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 

Senate Republican Leadership Releases Revised ACA Repeal and Replace Bill

Today, the Senate Republican leadership released a revised version of a bill to repeal and replace the Affordable Care Act (ACA). The new bill draft includes an amendment sponsored by Sen. Cruz (R-TX) that permits insurers to offer health insurance plans on the ACA exchanges that do not cover the ACA’s 10 essential health benefits (EHB) as long as they offer at least one other plan that provides full coverage of EHB’s. The bill also includes more funding for opioid addiction and for state initiatives to reduce insurance premiums and additionally, some flexibility for state Medicaid funding in the event of a public health crisis. The bill must still receive a cost estimate from the Congressional Budget Office (CBO), which will include the impact of the bill on insurance coverage levels, expected out Monday. The ATS remains deeply concerned about the bill because under the Cruz proposal, insurance coverage costs for people with pre-existing conditions would soar, leaving coverage unaffordable for many people with chronic respiratory conditions. The Senate leadership aims to begin voting on the bill by the middle of next week in an open amendment process, so changes could be made to the bill with subsequent votes occurring quickly.

Just before the revised leadership bill was introduced, Sen. Graham (R-SC) and Cassidy (R-LA) released their own ACA repeal and replace bill, which focuses on sending ACA funding directly to the states, rather than the federal government and would preserve more state Medicaid funding. The Graham/Cassidy proposal would also permit states to waive the ACA’s EHB’s although full details of this bill are not yet clear and some aspects are still under revision.

Despite the release of the Senate leadership’s new bill, it is still not at all clear whether it will gain the support of all Senate Republicans, a number of whom have concerns with the funding reductions to Medicaid.

Nuala S. Moore

American Thoracic Society

Washington, DC USA

Cite as: Moore NS. Senate Republican leadership releases revised ACA repeal and replace bill. Southwest J Pulm Crit Care. 2017;15(1):41. doi: https://doi.org/10.13175/swjpcc092-17 PDF

CMS Releases Data on Drug Spending

Yesterday (11/14/16) the Centers for Medicare and Medicaid Services (CMS) released data on spending for drugs under Medicare and Medicaid (1,2). Medicare paid $137.4 billion on drugs covered by its prescription drug benefit in 2015. About $8.7 billion of that spending occurred on drugs that had "large" price hikes, defined as a more than 25 percent increase between 2014 and 2015. In 2015, Medicaid paid $57.3 billion about $5.1 billion of which was spent on drugs that had large price increases.

The Medicare spending database highlights 11 drugs that doubled in price. The Medicaid database identified 20 drugs that more than doubled in price with 9 of these being old, generic drugs. Medicare drugs were led by Glumetza, a Type 2 diabetes drug which saw its price soar 380 percent and hydroxychloroquine sulfate, a generic malaria drug, which went up 370 percent. Medicaid drugs were led by Ativan, an anti-anxiety medication approved in 1977, which increased by 1,264 percent in price between 2014 and 2015. Daraprim, a decades-old antiparasitic drug that helped spark political attention to the issue of high drug prices after former pharmaceutical executive Martin Shkreli hiked the price, leapt up in average cost by 874 percent.

However, drugs commonly used in respiratory diseases also increased in price. These were led by mitomycin, an anticancer drug sometimes used in lung cancer, an antidepressant also used as a smoking cessation aid (Table 1).

Table 1. Medicare Spending on Respiratory Drugs. (Open table in separate window)

The data on price on small prices rises can be deceiving when calculating total costs. For example, Advair Diskus, a bronchodilator, ranked in the top-five of Medicare expenditures, with $2.3 billion in spending in 2015. However, he utilization of the drug has actually declined a little over the last five years. Meanwhile, the total spending has not gone down, but increased. Fueled by relatively modest price increases, from $3.81 per unit in 2011 to $5.28 in 2015, the spending on the drug increased by more than half a billion dollars over that period.

Of particular concern is a rise in price of some generics, a class of drugs that are intended to decrease drug prices and spending. Drugs that were responsible for large amounts of overall spending tended to see smaller increases that gradually increased the government outlay. In one outlier, the price of the hepatitis C treatment, Harvoni, decreased slightly in 2015, even as it led overall spending.

The prices do not include the impact of rebates, which are prohibited by law from being released (3). Those discounts can be significant, and not knowing what they are means the numbers almost certainly overstate how much the government actually paid for these drugs. CMS disclosed that, on average, rebates for brand name drugs were 17.5 percent for medicines covered by Medicare's "part D" prescription drug benefit in 2014.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. CMS. 2015 Medicare drug spending dashboard. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-Prescription-Drugs/2015Medicare.html (accessed 11/15/16.
2. CMS. 2015 Medicaid drug spending dashboard. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-Prescription-Drugs/2015Medicaid.html (accessed 11/15/16).
3. Johnson CY. Drugs for hepatitis C and diabetes drove Medicare spending in 2015. Washington Post. November 14, 2016. Available at: https://www.washingtonpost.com/news/wonk/wp/2016/11/14/the-drugs-driving-up-medicare-spending/ (accessed 11/15/16).

Cite as: Robbins RA. CMS releases data on drug spending. Southwest J Pulm Crit Care. 2016;13(5):242-3. doi: https://doi.org/10.13175/swjpcc118-16 PDF 

Trump Proposes Initial Healthcare Agenda

On Friday, November 11, President-elect Trump proposed a healthcare agenda on his website greatagain.gov (1). Yesterday, November 12, he gave an interview on 60 Minutes clarifying his positions (2). Trump said that he wanted to focus on healthcare and has proposed to:

• Repeal all of the Affordable Care Act;
• Allow the sale of health insurance across state lines;
• Make the purchase of health insurance fully tax deductible;
• Expand access to the health savings accounts;
• Increase price transparency;
• Block grant Medicaid;
• Lower entrance barriers to new producers of drugs.

In his 60 Minutes interview Trump reiterated that two provisions of the ACA – prohibition of pre-existing conditions exclusion and ability for adult children to stay on parents insurance plans until age 26 – have his support (2). Other aspects of the ACA that might receive his support were not discussed.

On the Department of Veterans’ Affairs Trump proposed to make the VA great again by removing corrupt and incompetent individuals who let our veterans down (1).  The website goes on to say that only honest and dedicated public servants in the VA have their jobs protected, and will be put in line for promotions.

Several aspects of healthcare were not addressed. Universal healthcare which Trump has supported in the past was not discussed (3). Trump did not make major policy proposals for Medicare during the campaign and Medicare was not addressed on his website or during his interview.

According to a survey conducted by the Kaiser Family Foundation the top three healthcare issues concerning voters were:

• Ensuring that high-cost drugs for chronic conditions such as hepatitis and cancer become affordable;
• Lowering prescription drug costs in general;
• Making sure health plans have enough physicians and hospitals in their networks (4).

None were addressed on Trump's website or during his interview.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. https://www.greatagain.gov/policy/healthcare.html (accessed 11/14/16).
2. CBS News. President-elect Trump speaks to a divided country on 60 Minutes. November 13, 2016. Available at: http://www.cbsnews.com/news/60-minutes-donald-trump-family-melania-ivanka-lesley-stahl/ (accessed 11/14/16).
3. CBS News. Trump gets down to business on 60 Minutes. September 27, 2015. Available at: http://www.cbsnews.com/news/donald-trump-60-minutes-scott-pelley/
4. Kirzinger A, Sugarman E, Brodie M. Kaiser Health Tracking Poll: October 2016. Available at: http://kff.org/health-costs/poll-finding/kaiser-health-tracking-poll-october-2016/ (accessed 11/14/16). 

Cite as: Robbins RA. Trump proposes initial healthcare agenda. Southwest J Pulm Crit Care. 2016;13(5):240-1. doi: https://doi.org/10.13175/swjpcc117-16 PDF