Monthly Archives: July 2018
The 340B drug program is a topic that needs daily updates. It seems that something is happening constantly. Like a prime time soap opera or The Bachelor, the 340B program is all the talk at the water cooler. From lawsuits to legislation to executive orders – there is no way of knowing the outcome, so we all wait with bated breath to watch who will hold the final rose.
On Tuesday, July 17, 2018, the metaphoric guillotine fell on the American Hospital Association (AHA) and on hospitals across the country. The Court of Appeals (COA) dismissed AHA’s lawsuit.
On November 1, 2017, the US Department of Health and Human Services released a Final Rule implementing a payment reduction for most covered outpatient drugs billed to Medicare by 340B-participating hospitals from the current Average Sales Price (ASP) plus 6% rate to ASP minus 22.5%, which represents a payment cut of almost 30%.
Effective January 1, 2018, the 30% slash in reimbursement rates became reality, but only for locations physically connected to participating hospitals. CMS is expected to broaden the 30% reduction to all 340B-participating entities in the near future.
What is the 340B drug program? The easiest explanation for the 340B program is that government insurance, Medicare and Medicaid, do not want to pay full price for medicine. In an effort to reduce costs of drugs for the government payors, the government requires that all drug companies enter into a rebate agreement with the Secretary of the Department of Health and Human Services (HHS) as a precondition for coverage of their drugs by Medicaid and Medicare Part B. If a drug manufacturer wants its drug to be prescribed to Medicare and Medicaid patients, then it must pay rebates.
The American Hospital Association (“AHA”) filed for an injunction last year requesting that the US District Court enjoin CMS from implementing the 340B payment reduction. On the merits, AHA argues that the HHS’s near-30% rate reduction constitutes an improper exercise of its statutory rate-setting authority.
The US District Court did not reach an opinion on the merits; it dismissed the case, issued December 29, 2017, based on lack of subject matter jurisdiction. The District Court found that: Whenever a provider challenges HHS, there is only one potential source of subject matter jurisdiction—42 U.S.C. § 405(g). The Medicare Act places strict limits on the jurisdiction of federal courts to decide ‘any claims arising under’ the Act.
The Supreme Court has defined two elements that a plaintiff must establish in order to satisfy § 405(g). First, there is a non-waivable, jurisdictional requirement that a claim for benefits shall have been “presented” to the Secretary. Without presentment, there is no jurisdiction.
The second element is a waivable requirement to exhaust administrative remedies. I call this legal doctrine the Monopoly requirement. Do not pass go. Go directly to jail. Do not collect $200. Unlike the first element, however, a plaintiff may be excused from this obligation when, for example, exhaustion would be futile. Together, § 405(g)’s two elements serve the practical purpose of preventing premature interference with agency processes, so that the agency may function efficiently and so that it may have an opportunity to correct its own errors, to afford the parties and the courts the benefit of its experience and expertise, and to compile a record which is adequate for judicial review. However, there are ways around these obsolete legal doctrines in order to hold a state agency liable for adverse decisions.
Following the Dec. 29, 2017, order by the District Court, which dismissed the lawsuit on jurisdictional grounds, the plaintiffs (AHA) appealed to the U.S. Court of Appeals (COA), which promptly granted AHA’s request for an expedited appeal schedule.
In their brief, AHA contends that the District Court erred in dismissing their action as premature and that their continued actual damages following the Jan. 1 payment reduction’s effective date weighs heavily in favor of preliminary injunctive relief. More specifically, AHA argues that 30% reduction is causing irreparable injury to the plaintiffs “by jeopardizing essential programs and services provided to their communities and the vulnerable, poor and other underserved populations, such as oncology, dialysis, and immediate stroke treatment services.”
By contrast, the government’s brief rests primarily on jurisdictional arguments, specifically that: (1) the Medicare Act precludes judicial review of rate-setting activities by HHS; and (2) the District Court was correct that no jurisdiction exists.
Oral arguments in this appeal were May 4, 2018.
AHA posted in its newsletter that the COA seemed most interested in whether Medicare law precludes judicial review of CMS’ rule implementing the cuts. AHA says it hopes a ruling will be reached in the case sometime this summer.
In a completely different case, the DC District Court is contemplating a request to toll the time to file a Section 340B appeal.
AHA v. Azar, a case about RAC audits and the Medicare appeal backlog. During a March 22, 2018, hearing, the COA asked AHA to submit specific proposals that AHA wishes the COA to impose and why current procedures are insufficient. It was filed June 22, 2018.
In it proposal, AHA pointed out that HHS is needlessly causing hospitals to file thousands of protective appeals by refusing to toll the time for hospitals to file appeals arising out of the reduction in reimbursement that certain 340B hospitals. In order to avoid potential arguments from the government that 340B hospitals that do not administratively appeal the legality of a reduced rate will be time barred from seeking recovery if the court holds that the reduction in payments is unlawful, AHA proposed that the Secretary agree to toll the deadline for such appeals until resolution of the 340B litigation—an arrangement that would preserve the 340B hospitals’ right to full reimbursement in the event the 340B litigation is not successful. HHS has refused to toll the time, meaning that Section 340B hospitals will have to protect their interests in the interim by filing thousands upon thousands of additional claim appeals, which will add thousands upon thousands of more appeals to the current ALJ-level backlog.
In a unanimous decision, three judges from the COA sided with HHS and ruled the hospitals’ suit was filed prematurely because hospitals had not formally filed claims with HHS because they were not yet experiencing cuts.
Basically, what the judges are saying is that you cannot ask for relief before the adverse action occurs. Even though the hospitals knew the 30% rate reduction would be implemented January 1, 2018, they had to wait until the pain was felt before they could ask for relief.
The lawsuit was not dismissed based on the doctrine of exhaustion of administrative remedies. The Decision noted that in some cases plaintiffs might be justified in seeking judicial review before they have exhausted their administrative remedies, but that wouldn’t be the solution here.
Hindsight is always 20-20. I read the 11 page decision. But I believe that AHA failed in two ways that may have changed the outcome: (1) Nowhere in the decision does it appear that the attorneys for AHA argued that the subject matter jurisdiction issue was collateral to the merits; and (2) The lawsuit was filed pre-January 1, 2018, but AHA could have amended its complaint after January 1, 2018, to show injury and argue that its comments were rejected (final decision) by the rule being implemented.
But, hey, we will never know.
The United States currently spends more per person on health care than any other developed country. So when my daughter and I recently vacationed the “Highlights of Europe” tour, I was interested in learning about the varied health care systems, country-by-country. We visited England, France, Switzerland, Austria, Germany, the Netherlands, and Italy. It was awesome!! She turned 13 during the trip, and she starts 8th grade next week. Where does the time go?
While I do not protest to know all the answers, during our vacation, I researched the diverse countries’ healthcare system and methods of payment, but, most importantly, I interviewed people. I interviewed people who were begging for money. I interviewed my taxi drivers. I interviewed the bus drivers. I interviewed people on the streets. I interviewed shop owners. I interviewed the hotel concierge. I interviewed bartenders and waiters.
This blog is intended to memorialize my findings. It has not been fact checked. In other words, if a person told me something about the healthcare system and their personal experiences, I did not go back and review that country’s laws to determine whether that person was telling the truth or that the person’s rendition of their experience was compliant with the law. I did this for a reason. Sometimes what the laws dictate as to healthcare is not what actually occurs in reality. I wanted personal perspectives. I wanted an opinion from citizens of other countries as to how healthcare was or was not working in their country. I did not want to meet health care policy, rules, regulations. I wanted the cold, hard, real truth.
At least one person in every country – Austria, The Netherlands, France, England, Germany, Switzerland, and Italy told me, “[Country name] has the best health care in the world.” Obviously, they cannot all be right. And I certainly heard the worst case scenarios in country’s that claimed to be the best in the world.
This is what I learned:
England has the best health care system in the world! England’s healthcare system is drastically different from the USA’s. England’s National Health Service (NHS) is a free healthcare program for all permanent residents of United Kingdom. Reading the fine print, however, the NHS is not completely free. There are charges associated with eye tests, dental care, prescriptions, and many aspects of personal care.
England relies on primary care more so than specializations. Mental health services, for example, are largely treated by the general practitioners (GPs). Provider trusts, fed by taxes, compensate most health care, the main examples in the hospital trust and the ambulance trusts which send the money allocated to them by commissioning trusts. Hospitals normally receive the lion’s share of NHS funding as hospital’s have the most expenses.
Our taxi driver (Jim) told me that paperwork is minimal with the NHS, which makes it super easy to use. Although he was quick to point out that the health care system in England does vary in quality and timeliness depending on where you live, but I believe we can say the same about the USA. Jim also told me that he and his family has had problems with wait-times to be seen by specialists. Jim’s wife suffered persistent and serious acid reflux. Her general practitioner referred her to a gastroenterologist. However, she could not get an appointment until 20 weeks later. But, in the end, she was seen, and had no waiting period on the day of her appointment. Generally, Jim is happy with the NHS. The costs are minimal, and, he believes that the quality of care is high.
The hotel concierge (let’s call him Blake) was extremely open about his experiences with the health care system in England. It appears from his enthusiasm that health care is just as big of a political issue in England than it is in the US. He told me that he has never waited more than four hours in an emergency room. Apparently, his children frequent it. However, I do place an asterisk on Blake’s comment. You will see below that Alice from France waited for 7 hours at the ER in the UK with her husband. Some of the stories that I heard contradicted each other.
Blake also told me that for traumatic experiences, such a broken arm due to a car accident, which his youngest daughter recently endured, the wait time is significantly less than when his best buddy got drunk at the pub and broke his finger. Blake also told me that, for day-to-day, general, “I have a tummy ache” appointments, English citizens do not get to choose appointment times. You leave a voice mail message for the nurse and the nurse informs you when you need to present yourself. While this may sound inconvenient, Blake stated that there are no wait times. I know that I have waited many an hour to see my general practitioner.
Dental insurance, on the other hand, is a whole new can of worms. Basically, general practitioners are free, but dentists are not. The wait times to see a dentist are extensive, and, if you do not have private dental insurance, the wait times can be even longer. My take-away? If I were a dentist, I’d move the the UK. This also explains a lot about English actors and actresses.
We cannot analyze any country’s health care system without taking into account the taxes that you must pay in order to maintain such a health care system, no matter how poor or amazing that health care system is. Income taxes in the UK are 40% if you make more than 46,351 pounds. Once you hit 150,000 pounds, then your taxes increase to 45%. Almost half of your wages are taken by the government, but you get, essentially, free health care. Does it balance out?
The Netherlands has the best health care system in the world! Every person that I asked in Amsterdam, informed me that Dutch health care is among the best in the world. It seemed that the Dutch took pride in their health care system. So, I wanted details. If Dutch health care is the best, why doesn’t everyone else mimic it?
I learned that everyone who lives or works in the Netherlands is legally obligated to take out standard health insurance. All insurers offer the same standard package. The standard insurance package includes general practitioners, some medications, dental care until the age of 18, nutritional and dietary care, medical aids, mental health services, and much more. It does not cover over-the-counter aspirin or cosmetic surgery procedures. But neither does insurance in America.
In Amsterdam, my daughter and I rented bicycles for two days. It was an absolute blast. The rental process, however, took a bit longer than expected. The gentleman behind the counter needed our passport numbers, information on our hotel, credit card information, and provided us with an instruction program on how to properly secure the bicycles. Given the length of the process, I took the opportunity to ask him about health care.
Let’s call the bicycle rental agent Stefan.
Stefan explained that the Dutch believe in misery first. According to him, regardless the affliction, general practitioners will tell you to take an aspirin and come back in two weeks if you are not dead. I am fairly sure that he was exaggerating. But I have always been of the opinion that exaggerations have some form of truth.
In the Netherlands, the general practitioners are called huisarts, which are expected to know all aspects of medicine. I liken the huisarts to attorneys who practice general law. What attorney could know all aspects of family law and criminal law? The answer is none. A generalist knows a tad about everything, but nothing much about anything.
Preventive care is rare in the Netherlands, certainly in terms of women’s health. For example, in the US, France, and Spain, it is typical to get a test for cervical cancer at least every 2 to 3 years. Here, in Amsterdam, insurance will only pay for one every 5 years. Hormone replacement therapy is also rare here, as most GPs are still following outdated guidelines, based on a flawed study from 2002.
It seems as though I am overly negative as to the health care in the Netherlands. All I can write is that I began this blog with an open mind because if any country has mastered health care then we should learn from it. I was also swayed by my interviewees.
While other countries maintained high income taxes to pay for “free health care,” the Netherlands does not use tax dollars to pay for health care. Every Dutch resident is required to buy their own health insurance on top of the taxes they pay to the government.
Taxes in the Netherlands is exorbitant. If you make over 66,421 euros, taxes are 52% of your income. These taxes, remember, do not include health insurance.
In Amsterdam, there was a pub across the river from our hotel Movenpick. A group of guys were “celebrating” an upcoming wedding and were drinking bottles upon bottles of wine at the river’s edge. Multiple times members of the group ended up swimming.
So, imagine my surprise when one of the intoxicated gentlemen sat at our table and ensued with a semi-intelligent conversation about health care. We will call him Henry. Henry had recently been married and his wife gave birth last year to a premature baby. I completely related because my daughter was born at 28 weeks and 2 pounds and 2 ounces. I asked Henry about the health care coverage for his premature baby girl’s birth and subsequent surgeries. He told me that, besides the meals that he ate during the two-month stay in the hospital, once his new daughter and wife were free to leave, his hospital bill was zero. His daughter endured a two-month stay in the neonatal department, his wife had a two-month, inpatient hospital stay, his daughter underwent multiple surgeries for her lungs and heart, and his daughter had 24-hour care for 60 days. All for zero euros. All children in the Netherlands are automatically insured by the government.
While I see the downside of paying 52% of your income to the Dutch government and having to pay for health insurance, I do see the benefit of Dutch insurance if you have a medical emergency, like a premature baby.
France has the best health care system in the world! In a 2000 World Health Organization (WHO) comparison of 191 different countries’ health care, France came out at number one. And they are not afraid to tell you. Even though the WHO ranking is from 2000, the French still tout its outcome because there have been no other such rankings since then. The French believe in the universal right to health care.
The entire population must pay compulsory health insurance.
Our two-hour ride on the Eurostar from Paris to London gave me a unique opportunity to ask other passengers about health care, especially since there is bar in one of the cabins. People congregated there to drink, eat, and talk, plus one nosy American asking about health care. The following are summaries of the stories I heard:
Nancy, who is from Devon, England and has lived in France with her family since 2006 thinks that French health care is the best. Since she moved to France her family has, unfortunately, undergone 6 operations. Her husband had cancer a couple of years ago and the Oncopole (oncologist) encouraged alternative therapies and even told him the taxi drivers (bringing patients home from the hospital) often go straight to a rebouteuse (a healer) after radiotherapy. A lot of doctors practice homeopathy, which is fantastic, according to Nancy. She also said that doctors prescribe “sacks full of medicine.” The good news is that Nancy’s husband is in remission.
Alice, a former British citizen, who moved to France told me the French health care system saved her husband’s life. Five years ago, her husband started to feel ill while visiting the UK. They couldn’t get a family/general practitioner to come to their home (I thought, my doctor wouldn’t come to my home in the US either). Over the phone, the general practitioner said, “take an aspirin and rest.” They also went to the ER but gave up after 7 hours waiting as her husband was in extreme pain (Juxtapose Blake’s recount that he never waited over 4 hours in the ER in the UK). A few days later they flew home, and her husband could not walk. Within an hour of arriving in France, her husband was admitted to a hospital. He was diagnosed with stage 4 kidney failure and stage 5 equates to dialysis. Needless to say, Alice is a French health care fan.
My daughter and I used a tour group company for our mommy-daughter vacation, and, while in France, I heard one person tout that health care is free in France. I will contend, from my travels, that French health care is great, but not completely free. I saw a presumably-homeless, elderly gentleman with no legs begging for money. In extremely, broken Frenglish and impromptu sign language, I asked the gentleman why he didn’t have health coverage and was he a French citizen? To the best of my ability, I interpreted his responses to indicate that, yes, he is a French citizen, but that free, French health care does not include prosthetics.
Taxes are approximately 41% if you make over $72,617. Whereas, in the US, if you make over $72,000 your tax bracket is 15.55%, barring extraordinary circumstances.
Italy has the best health care system in the world! From my travels, I gathered that Italians believe that their health care system is the best (over France’s – I believe that there is a bit of a friendly rivalry). In 2000, the World Health Organization (WHO) ranked Italy as the 2nd best health care system in the world, right under France. In 2012, WHO found Italy’s life expectancy to be 82.3 years.
Italy has a regionally organized National Health Service (“SSN” – Servizio Sanitario Nazionale) that provides citizens with free or low-cost healthcare. It’s funded through national income taxes and regional VAT, and generally the standard of care is very high. I was pleased to discover that foreign citizens living in Italy with a regular stay permit are entitled to all the same treatment and rights as Italian citizens. Retirement 2035 – here I come!
For a country with the best health care in the world, I saw the most homeless, medically-challenged beggars than any other country. Maybe there are more homeless, medically-challenged beggars in Italy than other country because the weather is so nice, the gelato is so delicious, the population is greater, mental health care is worse, or the food is so amazing…I do not know. But I saw the most homeless, medically challenged beggars in Italy than anywhere else. Oddly, the afflictions were the same. Their feet were misshapen and curled inward to a degree that did not allow them to walk. It was heartbreaking. I googled it and discovered that medical articles have been written on the anomaly of foot deformities in southern Italy.
Taxes in Italy are as follows:
- 23% for amounts up to $36,000
- 33% for the next band from $36,001 to $39,300
- 39% for amounts between $39,301 and $119,200
- 45% for amounts $119,201 and over.
I met Valentina in Roma. Europe has strict hourly limits for bus drivers and our original bus driver, apparently, over-drove. Valentina stepped in and was very chatty, unlike the original bis driver who spoke no English. Considering our group consisted of 21 English-speaking vacationers and one couple fluent in Spanish and English, a bus driver who only spoke French was unhelpful.
Valentina told me that in Italy, mainly in the south, public hospitals are very crowded and offer very limited and sometimes hasty assistance, so that patients are too soon sent to rehabilitation centers, very few of which are public. This almost entirely private field is financially sustained by the National Health Service, which pays a per diem for a patient’s clinic stay. If a patient still needs rehabilitation after 2 months in a rehabilitation clinic or center, reimbursement from the National Health Service will be in any case cut by about 40%. Private insurance is very rare and usually is not involved in rehabilitation.
In private rehabilitation centers, physicians often have to deal with overworked nurses and angry, worried patients and relatives.
Valentina said that her mother went to her general practitioner complaining of frequent headaches, depression, anxiety, dizziness, and recurrent fatigue. Her general practitioner, diagnosed her as “a hysteric neurotic,” and she was prescribed anxiolytics. Her headaches continued. When she finally was able to see a specialist, her magnetic resonance image report showed that she had several cerebral metastatic lesions from an otherwise silent neoplasia – basically, a death sentence.
Switzerland has the best health care system in the world! The Swiss health care system is regulated by the Swiss Federal Law on Health Insurance. There are no free state-provided health services, but private health insurance is compulsory for all persons residing in Switzerland (within three months of taking up residence or being born in the country) (country #2 on my options for retirement).
Like every country we visited, Switzerland has a universal health care system, requiring all to buy insurance. Switzerland holds a special place in my heart. My mother’s mother, Martha Zuin (imagine an umlaut over the ‘u’), immigrated to the US from Switzerland, so I still have family living in Switzerland.
The plans in Switzerland resemble those in the United States under the Affordable Care Act: offered by private insurance companies, community-rated and guaranteed-issue, with prices varying by things like breadth of network, size of deductible and ease of seeing a specialist. Almost 40% of people get subsidies offsetting the cost of premiums, on a sliding scale pegged to income. Although these plans are offered on a nonprofit basis, insurers can also offer coverage on a for-profit basis, providing additional services and more choice in hospitals. For these voluntary plans, insurance companies may vary benefits and premiums; they also can deny coverage to people with chronic conditions. Most doctors work on a national fee-for-service scale, and patients have considerable choice of doctors, unless they’ve selected a managed-care plan.
Both Swiss and German systems cost their countries about 11 percent of GDP.
Mia, the hotel clerk at Lake Maggiore, is a Swiss resident. She informed me that insurance premiums are not adequately adjusted to income, and they have doubled in price since 1996, while salaries have risen by just one-fifth. It comes as no surprise, then, that just over a quarter of the population needed government assistance to pay their premiums in 2014. She says that over 1/2 of Swiss residents owe money for medical bills.
You can be blacklisted from reimbursement for health insurance in Switzerland. Some 30,000 blacklisted patients so far have lost their right to be reimbursed for medical services under basic insurance and can be refused care, save for emergencies. A policy initially designed to encourage people to pay up has instead come under fire for going against the principle of basic health coverage for all. In 2017, EHR became mandatory for most, which increased the costs for many health care visits.
Research told me that Switzerland is the second most expensive country for health care other than USA with The Netherlands, Sweden, Germany, and Denmark closely following.
Germany has the best health care system in the world! The German health care system and Switzerland’s have a lot in common. According to interviewees, Germany has slightly better access to health care, especially with respect to costs. Switzerland has higher levels of cost-sharing, but its outcomes are hard to beat — arguably the best in the world – for real.
A majority of Germans (86%) get their coverage primarily though the national public system, with others choosing voluntary private health insurance. Most premiums for the public system are based on income and paid for by employers and employees, with subsidies available but capped at earnings of about $65,000. Patients have a lot of choice among doctors and hospitals, and cost sharing is quite low. It’s capped for low-income people, reduced for care of those with chronic illnesses, and nonexistent for services to children. There are no subsidies for private health insurance, but the government regulates premiums, which can be higher for people with pre-existing conditions. Private insurers charge premiums on an actuarial basis when they first enroll a customer, and subsequently raise premiums only as a function of age — not health status. Most physicians work in a fee-for-service setting based on negotiated rates, and there are limits on what they can be paid annually.
Though mostly public, the German health insurance system is not a state-run system like the National Health Service in the United Kingdom. In fact, more than 100 different health insurers, known as sickness funds, compete for members in Germany’s comparatively decentralized system. These sickness funds are non-profit, non-governmental organizations that operate autonomously. Most Germans’ health insurance contributions are deducted from their paychecks by their employers. The amount, however, is capped at 14.6% of a person’s salary, split fifty-fifty between the employer and the employee, so 7.3% each way. But coverage is not dependent on the employer, so when Germans change or lose their jobs, nothing changes in their health insurance. Recent changes in health care have allowed the wealthy to obtain higher quality and more efficient health care services. Anyone who makes over 57,600 euros/year can opt out of public health care and pay for private health care. Doctors are more prone to be more attentive of their privately-insured patients.
We met Emma at a beer garden; she was our waitress. Emma was as equally inquisitive about American health care as I was about German health care. She said that she could not get her head wrapped around HIPAA. Privacy, she indicated, is not a hot topic issue in Germany. Emma said that doctors in Germany “get it wrong a lot.” When I asked her what she meant, she said that she went to her general practitioner for chest pain. Whereas, in America, chest pain is considered serious, Emma said that her doctor did not even place a stethoscope on her chest. Instead, he told her to go home, rest, and take an Ibuprofen. Emma’s friend had a baby with a problem in one eye. She went to several doctors and they told her nothing can be done. She finally went to a specialist in Spain and received a concrete diagnostic and special glasses for the 7 month-old-baby, because the eye movement was related to the eye condition.
Austria has the best health care system in the world! If European health care were on a bell curve, Austria would be at the bottom (hmmmmm…..although I have not compared Austria to the US). Dr. Clemens Martin Auer is the President of the European Health Forum Gastein and Director General at the Austrian Federal Ministry of Health.
Dr. Auer is focused on digital health and access to drugs. Talking to people in other European countries, who complained about over prescribing, Austria, apparently, has a high cost issue barring many people from receiving prescriptions.
In Austria, the health care system is largely financed by social security contributions and taxes, to a lesser part also by private sources, such as prescription charges, compulsory personal contributions, per-diem charges for hospital stays or contributions to private health insurance.
Each month a contribution will be taken from your tax payment, which is worked out according to how much you earn. This gives you access to basic healthcare including treatment in hospitals, medication, dental care, and some specialist appointments. If you make over 31,000 euros, you pay 41% tax.
According to Tobias, the man I met in Innsbruck, people wait months to see a specialist. So, if you have a cold, you are good, but of you have cancer, then get on the waiting list. Tobias also told me that people do not go to hospitals unless they have a severe injury or serious surgery. Instead, the general practitioners are heavily relied on. I am not sure I like the idea of going to a generalist for everything. If I have stark knee pain, I want to see an orthopedic, not a general internist. But I am learning that free health care may not equate to the best health care.