Hospitals will recoup $9B under HHS' proposed remedy to 340B ruling

By Heather Landi - The federal government will pay eligible hospitals in the 340B program $9 billion to offset payment cuts the Supreme Court ruled unlawful last year. In 2018, the Department of Health and Human Services (HHS) cut prescription drug payments for 340B-covered entity hospitals by nearly 30%. The American Hospital Association (AHA) and other hospital groups sued to halt the cuts, and an appellate court sided with HHS that it has the power to make the cuts. Read Full Article…

VBA Article Summary

1. The Supreme Court ruled that the differential payment rates for drugs acquired through the 340B program were unlawful due to the lack of proper procedure followed by the Department of Health and Human Services (HHS). HHS failed to conduct a survey of hospitals' acquisition costs before implementing the rates, as required by the relevant statute.

2. HHS argued that the payment cuts were necessary to reimburse hospitals for the actual acquisition costs of the drugs. The 340B drug discount program mandates drugmakers to offer discounts to safety net providers in exchange for their participation in Medicare and Medicaid.

3. The Supreme Court sent the case back to lower courts to address potential remedies. The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule outlining the proposed remedy, which involves a one-time lump-sum payment to approximately 1,600 340B-covered entity hospitals that were underpaid due to the now-invalidated policy. However, HHS also proposed recouping funds from hospitals that received increased rates for non-drug services during the same period, by reducing hospital payments for other non-drug items and services by 0.5% over the next 16 years. The proposed rule will undergo a 60-day comment period before the final rule is issued.

Pharma’s strike-from-all-sides attack on the IRA could end up at the Supreme Court

By Alexandra Pecci - The pharmaceutical industry is attacking the Inflation Reduction Act with lawsuits that take a strike-from-all-sides approach, with companies and associations targeting different elements of the legislation. Merck & Co. and Bristol Myers Squibb are challenging the IRA using the First and Fifth Amendments, while industry lobbyists and co-litigants also include the Eighth Amendment in their lawsuit. Read Full Article… 

VBA Article Summary

1. Merck & Co. and Bristol Myers Squibb take legal action: Merck & Co. and Bristol Myers Squibb have filed lawsuits against the government, challenging the constitutionality of the IRA (Inflation Reduction Act). They argue that certain provisions of the IRA, particularly the Medicare Drug Price Negotiation Program, violate the First and Fifth Amendments of the Constitution. The companies claim that the program forces them to agree to government-mandated prices, which they consider to be extortion and a violation of their rights to fair compensation and freedom of speech.

2. Industry trade groups join the legal battle: In addition to the individual lawsuits filed by Merck and Bristol Myers Squibb, trade groups such as PhRMA, the National Infusion Center Association, and the Global Colon Cancer Association have also filed a complaint against the IRA. These groups introduce an Eighth Amendment argument, contending that the excessive fines imposed by the IRA's price-setting provisions are disproportionate and constitute an unconstitutional punishment.

3. Potential showdown at the Supreme Court: The various constitutional challenges posed by pharmaceutical companies and industry trade groups could ultimately lead to a high-stakes legal battle in front of the Supreme Court. If the lawsuits progress to this stage, it would set the stage for a significant confrontation between the industry and the government, with potential far-reaching implications for drug pricing regulations and the interpretation of constitutional rights in the context of healthcare policy. Other companies and organizations may also join the legal fight, further strengthening the case against the IRA and making it harder for the government to defend its position.

Biden to crack down on short-term health insurance plans, Politico reports

By Reuters - U.S. President Joe Biden's administration on Friday is expected to propose a new regulation cracking down on short-term health insurance plans, Politico reported, citing five Democrats with knowledge of the matter. Biden is due to deliver an announcement on healthcare cost savings on Friday. A White House official told Politico on Thursday that Biden plans to announce major actions to lower costs and crack down on junk fees. Read Full Article…

VBA Article Summary

1. The regulation aims to reverse a Trump-era policy that expanded short-term health insurance plans, which critics argue undermined the Affordable Care Act (ACA) and its protections for patients with pre-existing conditions. The Trump administration's move was seen as an attempt to undercut the requirements of Obamacare.

2. The Department of Health and Human Services extended the availability of short-term health insurance plans in 2018, allowing millions of Americans to enroll in these plans for longer durations, up to 12 months, with the option for renewal. However, these plans did not offer the same benefits as Obamacare, such as maternity coverage, and they didn't guarantee insurance regardless of health.

3. The new regulation is expected to curtail the availability of these skimpy health coverage plans. By reversing the Trump administration's policy, the regulation seeks to reinforce the broader protections for patients with pre-existing conditions and other essential benefits provided by the ACA. This move is seen as a step towards strengthening the Affordable Care Act and ensuring that individuals have access to comprehensive health coverage.

The C-suite's role in well-being

By Steve Hatfield, Jen Fisher, and Paul H. Silverglate - There’s no question that well-being is at the top of the C-suite agenda right now. While the pandemic brought worker safety into the spotlight, there’s also been an increased focus on the overall poor state of workforce well-being and the role that organizations play in determining quality of life for employees and their families. Read Full Article… 

VBA Article Summary

1. The Need for Holistic Health Investment: Companies are increasingly recognizing the importance of investing in the holistic health of their employees. Outdated norms like the nine-to-five schedule, the expectation of being "always on," substandard wages and benefits, and sacrificing personal lives for work are no longer acceptable. Workers are demanding more from their employers, and companies must adapt their employee value proposition to avoid a talent shortage.

2. Struggles of the C-Suite: Although less attention has been paid to well-being among the C-suite, recent research indicates increasing quit rates among executives. The Great Resignation has shown that people are no longer willing to tolerate unhappy and stressful jobs. Executives themselves are considering quitting for jobs that better support their well-being. There is a significant disconnect between how executives perceive employee well-being and how employees actually feel, highlighting the need for better understanding and care from the C-suite.

3. Work as an Obstacle to Well-Being: The pandemic has negatively impacted the well-being of both the C-suite and employees. Fatigue, mental health issues, and other challenges have affected both groups. Work-related factors such as heavy workloads, long hours, and lack of time are major obstacles to achieving well-being goals. Companies need to prioritize well-being and create a culture that supports the integration of well-being into daily work. Transparency and support from the C-suite are crucial for fostering a healthy work environment.

Overall, C-suite leaders must take responsibility for employee well-being and prioritize their own well-being. They need to recognize the extent of employees' struggles, bridge the gap in perception, and implement concrete actions to support well-being. This includes improving benefits, challenging societal norms, and embedding well-being into workplace culture. Transparent communication and leadership in well-being can lead to better outcomes for both employees and executives.

FDA seeks feedback on technologies to enable healthcare at home

By Nick Paul Taylor - The U.S. Food and Drug Administration is asking for public input on the transition to at-home care and how regulators can support enabling technologies. As part of its push to advance health equity, the FDA has posed a series of home-care questions to the medtech industry, including a query about how it can support the development of devices for use in non-clinical care settings. Read Full Article…

VBA Article Summary

1. The FDA's Center for Devices and Radiological Health is exploring the use of digital health technologies in home-based healthcare. The agency is seeking to facilitate access to medical devices that are safe and effective when used outside of traditional clinical settings, such as devices intended for home use.

2. The COVID-19 pandemic has accelerated the adoption of telehealth and remote monitoring, creating an opportunity for wider use of remote patient-monitoring devices and connected medical technologies. Home care can potentially reduce costs, minimize risks associated with healthcare facilities, and alleviate burdens on patients.

3. The FDA's request for comment includes various questions related to implementing home-based care and enabling access to medical technologies. The questions cover topics such as effective patient care in home settings, ideal medical procedures for transitioning to the home, and the design attributes of digital health technologies that can facilitate their use by diverse patient populations, including older adults and non-English speakers.

IRS Says Reimbursed Wellness Benefits Are Taxable

By Paul Mulholland - The Internal Revenue Service announced June 9 that wellness indemnity payments under a fixed-indemnity insurance policy count toward gross taxable income and cannot be treated on a tax-favored basis. Read Full Article… 

VBA Article Summary

1. Definition of a wellness indemnity program: A wellness indemnity program, as defined by the IRS, involves the deduction of salary on a pre-tax basis to reimburse employees for various health wellness benefits. This includes expenses related to weight-loss programs, nutritional guidance, and diabetes management. According to the IRS, since this money is reimbursed for non-medical expenses, it should be considered as taxable gross income.

2. Example of a wellness indemnity program: The IRS provides an example to illustrate how a wellness indemnity program might operate. In this hypothetical scenario, employees of a company contribute $1,200 in pre-tax monthly premiums to a wellness program through a cafeteria plan. They are then compensated with $1,000 for their wellness expenses. This arrangement allows employees to effectively use pre-tax dollars for their purchases and receive tax-free reimbursement for non-medical expenses, resulting in potential tax savings.

3. Tax implications and limitations: The tax treatment of wellness indemnity payments is contingent on the presence of unreimbursed medical expenses. According to the Groom Law Group, if an employee receives a wellness indemnity payment under a fixed indemnity health insurance policy and the premiums were paid through pre-tax salary reduction, the payment will be included in the employee's gross income as wages subject to FICA, FUTA, and federal income tax withholding. However, this applies only if the employee does not have any unreimbursed out-of-pocket medical expenses related to the payment. This highlights the importance of considering medical expenses when assessing the tax implications of a wellness indemnity program.

Disclaimer: The IRS memo referenced in this article is considered Chief Counsel Advice and serves as an indication of the IRS's views on the matter, but it is not formal guidance.

65% of health plans 'very concerned' about off-label use of Ozempic, other weight loss drugs

By Rylee Wilson - The majority of health plans surveyed in a report by the Pharmaceutical Strategies Group said they are "very concerned" about off-label use of medications for weight loss. Read Full Article…

VBA Article Summary

1. High concern among health plans: According to a survey conducted by Pharmaceutical Strategies Group, 65 percent of the health plans surveyed expressed significant concern about the off-label use of GLP-1 drugs, such as Ozempic, Trulicity, Victoza, and Mounjaro, for weight loss. This indicates a substantial level of unease within the healthcare industry regarding the use of these drugs beyond their intended purpose.

2. Employer perspective on off-label use: In contrast to health plans, employers showed slightly lower levels of concern regarding the off-label use of GLP-1 drugs. Among the employers surveyed, 29 percent stated they were "very concerned," while 36 percent were "moderately concerned." This discrepancy suggests that employers may have a different perspective or may be less informed about the potential risks associated with off-label use of these medications.

3. Limited coverage for weight loss medications: The survey also revealed that only 49 percent of the health plans surveyed currently provide coverage for medications used in weight loss treatment, whereas the coverage rate among employers was even lower at 41 percent. This indicates that access to GLP-1 drugs specifically approved for weight loss, such as Wegovy and Saxenda, may be limited due to their high cost, which can exceed $10,000 per year. However, there is some hope for increased coverage in the future, as 31 percent of health plans are considering adding coverage for these drugs within the next one to two years, while 20 percent stated that they are not considering coverage at this time.

These findings shed light on the concerns and perspectives surrounding the off-label use of GLP-1 drugs for weight loss, emphasizing the need for further research and discussions regarding the appropriateness and safety of this practice.

Pharma Battling Legal Precedent in Medicare Drug Price Lawsuits

By Celine Castronuovo - Decades of legal precedent defending the authority of Congress and the Medicare agency threaten to stand in the way of the pharmaceutical industry’s pursuit to stop the federal government from negotiating lower drug prices, lawyers and drug pricing analysts say. Read Full Article… 

VBA Article Summary

1. Constitutional challenges by the pharmaceutical industry: The Pharmaceutical Research and Manufacturers of America (PhRMA) and member companies Merck & Co. and Bristol-Myers Squibb Co. have filed lawsuits challenging the constitutionality of the drug price negotiation provisions in the Inflation Reduction Act. They argue that the negotiation process violates the Fifth Amendment's prohibition on taking private property without just compensation and the Eighth Amendment's excessive fines clause.

2. Uphill battle for the industry: The pharmaceutical industry is expected to face difficulties in overcoming legal precedent and convincing federal judges to rule in their favor. Courts have historically defended Medicare's authority as a voluntary program serving beneficiaries and have upheld federal agencies' regulatory powers within the bounds set by Congress. The industry's constitutional challenges are considered unlikely to succeed due to Congress' wide authority in shaping public interest policies.

3. Arguments against the drug price negotiation program: The lawsuits argue that the program violates the Constitution's separation of powers clause by granting the Department of Health and Human Services (HHS) discretion over determining fair prices for negotiated drugs. The Fifth Amendment's due process clause is also cited, claiming that companies should have greater opportunities to challenge the final negotiated prices set by Medicare. The lawsuits face obstacles in demonstrating the deprivation of constitutionally protected private or property rights.

Despite the legal challenges, the Centers for Medicare & Medicaid Services (CMS) plans to proceed with the implementation of the negotiation program. The Biden administration defends the program as a crucial policy to lower prescription drug costs for Medicare beneficiaries and argues that the government cannot be forced to accept any price demanded by sellers.