Medi-Cal Blamed for Poor Care in Lawsuit

Several sources are reporting a lawsuit filed in California alleging poor care in the state’s Medicaid program, Medi-Cal (1). The suit alleges that Medi-Cal failed to pay doctors enough to provide proper care. The suit was filed by five Latino residents on behalf of California’s 13 million lower-income residents, more than half of them Latinos. The suit alleges that "…California has created a separate and unequal system of health care, one for the insurance program with the largest proportion of Latinos (Medi-Cal), and one for the other principal insurance plans, whose recipients are disproportionately white.”

The state budget includes $107 billion in state and federal funding for Medi-Cal this year, but the spending is not enough to restore reimbursement cuts made during the Great Recession of 2008. A proposal in the U.S. Senate to repeal the Affordable Health Care law (ACA, Obamacare) could drastically reduce funding for Medicare and the individuals who can access it.

Thomas Saenz, an attorney with the Mexican American Legal Defense and Educational Fund who filed the lawsuit, said he believes it is the first time the civil rights approach has been tried in California. According to Saenz this legal approach is possible because California is one of the few states to specifically prohibit discriminatory effects in state programs.

Other states in the Southwest also have disproportionately large Hispanic populations in their Medicaid programs (Table 1).

Table 1. Percent Caucasian and Hispanic total population/Medicare population by State (2,3).

Reimbursement does appear disproportionately low in California which ranked 48th in the nation in 2015 in how much it paid hospitals, doctors and other healthcare providers for treating Medi-Cal patients, according to the Kaiser Family Foundation (4). In the Southwest the state with the highest reimbursement was Nevada (5-10). California reimbursement averaged only 47% of Nevada reimbursement for the procedures listed (Table 2).

Table 2. Medicare reimbursement for common procedures by state (4-9).

The reason for the wide differences in reimbursement rates is unclear but is likely historical dating back to cost containment programs from the 1980’s and 90’s (11). The differences do not appear to be explained by differing costs of living. None of the procedure reimbursements correlated with the cost of living in the largest city in each state (Phoenix, Los Angeles, Denver, Albuquerque, Honolulu, and Las Vegas, p>0.1, all comparisons).

The chances of the lawsuit’s success are unclear since there is no precedent. However, it seems likely that if the suit is successful, more suits will be filed since California Medi-Cal’s situation of disproportionately providing care to minorities is not unique.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Thompson D. Latino plaintiffs sue California alleging poor health care. Associated Press. July 12, 2017. Available at: http://abcnews.go.com/Health/wireStory/latino-plaintiffs-sue-california-alleging-poor-health-care-48592841 (accessed 7/13/17).
2. Kaiser Family Foundation. Population distribution by race/ethnicity. 2015. Available at: http://www.kff.org/other/state-indicator/distribution-by-raceethnicity/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D (accessed 7/13/17).
3. Kaiser Family Foundation. Distribution of the nonelderly with Medicaid by race/ethnicity. 2015. Available at: http://www.kff.org/medicaid/state-indicator/distribution-by-raceethnicity-4/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D (accessed 7/13/17).
4. Dickson V. Low Medi-Cal payments could weaken expanded coverage for undocumented children. Modern Healthcare. June 17, 2015. Available at: http://www.modernhealthcare.com/article/20150617/NEWS/150619908 (accessed 7/13/17).
5. California Department of Health Care Services Medi-Cal. Medi-Cal Rates. June 15, 2017. Available at: https://files.medi-cal.ca.gov/pubsdoco/rates/rateshome.asp (accessed 7/13/17).
6. Arizona Health Cost Containment System. Physician fee schedules. 2017. Available at: https://www.azahcccs.gov/PlansProviders/RatesAndBilling/FFS/Physicianrates/ (accessed 7/13/17).
7. Colorado Department of Health Care Policy and Financing. Provider rates & fee schedule. June 2017. Available at: https://www.colorado.gov/pacific/hcpf/provider-rates-fee-schedule (accessed 7/13/17).
8. Quest Hawai’i. Medicaid fee schedule. 2013. Available at: http://www.med-quest.us/ (accessed 7/13/17).
9. Nevada Division of Health Care Financing and Policy. Fee schedules. Available at: http://dhcfp.nv.gov/Resources/Rates/FeeSchedules/ (accessed 7/13/17).
10. New Mexico Human Services Department. New Mexico Medicaid fee for service CPT code fee schedule. 2017. Available at: http://www.hsd.state.nm.us/uploads/FileLinks/e7cfb008157f422597cccdc11d2034f0/7.17_CPT_Codes__2_.pdf (accessed 7/13/17).
11. Tatar M, Paradise J, Grafield R. Medi-Cal managed care: an overview and key issues. Kaiser Family Foundation. Mar 02, 2016. Available at: http://www.kff.org/report-section/medi-cal-managed-care-an-overview-and-key-issues-issue-brief/ (accessed 7/13/17).

Cite as: Robbins RA. Medi-Cal blamed for poor care in lawsuit. Southwest J Pulm Crit Care. 2017;15(1):42-4. doi: https://doi.org/10.13175/swjpcc091-17 PDF 

Lawsuits Allege Price Fixing by Generic Drug Makers

Two years after high generic drug prices became a public controversy, Reuters is reporting that 20 states filed a lawsuit Thursday against Mylan, Teva Pharmaceuticals and four other generic drug makers (1). The suit alleges the companies conspired to fix prices or allocated markets to prop up prices. The civil lawsuit, led by antitrust investigators in Connecticut, comes one day after the U.S. Department of Justice filed criminal charges against two former executives of the generic drug maker, Heritage. The states attorneys general asked the court to order the companies to disgorge ill-gotten gains, which were not defined, pay attorneys' fees and stop collusion. Of the states in the Southwest only Nevada is participating in the lawsuit.

The cases are part of a broader generic drug pricing probe that remains under way at the state and federal level, as well as in the U.S. Congress. In 2014, media reports of sharply rising drug prices led to Congressional hearings. "We believe that this is the tip of the iceberg," Connecticut Attorney General George Jepsen told Reuters in an interview. "Price fixing in the generic industry is widespread and pervasive, and it involves many other drugs and a number of other companies."

Both former Heritage CEO Jeffrey Glazer and former Heritage Vice President of Commercial Operations Jason Malek are expected to plead guilty. According to Reuters, it is typical for the Justice Department to file one lawsuit about an ongoing issue and use evidence from those defendants to build subsequent cases against others. Several companies have publicly disclosed receiving subpoenas from the Justice Department related to generic drug pricing including Mylan, Allergan, Lannett, Impax, Par, Sun and Mayne.

The drugs involved in the Justice Department lawsuit include two older drugs, doxycycline hyclate and glyburide. Doxycycline rose from $20 for 500 tablets to $1,849 between October 2013 and May 2014.

Richard A. Robbins, MD

Editor, SWJPCC

Reference

1. Bartz D, Lynch SN. U.S. states sue Mylan, Teva, others for fixing drug prices. Reuters. December 16, 2016. Available at: http://www.reuters.com/article/us-usa-drugpricing-idUSKBN14420C (accessed 12/17/16).

Cite as: Robbins RA. Lawsuits allege price fixing by generic drug makers. Southwest J Pulm Crit Care. 2016;13(6):313. doi: https://doi.org/10.13175/swjpcc142-16 PDF 

Hospital Executive Compensation Act Dropped from Ballot

The Hospital Executive Compensation Act did not qualify for the November 8, 2016 ballot in Arizona as a state statute (1). The Service Employees International Union (SEIU) dropped the initiative just before arguments were to begin in a lawsuit that challenged the legality of signature gatherers who failed to register with the state. The measure would have limited total pay for executives, administrators and managers of healthcare facilities and entities to the annual salary of the President of the United States. A similar measure in California was also dropped by the SEIU in 2014.

Supporters of the proposal said it would decrease escalating healthcare costs. Opponents of the measure, including the Arizona Chamber of Commerce who filed the suit challenging the proposition, alleged that it would lead to poorer healthcare. However, a survey conducted by the Southwest Journal of Pulmonary and Critical Care showed that most supported the measure and felt that it would not lead to poorer healthcare (2).

References

1. Ballotpedia. Arizona hospital executive compensation act (2016). Available at: https://ballotpedia.org/Arizona_Hospital_Executive_Compensation_Act_(2016) (accessed 8/22/16).
2. Robbins RA. Survey shows support for the hospital executive compensation act. Southwest J Pulm Crit Care. 2016;13:90. [CrossRef] 

Cite as: Robbins RA. Hospital executive compensation act dropped from ballot. Southwest J Pulm Crit Care. 2016;13:91. doi: http://dx.doi.org/10.13175/swjpcc081-16 PDF