By George W. Chapman
COVID-19 was the No. 3 cause of death behind heart disease and cancer. Early in the pandemic, naysayers believed COVID-19 would be no worse than the annual flu which was the ninth leading cause of death. Here are the top 10. No. 1, heart disease, 690,882 deaths; 2, cancer, 598,532; 3, COVID-19, 345,323; 4, accidents, 192,176; 5, stroke, 159,050; 6, respiratory disease, 151.637; 7, Alzheimer’s, 133,382; 8, diabetes, 101,106; 9, flu/pneumonia, 53,495; 10, kidney disease, 52,260. Experts believe deaths from COVID-19 are underreported.
New CMS Administrator
The Senate has confirmed Chiquita Brooks-LaSure as administrator of Center for Medicare and Medicaid Service (CMS), which oversees the Medicare and Medicaid programs. She replaces Seema Verma. Brooks-LaSure previously was director of Affordable Care Act (ACA) coverage policy with the Department of Health and Human Services (DHHS). Several industry trade associations, including the Association of Health Insurance Plans and some physician groups, lauded her confirmation.
Pharmacy Fraud: 300% Increase
Last year’s pandemic and resultant chaos provided some shifty pharmacies with an opportunity to scam unsuspecting consumers and their insurers. One national pharmacy benefits manager (PBM) found fraudulent claims submitted by participating pharmacies increased 300% in 2020 from 2019. The average audited recovery in 2020 increased 70% from 2019. The fraud was concentrated almost entirely in independent pharmacies versus pharmacy chains like CVS or Walgreens. Scheming pharmacies would hire telemarketers to call consumers to inquire about any pain or symptoms they may be experiencing. The unsuspecting consumer would provide their insurance information. The pharmacy would then bill the insurance company for unwanted or unnecessary items such as topical pain creams, expensive vitamins, migraine therapies, etc. Often, the pharmacy would supply the consumer with a generic drug, but then bill the insurance company for a more expensive brand name. This would increase the consumer’s out of pocket cost considerably. 112 pharmacies were fired from the PBM’s network.
2022 Healthcare Budget
Here are some of the major healthcare-related priorities being proposed by President Biden for fiscal 2022. 1. Increase Health and Human Services budget by 23%. HHS services include aging, alcohol and drugs, emergency medical services, disabilities, mental health, children and families and public health. 2. Make permanent the rule that those buying coverage on the exchange don’t have to pay more than 8.5% of household income on insurance if their income is above 400% of federal poverty guidelines. 3. Provide $400 million in grants for proposals to expand telehealth and electronic records into rural areas and to integrate the electronic records of rural veterans with private providers and the VA. 4. Expand rural maternity and obstetric management strategies by placing early childhood and development experts in pediatric offices serving high percentages of Medicaid patients.
As frequently reported here (ad nauseam), there are virtually no controls on drug prices. Biden is proposing to merely allow CMS to negotiate prices, (versus set prices like it does for physicians and hospitals), and have Medicare and Medicaid pay for some highly expensive drugs. The federal government negotiates prices on practically everything it buys, except drugs. The potential savings from the list of expensive drugs could be $50 billion a year for each of the next 10 years — or a total of half a trillion dollars. It would easily pay for all of the aforementioned priorities in Biden’s budget and more. But all of this depends on enough members of Congress to stand up to the ubiquitous and powerful drug lobby. Recent senate hearings have exposed the fact that Big Pharma spends far more enriching themselves on stock buy backs than on research and development. The drug industry as always argued it needs high profits to support research and development. The top 15 CEOs earned a combined $470 million in salary. The top three are: Len Schliefer of Regeneron, $135 million; Stan Erck of Novavax, $48 million; and Alex Gorky of J&J, $30 million.
The pandemic will be credited with expanding the use and acceptance of telehealth by providers, consumers and payers. However, some telehealth services were in jeopardy of being terminated by CMS, (no longer paid for), once we were clear of COVID-19. The most important of these temporary services was audio only (by phone) telehealth. A bipartisan and bicameral bill allowing CMS to pay for phone-only telehealth, permanently, is sure to be signed into law shortly. Geographic and originating site restrictions (like calls from the patient’s home to their provider) would be removed. Medicare Advantage plans currently require a video call but that restriction would be removed as well. Prior to the pandemic, the vast majority of providers and payers were highly skeptical of the efficacy and cost benefit of telehealth and its acceptance was slow to say the least. Interestingly, the majority of commercial payers expect they will not raise premiums due to the pandemic or telehealth. One third report they will adjust benefits, primarily for telehealth and mental health.
If you have experienced a delay in the care or services ordered by your provider lately, you’re not alone. A recent survey conducted by the Medical Group Management Association found that 80% of medical groups report a dramatic increase in the number of services, procedures, therapies and drugs that require a prior authorization or approval by the patient’s insurance company. This has resulted in more delays and outright denials of care. Medical groups have added staff just to stay on top and track hundreds of prior authorizations. Fortunately, Congress is well aware of this costly and potentially dangerous practice. A bipartisan bill called “Seniors’ Timely Access to Care Act” requires Medicare Advantage plans to adopt electronic prior authorization and several other reforms to speed the process up. Several studies in the past have demonstrated that the added costs associated with prior authorization, for both providers and insurers, often exceeds any savings in unnecessary care.
George W. Chapman is a healthcare business consultant who works exclusively with physicians, hospitals and healthcare organizations. He operates GW Chapman Consulting based in Syracuse. Email him at email@example.com.