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Legal Questions, Inquiries Intensify Around Noble Health’s Rural Missouri Hospital Closures

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by Sarah Jane Tribble, Kaiser Health News
Thu, 23 Mar 2023 09:00:00 +0000

A year after private equity-backed Noble Health shuttered two rural Missouri hospitals, patients and former employees grapple with a broken local health system or missing out on millions in unpaid wages and .

The hospitals in Audrain and Callaway counties remain closed as a slew of lawsuits and state and federal investigations grind forward.

In March, Missouri Attorney General Andrew Bailey confirmed a civil investigation. He had previously told local talk radio that there was an “ongoing” investigation into “the hospital issue.”

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Bailey's comment came weeks after the U.S. Department of Labor's Employee Benefits Security Administration notified executives tied to Noble Health, a startup, that they had violated federal laws and asked them to pay $5.4 million to unpaid employee health insurance claims, according to a 13-page letter detailing “interim findings” that was obtained by KHN.

The January letter confirms KHN's previous reporting, which was informed by employees and patients who described missing paychecks; receiving unexpected, high-dollar medical bills; and going without care, including cancer treatment. According to the letter from federal investigators, the Noble hospitals and their corporate owners collected employee contributions for medical, dental, and vision insurance in 2021 and 2022 but then failed to fund the insurance plans.

The owners and executives were “aware of the harm to participants and, in some cases, were attempting to resolve individual participant complaints,” the letter states, adding that “despite the volume and gravity of complaints and bills received,” they failed to respond.

‘Tomfoolery' and Doing ‘Everybody Dirty'

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Marissa Hagedorn, who worked as a hospital laboratory technician, has spent much of the past year starting a new job, caring for her 2-year-old son who was born with spina bifida, and haggling over unpaid medical bills. She told KHN the owes at least $8,000 for son Ryder's specialty care in St. Louis, with $6,000 of that in collections. As a Noble employee, Hagedorn said, she was told repeatedly that her employee health insurance would cover Ryder's care. It didn't.

Noble has “done everybody dirty,” she said. “We just would like for some responsibility to be taken by this company that didn't feel the need to get their act together.” Hagedorn's story of unpaid bills, which was first reported by the local newspaper, the Mexico Ledger, is common among former Noble employees a year after the hospitals closed.

A former employee of the Fulton hospital has filed a class-action lawsuit intended to represent hundreds of employees from both hospitals.

The Jan. 13 letter from federal called for responses by Jan. 27 from Noble corporate and hospital executives as well as Platinum Neighbors, which last April bought the hospitals and assumed all liabilities. The letter instructs executives to contact the agency “to discuss how you intend to correct these violations, fund participant claims, and achieve compliance.”

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Former employees say their claims have not yet been paid. A Labor Department spokesperson, Grant Vaught, said the agency could not comment on an ongoing investigation.

Separately, the Kansas Department of Labor is reviewing Noble and Platinum's failure to pay wages and severance to corporate employees. Agency spokesperson Becky Shaffer confirmed that hearings took place in early February on a half-dozen cases totaling more than $1 million in claims for unpaid wages and severance.

Dave Kitchens was among those who filed claims against Noble Health. Kitchens worked briefly as a contract employee and then was hired in October 2021 as a corporate controller, an accounting role in which he was responsible for financial reporting and data analytics. Kitchens provided an audio recording of his hearing to KHN and hopes to eventually get paid more than $90,000 in lost wages, benefits, and severance pay. During the hearing, Kitchens told the administrative judge: “I would just like to be paid what I'm owed.”

Kitchens, who is also named as a fiduciary on the federal investigation, said he was not on Noble's executive team. When asked by Kansas Administrative Judge James Ward whether he expected Noble or the secondary buyer Platinum to pay his wages, Kitchens responded he had “no idea who was in charge.”

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“I believe there was some tomfoolery,” Kitchens said.

A ‘Rabbit Hole' of Responsibility

Noble launched in December 2019 with executives who had never run a hospital, including Donald R. Peterson, a co-founder who prior to joining Noble had been accused of Medicare fraud. Peterson settled that case without admitting wrongdoing and in August 2019 agreed to be excluded for five years from Medicare, Medicaid, and all other taxpayer-funded federal health programs, according to the Health and Human Services Office of Inspector General.

By March 2022, the hospitals had closed and Noble offered explanations on social , including “a technology issue” and a need to “restructure their operations” to keep the hospitals financially viable. In April, -based Platinum Neighbors paid $2 for the properties and all liabilities, according to the stock purchase agreement.

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Despite receiving approval for nearly $20 million in federal covid-19 relief money before it closed the hospitals — funds whose use is still not fully accounted for — Noble had stopped paying its bills, according to court records. Contractors, including nursing agencies, a lab that ran covid tests and landscapers, have filed lawsuits seeking millions.

In Audrain County, where community members still hope to reopen the hospital or build a new one, county leaders filed suit for the repayment of a $1.8 million loan they made to Noble. Former Missouri state senator Jay Wasson also filed suit in September, asking for repayment of a $500,000 loan.

Two Noble Health real estate entities filed bankruptcy petitions this year. One Chapter 11 bankruptcy filing names the Fulton hospital property in Callaway County as an asset and lists nearly $4.9 million in liabilities. A third bankruptcy filing by FMC Clinic includes Noble Health as a codebtor.

In the U.S. District Court of Kansas, Central Bank of the Midwest is suing Nueterra Capital over a $9.6 million loan Noble used to buy the Audrain hospital. The bank alleges Nueterra, a private equity and venture capital firm that in 2022 included Noble as part of its portfolio, signed off as the guarantor of the loan.

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Federal investigators listed nearly a dozen people or entities connected to Noble Health as fiduciaries who they say are personally responsible for paying back millions in unpaid medical claims. The letter also detailed Noble Health's ownership for the first time. The owners included William A. Solomon with a 16.82% share, W. Carter with a 16.82% share, The Peterson Trust with a 19.63%, and NC Holdings Inc. with 46.72%.

NC Holdings is also listed on the stock sale agreement with Platinum along with several signatures including Jeremy Tasset, chief executive of Nueterra Capital.

Tasset did not respond to a request for comment for this article. In an email to KHN in March 2022, the Nueterra Capital wrote, “We are a minority investor in the real estate and have nothing to do with the operations of the hospitals.” In May 2022, Tasset wrote in an email to KHN that “everything was sold (real estate included) to Platinum Neighbors, a subsidiary of Platinum Team Management.”

It is unclear who owns and controls The Peterson Trust, which federal investigators identified. Peterson, who is listed on Noble's state registration papers as a director and in other roles, didn't respond to requests for comment for this article. He previously told KHN that his involvement in Noble didn't violate his exclusion, in his reading of the law.

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He said he owned 3% of the company, citing guidance from the Office of Inspector General for the U.S. Department of Health and Human Services. Federal regulators may exclude companies if someone who is banned has ownership of 5% or more.

In March 2022, Peterson created Noble Health Services, which federal investigators note in their letter was “established to restructure the ownership of multiple Noble entities.” Peterson dissolved that company in July 2022, according to a Missouri business filing.

In September, Peterson posted on LinkedIn that he was “sitting in the Emirates Air lounge in Dubai” to finish up due diligence on “launching a new business.”

A 2013 OIG advisory states that “an excluded individual may not serve in an executive or leadership role” and “may not provide other types of administrative and management services … unless wholly unrelated to federal health care programs.”

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KHN examined the federal system meant to stop health care business owners and executives from repeatedly bilking government health programs and found that it failed to do so.

The OIG keeps a public list of people and businesses it has banned from all federal health care programs, such as Medicare and Medicaid. KHN's review found a system devoid of oversight and rife with legal gray .

In the wake of KHN's reporting, Oregon Sen. Ron Wyden, a Democrat who is the chair of the powerful Senate Finance Committee, said “it's imperative that federal watchdogs can ensure bad actors are kept out of Medicare.” Sen. Chuck Grassley (R-Iowa) said the government needs to do more and “it's also up to private-sector entities to do a better job checking against the exclusions list.”

“We can't just depend on one or the other to do everything,” Grassley said.

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In recent months, the Missouri hospitals appear to have been sold twice more, according to public records. Oregon-based Saint Pio of Pietrelcina notified state officials of a change of ownership in December and requested an extension of the hospital licenses, which was denied. In January, Audrain County officials, in its lawsuit, revealed another owner named Pasture Medical, which registered as a Wyoming company on Dec. 27, 2022.

“We haven't come out of the rabbit hole on this one,” said Steve Bollin, director of the division of regulation and licensure for the Missouri Department of Health and Senior Services. Bollin's agency, which conducts inspections and approves hospital changes in ownership, said he would support his agency doing financial reviews.

“It's probably not a bad idea that someone takes a little bit deeper dive. We don't have that many changes of ownership, but we would need appropriate staffing to do that, including some really good CPAs [certified public accountants].”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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By: Sarah Jane Tribble, Kaiser Health News
Title: Legal Questions, Inquiries Intensify Around Noble Health's Rural Missouri Hospital Closures
Sourced From: khn.org/news/article/noble-health-missouri-hospital-closures-legal-questions-private-equity/
Published Date: Thu, 23 Mar 2023 09:00:00 +0000

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Kaiser Health News

Union With Labor Dispute of Its Own Threatens to Cut Off Workers’ Health Benefits

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Phil Galewitz, KFF
Fri, 26 Jul 2024 09:00:00 +0000

The National Education Association, the nation's largest union, is threatening to cut off health insurance to about 300 Washington, D.C.-based workers on Aug. 1 in an effort to end a bitter contract dispute.

It's a tactic some private employers have used as leverage against unionized workers that has drawn scrutiny from congressional Democrats and is prohibited for employers in California. Experts on labor law say they've never seen a union make the move against its own workers.

“This is like a man-bites-dog situation where the union is now in a position as the employer,” said Paul Clark, a professor of labor and employment relations at Penn State . “It's not a good look for a union.”

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NEA workers with pressing health needs are worried but say they won't fold. Joye Mercer Barksdale, a writer on the NEA's government relations team, said she needs coverage for a medical procedure to address atrial fibrillation, a cardiac disorder. “This is insane for the NEA to use our health benefits as a bargaining chip,” she said.

But Barksdale said the threat isn't enough to force her to agree to an unacceptable contract. “I am not ready to give in,” she said.

The NEA Staff Organization, the union representing workers at the NEA's headquarters, launched a strike on July 5 in Philadelphia, during the union's annual delegate assembly. It was its second walkout this summer as the two parties negotiate a new contract, navigating sticking points such as wages and remote work.

In response, the NEA ended the conference early. President Joe Biden was supposed to speak at the event but withdrew, refusing to cross the picket line. The NEA on July 24 endorsed Kamala Harris for president.

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On July 8, the day after the conference had been scheduled to end, the NEA locked out workers. In a letter the day before, the NEA informed its unionized workers that they would not be paid, effective immediately, and their health benefits would expire at the end of July unless a new deal were reached.

“NEA cannot allow NEASO to act again in a way that will bring such lasting harm to our members and our organization,” Kim Anderson, the NEA's executive director, wrote in the letter, obtained by KFF Health News. “We are, and have always been, committed both to our union values and to the importance of conducting ourselves as a model employer.”

Democrats in , including Sens. Sherrod Brown of Ohio and Bob Casey of Pennsylvania, introduced legislation last year to protect striking workers from losing their health benefits, after several large companies, including General Motors, John Deere, RTX (formerly Raytheon Technologies), and the maker of Kellogg's cereals, threatened to or did cut off coverage during labor disputes.

“Workers shouldn't have to choose between their 's health and a fair contract,” Brown said in a statement to KFF Health News.

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The legislation was endorsed by large labor unions including the Service Employees International Union and United Steelworkers, according to a press release from Brown's office. The NEA wasn't among them.

“This tactic is immoral, and it should be illegal,” United Steelworkers' president at the time, Thomas Conway, said in the release.

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Officials at the NEA, which represents teachers and other administrators, declined an interview request. In a statement, the organization's president, Becky Pringle, said “we are making every effort to reach an agreement as quickly as possible” with its staff union.

“As union leaders who have been on strike, we recognize the significance and impact of these important decisions on a personal and family level. We truly value our employees and look forward to continued collaboration with NEASO to develop a new contract that benefits us all,” she said.

Kate Hilts, a digital strategist who works for the NEA, said she fears losing her coverage will her unable to afford treatment for a rare autoimmune disease that attacks her kidneys. Her next treatment was slated for August.

“I wake up every day and can't believe this is happening,” she said. “You would expect this from an employer that is antiworker or has a terrible labor record, but I am totally flabbergasted that a labor union would do this that bills itself as pro-worker, pro-family, pro-education, and pro-.”

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The NEA staff union has filed multiple charges with the National Labor Relations Board this year, including allegations that the NEA withheld overtime pay and failed to provide information on the outsourcing of millions of dollars in bargaining unit work.

California is one of the only states that protect striking workers from losing health coverage. The state legislature passed a law in 2021 that blocks the tactic from being used against public employees and another law in 2022 that allows any striking workers who lose their insurance to immediately get heavily discounted coverage through the state's Affordable Care Act marketplace.

If they remain locked out, the NEA workers would be eligible for coverage under COBRA, a federal program that allows people who are fired or laid off to maintain their employer-sponsored insurance for 18 months.

But the coverage can be a financial hardship, as individuals often must pay the entire cost of their insurance premiums, plus a 2% administrative fee.

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Another option for workers would be coverage through the Affordable Care Act marketplace, though that also could be costly. And it may be unclear how soon that coverage would begin or whether insurers would their existing doctors.

“I'm hoping the NEA will be so ashamed of what they are doing that, at the very least, they will not take away our health benefits,” Barksdale said.

——————————
By: Phil Galewitz, KFF Health News
Title: Union With Labor Dispute of Its Own Threatens to Cut Off Workers' Health Benefits
Sourced From: kffhealthnews.org/news/article/nea-national-education-association-union-threatens-health-insurance-benefit-lockout/
Published Date: Fri, 26 Jul 2024 09:00:00 +0000

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The CDC’s Test for Bird Flu Works, but It Has Issues

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Arthur Allen and Amy Maxmen
Fri, 26 Jul 2024 09:00:00 +0000

The Centers for Disease Control and Prevention says a glitch in its bird flu test hasn't harmed the agency's outbreak response. But it has ignited scrutiny of its go-it-alone approach in testing for emerging pathogens.

The agency has quietly worked since April to resolve a nagging issue with the test it developed, even as the virus swept through dairy farms and chicken houses across the country and infected at least 13 farmworkers this year.

At a congressional hearing July 23, Rep. Brett Guthrie (R-Ky.) asked about the issue. “Boy, that rings of 2020,” he said, referring to when the nation was caught off guard by the pandemic, in part because of dysfunctional tests made by the CDC. Demetre Daskalakis, director of the CDC's National Center for Immunization and Respiratory Diseases, responded that the agency rapidly developed a workaround that makes its bird flu test reliable.

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“The tests are 100% usable,” he later told KFF , adding that the FDA studied the tests and came to the same conclusion. The imperfect tests, which have a faulty element that sometimes requires testing a sample again, will be replaced soon. He added, “We have made sure that we're offering a high-quality product.”

Still, some researchers were unnerved by the news coming four months after the government declared a worrisome bird flu outbreak among cattle. The CDC's test is the only one available for clinical use. Some researchers say its flaws, though manageable, underscore the risk of relying on a single entity for testing.

The problem came to light in April as the agency prepared to distribute its test to about 100 public health labs around the country. CDC detected the issue through a quality control system put in place after the covid test catastrophe of 2020.

Daskalakis said the CDC's original test design was fine, but a flaw emerged when a company contracted by the agency manufactured the tests in bulk. In these tests, one of two components that recognize proteins called H5 in the H5N1 bird flu virus was unreliable, eliminating an important safeguard. By targeting the same protein twice, tests have a built-in backup in case one part fails.

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The agency developed a fix to ensure a reliable result: If only one of the two parts detected H5, the test was considered inconclusive and would be again. With the FDA's blessing, the CDC distributed the tests — with workaround instructions — to public health labs.

Wroblewski, director of infectious diseases at the Association of Public Health Laboratories, said the results of the tests have not been ambiguous, and there is no need to discard the tests.

Still, the agency has asked a different manufacturer to remake the faulty component so that 1.2 million improved tests will be available soon, Daskalakis said. Some of the updated tests are already in stock at the CDC, but the FDA hasn't yet signed off on their use. Daskalakis declined to name the manufacturers.

Meanwhile, the outbreak has grown. Farmworkers continue to lack information about the virus and gear to protect them from it. Rural clinics may miss cases if they don't catch a person's connection to a farm and notify health officials rather than their usual diagnostic testing laboratories.

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Those clinical labs remain unauthorized to test for the bird flu. Several of those labs have spent months working through analyses and red tape so that they can run the CDC's tests. As part of the licensing , the CDC alerted them to the workaround with the current test, too.

But outside select circles, the news was largely overlooked. “I'm totally surprised by this,” Alex Greninger, assistant director of the of Washington Clinical Virology Laboratory, told KFF Health News this . Greninger's lab is developing its own test and has been to obtain CDC test kits to evaluate.

“It's not a red alarm,” he said, but he's worried that as the CDC and the FDA spend months developing and evaluating an updated test, the only one available relies on a single component. If the genetic code underlying that fragment of the H5 protein mutates, the test could give false results.

It's not uncommon for academic and commercial diagnostic labs to make mistakes and catch them during quality control checks, as the CDC did. Still, this isn't the agency's first mishap. In 2016, well before the covid debacle, CDC officials for months directed public health labs to use a Zika test that failed about a third of the time.

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The CDC caught and worked to remediate the situation far more quickly and effectively in this case. Nonetheless, the mishap raises concern. Michael Mina, chief science officer of the telemedicine company eMed.com, said diagnostic companies may be better suited to the task.

“It's a reminder that CDC is not a robust manufacturer of tests” and lacks the resources that industry can marshal for their production, Mina said. “We do not ask CDC to make vaccines and pharmaceuticals, and we do not ask the Pentagon to manufacture missiles.”

The CDC has licensed its updated test design to at least seven clinical diagnostic labs. Such labs are the foundation of testing in the U.S. But none have FDA clearance to use them.

Diagnostic labs are developing their own tests, too. But that has been slow-going. One reason is the lack of guaranteed sales. Another is regulatory uncertainty. Recent FDA guidance could make it harder for nongovernmental laboratories to issue new tests in the early phase of pandemics, said Susan Van Meter, president of the American Clinical Laboratory Association, in a July 1 letter to the FDA.

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Transparency is also critical, scientists said. Benjamin Pinsky, medical director of the clinical virology laboratory at Stanford University, said as a public agency the CDC should make its protocol — its recipe for making the test — easily accessible online.

The World Health Organization does so for its bird flu tests, and with that information in hand, Pinsky's lab has developed an H5 bird flu test suited to the strain circulating this year in the U.S. The lab published its approach this month but doesn't have FDA authorization for its broad use.

The CDC's test recipe is available in a published patent, Daskalakis said.

“We have made sure that tests are out there, and that they work,” he added.

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As the CDC came under fire at the July 23 congressional hearing, Daniel Jernigan, director of the CDC's National Center for Emerging and Zoonotic Infectious Diseases, noted that testing is just one tool. The agency needs money for another promising area — looking for the virus in wastewater. Its current program uses supplemental funds, he said: “It is not in the current budget and will go away without additional funding.”

——————————
By: Arthur Allen and Amy Maxmen
Title: The CDC's Test for Bird Flu Works, but It Has Issues
Sourced From: kffhealthnews.org/news/article/bird-flu-test-cdc-flaws/
Published Date: Fri, 26 Jul 2024 09:00:00 +0000

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KFF Health News’ ‘What the Health?’: Harris in the Spotlight

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Thu, 25 Jul 2024 18:45:00 +0000

The Host

Julie Rovner
KFF Health News


@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 podcast, “What the Health?” A noted expert on health policy issues, Julie is the author of the critically praised reference book “Health Care Politics and Policy A to Z,” now in its third edition.

As Vice President Kamala Harris appears poised to become the Democratic Party's presidential nominee, health policy in general and reproductive health issues in particular are likely to have a higher profile. Harris has long been the Biden administration's point person on abortion rights and reproductive health and was active on other health issues while serving as California's attorney general.

Meanwhile, Congress is back for a brief session between presidential conventions, but efforts in the GOP-led House to pass the annual spending bills, due by Oct. 1, have run into the usual roadblocks over abortion-related issues.

This week's panelists are Julie Rovner of KFF Health News, Stephanie Armour of KFF Health News, Rachel Cohrs Zhang of Stat, and Alice Miranda Ollstein of Politico.

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Panelists

Stephanie Armour
KFF Health News


@StephArmour1


Read Stephanie's stories.

Rachel Cohrs Zhang
Stat News

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@rachelcohrs


Read Rachel's stories.

Alice Miranda Ollstein
Politico


@AliceOllstein

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Read Alice's stories.

Among the takeaways from this week's episode:

  • President Joe Biden's to drop out of the presidential race has turned attention to his likely successor on the Democratic ticket, Vice President Kamala Harris. At this late hour in the campaign, she is expected to adopt Biden's health policies, though many anticipate she'll take a firmer stance on restoring Roe v. Wade. And while abortion rights supporters are enthusiastic about Harris' candidacy, opponents are eager to frame her views as extreme.
  • As he transitions from incumbent candidate to outgoing president, Biden is working to frame his legacy, including on health policy. The president has expressed pride that his signature domestic achievement, the Reduction Act, took on the pharmaceutical industry, including by forcing the makers of the most expensive into negotiations with Medicare. Yet, as with the Affordable Care Act's delayed implementation and results, most Americans have yet to see the IRA's potential effect on drug prices.
  • Lawmakers continue to be hung up on federal spending, leaving appropriations work undone as they prepare to leave for summer recess. Fights over abortion are, once again, gumming up the works.
  • In abortion news, Iowa's six-week limit is to take effect next week, causing rippling problems of abortion access throughout the region. In Louisiana, which added the two drugs used in medication abortions to its list of controlled substances, doctors are difficulty using the pills for other indications. And doctors who oppose abortion are pushing higher-risk procedures, like cesarean sections, in lieu of pregnancy termination when the mother's life is in danger — as states with strict bans, like Texas and Louisiana, are reporting a rise in the use of surgeries, including hysterectomies, to end pregnancies.
  • The Government Accountability Office reports that many states incorrectly hundreds of thousands of eligible people from the Medicaid rolls during the “unwinding” of the covid-19 public health emergency's coverage protections. The Biden administration has been reluctant to call out those states publicly in an attempt to keep the as apolitical as possible.

Also this week, Rovner interviews Anthony Wright, the new executive director of the consumer health advocacy group Families USA. Wright spent the past two decades in California, working with, among others, now-Vice President Kamala Harris on various health issues.

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

Julie Rovner: NPR's “A Study Finds That Dogs Can Smell Your Stress — And Make Decisions Accordingly,” by Rachel Treisman.  

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Alice Miranda Ollstein: Stat's “A Pricey Gilead HIV Drug Could Be Made for Dramatically Less Than the Company Charges,” by Silverman, and Politico's “Federal HIV Program Set To Wind Down,” by Alice Miranda Ollstein and David Lim. 

Stephanie Armour: Vox's “Free Medical School Won't Solve the Doctor Shortage,” by Dylan Scott.  

Rachel Cohrs Zhang: Stat's “How UnitedHealth Harnesses Its Physician Empire To Squeeze Profits out of Patients,” by Bob Herman, Tara Bannow, Casey Ross, and Lizzy Lawrence. 

Also mentioned on this week's podcast:

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Credits

Francis Ying
Audio producer

Emmarie Huetteman
Editor

To hear all our click here.

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

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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Title: KFF Health News' ‘What the Health?': Harris in the Spotlight
Sourced From: kffhealthnews.org/news/podcast/what-the-health-357-kamala-harris-campaign-health-policy-july-25-2024/
Published Date: Thu, 25 Jul 2024 18:45:00 +0000

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