abortion Pill Challenge — For Now 

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Thu, 13 Jun 2024 18:50:00 +0000

The Host

Julie Rovner
KFF


@jrovner


Read Julie's stories.

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Julie Rovner is chief Washington correspondent and host of KFF Health News' weekly health policy news , “What the Health?” A noted expert on health policy issues, Julie is the author of the critically praised reference book “ Politics and Policy A to Z,” now in its third edition.

A unanimous Supreme Court turned back a challenge to the FDA's approval and rules for the abortion pill mifepristone, finding that the anti-abortion doctor group that sued lacked standing to do so. But abortion foes have other ways they intend to curtail availability of the pill, which is commonly used in medication abortions, which now make up nearly two-thirds of abortions in the U.S.

Meanwhile, the Biden administration is proposing regulations that would bar credit agencies from medical debt on individual credit reports. And former President Donald Trump, signaling that drug prices remain a potent campaign issue, attempts to take credit for the $35-a-month cap on insulin for Medicare beneficiaries — which was backed and signed into law by Biden.

This week's panelists are Julie Rovner of KFF Health News, Anna Edney of Bloomberg News, Rachana Pradhan of KFF Health News, and Emmarie Huetteman of KFF Health News.

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Panelists

Anna Edney
Bloomberg


@annaedney


Read Anna's stories.

Emmarie Huetteman
KFF Health News

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@emmarieDC


Read Emmarie's stories.

Rachana Pradhan
KFF Health News


@rachanadpradhan

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Read Rachana's stories.

Among the takeaways from this week's episode:

  • All nine Supreme Court justices on June 13 rejected a challenge to the abortion pill mifepristone, ruling the plaintiffs did not have standing to sue. But that may not be the last word: The leaves open the possibility that different plaintiffs — including three states already part of the case — could raise a similar challenge in the future, and that the court could then vote to block access to the pill.
  • As the presidential race heats up, and former President Donald Trump are angling for health care voters. The Biden administration this week proposed eliminating all medical debt from Americans' credit scores, which would expand on the previous, voluntary move by the major credit agencies to erase from credit reports medical bills under $500. Meanwhile, Trump continues to court vaccine skeptics and wrongly claimed credit for Medicare's $35 monthly cap on insulin — enacted under a law backed and signed by Biden.
  • Problems are compounding at the pharmacy counter. Pharmacists and drugmakers are the highest numbers of drug shortages in more than 20 years. And independent pharmacists in particular say they are struggling to keep on the shelves, pointing to a recent Biden administration policy change that reduces costs for seniors — but also cash flow for pharmacies.
  • And the Southern Baptist Convention, the nation's largest branch of Protestantism, voted this week to restrict the use of in vitro fertilization. As evidenced by recent flip-flopping stances on abortion, Republican candidates are feeling pressed to satisfy a wide range of perspectives within even their own party.

Also this week, Rovner interviews KFF president and Drew Altman about KFF's new “Health Policy 101” primer. You can learn more about it here.

Plus, for “extra credit,” the panelists suggest health policy stories they read this week that they think you should read, too:

Julie Rovner: HuffPost's “How America's Mental Health Crisis Became This Family's Worst Nightmare,” by Jonathan Cohn.

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Anna Edney: Stat News' “Four Tops Singer's Lawsuit Says He Visited ER for Chest Pain, Ended Up in Straitjacket,” by Tara Bannow.

Rachana Pradhan: The New York Times' “Abortion Groups Say Tech Companies Suppress Posts and Accounts,” by Emily Schmall and Sapna Maheshwari.

Emmarie Huetteman: CBS News' “As FDA Urges Crackdown on Bird Flu in Raw Milk, Some States Say Their Hands Are Tied,” by Alexander Tin.

Also mentioned on this week's podcast:

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Credits

Francis Ying
Audio producer

Emmarie Huetteman
Editor

To hear all our podcasts, click here.

And subscribe to KFF Health News' “What the Health?” on SpotifyApple PodcastsPocket Casts, or wherever you listen to podcasts.

——————————
Title: KFF Health News' ‘What the Health?': SCOTUS Rejects Abortion Pill Challenge — For Now 
Sourced From: kffhealthnews.org/news/podcast/what-the-health-351-supreme-court-abortion-pill-mifepristone-june-13-2024/
Published Date: Thu, 13 Jun 2024 18:50:00 +0000

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