Monday, October 14, 2019

Attorney general hopefuls say they'd go after opioid makers

Both candidates for attorney general of Kentucky said Monday night that they would press legal action against manufacturers of opioids, and Democrat Greg Stumbo said he would pursue criminal charges against the Sackler family that owns Purdue Pharma, the make of Oxycontin.

"They are killing 30 Kentuckians a week," Stumbo said in a 55-minute forum with Republican Daniel Cameron, a former aide to U.S. Senate Majority Leader Mitch McConnell, on KET's "Kentucky Tonight."

Cameron said he would reopen the "paltry" $24 million settlement that the state got from Purdue Pharma in a lawsuit that Stumbo filed in Pike County as attorney general in 2004-07. The case was settled by his successor, Democrat Jack Conway, at the end of 2015.

Stumbo said he would seek to reopen the case if he finds that Purdue Pharma representatives lied in responding to questions in it.

Stumbo, 68, put more emphasis on the drug issue than Cameron, 33, and made his closing statement entirely about it.

Saturday, October 12, 2019

Weekly editor says he's coming to Nov. 15 workshop on drug coverage because 'We cannot continue to wear blinders'

Why should journalists attend a workshop on covering local drug problems?

"We cannot continue to wear blinders and ignore this problem that is now affecting every member of our communities," writes Dennis Brown, editor and publisher of the Lewis County Herald, who has signed up to attend the Covering Substance Abuse and Recovery workshop in Ashland on Nov. 15.

"I’m looking forward to attending the workshop to get some tips on covering what has truly become an epidemic for our area," Brown told the University of Kentucky's Institute for Rural Journalism and Community Issues, which publishes Kentucky Health News and is holding the workshop with Oak Ridge Associated Universities.

"The vast majority of law enforcement activity in Lewis County is directly related to substance abuse. Our jail is overflowing," Brown wrote. "The number of deaths in our community attributed to overdosing or long-term substance abuse has skyrocketed."

Brown reported that he has written stories "on school teachers, politicians, and otherwise 'good' community members who have fallen victim to this demon. . . . I feel we should be directing much more of our attention to this matter and exploring ways we can help curb the spread of addiction and provide our community members with information on helping themselves and/or family members through the limited available avenues of recovery."

The workshop will be held at the Marriott Delta Downtown from 8:30 a,m. to 5:15 p.m. Nov. 15. space is limited, and the earlybird registration rate of $50 is good until Nov. 1. Registration will close Nov. 8. Click here to register

The presenters include Pulitzer Prize winners Eric Eyre of the Charleston Gazette-Mail and Terry DeMio and Cara Owsley of the Cincinnati Enquirer. Beth Macy, award-winning author of Dopesick: Dealers, Doctors, and the Drug Company That Addicted America, will appear via Skype. Sharon Burton, editor and publisher of the Adair County Community Voice in Columbia, a national leader in substance-abuse coverage by weeklies, will discuss her recent efforts.

"The lineup of presenters for the workshop have the background and experience to arm journalists with the information we need to do the job we should be doing," Brown writes.

Research by ORAU has shown that the stigma attached to drug use and addiction are major obstacles to news coverage of the problem, which makes it harder for communities to find solutions.

The workshop will be preceded by informal gathering at the Delta hotel on Thursday evening, Nov. 14. A room block with a favorable rate of $109 a night is available at the Delta. The registration site has a link to the hotel reservation site. Please contact Institute Director Al Cross with any questions: al.cross@uky.edu.

Lawmakers say drug stores' issues with Medicaid pharmacy benefit managers will be a key issue in the next legislative session

By Melissa Patrick
Kentucky Health News

State Rep. Danny Bentley didn't mince words when he told a health advocacy group that a priority of the next legislative session will be to deal with pharmacy benefit managers' Medicaid payments to drug stores.

Independent pharmacies in Kentucky and around the nation have said for years that the problems are so bad that PBMs threaten their survival.

L to R: Reps. Russell Weber, Joni Jenkins and Danny Bentley
and Sens. Stephen Meredith and Morgan McGarvey
"I'm ready to do away with all of them," Bentley said, adding later, "PBMs are not honest, period."

Bentley, a Republican from Russell in Greenup County, was speaking as part of a legislative panel titled, ""Preparing for the 2020 General Assembly" at the Oct. 11 Kentucky Voices for Health annual meeting in Lexington.

In his effort to explain what PBMs do, Bentley first noted that he had dealt with them for 44 years as a registered pharmacist and opined, "Really, they don't do anything." He said one of the main issues with them is their lack of price transparency and the lack of legislation to require them to be so.

PBMs are middlemen between insurers and drug manufacturers. They determine what drugs are offered, how much someone pays for the drug, and the payments to pharmacists.

Lawmakers have been working on PBM issues for years. Most recently, in 2018, they passed Senate Bill 5, which let the Department of Medicaid Services, rather than managed-care organizations that handle relations between patients and health-care providers, set pharmacists' reimbursement rates.

The law lets the agency regulate contracts between the MCOs, pharmacists, and PBMs; requires more transparency in how PBMs spend the $1.7 billion a year they get for processing prescriptions in Kentucky; and gives the state authority to penalize the MCOs and PBMs for noncompliance.

In a report earlier this year, "Medicaid Pharmacy Pricing: Opening the Black Box," the state said two PBMs kept $123.5 million last year from the Medicaid program by paying pharmacies a lower rate to fill prescriptions, while charging the state more for the same drug.

Medicaid Commissioner Carol Steckel assured members of the Medicaid Oversight and Advisory Committee in July that the state was committed to resolving the payment issues of PBMs, which she called "predators." The state is negotiating contracts with the MCOs, which will take effect in July 2020. MCOs hire PBMs to oversee their drug benefits.

The attorney general's office is investigating whether PBMs have overcharged the state and discriminated against independent pharmacies.

Ohio is among the states that have tried to rein in questionable payment practices of PBMs. Last year, two Ohio PBMs "billed Medicaid $244 million more in a single year than they paid pharmacies, allowing them to profit three to six times the industry standard," Catherine Candisky and Darrel Rowland reported for The Columbus Dispatch.

Ohio Medicaid officials, among other things, then banned "spread pricing," in which a PBM keeps the difference between what it bills Medicaid and what it pays the pharmacy; and imposed a "pass-through" pricing model, which requires PBMs to pay pharmacies the same amount they bill the state.

A new analysis shows that this new model "netted an additional $38 million, a 5.7% increase, in the rates paid pharmacies to fill prescriptions during the first quarter of this year compared with the final quarter of last year," the Dispatch reported.

Kentucky's Medicaid department told lawmakers in July that one of the proposed changes in the state's new MCO contracts will require all PBMs to use a "pass-through model" of payment.

Other states have fired their PBMs. Michigan has proposed to fire its PBMs and manage its drug program itself starting Dec. 1, which is expected to save the state $40 million; California will shift all Medicaid benefits from PBMs by 2021; and West Virginia fired its PBM in 2017, Axios reports.

Steckel, the Kentucky Medicaid boss, said in July that she was using Kentucky data to replicate a West Virginia study showing the impact of removing pharmacy services from MCOs, which is what the Kentucky pharmacists' lobby and many legislators want. The West Virginia study found that the state saved $54 million by removing prescription drugs from Medicaid managed care.

State Sen. Ralph Alvarado spoke at the Kentucky Voices
for Health annual meeting. (Photos by Melissa Patrick)
Sen. Ralph Alvarado, the lieutenant governor candidate running with Gov. Matt Bevin, did not participate in the panel, but spoke to the group briefly beforehand. He said if the state's analysis shows it would make financial sense to remove pharmacy services from the MCOs, "you can expect that to be brought back in" to the government.

Also on the panel were Rep. Joni Jenkins and Sen. Morgan McGarvey, Democrats from Louisville, and Sen. Stephen Meredith of Leitchfield and Rep. Russell Weber of Shepherdsville, Republicans.

The legislators said other issues likely to be brought up in the next session are medical marijuana; expanding nurse practitioners' scope of practice; insulin cost; health department funding; and electronic cigarettes. Weber, who sits on the Public Assistance Reform Task Force, said he was not sure if it would recommend legislation.

Alvarado told the group that he and Bevin had discussed ways to approach e-cigarettes, which as of Oct. 8 had been associated with 1,299 cases of lung injury and 26 deaths in the U.S. He said the ideas include outlawing "vaping" altogether, as a few states have done; taxing it at a higher rate and using the money to pay for education and getting people off of tobacco products; and placing all e-cig products behind the counter and requiring proof of age, with limits on purchases. He said that would allow adults who want to use the products in order to quit smoking combustible tobacco to get them.

Friday, October 11, 2019

Federal appeals-court judges indicate they are unlikely to revive Gov. Matt Bevin's plan for work requirements in Medicaid

Bevin is running for re-election on his Medicaid plan. This
mailer is from Americans for Prosperity, a conservative group.
Federal judges were dubious Friday of Republican Gov. Matt Bevin's campaign to add work requirements to the Medicaid program, as they heard an appeal of rulings that have blocked it.

“People are going to lose coverage … and you haven’t addressed that,” Judge Harry Edwards told Trump administration lawyers during oral arguments at the U.S. Court of Appeals for the District of Columbia Circuit in Washington.

Edwards and the other two judges asked how the plan would "fulfill the central objective of Medicaid, which is to ensure health coverage to the nation's most vulnerable citizens," reports Deborah Yetter of the Louisville Courier Journal.

"The government argued that in order for states to maintain a certain level of quality of coverage for everyone, states can compel able-bodied adults that are covered by Medicaid under the Affordable Care Act to work for a certain amount of time each month to promote general physical health and financial stability," Alexandra Marquez reports for the Lexington Herald-Leader.

The law doesn't allow "states to make people prove they are working in order to keep coverage, said Judge David Sentelle, brushing aside arguments from the states that requiring people to prove they are working or volunteering could make them more engaged in their communities and become healthier," Yetter writes.

Sentelle was appointed by Ronald Reagan, and Edwards by Jimmy Carter. Judge Cornelia Pillard, a Barack Obama appointee, "questioned claims by states and the Trump administration that the changes could help make people healthier and move from Medicaid to commercial insurance," Yetter reports:
"Where is the evidence that this kind of stuff is even plausibly going to have that effect?" she asked Alisa Klein, a U.S. Justice Department lawyer representing the Trump administration, which has approved such plans in nine states and has 10 more requests pending.
"It is very difficult to prove causation," Klein said.
"Indeed," replied Pillard dryly, triggering a burst of laughter in the packed courtroom.
Bevin wants to require "able-bodied" Medicaid members without children to spend 80 hours a month working, going to school or taking job training, and report their hours monthly. His administration has estimated that in five years, the state's Medicaid rolls would have 95,000 fewer people with the rules than without them, with noncompliance being one of the main reasons.

Kentucky was the first state to get work requirements approved, but a lower-court judge blocked its plan and one that had already taken effect in Arkansas.

"There is no set date for a judges’ ruling on the case, but the Justice Department has asked for an expedited decision," Marquez reports. "Depending on the decision, the suing Kentucky and Arkansas residents or HHS will have the option to appeal the case to the entire D.C. Circuit Court of Appeals or directly to the Supreme Court," either of which can refuse to hear the case.

Bevin has said he expects the Supreme Court to decide the issue. He has issued an executive order that would end the Medicaid expansion six months after a final ruling against his plan. His opponent in the Nov. 5 election, Attorney General Andy Beshear, has promised to drop the work rules.

Beshear's father, then-Gov. Steve Beshear, used the 2010 reform law in 2014 to expand Kentucky Medicaid to about 500,000 people with incomes less than 138 percent of the federal poverty level. That limit is $23,336 for a couple and $35,535 for a family of four. The federal government pays 90 percent of the expansion's cost, and about 70 percent of the cost of traditional Medicaid.

The Trump administration is giving states hundreds of millions of dollars to implement work rules. The General Accounting Office of Congress said Thursday that the Centers for Medicare and Medicaid Services is "not conducting adequate oversight" of the money, but "CMS rejected GAO’s recommendation to consider the administrative costs of such programs when looking at whether [they] are budget neutral," which the law requires, James Romoser reports for Inside Health Policy.

"Work requirements may cause significant increases in Medicaid administrative costs as states seeking to adopt the policy update their eligibility and enrollment systems, educate beneficiaries, train staff, and develop ways to monitor compliance," Romoser writes. "According to GAO, CMS officials said the agency did not review the Kentucky contract and approved Kentucky’s request based on the state’s assertion that the costs were specific to technology."

Kentucky's budget of $271 million for the work (more than $100 million of which has been spent, 87 percent of it federal money) is much larger than the five other states examined by the GAO. That's apparently because it presumes that the plan would affect 620,000 Medicaid members, a much higher number than previously published. The GAO report, which includes many details about the programs in the five states, says the figure includes people who might qualify for an exemption, so it could reflect the total number of expansion members over three years; tens of thousands of members go on and off the program each month.

Feds will remind doctors to ask people with respiratory illness whether and how much they use electronic cigarettes

Federal health agencies are about to warn doctors that they need to ask "every patient with an apparent respiratory infection" about their history of using electronic cigarettes, Julie Steenhuysen of Reuters reports.

The Centers for Disease Control and Prevention said many of the early symptoms of e-cigarette injury are the same as common respiratory infections and influenza, and flu season has started.

Through Oct. 8, the CDC and state health agencies had confirmed that 1,299 Americans, most of them under 35, had confirmed or probable lung injuries linked to e-cigarettes, and 26 had died.

"Of 573 patients whose vaping habits have been evaluated so far, 76 percent reported using THC, the psychoactive ingredient in marijuana," Reuters reports. Some also used nicotine e-cigarettes; nearly a third said they only used THC products, while 13% said they only vaped nicotine.

"In addition to flu, many respiratory infections, including fungal infections, can cause symptoms that could confound doctors and delay a vaping injury diagnosis," Reuters notes.

Thursday, October 10, 2019

West Nile virus blamed for a death in Louisville

Health officials have confirmed that one person in Louisville has died from West Nile virus and one other has been infected with it, Billy Kobin reports for the Louisville Courier Journal. 

No details have been released about the patient's death, due to patient privacy, Kobin reports.

Ann Robinson Burks, who was infected with the West Nile virus in September, told the Courier Journal that she is still fighting the virus.

Most people with the virus do not experience symptoms, according to the Centers for Disease Control and Prevention. But about one in five who are infected will develop a fever with other symptoms such as headache, body aches, join pains, vomiting, diarrhea or rash. 

Most people with the virus will recover completely, but the CDC warns that about one in 150 people with the virus can develop a serious illness, like inflammation of the spinal cord or brain. Older people and those with certain medical conditions, such as cancer, diabetes, hypertension, kidney disease and organ transplants, are at greater risk for serious illness if they contract West Nile.

The West Nile virus is most commonly spread to humans by bites from infected mosquitoes.

There is no vaccine or specific antiviral treatment for the virus. To reduce your exposure to mosquitoes minimize your time outside when mosquitoes are most prevalent, such as dawn, dusk and early evening, wear clothing that covers your skin when outdoors, apply mosquito repellent and to cover your infant's stroller or playpen with mosquito netting.

Medicare open enrollment begins Tuesday, Oct. 15

The open enrollment period for Medicare begins Tuesday, Oct. 15. This is the period in which Medicare beneficiaries can select new health-insurance plans and adapt to changes in costs and coverage and their health-care needs. If they do nothing, their current coverage will continue in 2020.

The new year will see the end of the Medicare Part D "donut hole." Beneficiaries will pay no more than 25 percent of the cost of brand-name and generic prescription drugs after any deductible, until they reach the limit on out-of-pocket spending. Also, some Medicare Advantage (Part C) plans will offer nontraditional services, such as transportation to a doctor's office, home safety improvements, or services of nutritionists.

"Because Medicare is such a large program — serving close to 60 million or almost one in five Americans — it’s also a big target for scammers," the Danville Advocate-Messenger says in an editorial. It notes that the Kaiser Family Foundation "recommends using the Medicare.gov website or calling 1-800-MEDICARE (633-4227) to find a Medicare plan you like."

The foundation has many frequently asked questions about Medicare, with answers. It advises, “If you are covered by Medicare, and you are interested in reviewing and comparing your Medicare options, make sure the plans you are considering during the Medicare open enrollment period are Medicare plans, not Marketplace plans. Medicare plans are not sold through the federal or state Marketplace websites,” which are used to sell federally subsidized insurance under the Patient Protection and Affordable Care Act, often called Obamacare.

Wednesday, October 9, 2019

States crack down on opioid treatment scams that can kill

An opioid treatment scam is snaring young adult victims across the nation, sometimes leading to patients' deaths after enrolling in programs that provide poor or nonexistent treatment. The scam hasn't been reported in Kentucky, but the state is susceptible to it because of its high levels of addiction and prescriptions for the most common drug used in medication-assisted treatment.

"Here’s how the scam works: Seemingly caring people join recovery-related online chat groups, answer addiction hotlines advertised online, or show up at fundraisers for addiction recovery. They typically say they’re in recovery themselves and are therefore uniquely qualified to help," Christine Vestal reports for Stateline. "People with addiction and their families often don’t want to ask their doctors or pastors for help because they’re ashamed and want to hide their illness. So, turning to a stranger can be appealing."

The scammers, who call themselves "patient brokers," usually sweeten the deal by offering free plane tickets and pocket money as well as waiving insurance deductibles. Patient brokers can make as much as $2,000 in commissions per patient, plus extra money when they re-enroll the same patients after relapse, Vestal reports.

"Within two to four weeks of a patient checking into a sober home where treatment is subpar or nonexistent, insurers may stop paying claims under standard protocols for that type of service, and the fraudulent operators dump their young clients on the street, prosecutors say," Vestal reports. Many then begin using drugs again and many end up homeless.

Some get lured into other fraudulent treatment programs, which insurers are required to pay for. "Past cases show that the cycle can continue until the insurance company stops paying on the patient’s 26th birthday, when the Affordable Care Act allows insurers to drop dependent care coverage under a parent’s policy," Vestal reports. In addition to spotty or nonexistent treatment, many of the fraudulent programs make extra cash by ordering excessive numbers of urine drug tests to extract more money from insurance companies.

Several states have enacted laws to outlaw patient brokering and crack down on the bogus treatment programs: Arizona, California, Florida, New York, Tennessee, and Utah. Donna Johnson, who lost her son after falling for a treatment scam in Florida, says she worries scammers are setting up shop in Maryland, and has persuaded state Rep. Karen Lewis Young to draft a similar bill, Vestal reports. Florida officials are talking to advocates in Georgia, North Carolina, New Jersey, Ohio and Pennsylvania about creating their own laws.

The anti-kickback laws work, according to Florida officials. The state enacted the nation's first such law in 2016, which has served as a template for other states' laws, Vestal reports. In Palm Beach County, for example, where fraudulent treatment programs were popular, drug overdose deaths dropped from 647 in 2017 to 400 in 2018, a nearly 40 percent decline.

There's a federal anti-kickback law, but it "only applies to federal health care programs and is not broad enough to address the full range of false marketing, insurance fraud and patient brokering that is occurring in the industry," Vestal reports.

Illnesses and deaths from e-cigarettes are still on the rise, and the causes are still not known; state health officials urge quitting

As health officials try to figure out the exact cause of more than 1,000 cases of illness related to Americans' use of electronic cigarettes, Kentucky's top health official's advice is to quit them.

Click here for a CHFS video on vaping related illness.
"As the investigation into the cause of severe lung injury associated with vaping continues, we recommend you refrain from using e-cigarettes, or any vaping product," Dr. Angela Dearinger, commissioner for the Kentucky Department for Public Health, said in a news release.

("Vaping" is a term used by manufacturers, sellers and users of electronic cigarettes, which do not produce a vapor, which is liquid particles suspended in the air, but an aerosol, which has liquid and/or solid particles suspended in a gaseous medium.)

As of Oct. 4, 25 cases of severe lung disease associated with vaping have been reported in Kentucky, with one confirmed, three considered probable and two ruled out, according to a Cabinet for Health and Family Services website that updates those numbers every Friday.

"The confirmed case involves a man in his early 30s who reported vaping with nicotine, and no THC or synthetic cannabinoid," says the state news release. Tetrahydrocannabinol is the psychoactive ingredient in marijuana; most of the patients have reported a history of using products with THC.

“We don’t know exactly which products or ingredients are responsible for the lung injury associated with vaping," Elizabeth said Anderson-Hoagland, supervisor of the Health Promotion Section in the department's Chronic Disease Program. "Until we know more, we strongly urge Kentuckians to avoid vaping any products."

Victims of e-cigarette illnesses have respiratory symptoms such as cough, shortness of breath, and fatigue. Symptoms usually worsen over days or weeks before victims enter a hospital. Some victims have also reported fever, nausea, diarrhea, vomiting, chest pain, and loss of appetite.

If you use e-cigarettes and have any of these symptoms, health officials urge you to seek medical care promptly and to take your e-cigarette products (device, cartridges, etc.) with you to the doctor.

University of Pikeville cross-country runner Dalton Stiltner
suffered a collapsed lung from using electronic cigarettes for
about a year. (Lexington Herald-Leader photo by Alex Slitz)
The Lexington Herald-Leader reported on Dalton Stiltner, a 21-year-old University of Pikeville cross-country runner. He told reporter Alex Acquisto that he had been using the popular Juul device for about a year when he became short of breath and then had searing pain under his rib cage that "felt like a hot knife was sticking out of my chest."

Stiltner ended up in the hospital with a collapsed lung and has been told that he will no longer be able to run cross country, and that future smoking of any kind would almost guarantee another collapse of one or both of his lungs, Acquisto reports.

“I wake up in the morning still reaching for my Juul, but I know I’m never going to do it again because the pain was the worst of my life,” he said. “No buzz is worth going through all this.”

The latest numbers posted by the federal Centers for Disease Control and Prevention on Oct. 1 showed 1,080 lung injuries associated with e-cigarettes. About 80 percent of the cases have occurred in patients under 35, with 16% of them in under 18, and 21% in young adults 18-20.

Claire Kopsky of WLEX-18 reports that NBC has confirmed that the number of vaping related deaths in the U.S. is up to 24, with one of the latest a 17-year-old boy in New York.

Information and support for quitting smoking is available at www.QuitNowKentucky.com or 1-800-QUIT-NOW (784-8669). You can also text “QUITKY” to 797979 for help. Also, many local health departments offer smoking cessation classes.

Rising drug prices put more pressure on Congress to act; advocates are optimistic, but drug makers are a powerful lobby

By Trudy Lieberman
Community Health News Service

Maybe – just maybe – Americans will get some relief from the relentlessly rising prices of pharmaceuticals.

That, of course, depends on Congress pushing back against the drug companies’ formidable lobbying machine, their generous campaign contributions, and the industry’s historical coziness with members of Congress. But this year seems different.

When you consider that the country’s spending on prescription drugs increased by 28 percent from 2011 to 2016, it’s easy to see why it’s harder for politicians to ignore the public anger over prices of life-saving medicines they can’t afford.

Iowa Sen. Charles Grassley, who heads the Senate Finance Committee and has co-sponsored a bipartisan bill to tackle drug prices, has said that passing a bill to control them will be essential to Republicans’ “keeping a majority in the Senate” in the 2020 elections. “Eventually it will come down to this. There are 22 Republicans up for election this year, and if it’s like in my state … there is a great deal of disgust with the rapidly increasing prices of drugs.”

Is a breakthrough really at hand?

I checked in with David Mitchell, a former public relations executive and now a cancer patient, who has been leading a grassroots effort to challenge congressional thinking about drug prices. His organization, Patients for Affordable Drugs, has heard from some 20,000 patients recounting the troubles they’ve had paying for their medicines. Many have told their stories to Congress.

Mitchell was upbeat. “The fact we’ve gotten this far, and there’s still talk of getting something meaningful done is remarkable,” he said. “The anger is really boiling up, and elected officials know and feel this anger can cost them their jobs if they don’t do something.”

He said the question is: Can a compromise be reached that will get to the president’s desk?

Drug legislation is never easy to understand, so I asked Mitchell to break down the main ideas for reform and the points of contention. Here are the main elements that could be in a final package.

Changing patent laws would encourage market competition and make it easier for generics and biosimilar drugs – similar versions of medicines made from living microorganisms found in plant or animal cells – to come to market.

Negotiating drug prices for Medicare beneficiaries would be a huge step toward helping seniors. The 2003 law that authorized Medicare’s drug benefit prohibits Medicare from negotiating prices with pharmaceutical manufacturers. A bill sponsored by House Speaker Nancy Pelosi would allow Medicare to negotiate prices for the top 250 brand name drugs that are usually the most expensive and would levy steep fines for manufacturers that refuse to negotiate.

Capping out-of-pocket costs for seniors might encounter the least opposition from the industry, and Pelosi’s bill would limit those costs to $2,000 a year. A Senate bill introduced by Grassley and Oregon Sen. Ron Wyden caps expenses at $3,100. “Everyone agrees that we need to fix the unlimited out-of-pocket expense under Medicare,” Mitchell says.

Pricing drugs more in line with other industrialized countries, using a system called reference pricing, is far more controversial. U.S. drug prices are two to three times higher than those in most other nations, and a reference pricing system would cut costs for patients and revenue for drug makers, which argue that their profits drive research that gives the U.S. the world's best drugs.

More transparency for pharmacy benefit managers, the middlemen between insurers and drug manufacturers, who cut secret rebate deals that determine what patients ultimately pay, would shine a light on how prices get set.

As Congress considers what to do, the drug industry is taking no chances that things might change. Although a recent Gallup poll shows drug companies are the most poorly regarded businesses in a list of 25 industries, their public-relations machine is in overdrive trying to convince Congress to preserve their customary path to profits. An epic legislative battle is in the making.

How do you think drug prices should be controlled? Write to Trudy at trudy.lieberman@gmail.com.

Tuesday, October 8, 2019

Ky. Rural Health Association 21st annual conference will be Nov. 14-15 in Bowling Green; discounted registration fees until Nov. 1

The 21st  annual Kentucky Rural Health Association conference will be held in Bowling Green Nov. 14-15 at Western Kentucky University's Knicely Center, 2355 Nashville Rd.

Through Friday, Nov. 1, the registration fee is $125 for KRHA members and $175 for non-members. After Nov. 1, the fees are $175 and $225, respectively. Student rates are $45 for KRHA student members and $55 for non-KRHA student members. For detailed registration information, click here. For a copy the agenda and other information, click here.

Sunday, October 6, 2019

Study concludes 16 rural hospitals in Ky. at high risk of closing; another found 35 in poor financial health; remedies proposed

By Melissa Patrick
Kentucky Health News

Many rural hospitals across Kentucky are struggling to keep their doors open. And though the numbers vary on just how many are in dire financial straits, the conclusion is the same: in much of rural Kentucky, health care as we know it is in trouble.

Table from Navigant Consulting report
"We can't keep doing health care the way that we've done in the past, and that's the bottom line," Dr. Dan DeBehnke, managing director of healthcare at Navigant Consulting Inc., told Kentucky Health News. "But the other key component to that is that there's not a single magic bullet."

DeBehnke is a former health system CEO and co-author of a Navigant study released in February, which concluded that 16 of Kentucky's rural hospitals, or almost one-fourth of the total, are at high risk of closing unless their finances improve. The study considered 65 of Kentucky's 129 hospitals to be rural.

Another report, released in April, concluded that eight rural Kentucky hospitals are at high risk of financial distress; and 12 are considered to have mid-high risk of such distress. The report was done by the Cecil G. Sheps Center for Health Services Research at the University of North Carolina, using a distress-index model it has developed in tracking rural hospitals for a decade.

And a recent Kentucky Hospital Association analysis, using 2017-18 data, concluded that 35 of the 70 Kentucky hospitals it considers rural are in poor financial health. 

KHA told Kentucky Health News in an e-mail that the "good news" is that 21 of the 35 are owned by larger hospital systems, "so it is more likely that they will continue to have support. However, that leaves 14 hospitals very vulnerable [and] 10 of these 14 are critical-access hospitals."

Critical-access hospitals get slightly higher Medicare and Medicaid reimbursements in return for limiting their size and services. Kentucky has 27 of them

KHA recently replicated a narrower study that looked at the financial health of 44 rural hospitals in 2015, and found that their situation has worsened. The first study found that 15 of the 44, or 34 percent, were in poor financial health. The updated study added eight more to the list, bringing the number to 29 23, or 66 52 percent of the total.

While the numbers in these studies vary because they define financial risk differently, Navigant's DeBehnke told Kentucky Health News that the message to be taken from them is clear.

"The message is the same," he said. "Rural health care is facing a crisis."

The crisis becomes more real every time a rural hospital closes. Nationwide, 113 have closed since 2010, according to the North Carolina center. Five have closed in Kentucky since 2009, four of them since 2014. A hospital is considered closed if it has stopped providing inpatient care, even if it still offers other services, like emergency or primary care.

Why are rural hospitals struggling? 

A main reason rural hospitals are struggling, said DeBehnke, is that patient care has shifted from an inpatient model to an outpatient one, which has left them overstaffed and underused.

"The average rural hospital has about 50 beds and has an average daily census -- so, patients actually in beds every day -- of seven," he said. "They are utilizing well less than 50% of their capacity and they've got about 300 employees."

He also pointed to the loss of agricultural and manufacturing jobs in rural communities, leaving them with a shrinking population that tends to be older and poorer, meaning they are likely to be uninsured or on Medicaid or Medicare, which don't pay for the total cost of care.

The Navigant report adds that "budget-strapped" rural hospitals are also unable to invest in updated, innovative technology due to a lack of capital.

"It's a mixture of a lot of different things that have kind of come to a head at this point," DeBehnke said.

Federal reimbursement policies 

The Kentucky Hospital Association said several changes in federal reimbursement policies have hurt Kentucky hospitals, and several more being considered would do further damage.

KHA said last-minute changes to a rule that changes how Medicare reimburses the bottom 25% of hospitals for their "wage index" will cause a $2.6 million loss to Kentucky hospitals instead of the $4 million increase they would have gained under the original version. Some Kentucky hospitals in the bottom 25% will benefit from the extra money, but eight that would have been helped from this new rule will be worse off under the new formula, says KHA.

Cuts in the Medicare program that helps hospitals with a "disproportionate share" of Medicaid patients will leave Kentucky hospitals with $77 million less by 2021, KHA says. Medicare no longer allows such hospitals to mitigate what the industry calls the "Medicaid shortfall," the difference between what Medicaid pays and the actual cost of care.

Medicaid has its own disproportionate-share program. Its proposed cuts would reduce Kentucky's payments in 2021 to $60 million, 75% less than the 2018 total of $227 million, KHA says. Those cuts have been put on hold until Nov. 21, and hospitals are still hoping to prevent or mitigate them.

Also of concern is a "site-neutral" rule, finalized in November 2018 that allows Medicare to pay the same for an outpatient hospital clinic visit as it does to a traditional clinic for the same service. A federal judge blocked the rule last month, but the government could appeal. If the rule is reinstated, KHA says, it would cost Kentucky hospitals $563 million over the next 10 years.

The Hardinsburg hospital may have been saved
by a program federal officials are trying to cut.
Kentucky hospitals would also take a hit if the Centers for Medicare and Medicaid Services cuts a federal drug-discount program known as 340B. CMS has appealed a federal judge's ruling that its Medicare 340B rate cuts for drugs purchased through the program was unlawful. KHA says such cuts would cost Kentucky hospitals $16 million a year.

The impact of federal reimbursement policies can be told in the story of Breckinridge Memorial Hospital in Hardinsburg, which was on the brink of closing, largely because of ongoing federal reimbursement cuts to Medicare and Medicaid, but was finally able to break even because it started participating in the 340B program.

Hospital officials recognized that its break-even status obtained from the 340B program was a short-term solution, but city officials said it was enough to thwart their request for a tax hike to shore up the hospitals empty savings account.

Why does it matter?

Rural hospital closures cost communities their immediate access to emergency and acute care, causing longer drive times to the nearest hospital and in some cases poorer health outcomes, especially in a traumatic event. A University of Kentucky study found that ambulance-run length for rural patients increased 76%, from 14.2 minutes to 25.1 minutes, when their hospital closes. For seniors that transport time was 98% longer, going from 13.9 minutes to 27.6 minutes.

Hospital closures can also bring economic hardship to a community, since hospitals tend to be large employers and support other businesses, like pharmacies and clinics. When the sole hospital in a community closes, per capita income declines by 4% and the unemployment rate rises 1.6 percentage points, according to a study in the journal Health Services Research.

On top of that, not having a hospital can make it more difficult for a community to attract new employers or new health-care providers; hospital closures often results in the out-migration of existing providers and specialists.

Navigant determined that 10 of the 16 rural hospitals in Kentucky at high financial risk were essential to their communities, based on an analysis of trauma status, service to vulnerable populations, geographic isolation, and economic impact.

About 41% of Kentuckians live in rural areas, according to the Rural Health Information Hub.

What can be done? 

One of the main suggestions to shore up rural hospitals is to expand Medicaid under the Patient Protection and Affordable Care Act, but Kentucky has already done that. The liberal Center on Budget and Policy Priorities says that from 2013 to 2015, rural hospitals in Medicaid-expansion states improved their operating margins by 4 percentage points more than rural hospitals in non-expansion states, and their total margins by 2.3 percentage points more.

Another suggestion is to stop requiring small rural hospitals to have inpatient beds in order to get Medicare reimbursement. DeBehnke said that would allow them to become "rural emergency hospitals," with a well-functioning emergency department and an attached ambulatory clinic designed to meet local needs. This new designation would allow them to receive special help from Medicare.

One such proposal is the bipartisan Rural Emergency Acute Care Hospital (REACH) Act which has not gained much traction in Congress though it has been sponsored by Sen. Chuck Grassley of Iowa, the Republican who chairs the Senate Finance Committee. Navigant is proposing that states be able to do this on their own, through a waiver from CMS, DeBehnke said

Another suggestion is for rural hospitals to regionalize their care, which means they would divvy up functions among hospitals or agree to let certain hospitals specialize in certain types of care. Many already do this for perinatal care, the care given before and after the birth of a child.

DeBehnke said one model could have four hospitals in a region each be responsible for one area of care. One would do inpatient care, another would be a free-standing emergency room with a robust clinic, another would provide long-term care, and another would provide behavioral-health and addiction-recovery care. He said that may sound really good to some, but is a hard sell because communities and their hospitals are reluctant to give up services.

"There's a balance between keeping some resource in that community that are health-care related or losing the facility altogether because of the financial stresses," DeBehnke said. "So we think that regionalization is a really good opportunity to stabilize rural healthcare."

It's also important for these facilities to be "really, really laser-focused on cost and cost structure," he said.

DeBehnke said there needs to be a shift away from only thinking about how to save rural hospitals to one that looks at the bigger picture, which considers the real health-care needs of rural communities and what kind of facilities and services they require.

"It's a multi-factorial problem that actually is nuanced, related to the local community and the region in which health care is provided, and the solutions will have to be tailored accordingly. There's not going to be a single fix," DeBehnke said. "It's a heavy lift, mostly from a cultural standpoint and from an emotional standpoint related to those communities."

Sen. Stephen Meredith
State Sen. Stephen Meredith, R-Leitchfield, has filed three bills for the upcoming legislative session to help rural health providers. They would remove all requirements for Medicaid co-payments; require more equitable payments between urban and rural providers from managed-care organizations, which care for most Kentucky Medicaid members; and reduce administrative burdens on providers by decreasing the number of MCOs to three from the current five.

Meredith said the bills would only help rural hospitals, not save them. "The only thing that is going to save rural hospitals is a fundamental change in the health-care delivery system," he said. "But reduced administrative costs associated with providing health care, every dollar we can put back into the care of patients versus the paperwork, that would be a benefit."

A former hospital administrator, Meredith said some rural hospitals have "a margin of 1/2 to 1 percent, that's nothing," and that could disappear if a doctor gets sick and is unable to practice "for an extended period of time."

The Kentucky Hospital Association says it also is "very concerned about the ongoing financial viability of rural hospitals," and is working to improve policies to help them. KHA said it changed the distribution methodology of the Medicaid disproportionate-share payments so that hospitals with a higher-than-average number of Medicaid patients, including critical-access hospitals, get twice the amount from the payment pool than they would have otherwise.

KHA said it is working with the state to implement a new Medicaid Hospital Rate Improvement Plan that would generate $100 million in additional reimbursement in the current state fiscal year. The money would make up the difference between what Medicaid actually pays and the actual cost of care. KHA says Medicaid pays 82% of the total cost of care. This would be accomplished through a provider tax, the revenue from which would be used to qualify for more federal funding.