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The Mythology of Safe, Cheap Drugs from Canada

February 24, 2017
1:54 pm

In January, the U.S. Senate rejected legislation, as it has multiple times in the past, which would have allowed the importation of prescription drugs from Canada.  Apparently believing that a bad idea can never have too much exposure, some senators are reportedly poised to bring drug importation up for another vote.  The evidence on this issue hasn’t changed and neither should the outcome.

Last month, the Congressional Research Service provided lawmakers with a report on the safety of the Canadian drug supply that should have put this issue to rest once and for all.  The report, compiled by a Senate committee in Canada, illustrated the differences between the rigorous drug safety infrastructure maintained here in the United States and the protocols in other countries which are, well, less extensive.  While both Canada and the U.S., for example, import ingredients used to manufacture prescription medications, the U.S. Food and Drug Administration conducts hundreds of inspections at foreign manufacturing facilities each year.  Canadian authorities conducted only 14 in 2013 and 2014.

This is of particular concern when drug counterfeiting is becoming a global crisis.  Putting a crack in our closed drug inspection-and-approval system with importation legislation will place American patients and consumers at unnecessary risk.

What Congress should keep in mind is that laws already exist to permit drug importation from Canada.  The Secretary of Health and Human Services has the authority to permit drug imports, under the Medicare Prescription Drug Improvement and Modernization Act of 2003, if it can be certified that such action will generate substantial cost savings while protecting public safety.  No HHS Secretary in either Democratic or Republican administrations has ever made that certification.

There’s no doubt that drug importation is one of those crowd-pleasing issues that looks good on paper.  The reality is, though, that it offers very little, if any, gain for consumers while carrying a very high potential cost that is simply unacceptable.

Walden Discussed Repeal and Replace Strategies at HLC Meeting

January 26, 2017
3:06 pm

On January 24 at a dinner hosted by the Healthcare Leadership Council for its members, U.S. Representative Greg Walden (R-OR), the new chairman of the influential House Energy and Commerce Committee, spoke of his panel’s goals for the upcoming healthcare overhaul.  CQ Roll Call published the following article based upon his prepared remarks.


CQ: Walden Outlines Obamacare Strategy to Health Care Executives By Joe Williams, CQ Roll Call

Energy and Commerce Chairman Greg Walden was poised Tuesday night to outline to health care industry executives his panel’s strategy for repealing and replacing the 2010 health care law, including insights on his plans to overhaul Medicaid.

The Oregon Republican planned to use his closed-door meeting with the Healthcare Leadership Council to discuss several measures his panel would consider in the coming weeks, according to prepared remarks obtained by CQ Roll Call.

A pair of hearings to be scheduled for late next week will center on stabilizing the health insurance marketplaces and on Medicaid. Walden is working with Senate Finance Chairman Orrin G. Hatch of Utah on changes to Medicaid, which provides health insurance to more than 73 million Americans.

Walden planned to confirm during his speech Tuesday night that Republicans will model their legislation largely on a repeal bill President Barack Obama vetoed last year.

“We will use our 2015 reconciliation bill as a starting point in order to repeal major portions of Obamacare, such as the individual and employer mandates, and address the Obamacare Medicaid expansion and the failing exchanges,” Walden’s prepared remarks say. They also say a “stability period” would be included in the legislation.

Walden also is expected to say that Republicans will “maintain protections for those with pre-existing conditions” and permit children to stay on their parents’ insurance plan until age 26, two provisions in the current law (PL 111-148, PL 111-152) that President Donald Trump has voiced support for keeping in a replacement plan.

In his prepared remarks, Walden calls on the Healthcare Leadership Council to engage publicly in the health care debate. The group includes executives from hospitals, insurers, pharmaceutical companies, medical device manufactures and other industries.

“We can’t do this alone. But by working together . . . we can reach our mutual goal of helping people live healthier lives and giving every American a new opportunity to get affordable health care coverage,” Walden will say, according to the prepared remarks.

Changes to Medicaid

Walden’s remarks don’t detail how the GOP would address the 2010 law’s Medicaid expansion, but he confirmed to CQ Roll Call earlier in the day he has had several meetings with Hatch to discuss their legislation on changes to the program.

Earlier this month, Walden organized a meeting between Republican lawmakers on his panel and GOP governors to discuss potential changes to Medicaid. He also attended a separate but similar meeting organized by Senate Finance.

A top aide to Trump said earlier this week the president would propose turning Medicaid into a block grant system. Some GOP governors at the meetings last week, however, suggested a per capita approach that would explicitly require the federal government to incorporate enrollment changes when determining reimbursement rates.

J. Mario Molina, president of Molina Healthcare, told CQ Roll Call both Republican and Democratic governors are likely to push for a per capita approach because it would account for potential increases in each state’s Medicaid population.

“This is going to be a debate between the states and the federal government as to how best to continue this entitlement program while trying to rein in costs,” he said in a recent interview.

Others Republican governors, including Gov. John R. Kasich of Ohio, proposed lowering the Medicaid coverage threshold to 100 percent of the poverty level and allowing people with income above that amount to get exchange coverage. The law’s expansion provides Medicaid coverage for individuals up to 138 percent of the poverty level.

 

Expert Perspectives on an Uncertain Health Policy Future

December 05, 2016
3:26 pm

As speculation heats up over how the new Trump administration and Congress will address healthcare in 2017, your time would be well spent viewing this Yahoo Finance video interview with George Barrett, chairman and CEO of Cardinal Health and incoming chair of the Healthcare Leadership Council.  In the video, he addresses the uncertainty surrounding the Affordable Care Act (ACA), believing there would be dramatic modifications under any administration but doubting we will see a full repeal of the ACA.  Mr. Barrett correctly notes that many aspects of the health law counterbalance one another, making it a challenge to determine who to make changes without creating unwanted and harmful disruptions.

There are other interesting aspects to this interview.  Mr. Barrett addresses a number of topics including the healthcare system’s difficulty in delivering care in an equitable manner, the social determinants of health and the intertwining of social issues with healthcare delivery, the systemic issue of healthcare access, and steps Cardinal Health is taking to improve health outcomes and curb hospital readmission rates.

Addressing the Unintended Consequences of the Stark Law and Anti-Kickback Statute

October 12, 2016
2:27 pm

In the new era of healthcare in which value-based care is steadily pushing aside the fee-for-service model, outdated rules and regulations continue to hinder the progress of healthcare reform.  The Healthcare Leadership Council (HLC) has been focusing on what the barriers to innovation are and how the pathway can be cleared.  HLC’s National Dialogue for Healthcare Innovation (NDHI), a platform that builds consensus among the health industry, patient groups, government and academia on issues affecting healthcare progress, hosted a webinar discussing one area considered to be a barrier, the Stark Law and Anti-Kickback Statute.

The Stark Law and Anti-Kickback Statute have been detrimental to the development of alternative payment models.  There is agreement that updates are necessary in order for broader collaboration to occur among healthcare providers, without the fear of penalties.  This uncertain environment has caused many organizations to hesitate in moving forward, and is delaying the switch from fee-for-service to value based payments.  Stephanie Zaremba, of athenahealth, voiced concerns regarding this issue in a recent blog post.

NDHI released a report at the beginning of this year that offered up six viable solutions to transform healthcare, which included the Stark Law.  Also earlier this year, the Senate Finance Committee held a hearing to examine possible ways to modernize the law.  The interest and focus on this matter is growing, and HLC/NDHI will continue to engage with cross-sectoral stakeholders in developing recommendations.  Stay tuned for the whitepaper being released in the near future.

The full athenahealth blog post can be viewed below:


A healthcare law held together by duct tape

By Stephanie Zaremba | August 12, 2016 | Opinion

The drive to fix healthcare is full of big ideas — major overhauls of how physicians are paid, patients are insured, health information is documented, and care is coordinated.

But some of the most important fixes might come from focusing on less exciting details. For example: How outdated fraud and abuse laws are squeezing innovation from the system.

Imagine our existing healthcare laws as a building. Ideally, it is well constructed at the outset, regularly maintained, and remains useful for decades into the future.

But when a law becomes riddled with exceptions — and then with addendums to close the loopholes to the exceptions — its integrity starts to fail. Pretty soon, it’s dilapidated, having exceeded its useful life, held together with a complex web of duct tape and a door that only opens if you know exactly where to kick it.

Our fraud and abuse laws — specifically, the Stark Laws and Anti-Kickback Statute — were written in the era of fee-for-service. They were essential, at the time, to addressing the fundamentally misaligned incentives created by a payment system that rewards physicians for volume.

The basic premise of the laws is simple: A physician can’t receive a financial benefit for referring a patient to another care provider or prescribing a drug, treatment, etc. As patients, we want our providers recommending care based on what is best for our health, not best for their wallets.

But as we shift away from fee-for-service and toward value-based care, Stark and Anti-Kickback are not keeping up. We increasingly see behaviors that are desirable but technically prohibited, such as a hospital paying for the electronic health record used by community physicians. So over time, each law has been subject to a few dozen exceptions and hundreds of advisory opinions carving out specific acceptable behaviors.

Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program receive broad waivers to Stark and Anti-Kickback in recognition of the fact that these laws directly prohibit what is required for ACO success: sharing of costs, infrastructure, and savings.

The Department of Health and Human Services has set aggressive goals for tying payments to value, not volume, and our fraud and abuse laws must be reformed for those goals to be realized. Currently, physicians and hospitals are prohibited from a long list of desirable behaviors under a value-based model: advising patients on the selection of a high quality post-hospital care facility; providing patients with cab rides to appointments or scales to help monitor their weight between visits; and paying for the cost of exchanging patient information electronically, to name a few.

When physicians are financially incentivized to coordinate care, they need a legal framework that encourages innovation around how healthcare providers organize, share costs, exchange information, and engage across the broad continuum of care.

But instead of reform, to date the policy changes necessary to implement this shift are piled on top of a rickety foundation and, as a result, innovation suffers.

The good news is that members of Congress are looking at ways to address problems with the Stark Laws and Anti-Kickback Statute. As they dive in, policymakers need to recognize this crumbling building for what it is: Something that needs comprehensive rebuilding, not another round of patches.

Stephanie Zaremba is director of government and regulatory affairs for athenahealth.

Patients Need Both Innovation and Accountability

September 29, 2016
1:42 pm

Let’s begin this post by stipulating the concept behind the creation of the Center for Medicare and Medicaid Innovation (CMMI) is both sound and important.

CMMI was created as part of the Affordable Care Act to test new payment and delivery mechanisms that have the potential to improve patient care while containing costs.  Given the healthcare system’s current movement toward value-based care, and the need to strengthen Medicare’s financial sustainability, having a CMMI to serve as a testing center for new ideas makes sense.

However, as the op-ed below by former Congressional Budget Office director Dan Crippen points out, CMMI has taken actions that go beyond the scope of what anyone would define as a limited demonstration project.  As Mr. Crippen writes, referring to a project affecting payment for drugs administered in a physician’s office, “Untested payment changes for Medicare benefits, especially when mandatory and applied to tens of millions of recipients, should receive much more consideration than a brief comment period before the initiation of the new policy.”

This is an issue about which we’re going to hear a great deal more in the weeks and months ahead.  The Medicare and Medicaid programs, and the millions of Americans they serve, need innovation to bring about care that is both high-quality and cost-efficient, but there also need to be built-in accountability guardrails having to do with the scope of projects and the transparency of decision-making.

Mr. Crippen is absolutely right in describing Patrick Conway, who heads CMMI, as a conscientious, effective public servant.  We look forward to working with him and elected lawmakers in Congress to assure that CMMI fulfills its intended mission in improving healthcare for current and future generations.

Here is the Dan Crippen op-ed:

I have the utmost respect for Patrick Conway, who heads the Center for Medicare and Medicaid Innovation at CMS, the federal agency that runs Medicare and Medicaid. Conway, like thousands of others in and out of government, is looking for ways to improve the health care of our nation.

However, action taken in the closing days of an administration, especially if it supersedes congressional authority and oversight, needs to be carefully examined. Last week, the House Budget Committee held a hearing taking a closer look at this with regard to CMMI and how the Congressional Budget Office evaluates costs associated with it, putting the CBO squarely in the middle of the struggle between the branches.

As recent proposals by CMMI to alter Medicare payments highlight, there are serious problems with the expansive reading of CMMI’s statutory authority. And the result is a significant shift of power from Congress to the executive branch.

The Affordable Care Act, which created CMMI, authorized CMMI to conduct demonstration projects for any part of Medicare and some of Medicaid, with the goal of saving money and improving quality. To conduct these experiments, the ACA allows the Secretary of HHS to waive virtually any part of Medicare and exempt a limited but important number of Medicaid provisions (e.g. the requirement that state Medicaid programs pay actuarially sound rates for managed care).

If HHS determines that a demonstration produces savings (or does not increase costs) and preserves or increases quality, it can expand the policy through rulemaking to the entire Medicare or Medicaid population. The process does not require any congressional approval or assessment, or review of the claims of savings and quality by the CBO or the Government Accountability Office.

With this process, HHS/CMMI can alter benefits and potentially reduce access for beneficiaries, and expose the federal budget to financial risks based on estimates generated solely by the executive branch. Given the uncertainty in savings and the somewhat nebulous definitions of quality in some of these demonstrations, it is not difficult to imagine that the use of this process could vary dramatically with changes of administration.

In a recent example, CMMI has proposed to change the Medicare payment system for drugs that treat diseases such as cancer and rheumatoid arthritis, which are administered in a doctor’s office. The new payments would go into effect on a mandatory basis in roughly half the country, but Medicare payments would be left unchanged in the other half. Payments, benefits, and potentially access to care, would depend on where the Medicare beneficiary lived. This approach is a nationwide policy experiment introduced unilaterally by the executive.

There are many reasons this new policy, and others like it, should receive congressional review before implementation. Untested payment changes for Medicare benefits, especially when mandatory and applied to tens of millions of recipients, should receive much more consideration than a brief public comment period before the initiation of the new policy. Whatever the good intentions, a major and mandatory change in payment is not something (most of) Congress contemplated.  In fact, many members of Congress have publicly expressed concern to HHS regarding this proposal.

To compound the problem, congressional budgetary rules generally impose a “pay-as-you-go” requirement. Since HHS claims the new policy will save money, any legislation to delay or modify CMMI’s proposals would likely be scored by CBO as lost future savings. Therefore, legislation to limit the experiment would have to be offset by cutting spending or raising revenues by an equal amount. Congress would be forced to “pay for” the delay or repeal of untested policy created by the executive branch.

As a former director of the CBO, I know firsthand how difficult it can be to estimate the impacts of regulatory changes. The assessment of new regulations (and scoring of legislation affecting them) is especially difficult — the effects are necessarily prospective and somewhat speculative. As CBO said last year:

(CBO) … expects that only a few (CMMI) models … will reduce program spending. However, CBO cannot predict which models will succeed, and CMMI has not operated long enough to determine its overall track record.

Given this shift in balance of power between the two branches, and the difficulty in measuring the true cost savings from any particular CMMI experiment, Congress should not set precedent by attempting to legislatively offset the cost of delay or repeal of any CMMI proposal, particularly if it has not gone into effect and there is no track record.

Having worked both in the Congress and the White House, I understand the frustrations and tensions between the congressional and executive branches. And at the end of an administration, which I also experienced, there is always unfinished business. As a member of the team that reviewed end-of-term proposals, I can confidently say this CMMI proposal is not one we would have approved. With limited ability for oversight under this framework, Congress should exercise its authority and halt this experiment until it can properly consider the effects of the proposed policy.