Congress unlikely to take up health care, retirement issues this year

By Susan Rupe - “It’s no secret that this Congress has not been the most productive one,” said Geoff Manville, partner with Mercer’s Law and Policy Group, in a recent webinar. However, some bipartisan health care reforms could come before Congress at the end of 2024, he said. Read Full Article…

VBA Article Summary

1. Health Care Reforms in the Lame Duck Session: Key reforms under consideration include pharmacy benefit manager reforms, emphasizing transparency and fairness, such as mandating disclosure of their business practices and banning spread pricing. There's also a push for price transparency, requiring plans to disclose out-of-pocket costs and negotiated rates. Additionally, proposed reforms target provider and hospital billing practices to enhance efficiency and reduce costs, alongside telehealth flexibilities and health savings account modernization to improve accessibility and financial management in health care.

2. Retirement Policy and Legislative Prospects: Despite limited expectations for retirement policy action in Congress, notable developments include the passage of HR 2799 by the House, potentially allowing 403(b) plans to invest in collective trusts, and ongoing work on a SECURE 2.0 technical corrections bill. However, environmental, social, and governance (ESG) related legislation faces stagnation, with little chance of advancement before the new Congress session. Future legislative efforts may focus on enhancing retirement savings options and strengthening defined benefit pension plans.

3. Health Care in the Presidential Campaign: Health care affordability remains a central issue in the 2024 presidential campaign between Joe Biden and Donald Trump. Biden's proposals include extending prescription drug cost controls, tackling industry consolidation, mandating coverage for mental health care visits without cost sharing, and establishing a national paid leave program. In contrast, Trump aims to reduce premiums and drug costs, increase price transparency, and expand coverage options beyond Affordable Care Act mandates, reflecting differing approaches to reforming and improving the U.S. health care system.

Surprise medical bill law has been good for providers

By Caitlin Owens - The federal process for resolving billing disputes for out-of-network care has to date yielded payouts well above what Medicare and most in-network private insurers would pay providers, according to a new Brookings Institution analysis provided first to Axios. Read Full Article…

VBA Article Summary

1. Analysis Reveals Unintended Consequences on Healthcare Costs: The Brookings Institution's analysis of CMS data for the first half of 2023 indicates that arbitration decisions related to the law banning surprise medical bills have resulted in median payouts for emergency care, imaging, and neonatal and pediatric critical care at least 3.7 times higher than what Medicare pays, and 50% higher than the highest payments historically made by commercial plans for in-network care. This suggests that, contrary to the Congressional Budget Office's predictions, the law could raise in-network prices and, consequently, premiums.

2. Brookings Finds Providers Winning Majority of Disputes: The analysis highlights that arbitrators have predominantly sided with providers over insurers, with providers winning over three-quarters of arbitration cases. This trend, which deviates from initial expectations that the law would encourage lower prices through incentivizing in-network care, indicates that being out of network might now be more financially appealing for providers. This could strengthen providers' negotiating power with insurers, potentially leading to higher healthcare prices.

3. Overwhelmed System and Lack of Guidance Complicate Law's Execution: Challenges in the arbitration process itself have compounded these issues. The system has been overwhelmed by a volume of disputes 13 times greater than anticipated, and recent court rulings have invalidated Biden administration guidelines for dispute resolution. This leaves arbitrators without clear guidance on making payment decisions, further complicating the law's implementation and its intended effects on healthcare costs.

APG’s Susan Dentzer: the Value-Based World Is Steaming Ahead

By Mark Hagland - Susan Dentzer is president and CEO of APG—America’s Physician Groups—one of the leading nationwide associations representing physicians and medical groups delivering care in value-based contracts. APG has been instrumental in advancing the policy interests of its member physician groups, particularly around ensuring that the conditions under which they deliver care are optimally conducive to creating value and improving the health status of populations. Read Full Article…

VBA Article Summary

1. Cybersecurity Urgency in Healthcare: Susan Dentzer highlights the pressing issue of cybersecurity in the healthcare industry, particularly in the wake of a cyberattack on Change Healthcare that significantly impacted many members of her association. The attack revealed the vulnerabilities in the healthcare system's digitized infrastructure, leading to tens of millions of dollars in damages for those reliant on Change Healthcare's services. The incident prompted discussions with CMS and the White House to unfreeze payment systems affected by the cyberattack, underscoring the critical need for robust cybersecurity measures and fail-safe backups within the healthcare sector.

2. Evolution of Value-Based and Risk-Based Contracting: Dentzer discusses the state of value-based care (VBC) and emphasizes the importance of incentivizing smaller physician practices to participate in programs like the Medicare Shared Savings Program (MSSP). She notes that significant improvements in healthcare utilization and savings have been achieved through physician-led organizations. However, challenges remain in meeting the Biden administration's goal of covering all Medicare recipients under accountable care models by the decade's end. The discussion extends to the Medicare Advantage (MA) program, which serves as an agent of value-based care but faces issues related to payment benchmarks that need reevaluation to reflect the evolving landscape of healthcare delivery and financing.

3. Hospital Sector's Adaptation to Value-Based Care (VBC): The article touches on the varying attitudes within the hospital sector towards VBC, from proactive engagement to resistance. Dentzer argues that hospitals must evolve beyond traditional revenue models predicated on elective surgeries and explore partnerships with independent physician groups for better care management and patient outcomes. She emphasizes the potential for a virtuous cycle where hospitals and physician groups collaborate in value-based contracts to enhance healthcare delivery, reduce unnecessary hospitalizations, and share savings, thereby contributing to the broader transformation of the healthcare system towards quality and efficiency.

Health insurers win lobbying battle with doctor, hospitals over ‘prior authorization’

By NKyTribune.com (KY)  - A bill to exempt health-care providers who have 90% or more of their claims approved from health-insurance companies' requirements for prior authorization of certain treatments has failed again. Read Full Article…

VBA Article Summary

1. Failure of House Bill 317 Amid Legislative Challenges: House Bill 317, aimed at expediting patient care by modifying the prior authorization process used by insurers, failed to pass in Kentucky's 2024 legislative session despite its intent to ensure timely treatment as prescribed by healthcare providers. The bill's sponsor, state Rep. Kim Moser, expressed disappointment over the lack of compromise and hearing for the bill, which had cleared two of its three required readings but never got called up for a final hearing on the House floor.

2. Opposition and Concerns: Balancing Healthcare Costs and Efficiency: The bill faced opposition from health insurers, with arguments focusing on the potential increase in healthcare costs. The Kentucky Association of Health Plans (KAHP) argued that HB 317 could lead to higher insurance premiums, estimating an additional $11.29 per member per month. They defended prior authorization as a measure to prevent unnecessary care and ensure treatment adheres to best practice standards. Meanwhile, supporters, including the Kentucky Hospital Association (KHA) and Kentucky Medical Association (KMA), argued that the current prior authorization process adds administrative burdens, delays patient care, and contributes to healthcare professional burnout.

3. Continued Advocacy for Reform in Prior Authorization Processes: Despite the setback, advocates for the reform of the prior authorization process, including Moser, healthcare professionals, and association leaders, vow to continue their efforts. They emphasize the need for a streamlined process that ensures timely access to necessary care without overburdening healthcare providers or compromising patient health. The ongoing debate highlights the tension between cost control measures by insurers and the medical community's push for more efficient patient care delivery.

Walgreens takes $5.8B hit on VillageMD

By Molly Gamble - Walgreens is marching on in its downsizing and bearing the costs tied to it, as its results for the second fiscal quarter of 2024 show. Read Full Article…

VBA Article Summary

1. Significant Financial Loss and VillageMD Devaluation: In the second fiscal quarter of 2024, Walgreens experienced a substantial financial downturn, posting a nearly $6 billion loss, a stark contrast to the net earnings of $703 million in the same quarter of the previous year. This downturn was largely attributed to a non-cash impairment charge of $12.4 billion related to the goodwill of VillageMD, its primary care clinic investment, culminating in a $5.8 billion after-tax non-cash charge specifically attributable to Walgreens. The company's operating loss for the quarter was a staggering $13.2 billion, compared to an operating income of $197 million in Q2 2023.

2. Strategic Cost-Cutting and Operational Adjustments: In response to these financial challenges, Walgreens announced a comprehensive cost reduction plan in October 2023, aiming to save $1 billion. This plan included withdrawing VillageMD from selected markets and closing approximately 60 clinics throughout fiscal 2024. To date, VillageMD has exited Florida and Illinois and sold several clinics in Rhode Island. These moves are part of Walgreens' broader strategy to streamline operations and improve financial health.

3. Leadership Optimism and Future Projections: Despite the financial setbacks, Walgreens' leadership remains optimistic about the company's trajectory. CEO Tim Wentworth expressed confidence in achieving the targeted $1 billion in cost savings within the year and highlighted ongoing strategic reviews of the company's portfolio to drive growth and deliver value. Furthermore, Walgreens anticipates an adjusted profit of $3.20 to $3.35 per share for the fiscal year ending August 31, albeit at the lower end of its initial projections. The company has also made key leadership appointments, signaling a commitment to its strategic vision and operational efficiency.

Multiple sclerosis has distinct subtypes, study finds, pointing to different treatments

By Isabella Cueto - For years, researchers have been hopeful they could get under the hood of multiple sclerosis. The neurological condition shows up in over 2.5 million people around the world, but it doesn’t always look the same. If science could point its light in just the right way, patients might be sorted into disease subgroups, and treated more successfully depending on their kind of MS. Read Full Article…

VBA Article Summary

1. Innovative Research Approach: A groundbreaking study led by Heinz Wiendl, a professor of neurology at the University of Münster, Germany, has identified three distinct subtypes of Multiple Sclerosis (MS), categorized as E1, E2, and E3, based on unique immunological markers in patients' blood. This classification, derived from a cohort of 500 early-stage MS patients, highlights the differences in immune system response among the subtypes, providing new insights into the disease's complexity. The research team's agnostic approach, allowing data to define the categories without bias, has shed light on specific immune cells' roles in the disease's progression, akin to observing all players in a game, not just the stars.

2. Characterizing the Subtypes and Their Implications: Each newly identified MS subtype exhibits distinct immune system characteristics and disease progression patterns. Subtype E1 is marked by alterations in CD4 T cells and inflammatory proteins, leading to more severe disease symptoms and higher disability rates. E2 is distinguished by variations in natural killer cells, while E3 features changes in CD8 T cells, indicating a more inflammatory state with a higher relapse rate and more significant blood-brain barrier issues. These findings not only underline the diversity in MS pathogenesis but also hint at the potential for subtype-specific treatments, moving towards personalized medicine in MS care.

3. Future Directions and Clinical Impact: The identification of MS subtypes opens new avenues for targeted therapy, with preliminary findings suggesting differential responses to current treatments among the subgroups. Particularly, the E3 group showed better outcomes with monoclonal antibody treatments over interferons, pointing towards the necessity of customized treatment plans based on a patient’s specific immunological profile. Wiendl's development of an app and a diagnostic test for distinguishing between the E subtypes aims to streamline this personalization. While further research is needed to validate these subtypes and their treatment implications, this study marks a significant step towards individualized care for MS patients, potentially transforming patient outcomes and quality of life.

Does decaf coffee contain a harmful additive? Advocates want to ban a certain chemical in the brew

By Nicholas Florko - There’s a fight brewing over the future of decaf coffee. Consumer health advocates are petitioning the Food and Drug Administration to ban a key chemical, methylene chloride, used to decaffeinate coffee beans. While the chemical is almost entirely removed during the decaffeination process, advocates say that a little-known nearly 66-year-old federal law mandates the agency ban the additive because it has been proven to cause cancer in rodents. Read Full Article…

VBA Article Summary

1. Widespread Use of Methylene Chloride in Coffee Decaffeination: Methylene chloride, a chemical previously banned as a consumer paint stripper, is employed by nearly all major U.S. coffee companies, including Starbucks and Dunkin' Donuts, for decaffeinating coffee. This solvent binds to caffeine in coffee beans for removal, despite potential health concerns and the availability of alternative decaffeination methods.

2. Advocacy Efforts and Regulatory Challenges: Advocates, leveraging the Delaney Clause of the FDA’s food additive laws, aim to ban methylene chloride due to its potential carcinogenic effects, as demonstrated in animal studies. This clause has historically compelled the FDA to prohibit additives found to induce cancer, even in conditions not replicable in human consumption, causing frustration within both the food industry and regulatory bodies. The FDA's historical stance and the industry's counterarguments highlight the complex balance between safety concerns and the perceived benefits of methylene chloride in coffee production.

3. Health and Environmental Concerns Versus Industry Arguments: The push for banning methylene chloride centers on health risks, environmental hazards, and the existence of safer, albeit more costly, decaffeination methods. Opponents of the ban argue that methylene chloride decaffeination poses minimal risk to consumers and offers significant health benefits from drinking decaffeinated coffee. Additionally, the coffee industry contends that alternatives would compromise coffee quality and increase costs, despite advocacy groups highlighting the risks to factory workers and the outdated nature of FDA cancer risk assessments.

Steward's physician group purchased by Optum, Sen. Markey says

By Michael P. Norton - In a disclosure that hinted that further transactions, state health care officials received notifications Tuesday in connection with the proposed sale of Stewardship Health Inc. and the contracting Steward Health Care Network to OptumCare, a subsidiary of UnitedHealth Group. Read Full Article…

VBA Article Summary

1. Announcement of a Significant Healthcare Transaction: The office of Senator Ed Markey announced that Optum Financial, a Minnesota-based company, has agreed to purchase the physician group of Steward Health Care, which operates under Stewardship Health Inc. This acquisition involves primary care physicians and clinicians across nine states, highlighting a major shift in the healthcare landscape both within Massachusetts and nationally.

2. Regulatory Review and Implications for Healthcare in Massachusetts: The Health Policy Commission (HPC) Director, David Seltz, emphasized the significance of this proposed transaction, noting its potential impact on healthcare delivery, costs, quality, access, and equity across Massachusetts. The HPC, along with state and federal antitrust authorities, will review the details of this proposal to assess its impact. The HPC has a 30-day period to evaluate the transaction once all required information is submitted, with the possibility of initiating a full Cost and Market Impact Review if significant impacts on healthcare costs and market functioning are anticipated.

3. Concerns Over Steward’s Financial Stability and Future Oversight: Senator Ed Markey highlighted Steward's recent financial troubles and the necessity for a shift away from its financial instability for the health of Massachusetts' healthcare system. The senator urged Optum to take on the responsibility of preserving healthcare access in the Commonwealth by controlling costs and prioritizing patients and providers. Additionally, Steward Operations Holdings LLC indicated the possibility of further notices regarding transactions related to its acute care hospitals and other operations within the next year, suggesting ongoing changes and challenges within the organization.

Obesity drugs inch closer to outsize expectations

By Reuters - Novo Nordisk (NOVOb.CO), opens new tab and Eli Lilly (LLY.N), opens new tab have inched closer to justifying their enormous valuations. The U.S. government said Thursday it would pay for patients covered by Medicare – the publicly financed health insurance offered to older Americans – to use weight loss drug Wegovy and potentially Zepbound, so long as prescribed for cardiovascular disease. Read Full Article…

VBA Article Summary

1. Medicare's Cost Concerns Over Weight-Loss Drug Coverage: Medicare, serving 65 million patients, does not currently cover weight-loss drugs due to cost concerns. A study in the New England Journal of Medicine highlighted that prescribing these drugs to just 10% of obese Medicare patients could incur costs up to $27 billion, contrasting with the nearly $130 billion Medicare spent on drugs under its Part D program in 2022. However, Novo Nordisk's Wegovy, now approved for treating cardiovascular diseases potentially linked to obesity, such as kidney and liver disorders or Alzheimer’s, introduces a possibility for coverage expansion.

2. Potential Medicare Coverage Expansion with Wegovy's Approval for Cardiovascular Conditions: The approval of Wegovy for cardiovascular conditions and the potential for future approvals for obesity-related diseases like kidney and liver disorders or Alzheimer's underline a strategic shift that could indirectly support the coverage of weight-loss drugs under Medicare. This comes amidst discussions on the financial implications for Medicare, with lawmakers expressing concerns over the substantial costs associated with adding such medications to Medicare's covered drugs list.

3. Pharmaceutical Valuations and Market Expectations on Obesity Treatments: The market valuation of pharmaceutical companies such as Novo Nordisk and Eli Lilly reflects investor expectations regarding the future sales of their obesity treatments. Novo Nordisk's valuation at $579 billion, representing a multiple of 10 times its estimated revenue over the next 12 months, and Lilly's valuation with a multiple of around 15, hinge on the broad market adoption of their obesity treatments. The potential inclusion of weight-loss drugs like Wegovy and Lilly's Zepbound in Medicare coverage could significantly alter market perceptions and financial projections, despite the high list price of these treatments, which currently stands at around $1,000 a month for self-paying patients.

Pharmaceutical company Amgen sues Colorado over price-setting prescription drug board

By John Ingold - Amgen, the multinational pharmaceutical company that makes the blockbuster arthritis drug Enbrel, has sued Colorado over a state board’s efforts to possibly cap the price of the drug. Read Full Article…

VBA Article Summary

1. Amgen Challenges Colorado's Drug Pricing Board as Unconstitutional: Amgen has filed a lawsuit against the actions of Colorado's Prescription Drug Affordability Board, claiming they are unconstitutional for conflicting with federal laws, violating due process rights, and overstepping federal patent laws. The pharmaceutical giant is seeking to overturn the board’s decisions regarding Enbrel, a high-cost medication used to treat rheumatoid arthritis, and challenge the legality of the board itself, which was established to cap prescription drug prices deemed unaffordable.

2. Legal Controversy: Amgen Critiques Vagueness and Federal Law Conflicts: The lawsuit filed by Amgen targets several aspects of the Colorado Prescription Drug Affordability Board’s authority, arguing it interferes with federally established intellectual property and pricing mechanisms, including potential impacts on Medicare, and contends that the law's vagueness and the discretionary power it grants the board violate manufacturers' rights to due process by not providing a clear framework or opportunity for defense.

3. Court Battle Ahead: Pharmaceutical Giant vs. State Drug Affordability Efforts: The case, now before U.S. District Court Judge Nina Y. Wang, highlights the tension between state efforts to control prescription drug costs and the pharmaceutical industry’s defense of its pricing strategies under federal law. Amgen’s legal challenge reflects broader industry practices of litigating to protect market exclusivity and prices, while critics of the lawsuit argue it prioritizes profits over patient access to affordable medication.