Monday, February 10, 2020

What the Heck Happened to Surprise Billing Legislation? (Or, it’s never too late for the lobbyists to win.)

With constituents pressing for something to remedy unexpected liabilities incurred from “surprise” medical bills, it was expected that surprise medical bill legislation would pass federally in December 2019 as part of an end-of-year legislation package. House and Senate committees had worked for months on consensus legislation that was ready to go, but that fell through at the last moment. What happened?

Some background on the issue: Surprise bills are something of a battleground between payers (insurers) and providers (doctors/hospitals). Insurers want to lower bills, and providers want to raise them. More and more, hardball is being played. If large groups of specialty providers remain out-of-network, they can often make a great deal more money than if they signed a contract for a number agreeable to the insurer. Patients – who can get nightmarish huge bills and be legally liable for them – are the roadkill in this tug-of-war. Private equity firms, who are now buying up group medical practices on the assumption that they can increase earnings substantially, have recently become a major player in the dynamic. Dr. Poses had a good post in September on their role and on their lobbying/advertising efforts. Private equity firms like Blackstone and KKR put a TON of money into the radio and TV ads that urged people to call their legislators to oppose "government rate-setting."

We’re not talking chump change, here. A recent analysis showed that surprise billing charges in excess of negotiated rates amount to as much as FORTY BILLION dollars annually.

Surprise billing legislation – state and federal - to date has taken two approaches. One approach is to fix the bill with out-of-network doctors based in some way on what an in-network doctor makes. This “benchmarking” approach advantages the insurance companies and self-funded employers.

The other is to rely on arbitrators to settle the dispute about amounts between provider and insurers. Experience has shown that this is in practice highly advantageous to the provider – to hospitals and to specialty groups (and in some cases to their private equity investors). This second approach drives up already-high U.S. medical costs. This major downside, in my opinion, makes it far more in the public interest to lean toward the benchmarking type of solution, while striving for fairness.

The bipartisan consensus agreement, known as the Murray-Alexander bill after Democrat Patty Murray and Republican Lamar Alexander, was initially based on a benchmarking approach, but after compromises that were made, had room for outside arbitration for amounts over $750. The Congressional Budget Office estimated that its passage would save TWELVE BILLION dollars in insurer medical costs, enabling lowering of premiums (this does not even include out-of-pocket patient savings). But, of course, those twelve billion dollars in saved costs are also twelve billion dollars in lowered revenue to providers and their owners.

And so, this bipartisan deal was torpedoed at the last moment by another bipartisan team, Democrat Richard Neal (House Ways and Means committee chair) and Republican Kevin Brady. Everything also indicates that Senate Minority Leader Chuck Schumer – who pushed Murray to back off from her support - was instrumental in killing the deal. Nancy Pelosi, too, was an enabler, allowing Neal to kill the bill. She was heard assuring industry representatives that "we are not going to give a handout to big insurance companies."

As journalist Jon Walker tweeted:
Disgraceful. @SpeakerPelosi is going around trying to keep your premiums sky high to pay off private equity firms and bad actor hospitals.

Everything about the spiking of the deal indicates that money talks, and loudly, with large donations having been made to Schumer’s Senate Majority PAC by the Greater New York Hospital Association and with donations too to Richard Neal from private equity.

And so the legislation is dead until and unless Schumer and Neal can get their preferred (and price-raising) approach adopted. Meantime, real people are suffering from getting huge bills they have no control over. As Elizabeth Rosenthal observed recently, practices that are both routine and legal in the medical industry are nonetheless in essence fraudulent. The business model of U.S. medicine is fraud – and a very profitable business model it is.

NOTE 1: Although a number of states have passed surprise bill legislation, it is critical to get something passed on a federal level, because most large employer-based plans are federally regulated and state laws don’t apply.

NOTE 2: Benchmarking and arbitration are not the only possible approaches. Another suggestion is to abolish the practice of separate bills from doctors for services provided in hospitals.

Friday, February 07, 2020

The Big Spin Out: 2020 Revolving Door Update

In  2020, cases of the revolving door accumulated quickly. 



The Old School Outgoing Revolving Door

Let us begin with cases of the old fashioned outgoing revolving door, that is, of people leaving leadership positions in governmental bodies which regulate health care or make health care policy, then soon obtaining jobs in the health care industry, particularly organizations which they previously regulated or were affected by the policies they made.

Dr Vindell Washington from National Coordinator for Health Care Information Technology to Alphabet

Per FierceHealthCare, January 7, 2020:

Alphabet, the parent company of Google and Verily Life Sciences, continues to bolster its ranks of healthcare experts with the latest hiring of Vindell Washington, M.D.

Verily Life Sciences hired Washington as its new chief clinical officer as part of its health platforms team, Verily Life Sciences representative Kathleen Parkes confirmed to FierceHealthcare Tuesday.

Washington served as the national coordinator for health IT from August 2016 to January 2017.

As one of the highest health IT policy leaders, Washington brings to Verily a deep understanding of the industry. He is an emergency medicine physician by training.

So he moved from a position with significant influence over government health IT policy to a big IT company involved in health care.  Admittedly though, this moves comes three years after he left the ONC.

Dr Kate Goodrich from Chief Medical Officer of the Center for Medicare and Medicaid Services (CMS) to Humana Inc

Per Louisville Business First, January 17, 2020:

Humana Inc. has hired away a key regulatory insider from the federal government.

Dr. Kate Goodrich will leave the chief medical officer role at Centers for Medicare & Medicaid Services in February. Politico reported Thursday Goodrich will become a senior vice president for the company.

CMS is the agency that oversees both Medicare and Medicaid, the government-backed health plans. Goodrich was also director of the Center for Clinical Standards and Quality, the CMS website states.

Note that Humana's business is heavily influenced by the actions of CMS.

Humana's core business is providing Medicare Advantage plans, a private version of the federal health plan for seniors. It has about 4.1 million members in Medicare Advantage plans, according to its latest financial disclosure.

The Medicare Advantage segment brought in about $37.1 billion of revenue in the nine months ended Sept. 30, 2019.

Mary Sumpter Lapinski from Government Affairs at Bristol-Myers-Squibb to Counselor to the Secretary of the Department of Health and Human Services (DHHS) for Public Health and Science, then to Vice President of Global Governance Affairs for Greenwich Biosciences


Note that in this case, someone recently reported as transiting the outgoing revolving door has also had in the past transited the incoming revolving door.

Per a Buzzfeed News article, January 24, 2020 (which also discussed the larger revolving door problems involving the pharmaceutical industry and the Trump administration):

Mary-Sumpter Lapinski, who worked in government affairs for Bristol-Myers Squibb from 2002–2007, served as a counselor to the health and human services secretary for public health and science. As of April 2019, Lapinski is the vice president of global government affairs for biopharmaceutical company Greenwich Biosciences.

Again, most recently she moved from a senior position in DHHS affecting public health and science to a biotech company.

Roxana Weil, Lead Toxicologist from the Center for Tobacco Products at the Food and Drug Administration (FDA) and Gabriel Muniz who inspected tobacco manufacturers for the FDA to Juul Labs Inc

Per Bloomberg (via the Detroit News, February 5, 2020):

Juul Labs Inc. has hired former Food and Drug Administration employees and is recruiting more researchers as it prepares for a crucial regulatory hurdle that will determine the future of the top U.S. e-cigarette maker.

So

Roxana Weil, formerly a lead toxicologist at the agency’s Center for Tobacco Products, joined Juul as principal scientific adviser in September. Gabriel Muniz, who worked in an FDA division that inspects tobacco manufacturers, joined Juul last month as a director of regulatory compliance.

Note that

The company and its peers must submit applications to the FDA by May 12 in order to continue selling their products. The deadline is a defining moment for the e-cigarette industry, which has been under fire following a surge in teen vaping and a lung-injury outbreak that sickened thousands and was later tied to THC.

For Juul, securing a swift clearance is critical. The company has seen its once-rich valuation drop since the broader vaping backlash began. Failing to win the FDA’s blessing could shut it out of a market it has dominated.

So they moved from regulating tobacco to a company essentially involved in selling tobacco analogues.  Note that the tobacco company Altria made a major investment in Juul (look here.)

The Au Courant Incoming Revolving Door

In the Trump era, many people have come through the incoming revolving door, that is, people with significant leadership positions in health care corporations or related groups have attained leadership positions in government agencies whose regulations or policies could affect their former employers.

There are two recent examples

Brad Smith, Chief Operating Officer of Anthem's Diversified Business Group to be Director, Center for Medicare and Medicaid Innovation (CMMI) at the DHHS

Per FierceHealthcare, January 6, 2020:

The Trump administration has selected Brad Smith to serve as the director of the Center for Medicare and Medicaid Innovation (CMMI), where he will oversee the creation and stewardship of value-based payment models.

Smith most recently was the chief operating officer of Anthem’s Diversified Business Group, a division of the insurance giant that includes provider services. He was also the co-founder and CEO of palliative care services company Aspire Health.

Anthem is a health insurer which provides Medicare supplements and Medicare Advantage programs, so its business is greatly affected by any changes in how Medicare or Medicaid makes payments.

Amanda Adkins, Executive for Cerner Corp, Now Running for the House of Representatives as a Republican

This could be called a running start that will likely lead through the incoming revolving door.

Per the  Kansas City Star, January 23, 2020:

Cerner executive Amanda Adkins has taken a leave of absence from the company to focus on her campaign to unseat Democratic Rep. Sharice Davids.

Adkins, a former Kansas Republican chair, launched her bid for Kansas’ 3rd congressional district in September, but initially planned to remain as Cerner’s vice president of strategic growth through the campaign.

But as of last week, according to a company spokeswoman, Adkins went on unpaid leave after from her role after 15 years with the health care IT giant.

Note that the Star article, unlike the others quoted above, provided at least a slightly detailed discussion of why this (potential) move poses a conflict of interest:

The Kansas City-based company is a major federal contractor with a $10 billion contract to design a new health care records system for the U.S. Department of Veterans Affairs. The new system is expected launch later this year.

Federal election rules prohibit federal contractors from giving directly to federal candidates. Craig Holman, a lobbyist for Public Citizen, a national group which advocates for tougher ethics standards, said Adkins’ unpaid leave protects Cerner from violating this rule.

But Holman said the fact that she can return from leave after the election still raises questions about a conflict of interest since she could end up on committees with oversight of the company’s contracts if elected to Congress.

'The conflict still persists,' Holman said in a phone call. 'The fact that she has not resigned and remains an employee of Cerner means that conflict of interest remains front and center.'

Summary

Sigh.  So while there is much discussion of corruption in high places, and its potential link to high crimes and misdemeanors, the revolving door quietly spins on well-oiled hinges, as it has for years, including many years before the current administration.  

So as we have repeatedly said,  most recently in October, 2019, ...

The revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,


The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The ongoing parade of people transiting the revolving door once again suggests how the revolving door may enable certain of those with private vested interests to have disproportionate influence on how the government works.  The country is increasingly being run by a cozy group of insiders with ties to both government and industry. This has been termed crony capitalism. The latest cohort of revolving door transits suggests that regulatory capture is likely to become much worse in the near future.

Remember to ask: cui bono? Who benefits? The net results are that big health care corporations increasingly control the governmental regulatory and policy apparatus.  This will doubtless first benefit the top leadership and owners/ stockholders (when applicable) of these organizations, who are sometimes the same people, due to detriment of patients' and the public's health, the pocketbooks of tax-payers, and the values and ideals of health care professionals.  

 The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.