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May 22, 2015

March 27, 2015

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March 26, 2015

Appropriator Pushes for Good Deals on Drug Stockpile

The chairman of the House panel that oversees most discretionary federal health spending wants ensure that the government is negotiating the good deals for medicines held in the national stockpile of treatments for potential terrorist attacks and severe flu pandemic

“Private industry needs to give the federal government, I think, a break” on sales to the Strategic National Stockpile, Rep. Tom Cole R-Okla, the chairman of the House Labor-Health and Human Services-Education Appropriations Subcommittee, said at a Wednesday hearing.

While examining the fiscal 2016 budget request for the Centers for Disease Control and Prevention, Cole urged the agency’s leader to considering enlisting Congress if the agency needs to improve the government’s bargaining position. The fiscal 2016 budget for HHS includes $571 million for the stockpile, an increase of $37 million from the current level. These extra funds would allow CDC to replace some expiring products as well as maintain countermeasures used to respond to emergencies.

“If you need some help on that, I hope you are very forthcoming with Congress because in many cases the federal government is not only the largest purchaser, but has done a great deal of the initial scientific work” on these medicines, Cole told CDC Director Thomas Frieden at a Wednesday hearing. “This is not an area to unduly profit from in my view.”

The CDC is only part of a network of federal agencies involved in encouraging development of treatments for potential disaster and attacks, Frieden said. An Institute of Medicine meeting Thursday on countermeasures, for example, will include speakers from the Biomedical Advanced Research and Development Authority, the Food and Drug Administration and Defense Department, as well as representatives of vaccine makers, including Merck & Co. and Novartis AG.

The stockpile now holds about $6 billion worth of products, held at sites throughout the nation so that countermeasures could be delivered to any community within hours, Frieden said. CDC is working with the FDA to try to determine which products may remain effective beyond their official expiration date, he said. In answer to Cole’s question on pricing, Frieden allowed that it can be difficult when there is little competition for a treatment.

“We’re able to negotiate with manufacturers but sometimes there is only one manufacturer and that makes the negotiations challenging,” he said.

March 25, 2015

New Rules Seen for Drug Discount Program

The rapid expansion of the federal 340B discount drug program may require new legislation to make sure that its benefits reach the intended population, the neediest Americans, lawmakers said Tuesday.

Rep. Larry Bucshon, R-Ind., was among those who raised concerns at a House Energy and Commerce subcommittee hearing about the lack of firm directives to hospitals about how savings from the program should be used. Hospitals, clinics and other health agencies enrolled in the program saved about $3.8 billion in 2013 by acquiring steeply discount drugs, according to the Health Resources and Services Administration.

Hospitals are not required to divulge how they use the savings from the program, which was created in 1992 to aid medical facilities that serve as “safety nets” in less affluent communities. Some hospitals may use savings instead for general purposes, he said. While perfectly legal, Bucshon said this use of the savings runs counter to the purpose he sees for the program, which would be to expand health services and education.

“Clearly if we want to maintain a program that seems to be exploding in size and make sure that these patients continue to have access to this type of program, more aggressive oversight and probably congressional action may very well be needed,” Bucshon said .

More than 11,000 hospitals, clinics and other health organizations are participating in the 340B program, an increase of 30 percent since 2008, according to the Government Accountability Office. That growth, combined with questions about the role of contract pharmacies such as Walgreens, has lawmakers taking a closer look at the program. Rep. Joe Pitts, R-Pa., the chairman of the health subcommittee, said that it appears that Congress has follow-up work to do.

On the Senate side, the 340B program has attracted the attention of Sen. Charles E. Grassley, R-Iowa, a watchdog for federal medical spending. The inspector general for the Department of Health and Human Services last year said that some health organization participating in the program did not offer the discounted price to their uninsured patients whose medications were handled through the contract pharmacy arrangements.

In a sign that lawmakers are gearing up to propose 340B measures, they have asked the Medicare Payment Advisory Commission to has been asked to take a deeper look at the program, although it doesn’t fall strictly in its bailiwick.

Drug manufacturers have complained that the relationship with contract pharmacies allow the health organizations participating in 340B to extend the sweep of this program, while hospitals maintain that savings from the program support programs for their patients,  Mark Miller, the executive director of MedPAC, said at a March 5 meeting.

“That’s kind of the crux of the argument, why people are even talking about 340B to begin with,” he said.

March 24, 2015

Health Law Credits Boosted Coverage in 2014, GAO Says

A look at the early numbers suggests that the premium tax credit offered via the health care law boosted health care coverage in 2014.

A Government Accountability Office report released Monday found that the tax credit, which was intended to make premiums more affordable under the law, expanded coverage among uninsured, eligible people by as much as 5 percent in 2014.

The GAO looked at studies on insurance rates and interviewed experts from 11 research groups, as well as from the Department of Health and Human Services.

The report found that the advanced premium tax credit, or APTC, reduced premiums by 76 percent from 2013 to 2014.  Although data were not yet available for 2015, studies found the tax credit saw caused only modest changes between 2014 and 2015.

The GAO on Monday also released a report recommending that Congress require Medicare to pay certain exempt cancer hospitals in the same way in pays teaching hospitals, saying that methodologies for paying the exempt hospitals provided little incentive to control costs.

In 2012, the report found, Medicare payments to the exempt hospitals and the teaching hospitals, were substantially higher – roughly 42 percent more for inpatient services.

March 23, 2015

CMS Weighs Expanding Payment for End-of-Life Planning

Medicare officials may this year propose creating a new payment for time that doctors spend helping their patients plan for how they would confront terminal illness and rapid declines in health.

Patrick H. Conway, the chief medical officer for the Centers for Medicare and Medicaid Services, gave an update on this work Friday at an Institute of Medicine conference on end-of-life planning. CMS last year rejected a request from the American Medical Association to create a new billing code, but clearly signaled an interest in looking further at this proposal as part of a future rule on payments for doctors.

“In this year’s rulemaking, we will be considering whether to propose that code and whether there will be a payment for that code,” Conway said, adding that he couldn’t comment further.

Many doctors and lawmakers are pressing to incorporate end-of-life counseling into routine medical practice in the United States, moving beyond the limited discussion now covered as part of the wide-ranging “Welcome to Medicare” visit. The approach came under fire during the debate leading to enactment of the 2010 health law, with critics portraying it as a government effort to establish “death panels.”

Advocates for end-of-life planning say a lack of planning can lead people to suffer through needless treatments and long hospital stays when they might prefer to spend more time at home. Noted surgeon and author Atul Gawande pointed out at Friday’s meeting that the week in which people in the United States are most likely to undergo surgery is the last week of their life. Without advanced consideration, the wishes of the dying person can be overlooked in a hurried chain of discussions about their care, with family members often flying in from all over the country to attend a loved one, he said.

“There’s been no plan and no discussion,” he said.

While CMS’ rulemaking may provide the most direct path for expanding end-of-life planning among elderly Americans, lawmakers also are weighing action. Sen. Susan Collins, R-Maine, and Mark Warner, D-Va., addressed the IOM meeting early in the day. Collins had helped get the advanced directive discussion included in the Welcome to Medicare visit.

“Many people nearing the end of life may not be physically or cognitively capable of making their own decisions about care,” Collins said in remarks prepared for the IOM meeting. “Moreover, some of these patients will, at some point, receive acute hospital care from physicians who do not know them or their families.”

Warner is likely to reintroduce a measure that he offered in the last session of Congress, a bill developed with Sen. Isakson, R-Ga., that would create a Medicare and Medicaid benefit for end-of-life planning. Speaking at the Institute of Medicine meeting Friday, Warner recalled how that even families with access to good medical information now struggle when confronting with terminal illnesses, as happened in his own mother’s fight with Alzheimer’s disease. After her initial diagnosis, his family didn’t discuss living wills and advanced care directives or what his mother wanted in her final years.

“I was an informed citizen at the time – the governor of Virginia – and yet my family and I didn’t have a full understanding of everything that was before us,” Warner said. “With more information and support, we could have been able to hold important family discussions with my mother, worked with her doctors and pastor to craft a care plan that truly reflected her wishes.”

March 20, 2015

Hospitals Press for Relief From Medicare Readmission Penalty

While pressing for relief from a penalty tied to readmission rates, hospital executives showed how the Medicare policy is spurring a deeper look at how some of the poorest Americans live.

The American Hospital Association briefed congressional staff Thursday about its bid to change the penalty policy, which it is seeking to attach to a measure that designed to prevent a cut in Medicare payments to doctors.

About 2,600 hospitals faced fines related to relatively high readmission rates for certain conditions in fiscal 2015, with penalties totaling about $428 million, according to the AHA.

Hospital officials contend that Medicare should factor in the socioeconomic status of patients served when assessing the readmission fee for hospitals. The penalty, created by the 2010 health law, is leading hospitals to more carefully consider what happens to patients after they are discharged for select common conditions, such as heart failure and heart attacks.

“They honestly may not have somewhere to go that night when you discharge them,” said Rachel George of Illinois’ Presence Health. “They certainly may have to make choices about whether they pick up their medication or they are going to eat, or if they are going to pick up their medications or if they are going to stand in line for a shelter.”

Her hospital network is trying to help patients avoid readmissions with steps such as providing 30 days worth of medication, she said.

In the end, though, there is only so much that hospitals can control, she said.

“To penalize hospitals because we cannot solve the socioeconomic issues in the communities that we face, that’s a challenge,” she said.

In addition to trying to attach a bill on the readmission penalty to the doc fix measure, the AHA is backing bills (HR 1343, S 688)  that have been introduced in both chambers addressing this issue.

By Kerry Young Posted at 2:01 p.m.
Hospitals

March 19, 2015

CMS Weighs Expanding Coverage of PET Cancer Scans

In the latest round of battles over Medicare payments for positron-emission tomography, or PET, scans, federal officials are considering a request to greatly widen coverage for a form of the test to track whether cancers have spread to the bones.

Doctors who oversee a key research body for use of PET scans in cancer patients have asked for national Medicare coverage of a version of test that uses a form of sodium fluoride to check for unusual growths in bones. The Centers for Medicare and Medicaid Services now limits its payment for this product to people who participate in the National Oncologic PET Registry (NOPR), a requirement that is part of the agency’s “coverage with evidence development” approach to evaluating products.

In a letter last month to CMS, the leaders of the NOPR argued that finding from this research effort on the sodium fluoride scans support their request to end the data collection requirement, and allow national Medicare coverage with the product for cancer in general. Reports made by doctors to the NOPR indicate that the scan allowed them to avoid ordering additional noninvasive tests in 71 percent of cases and invasive procedures in 66 percent, according to the letter.

“The NOPR has been successful in meeting the goal for which it was established — providing clear, extensive data on the previously little-researched question of whether there is a clinical benefit” of using the scans to identify bone metastasis,  wrote Bruce E. Hillner, the chair of the NOPR and his cochairs, Barry A. Siegel and Anthony F. Shields, in a Feb. 15 letter to CMS.

CMS formally accepted their request for its national coverage analysis process on March 16, and will accept comments regarding it through April 15. A proposed decision is due Sept. 16, with a final one slated to be completed by Dec. 15.

PET scans seem to have attracted special scrutiny from CMS over the years, with the agency having used the national coverage analysis more than dozen times for different forms and uses of the test, such as checking for signs of Alzheimer’s disease. That makes PET scans one of the technologies most heavily studied by CMS through its NCA process.

In PET tests, a small amount of a radioactive material known as a tracer is injected into a patient. Doctors can then again information about what’s happening in the body through following the path of the materials, such as checking for the spread of cancer.

CMS created the NOPR in 2006 as part of its answer to a request that Medicare cover PET testing with another agent, F-fluorodeoxyglucose (FDG), for more cancers, Hillner, Siegel and Shields noted in their letter. By 2013. CMS approved a request from NOPR to end the data collection requirement and provide coverage for essentially all cancer uses.

By Kerry Young Posted at 9:05 a.m.
Cancer

March 18, 2015

Children’s Health Coverage Losses Outlined in Multiple Scenario Study

More than 3.3 million children could lose their health care coverage if Congress does not renew the Children’s Health Insurance Program, the Supreme Court strikes down subsidies in the federal marketplace and states scale back coverage.

That scenario is the most dramatic of seven situations affecting children’s coverage that the Urban Institute analyzed in a report released Tuesday.

Coverage for kids faces a number of challenges in the next few months. Funding for CHIP expires Sept. 30 absent congressional action. The Supreme Court could rule in the King v. Burwell case that federal health law subsidies are only allowed in state-run marketplaces and not in the federal marketplace, which could erode coverage for families.

And if Congress does not renew a requirement in the health care law that states must maintain coverage for children through 2019, some states could decide to scale back eligibility levels. States might decide to stop offering Medicaid coverage for kids in families with income above 138 percent of the federal poverty level. States that choose to expand Medicaid have to offer Medicaid benefits up to that amount.

The Urban Institute researchers looked at several possible scenarios in which the Supreme Court allowed tax credit subsidies to continue for people in all marketplaces. If the credits remained available but coverage under certain CHIP programs that stand apart from the Medicaid program is eliminated, the researchers estimate that about 1.1 million children would lose coverage. If Congress also got rid of the requirement that states maintain their current eligibility for children and states stopped providing Medicaid coverage for kids in families over 138 percent of the poverty level, an additional 828,000 kids would lose coverage.

The report also examined what would happen if the Supreme Court struck down subsidies in the federal marketplace. That type of ruling would leave about 730,000 more children without coverage compared to what would occur if the marketplace tax credits were available in those states. The researchers noted that under that scenario, eligibility for Medicaid and CHIP would not change. If CHIP under standalone state programs expired on top of a court ruling eliminating subsidies in the federal marketplace, another 1.2 million kids in addition to the 730,000 kids would lose coverage.

Adding the possibility of states cancelling Medicaid coverage for families above 138 percent of the poverty level, an additional 1.4 million children would lose coverage. Altogether, those three categories of children who would lose coverage would total more than 3.3 million kids.

If none of these circumstances happen, the health care law under current law is expected to reduce the number of uninsured children by roughly half, said the report.

By Rebecca Adams Posted at 9:41 a.m.
Insurance

March 17, 2015

Racial, Ethnic Health Coverage Disparities on the Decline, HHS Says

Minorities have gained health insurance at higher rates than white Americans since the marketplaces created by the health care law opened in October 2013, Health and Human Services officials said Monday in releasing a report that found 16.4 million people gained insurance since 2010.

African-American and Latino adults still remain less likely to have health coverage than white people. However, the disparities are declining.

HHS Secretary Sylvia Mathews Burwell called the increases in insurance rates “the largest reduction in the uninsured in four decades.”

Before the marketplaces opened, about 14.3 percent of white adults did not have coverage, compared to 22.4 percent of African-Americans and 41.8 percent of Hispanics, according to the HHS report. As of March 4, about 9 percent of white adults were uninsured, compared to 13.2 percent of African-Americans and 29.5 percent of Latinos.

The improvement is “not probably exactly where you want to be because the numbers are still high,” Burwell told reporters Monday morning.

“We did a lot of things to highly target those communities,” said Burwell. “I believe we can do more.”

She noted that she held a large number of events focused on urging minorities to sign up for coverage, including Google hangouts, visits to African-American churches, and an increased percentage of ad buys on Spanish-language media. HHS officials are now analyzing which efforts worked.

Hispanic adults stand out because they are less likely to have employer-sponsored insurance and because people who are in the country illegally are not eligible to buy insurance through marketplace plans created by the health law. Those who live in states that have not expanded Medicaid to more people also have fewer opportunities for coverage.  Nationwide, about 1.5 million Latinos would gain coverage if all states expanded, said Steven Lopez, a health policy expert at the National Council of La Raza, an advocacy group. About one million of them live in just two states: Florida and Texas.

“We’re encouraged by what we see as an upward trajectory,” said Lopez. “But we know it’s going to take time to bring those numbers down.”

Lopez and other advocates are encouraging HHS officials to tweak their outreach efforts and make it easier for people without a long credit history to verify their identities so that they can get coverage.

The HHS numbers indicate the percentage of adults over the age of 18 who have coverage. HHS officials are expected to release more comprehensive data including children later this year.

For young adults between the ages of 19 to 25, the uninsured rate dropped from 34.1 percent to 26.7 percent since 2010. The law allows young adults to stay on their parents’ coverage until age 26, in addition to providing new coverage options for some young adults through marketplace insurance or Medicaid.

The HHS analysis was based in part on previously-reported survey data from 27,800 adults through the Gallup-Healthways Well-Being Index survey, which was released on March 4. That information showed that 12.3 percent of the U.S. population is uninsured. The organization will release new numbers in early April.  The agency also used previously-reported data from the National Health Interview Survey conducted by the U.S. Census Bureau.

About 40 million adults were uninsured before insurers started selling insurance through the marketplaces in 2013, and about 26 million adults are currently uninsured, based on data extrapolated from the uninsured rates.

The report and remarks by Burwell come as part of the administration’s publicity around the upcoming anniversary of the health care law, which President Barack Obama signed almost five years ago.

The news comes as federal and state officials are waiting for a ruling, expected to probably come in June, on whether federal tax subsidies should be available in states that did not create their own state-run enrollment marketplaces.

March 16, 2015

Admininstration Behind in Sending Corrected Health Tax Information

Federal officials are behind schedule in sending out corrected health insurance tax subsidy information that people who obtained coverage through the health law marketplace need to file their taxes.

Centers for Medicare and Medicaid Services officials last week declined to say how many of 800,000 incorrect tax forms they have fixed and sent to taxpayers. In February, CMS officials acknowledged that the health insurance tax credit subsidy information was wrong and pledged to mail out new forms by the first week of March. CMS and Treasury spokespersons wouldn’t say if people who are still waiting for the Obama administration to fix their forms will get any automatic extensions in filing their taxes or other assistance.

Administration officials also have declined to specify how many people are affected by the 800,000 incorrect tax forms, known as 1095A forms.

The error affected about 20 percent of the tax forms for people who bought marketplace coverage last year.

Consumer advocates are concerned about the delays in providing accurate information for these people because many of the individuals are low-income and depend on getting their tax refunds quickly so that they can pay their bills.

About 87 percent of the people who bought federal marketplace coverage through healthcare.gov in 2014 had incomes that were low enough that they qualified for subsidies to discount their coverage. Subsidies are available for people with income at the federal poverty level, which was $11,490 for 2014 coverage, up to those with income that is four times that much.

CMS Marketplace CEO Kevin Counihan told reporters on a call Friday that federal officials would “soon” release more information on the administration’s efforts to fix the mistake. CMS Deputy Administration Andrew Slavitt said that it was “not correct” that no 1095A forms at all have been corrected and sent back, but he declined to elaborate.

Some of the people with incorrect forms may owe more money than the original forms indicate, while others may get bigger refunds.

Taxpayers represented in about 50,000 of the forms had already filed their taxes when administration officials informed the public about the error. Treasury Department officials said last month that the administration would not chase taxpayers who had already filed, using the wrong information, and may actually owe more than they paid.

Counihan said that administration officials are focused on building awareness of a special enrollment period that begins Sunday and runs through April 30 for people who had to pay a tax penalty for foregoing coverage in 2014 and still need to buy insurance this year. People will still have to pay the 2014 penalty and any penalty they may owe for not getting covered yet this year, but they would have the opportunity to buy insurance and stop accruing additional fines.

The Affordable Care Act requires people who went without coverage last year for at least three months to pay an annual fee of 1 percent of their income, or $95 per person, whichever is more.  In 2015, the fee rises to 2 percent of income or $325 per person.  If people are covered for part of the year, the fee is reduced and is based on how many months they did not have coverage.

By Rebecca Adams Posted at 9:14 a.m.
Insurance

March 13, 2015

CDC, Doctors Team on Diabetes Initiative

With 90 percent of people who have pre-diabetes unaware that they even have the condition, the Centers for Disease Control and Prevention and the American Medical Association are calling on doctors to ramp up screening efforts and raise awareness about the risk factors for developing a full onset of the disease.

Patients with pre-diabetes have higher blood sugar levels than normal, but are not yet at the levels associated with diabetes. However, without taking preventative steps, these individuals are at a much greater risk for developing type 2 diabetes, stroke or heart disease. Around 86 million adults have pre-diabetes, according to the AMA, who labeled diabetes as “one of the nation’s most debilitating chronic diseases.”

“Our health care system cannot sustain the number of people with diabetes,” said Ann Albright, director of CDC’s Division of Diabetes Translation, speaking in a press call Thursday. “Screening and referring those at risk is critical. When people know, they are more likely to take action.”

The AMA and CDC are expanding their ongoing efforts to combat diabetes by focusing on awareness and early prevention through enlisting greater help from physicians. The AMA, which is the nation’s largest association of physicians, said it would use its wide-reaching connections to spread the message to stakeholders.

Their joint initiative, which will focus on screening, testing and acting on a potential diagnosis of pre-diabetes, includes an interactive website and toolkit for both patients and doctors. A “screening” button allows individuals to take an at-home test to determine whether they may be at risk for having pre-diabetes, while a toolkit for health care professionals provides detailed information about testing and referrals.

The CDC and AMA said the goal of the initiative is not only to increase the number of people who are aware of their pre-diabetes, but to also encourage them to act on it by funneling them into existing diabetes prevention programs. The website contains a link to find nearby locations.

However, Albright acknowledged that the next critical step will be making sure more of the programs – which AMA said are 70 percent effective in delaying or preventing individuals over 60 from developing type 2 diabetes – are covered by health insurance.

“It’s critical for people to know whether they have pre-diabetes so they can take action,” Albright said. “So by increasing the number of people who know they have it, and the number who take advantage of a lifestyle-change program, we have a significant opportunity to reduce these cases.”

March 12, 2015

Many Households Lack Liquid Savings to Pay Deductibles, Study Shows

More than a third of non-elderly U.S. households have enough liquid savings to pay the annual mid-range deductible for a private insurance plan, raising the prospect that many Americans could forego care, according to a new Kaiser Family Foundation study.

While concerns about cost-sharing are not new, the study notes that coverage expansions under the health care law have put a new focus on defining affordable coverage. Family expenses can easily exceed $10,000 when someone becomes seriously ill, the study notes.

“The goal of the law was to cover more of the uninsured, many of whom have limited means,” the study’s authors note. “The issue for some families … is that the policies with affordable premiums may have cost-sharing requirements that would be difficult for them to meet when they access services.”

The study uses Federal Reserve data to compare households’ liquid financial assets with cost-sharing representative of health plans offered by employers or available on the individual market, including in health law exchanges.

Researchers found 32 percent of lower-income households have sufficient liquid resources — defined as bank accounts, CD’s and stocks — to pay a $1,200 annual deductible for an individual or a $2,400 deductible for a family. Only 20 percent of those households can afford an annual deductible of $2,500 for an individual or $5,000 for a family. The cohort is defined as having income of 100 percent to 250 percent of the poverty level, or $11,770 to $29,425 for an individual.

The study also found 38 percent of moderate-income households lack the liquid savings to cover a mid-range deductible. Moderate-income is defined as 250 percent to 400 percent of the poverty level, or $29,425 to $47,080. Because the health law doesn’t provide cost-sharing for this group, individuals would have to borrow money or become indebted to health providers if they get seriously ill.

The study found less than half, or 47 percent, of households without enough assets to pay deductibles could obtain $3,000 from friends or family to help in an emergency.

March 11, 2015

Hepatitis Pills Contributed to 13 Percent Spike in Drug Spending

Costly new hepatitis pills helped drove a 13 percent increase in drug spending last year among insurer-managed plans in the United States, a rate not seen in more than a decade, according to a report from the pharmacy benefit manager Express Scripts.

A course of therapy to treat the liver-damaging hepatitis C virus could cost as much as $150,000 with the approvals of medicines such as Gilead Sciences Inc.’s Sovaldi and Harvoni and Johnson & Johnson’s Olysio, Express Scripts said in the report, released Tuesday. Driven as well by higher costs of specialty and compounded medicines, the estimated drug spend in general for each person in commercial-insured plans was $980 in 2014.

The new hepatitis C medicines are particularly challenging for government health plans and programs.

“With more than 750,000 patients with chronic hepatitis C receiving state-funded healthcare through either Medicaid or the prison system, the burden of paying for the cost of these hepatitis C treatment regimens falls disproportionately on state budgets, as opposed to commercial insurance plan budgets,” St. Louis-based  Express Scripts said.

The federal Bureau of Prisons also is facing a spike in its costs for caring for prisoners who have hepatitis C, or HCV, with the average cost to treat an inmate now seen at about $100,000, according to a Justice Department budget document.

“The BOP has historically treated approximately 250 HCV patients per year. Continuing this treatment rate would increase HCV treatment costs to $25 million per year,” the DOJ said in a fiscal 2016 budget justification. “These costs have been between $4 and $5 million over the last several years.”

Express Scripts noted that industry research suggests the newer hepatitis pills will raise costs for Medicare’s Part D drug program by $2.9 billion to $5.8 billion in 2015.

Gilead contends that purchasers already are pushing for deep discounts for its drugs for hepatitis C.

“Any change in the formulary coverage, reimbursement levels or discounts or rebates offered on our HCV products to payers may impact our anticipated revenues,” Foster City, California-based Gilead said in an annual report filed last month with the Securities and Exchange Commission. “We also expect pricing pressure in the HCV market to continue.”

The Senate Finance Committee, which oversees the Medicare and Medicaid programs, has questioned the price charged for Sovaldi, Gilead said in the filing. Cooperating with the committee’s request has proven “costly and time-consuming” and Gilead “cannot predict the outcome” of Senate Finance’s work in this matter. 

“It is possible that the inquiries could result in negative publicity or other negative actions that could harm our reputation, reduce demand for Sovaldi, Harvoni or” related products,” Gilead said.

By Kerry Young Posted at 10:20 a.m.
Pharmaceuticals

March 10, 2015

Burwell Defends Nationwide Subsidies for Health Law

The fact that 87 percent of the 11.7 million people who got covered in the health law’s individual exchange market received subsidies shows “just how important the tax credits are to millions of Americans and to the insurance markets in those states,”Health and Human Services Secretary Sylvia Burwell said on Monday.

The subsidies are at the core of a Supreme Court case against Burwell and the Obama administration that was argued March 4. The challengers contend that people in the 34 states that did not set up their own marketplaces should not get federal tax credits to subsidize the costs of their insurance under the health care law.

Burwell said the Obama administration is “confident that we will prevail” because she said the structure of the law is clear.

“Those who support this lawsuit believe that the law should be dismantled or repealed and they are content to back the progress that we have achieved,” she told supporters at a White House event.

The numbers that Burwell released Monday update previous estimates that the administration released on Feb. 17 showing that 11.4 million people had enrolled. A week later, administration officials provided a partial update with data from federal exchanges only.

The new numbers include data from both federal and state-run marketplaces through Feb. 22.

By Rebecca Adams Posted at 11:37 a.m.
Insurance

March 9, 2015

Utah House Adopts Alternative Medicaid Plan

Utah lawmakers approved a more modest alternative to Republican Gov. Gary Herbert’s Medicaid expansion plan on Friday after a contentious debate.

The House’s 56-18 vote sends the measure to the state Senate. Herbert’s measure, known as Healthy Utah, passed the state Senate late last month but failed on Wednesday night to make it out of a House committee. The panel instead approved the alternative, called Utah Cares, which costs almost as much as Herbert’s plan but covers a much smaller population. The House bill would bring in a much smaller pot of federal matching grant money the governor’s plan.

House Majority Whip Francis Gibson, R-Mapleton, told representatives before the vote they should “feel free” to oppose Utah Cares, but called it “analogous to the guy in the desert who walks past a glass of water because he wants a gallon,” according to the Deseret News of Salt Lake.

Democrats tried to substitute Herbert’s proposal for the Utah Cares bill, sponsored by House Majority Leader Jim Dunnigan, the chamber’s second-ranked Republican, but fell short in a 22-52 vote, even as 10 Republicans joined the dozen members of the minority party.

Rep. Marie Poulson, D-Cottonwood Heights, a member of the Legislature’s Health Reform Task force that studied options for the Medicaid expansion available under the Affordable Care Act, said she was offended by the name of the House plan, according to the Deseret News account of the debate:

“We can care more. Utah needs us to care more about the lives of our citizens than we do about making a political statement,” Poulson said, calling the limited coverage offered by Utah Cares a “huge missed opportunity.”

Herbert had said he was open to suggestions floated by some lawmakers to approve both Healthy Utah and the rival plan, with one taking effect for a couple of years and the other being implemented later if the original plan doesn’t work well. But Herbert insisted that Healthy Utah should be implemented initially and that the narrower plan be available as a fallback option of costs turn out to be too high.

Herbert said that his program could be capped so that if costs exceed expectations, new applicants would not get the same benefits as people who were already enrolled and would be grandfathered into that level of coverage. Herbert won assurances from Health and Human Services Secretary Sylvia Mathews Burwell that the unusual cap would be approved.

The governor also sought to portray the House version as the fiscally unsustainable option. Because that bill would not expand Medicaid under the health care law, it would attract fewer federal dollars.

Matching Rate

The health care law provides a generous matching rate to states that expand to the population that Obama administration officials want. The administration will cover all of the costs through 2016 for people who qualify under expanded eligibility guidelines if states broaden the population to anyone with income up to 138 percent of the federal poverty level. That full financing phases down until the federal Department of Health and Human Services will cover 90 percent of the costs for those people starting in 2020.

The Utah Cares plan would not meet the federal requirements for the 100 percent federal matching money and cost $56 million in state revenues and draw down $139 million in federal matching grants in 2021, according to House legislative estimates. The program would cover an additional 32,000 adults with comprehensive care and provide basic care to 61,000 adults. The estimates include people who qualify under previous eligibility guidelines but learn of benefits and enroll for the first time.

The governor’s version would have cost $78 million in state funds while attracting $648 million in federal matching moneyin 2021. It would cover about 146,000 people.

Under Utah legislative rules, it would be rare for Dunnigan’s bill and Herbert’s plan to be reconciled in a conference committee.

“You can never say never, however,” said Gates, the spokesman for House Republicans. “And Rep. Dunnigan is never one to close a door.”

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