#38 • A Healthy Dose of Healthcare News • July 23, 2021
J&J and distributors settle opioid lawsuits for $26B, CMS covers telehealth post-pandemic, larger fines for hospitals that fail to post prices, Missouri's Medicaid expansion goes through, and more
This week was punctuated by heated exchanges between Drs. Sen. Rand Paul and Anthony Fauci in the Senate over the NIH’s funding of gain-of-function research conducted at the Wuhan Lab of Virology, in whose vicinity the first cases of COVID-19 were observed in late 2019. Meanwhile, the White House condemned China’s rejection of a second phase of the WHO’s investigation into the origins of the virus as “dangerous” and “irresponsible.”
Also, brace yourselves for monkeypox.
In this edition, you will read about:
#38.1. A new settlement of $26B to resolve opioid lawsuits,
#38.2. CMS’s expansion of telehealth coverage through 2023 and beyond,
#38.3. A hike in hospital fines for not disclosing prices,
#38.4. The final word on Missouri’s Medicaid expansion,
#38.5. Insurers forced to offer PrEP at no out-of-pocket cost, and
🎁 a bonus article on pharmacist remuneration.
Scroll to the bottom for job openings in health policy.
#38.1. States Announce $26 Billion Settlement to Resolve Opioid Lawsuits (Wall Street Journal)
We learned last week that overdoses jumped over 30% in 2020. Almost two thirds of them were linked to synthetic opioids, primarily fentanyl. We also found out that West Virginia refused the settlement for OxyContin manufacturer Perdue Pharma because the amounts aren’t enough given how badly affected West Virginia has been by the opioid crisis. This week, seven states (Tennessee, North Carolina, Pennsylvania, New York, Louisiana, Delaware, and Connecticut) announced a settlement, with the country’s three largest drug distributors, McKesson Corp., AmerisourceBergen Corp., and Cardinal Health Inc. paying $21 billion and drug maker Johnson & Johnson paying $5 billion. The funds are to go to the states to support programs that will help people overcome opioid addiction. None of the money will go directly to the families who lost members to opioids. But there is already a wrinkle in the plan: Philadelphia District Attorney Larry Krasner filed a lawsuit against the settlement in a PA state court. He argues that the amounts are too low and that the money may never be paid out.
#38.2. CMS Expands Telehealth Coverage in Proposed 2022 Physician Fee Schedule (mHealth Intelligence)
The Centers for Medicare and Medicaid Services (CMS) just published its proposed fee schedule for FY22, and the biggest news concerns telehealth: CMS is offering to keep many of the pandemic-related relaxations on the books through the end of 2023 and some permanently. Since those changes were helpful during the pandemic, they may continue to be so after the pandemic ends. Specifically, CMS is proposing to get rid of geographic restrictions for behavioral health and make the patient’s home the originating site, with requirements for regular in-person encounters. Other elements of the plan include expanding the Medicare Diabetes Prevention Program, which is designed to help patients to avoid developing Type 2 diabetes, as well as changes to reimbursement for the flu, pneumonia, and hepatitis B vaccines, as reimbursement for those have gone down significantly in the past few years.
#38.3. CMS Proposes Rule to Increase Price Transparency, Access to Care, Safety & Health Equity (CMS)
In other CMS news, the agency proposed a potentially game-changing rule that has price transparency mandate enthusiasts celebrating. The Trump administration’s price transparency rule mandated that hospital disclose list prices gradually over the next few years, starting in January 2021. The penalty for failing to comply, however, was just $300 a day, or $109,500 a year — a drop in the bucket for most large hospitals. The new rule would make that amount the minimum penalty for failing to comply, and those lower penalties would only apply to small hospitals with a bed count of 30 or fewer. The penalty would be higher ($10/bed/day) for hospitals with a bed count greater than 30, with a maximum daily dollar amount of $5,500, or a little over $2 million annually. Now, when we know that a hospital like the Mayo Clinic had a revenue of $13.9 billion in 2020, it’s no surprise that some are calling for even higher penalties.
#38.4. Missouri Supreme Court rules in favor of Medicaid expansion (The Hill)
This may be the last straw for opponents to Medicaid expansion in Missouri after a long political and legal battle. The expansion was first approved via ballot box in 2020, but the Missouri legislature didn’t fund it and the governor withdrew the expansion plans as a result. A judge later struck down the expansion as unconstitutional since it didn’t have a funding mechanism. Now, the Missouri Supreme Court overturned that ruling. Eligibility will be granted to people who earn 138% of the federal poverty line or less. This could mean an additional 275,000 in Missouri’s Medicaid program. While the federal government pays for a large portion of the price of coverage, Missouri will be responsible for a large amount as well. Next steps on funding mechanisms have yet to be presented.
#38.5. PrEP, the HIV prevention pill, must now be totally free under almost all insurance plans (NBC News)
PrEP, which stands for for pre-exposure prophylaxis, refers in common parlance to the use of medications to prevent the spread of HIV. The two approved PrEP drugs are Truvada and Descovy, both of which are manufactured by Gilead Sciences. The guidance by CMS, the Department of Labor, and the Department of the Treasury, gives insurers 60 days to comply with the mandate to remove all cost-sharing for the two drugs. Up until recently, both drugs’ list price was very high (Truvada was $14,000 a year when the drug hit the market about 10 years ago and is now up to $22,000), but the drugs are already available at almost no out-of-pocket cost to those with insurance and Gilead has donated a supply of drugs to the government that can treat 200,000 people for the next 10 years and generics are hitting the market. Despite the current availability of near-free drugs, the people who are at risk aren’t taking them. Whether this guidance will be of any help, medically speaking, remains to be seen. A more predictable outcome is that premiums will rise as a result.
🎁 BONUS: Reforming Pharmacy Direct And Indirect Remuneration In The Medicare Part D Program (Health Affairs)
Even wondered what share of the price of drugs pharmacists pocket? In a new article in Health Affairs, my friend Ge Bai and her colleague shed like onto the question and proposes potential reforms.
Job openings:
Research Assistant, Healthcare @ Mercatus Center. Key qualifications: excellent writing skills & quantitative skills, mission focus, and strong interest in health policy. Please reach out to me if you’re interested in hearing more about the role. More here.
Executive Director, Health Innovators Fellowship @ Aspen Institute. More here.