By ROLF E. LOW
The Health Information Technology for Economic and Clinical Health Act (the HITECH Act) enacted as part of the American Recovery and Reinvestment Act of 2009 contains several provisions intended to strengthen Privacy and Security Rules in the Health Insurance and Portability Accountability Act of 1996 (HIPAA). One of these provisions gives state attorneys general (SAG) the authority to bring civil actions on behalf of state residents for violations of the HIPAA Privacy and Security Rules.
The Health and Human Services Office of Civil Rights, which has oversight of HIPAA violations at the federal level, is also involved in actions brought by SAGs. The Office of Civil Rights provides a training module to assist SAGs in investigating and seeking damages for HIPAA violations on behalf of state residents. SAGs contemplating filing a civil action for HIPAA violations are encouraged but not required to contact the regional office of the Office of Civil Rights to discuss potential actions. SAGs are also required to notify and serve Health and Human Services with a copy of the complaint they intend on filing at least 48 hours prior to filing an action, unless notice is not feasible. While Health and Human Services is required to investigate any […]
By VICTORIA KNIGHT
Despite hospital systems and health officials calling out the need for more primary care doctors, graduates of U.S. medical schools are becoming less likely to choose to specialize in one of those fields.
A record-high number of primary care positions was offered in the 2019 National Resident Matching Program — known to doctors as “the Match.” It determines where a medical student will study in their chosen specialty after graduation. But this year, the percentage of primary care positions filled by fourth-year medical students was the lowest on record.
“I think part of it has to do with income,” said Mona Signer, the CEO of the Match. “Primary care specialties are not the highest paying.” She suggested that where a student gets a degree also influences the choice. “Many medical schools are part of academic medical centers where research and specialization is a priority,” she said.
The three key primary care fields are internal medicine, family medicine and pediatrics. According to the 2019 Match report, 8,116 internal medicine positions were offered, the highest number on record and the most positions offered within any specialty, but only 41.5% were filled by seniors pursuing their M.D.s from U.S. medical schools. Similar trends were seen this year in family […]
The state wants to end an agreement with the local public entity responsible for administering mental health services in West Michigan and instead go directly through a private health provider, sparking concern of the “privatization overnight” of mental health care.
The Michigan Department of Health and Human Services announced June 28 it plans to end its contract with Lakeshore Regional Entity, the pre-paid inpatient plan (PIHP) covering the region containing Allegan, Ottawa, Kent, Muskegon, Oceana, Mason and Lake counties.
In mental health service delivery, the state contracts with regional, locally controlled public entities known as PIHPs to administer behavioral health care services. The PIHPs in turn contract with the local community mental health agencies to deliver those services.
In this instance, DHHS wants to contract directly with Beacon Health Options—a private provider LRE already works with—and essentially make it the PIHP for the western Michigan region until the state can establish a new PIHP.
But this would mark the first time DHHS would depart from the usual mental health service delivery model and go directly through a private provider. DHHS spokesperson Lynn Sutfin said the state intends to strike a deal in such a way to make Beacon like a PIHP for the region under federal regulations.
But Robert Sheehan, […]
By EWA MATUSZEWSKI
Collaboration is a favorite topic of mine, but one offshoot of collaboration I haven’t touched on much is learning collaboratives. A learning collaborative takes collaboration into a more formal, but still relaxed, learning environment, bringing together practice teams to share ideas and find solutions to existing challenges.
Some may recall the Mackinac Learning Collaborative (MLC), which was launched in Detroit in 2009-2010 with the goal of transforming primary care physicians’ offices into patient-centric practices. While our Patient Care Organization championed and led the effort, its success was due to the commitment of primary care practices and family residency training programs throughout SE Michigan who not only participated but did their homework between sessions and established collegial relationships with other MLC participants. The fact that many of these relationships are still thriving today remains among one of the most satisfying outcomes of the MLC.
The MLC was further buoyed by its guest speakers—thought leaders contributing big picture trends and insights on state and national initiatives. They weren’t paid speakers—and some sought out the MLC because they wanted to be part of an audience of 100-plus physicians, behavioral health specialists, nurses, medical assistants, office administrators and healthcare executives that were changing healthcare in the trenches.
I hope at […]
By EMMARIE HUETTEMAN
A draft plan spearheaded by House Speaker Nancy Pelosi would allow the federal government for the first time to negotiate prices for 250 drugs for Medicare and apply those prices to all payers, including employers and insurers.
As House Democrats hash out a proposal empowering the federal government’s top health official to negotiate lower drug prices, House Speaker Nancy Pelosi is taking it a step further and pushing a plan that could benefit even those Americans with private health insurance.
A draft plan spearheaded, but not yet released, by Pelosi and other House Democratic leaders would ensure that prices negotiated on the most expensive drugs would apply not only to the government but to all payers, including employers and insurers, a Democratic aide said.
But first, Democrats must agree on how best to muscle drug companies to the negotiating table, as well as how to prevent Americans from paying more or even losing access to the other drugs they take. Pelosi has faced pressure from progressive House Democrats, who have pushed for a more aggressive approach, including opening up all drugs to negotiations.
However bold a plan Democrats produce, any proposal to invite the federal government into price negotiations looks doomed in the Republican-controlled Senate, where GOP […]
Budget Office Projecting $45M Shortfall In DHHS’ IT Spending
The Michigan Department of Health and Human Services (DHHS) could be as much as $45 million in the hole by the end of the fiscal year if “major adjustments” are not made to address the agency’s IT budget shortfall, according to the State Budget Office.
On May 31, the SBO informed the legislative appropriations chairs that DHHS is the only agency at risk of spending more than it’s allotted to spend this fiscal year, which ends Sept. 30.
While no appropriations have been overspent, according to Budget Director Chris Kolb in the letter, the shortfall could result in overspending by the end of Fiscal Year 2019. The $45 million figure was given as the “high-end” estimate.
There’s been prior documented IT project spending overages associated with the DHHS—the department was dragged before a committee hearing earlier this year to explain itself.
The FY 2019 budget included a $4.1 million General Fund appropriation to address an ongoing funding shortfall, after DHHS told the Legislature in May 2018 there was a $15 million shortfall in GF in its FY 2018 budget, according to a report by the House Fiscal Agency. The agency halted all new IT projects deemed as non-essential at that […]
By PAUL NATINSKY
A famous catcher and left fielder once reportedly said: “It’s like déjà vu all over again.” This is precisely the case with medical coverage under Michigan’s new no-fault auto insurance law.
The new law ends the unlimited medical benefits provision contained in the original 1973 no-fault law and replaces it with tiered premium discounts that allow drivers to pay less for less medical coverage. The law guarantees no premium increases for eight years on the medical portion of insurance premiums and imposes a fee schedule for healthcare providers that begins at about double what Medicare pays.
Michigan’s auto insurance premiums are the highest in the country, with Detroiters often paying $5,000 or more annually. The law precludes insurers from using ZIP codes and credit scores to set rates, numbers that fall disproportionately hard on Detroiters. However, there are loopholes that allow insurers to use “territories,” which can be based on census data and credit reports that track late payment histories.
The Detroit Free Press reported that the Michigan Catastrophic claims Association fee, which covers lifetime medical benefits would dip from $192 per car to $43 per car. There is a likelihood that drivers opting for unlimited coverage would pay substantially more than the current $192 because […]
Calling the bill “destructive,” “a sell-out of Michigan citizens” and “a total gift to the insurance industry,” the Coalition Protecting Auto No-Fault (CPAN) was among several groups that didn’t hold back opposition to the auto insurance bill approved by the Legislature and signed by Gov. Gretchen Whitmer.
CPAN, the Michigan Brain Injury Provider Council (MBIPC), the Michigan Association of Justice (MAJ), Michigan Health & Hospital Association (MHA) and the Insurance Alliance of Michigan (IAM) all criticized SB 0001.
About the only outside entity that shared in the Legislature’s enthusiasm was Detroit developer Dan Gilbert, whose promise of a citizens’ initiative absent legislative action helped push the issue for a pre-Memorial Day deal.
“Today is a monumental day in Michigan,” Gilbert wrote in a statement. “The unscrupulous actors have finally been defeated . . . Both Democrats and Republicans became wise to the predatory nature and strategies of those who rationalize their fleecing of the system with twisted arguments and fear tactics while using the complexity of the issue as a shield against real change. That dark era ends today.”
For CPAN President John Cornack, he said it would result in the loss of “current lifetime medical expense coverage because they are simply no longer able to pay the unconscionable […]
By EWA MATUSZEWSKI
While my recent columns have put me on the defensive regarding primary care trends, I’m thrilled to see CMS not only acknowledge but reinforce the important role of primary care in achieving optimal overall health and well-being through the recent introduction of its Primary Care Initiative Medicare payment models. At the heart of the introduction is a threefold goal: reduce administrative burdens, empower PCPs to spend more quality time with patients, and reduce overall healthcare costs. I’m not the only one applauding. The Patient Centered Primary Care Collaborative (PCPCC) cites the CMS move as reinforcement of the role primary care plays not only in health, but healthcare value.
There are five models falling under one of two categories, Primary Care First (for individual practices) and Direct Contracting (for large organizations like ACOs, Medicare Advantage Plans and MCOs); all models are geared to patients with chronic conditions and serious illnesses:
1. Primary Care First (PCF)
2. Primary Care First – High Need Populations
3. Direct Contracting – Global
4. Direct Contracting – Professional
5. Direct Contracting – Geographic
Primary Care First (PCF) is the model Medical Network One will enthusiastically recommend to high performing providers/practices. There is up to a 50 percent gain in reimbursement and only a 10 percent downside […]
The National Practitioner Data Bank (Data Bank) published an article in the May 2019 issue of NPDB Insights that provides significant guidance regarding when proctoring is reportable. Proctoring can come in many different forms and has several different names depending on the hospital, such as monitoring, mentoring, or preceptoring. Regardless of the name, hospital-assigned proctorship agreements can be a useful tool to help evaluate a practitioner when a hospital has concerns about clinical competence. This is especially true because certain proctorships can be structured to avoid a report to the Data Bank. When that is accomplished, hospitals are able strike a rare balance between adequately addressing competency concerns and not tarnishing a practitioner’s reputation and career.
According to the Data Bank, when a hospital is deciding whether it should report the assignment of a proctor, it should consider the role of the proctor and whether that role limits the practitioner’s privileges. A hospital should report proctoring if: (1) it is a result of a professional review action related to professional competence or conduct, (2) it is a limitation on the practitioner’s privileges, and (3) it is in effect for more than 30 days. As such, if as […]
By FEDERICO MARIONA, MD
Last Nov. 6, in lieu of a legislative decision that never took place, the Michigan voters approved the legalization of marijuana for recreational use by adults. That made our state the first in the Midwest to have such policy, complementing the previous implementation of the medical marijuana use. The statute included the proviso that recreational marijuana was to be allowed on persons of 21 years old and above, and that certain rules and regulations were to be developed via legislation to organize the cultivation, process, distribution and sales of the approved substance by a state certified system.
As of May 6, six months after the approval, a rather confusing environment is in front of us. And we have only six more months to be up and running. First, if medical marijuana is a substance that treats certain medical conditions, we must know that indeed the results of its use shows an improvement on those conditions as part of the public health effort to improve population health and practice evidence-based medical care.
The Michigan public, the state Department of Health and the practicing physicians are entitled to see those results to justify supporting the medical use of cannabis in the improvement of the debilitating conditions […]
State Medicaid Official Placed On Leave Following Negligence Accusation
Michigan’s chief medical director for Medicaid was placed on administrative leave May 9 after accusations of negligence and deficiencies in patient care.
Dr. David Neff, who had been recognized for helping combat the state’s opioid crisis, is accused of failing to meet minimal standards and violating his general duty as a health care provider, according to an administrative complaint filed by the Michigan Department of Licensing and Regulatory Affairs (LARA) that MIRS received via a Freedom of Information Act request May 31.
LARA spokesperson David Harns said the department is not commenting outside the administrative complaint.
Lynn Suftin, spokesperson with the Michigan Department of Health and Human Services, confirmed Neff’s leave from his $191,184 a year position began May 9. She also said the department is not offering further comments.
Efforts to reach Neff were not successful. A response to LARA’s complaint was filed May 31, but that report wasn’t immediately available for release.
The May 1 complaint filed with the Michigan Board of Osteopathic Medicine and Surgery alleges Neff overprescribed controlled substances to some patients in his part-time medical practice.
Specifically, the complaint alleges Neff didn’t request MAPS reports prior to prescribing controlled substances medication to patients between June 1 and September […]
House Republicans stuck together and, with the support of three Democrats, pushed through sweeping reforms to the state’s 40-year-old auto insurance.
Michigan’s auto insurance customers would see guaranteed rate rollbacks, choice in personal injury coverage and a fee schedule for medical providers under a plan that moved 61-49 at 2 a.m. Thursday morning, 18 hours after the Senate passed similar changes.
Unlike the Senate version, HB 4397 will give the Department of Insurance and Financial Services (DIFS) the power to prevent non-driving factors from affecting rates. It also mandates that between 10 and 100 percent of previous personal injury protection (PIP) costs, meaning some ratepayers can opt out of the Michigan Catastrophic Claims Association’s (MCCA) unlimited, lifetime coverage.
Despite the concessions made on the two issues that Democrats and Gov. Gretchen Whitmer cited as reasons for their opposition on May 7, most Dems were a no vote. Instead, Democrats pivoted to talking about the people who will choose to take lesser coverage and “be left in the cold” if they get in a catastrophic car accident.
The governor joined Democrats in the caucus room for about 10 minutes May 8, but left the chamber without commenting to the media to give a reaction to the plan.
Democrats who voted in […]
By JUDITH GRAHAM
Dr. Hasan Shanawani was overcome by frustration. So, he picked up his cellphone and began sharing on Twitter his family’s enraging experiences with the U.S. health care system.
It was an act of defiance — and desperation. Like millions of people who are sick or old and the families who care for them, this physician was disheartened by the health care system’s complexity and its all-too-frequent absence of caring and compassion.
Shanawani, a high-ranking physician at the Department of Veterans Affairs, had learned the day before that his 83-year-old father, also a physician, was hospitalized in New Jersey with a spinal fracture. But instead of being admitted as an inpatient, his dad was classified as an “observation care” patient — an outpatient status that Shanawani knew could have unfavorable consequences, both medically and financially.
On the phone with a hospital care coordinator, Shanawani pressed for an explanation. Why was his dad, who had metastatic stage 4 prostate cancer and an unstable spine, not considered eligible for a hospital admission? Why had an emergency room doctor told the family the night before that his father met admission criteria?
Sidestepping Shanawani’s questions, the care coordinator didn’t provide answers. Later, another senior nurse in the hospital unit didn’t respond when […]
By EWA MATUSZEWSKI
As any regular reader of this column knows, I’m a big booster of the pharmacy profession and have been committed to maximizing the skill level and reach of pharmacists when it comes to primary care. That’s why our organization was among the first Patient Care Organizations (formerly PO’s) in Michigan to actively recruit pharmacists into care management training programs and to seek out pharmacists to serve as care managers at large primary care practices within our network. It’s been gratifying to see other Patient Care Organizations follow suit.
Still, I was taken aback when I read a recent Detroit Free Press article with the headline, “Flocking to pharmacies instead of the family doctor.” Yes, it’s fitting and overdue to see pharmacists getting the recognition they deserve for the invaluable role they play in the health care continuum. With newer pharmacy service offerings like vaccines and treatment for relatively simple ailments via the Minute Clinic type model, much needed access to care has been enhanced because of pharmacists and the large consumer-driven entities that support them. That’s to be applauded.
Yet, pharmacists and pharmacies are not equipped to offer integrated care that treats both behavioral and physical health; they are not set up to coordinate care […]
By ALLAN DOBZYNIAK, MD
Doctor, if you have recently visited with upper hospital management in the plush executive suite, it was most surely you who stood out conspicuously. Being greeted by one of the administrative secretaries, you were asked to be seated and wait along with others, consultants, lower level management, salesmen, business associates, insurance executives and maybe even golf buddies. You were notable as the only one not appearing in sartorial splendor, groomed to the hilt, well rested and adorned in a three-piece suit. You were the person bleary-eyed from the night shift or up all night with an emergency, dressed in a white coat with pockets full of papers and baggy greens or blues. Curious though, it is you, the physician, who is responsible for all of their incomes.
Granted, as healthcare has become a complex, shifting regulatory nightmare with falling reimbursement rates and myriad payment mechanisms, hospital management has become more complicated. Looking for the easy way out of revenue erosion, managements’ expensive consultants have likely suggested reducing costs; and the most important driver of costs in virtually all hospitals is the medical staff. While physician compensation accounts for only 8 percent of healthcare spending, physician decisions account for up to 80 percent of […]
By ANDREW B. WACHLER, ESQ.
On Nov. 1, 2018, U.S. District Court Judge Boasberg ruled that the U.S. Dept. of Health and Human Services (HHS) must eliminate the Medicare appeals backlog by the end of fiscal year 2022.
As of the end of 2018, there was a backlog of 426,594 appeals. Judge Boasberg’s ruling imposes a timetable for reducing the backlog of appeals. Specifically, HHS must clear 19 percent of the appeals by the end of fiscal year 2019; 49 percent of the appeals by the end of fiscal year 2020; 75 percent by the end of fiscal year 2021; and eliminate the backlog entirely by the end of 2022. Beginning on Dec. 31, 2018, HHS must file quarterly status reports on its progress.
This long-awaited ruling comes years after the American Hospital Association (AHA) filed the lawsuit alleging that HHS was violating federal law by failing to process appeals according to statutorily-mandated timeframes. Federal regulations require appeals at the Administrative Law Judge (ALJ) hearing level to be completed within 90 days following the date the request for hearing is received by the Office of Medicare Hearings and Appeals (OMHA). The current average processing time, however, for a case pending at the ALJ level is more than […]
By JULIE ROVNER
“The Mueller Report” is so last week’s news. Health care has returned in force as the dominant political issue in Washington, reflecting what voters have been telling pollsters for the past year.
The Trump administration moved night to get more in line with President Donald Trump’s voter base by endorsing a Texas federal judge’s December opinion that the entire Affordable Care Act should be struck down as unconstitutional.
After he arrived at the Capitol for lunch with Republican senators Tuesday, Trump endorsed the change, suggesting it will usher in Republican priorities instead. “The Republican Party will soon be known as the ‘party of health care!’” he told reporters.
Less than two hours later, House Democrats unveiled their proposals to not only protect the health law, but also expand it — including extending help paying premiums and other costs to families higher up the income scale than those now eligible and reinstating cuts made by the administration for outreach to help people sign up for coverage.
Speaker Nancy Pelosi said that, since taking control of the House in January, Democrats have been fighting to preserve the health law and “voted on Day One” to file a motion in the Texas court case to support the ACA.
The arguments are […]
Critics of Medicaid work requirements say that a U.S. district judge’s ruling disapproving work requirements for Medicaid recipients in Kentucky and Arkansas could lead to a similar ruling in Michigan.
Judge James Boaasberg in Washington, D.C., recently ruled work requirements to receive Medicaid in Kentucky and Arkansas are “arbitrary and capricious.” That may also affect states with similar laws, according to Families USA, a nonprofit health care organization.
Michigan is one of those. Republican lawmakers pursued work requirements for Medicaid recipients enrolled in the Healthy Michigan Plan last year. They take effect next year.
Sen. Mike Shirkey (R-Clarklake) sponsored the bill that added the work requirements after President Donald Trump approved states to do so in 2017.
“Michigan has very similar laws to those in Kentucky and Arkansas since we followed through with passing these laws so soon after,” said Alex Rossman, the communications director for the Michigan League for Public Policy. “A lot of the reasons that the judge decided work requirements shouldn’t be there applies to Michigan, as well.”
The Healthy Michigan Plan expanded Medicaid health care coverage to another 600,000 people whose income would be too high to receive federal Medicaid, said Bob Wheaton, a public information officer for the Michigan Department of Health and Human Services.
By EWA MATUSZEWSKI
Because my column is due a few weeks prior to publication, I can only hope that the ugliness of the Wayne State University Board of Governors schism has diminished by the time you are reading this. Still, I am compelled to comment on what has disintegrated into personal name calling and the appearance of grandstanding by some board members. Lost in all this seems to be an understanding of the mission and values of a university and the role of its board of governors.
While I don’t want to get involved here in the discussion on whether University boards of governors should be appointed or elected, the fact of the matter is that as it stands now, board members are elected by Michigan residents. Hence, the board’s constituents are not just the students, faculty and employees of the university, but the entire state. As taxpayers, we all contribute to Michigan’s public institutions of higher learning and should rightly expect that BOGs have education and the state’s best interests at heart. That’s not what I’m seeing on the current board.
The key responsibilities of the Wayne State University Board of Governors, as stated on their website include, “…choosing the university presidents, supervising the control and direction […]
The Authority Health Board of Directors has named Loretta V. Bush, MSA, president and CEO of Authority Health, effective May 1, announced Gail Warden, Chairman of the Authority Health Board. Ms. Bush will replace Chris Allen, who has served as president of Authority Health since its inception in 2004, who will retire on April 30.
“I am pleased to announce that Loretta Bush will be our new president and CEO,” Gail Warden said. “Her extensive experience in public health practice and administration makes her an excellent candidate to lead our organization in the next phase of its history. She has impressive background addressing the complex health issues of the uninsured, underinsured and vulnerable populations.”
Ms. Bush has served as chief executive officer of the Michigan Primary Care Association, which represents community health centers throughout the state.
Prior to this position, Ms. Bush served as Group Executive/Health Officer for the Detroit Department of Health and Wellness Promotion and the Department of Health Services, Director of Public Health/Health Officer for the Wayne County Department of Public Health, Director of the Division of Health, Wellness and Disease Control, Michigan Department of Community Health, and Administrator of the HIV/AIDS Programs for the City of Detroit Health Department.
Ms. Bush has a Bachelor of […]
By JESSE ADAM MARKOS, ESQ.
The National Practitioner Data Bank (Data Bank) has published an article in the April 2019 issue of NPDB Insights that urges reporting entities to include a detailed narrative when submitting an Adverse Action Report. The Data Bank’s stated purpose for requesting detailed information is to give organizations a more complete picture of what occurred to assist in making critical hiring and credentialing decisions. However, it will also result in healthcare providers being saddled with a career-damaging Data Bank report that contain inaccurate details and contested facts. Importantly, options are available to these providers to help minimize the damage. More specifically, healthcare providers have the right to submit a Subject Statement to the report at any time to give a more accurate and complete picture of what occurred.
By way of background, the Data Bank is an alert system that collects and discloses certain adverse information about physicians and other healthcare providers. A report to the Data Bank can significantly impact a healthcare provider’s reputation and career. NPDB Insights is published by the Data Bank to provide guidance to users on topics such as eligibility, querying and reporting requirements, and the dispute process. The April 2019 version of NPDB Insights contains an […]
GOP Lawmakers Think DHHS Caro Study A Sham
Two Republicans representing Tuscola County say the state has already made up its mind about moving the replacement Caro Center, based on emails published by a TV station.
ABC 12 got its hands on emails from Gov. Gretchen Whitmer administration officials discussing the future of the proposed replacement for the psychiatric facility, including messages from Robert Gordon, director of the Michigan Department of Health and Human Services.
According to the report, Gordon in January “increasingly believes that closing Caro entirely is the correct path forward.”
In another email “within weeks,” Gordon suggested the idea of forming a commission “that would help us get the right answer, building support for that answer, and perhaps hold off the Legislature from doing anything rash,” according to the report.
It was in that same email that Gordon said a leading idea was to instead expand the Center for Forensic Psychiatry in Saline and build a smaller location in a better location than Caro.
In mid-March, the state publicly announced it would halt construction on the new Caro Center and hire a consultant to study where best to locate the project.
The state had already broken ground under the previous administration on a new psychiatric facility located close to […]
By ALLAN DOBZYNIAK, MD
Economics is apolitical. Economists can and often do have biases. But there are basic economic principles that are accepted. There are empiric data that provide the proof for their reliability. Trying to plough through healthcare and arrive at logical economic conclusions for a non-economist is not that easy. But hang in there if you can, and follow along as an attempt is made to do just that.
Healthcare is, like most everything, a scarce resource. Besides that, it is so complex that no single person or any limited group of persons is capable of completely planning and supervising the goods and services included in healthcare. It requires elaborate coordination of multitudes of producers of both goods and services. An unchallengeable statement by Armand Alchien is as follows. “The modes of coordination in a basic private property, individualistic society have dominated all other forms in productivity, growth and freedom.”
A free good or service exists when there is no scarcity; it is hard to think of any. Healthcare is certainly not one of them. Even if a zero price is charged, healthcare cannot be free. Consuming healthcare for “free”, really at a zero price, does not convert this limited, scarce, service into a “free” service. […]
The head-spinning experience of navigating the pharmaceutical pricing world came to town Feb. 28, leaving lawmakers and laypeople alike with no greater understanding of why the entire scheme leaves consumers light in the pocket.
The basics are clear. Drug companies set the price for their drugs, but rarely does anyone pay it, Peter Fotos, PhRMA’s Chicago-based regional director for state advocacy told the House Health Policy Committee.
Generally, health insurers go through this relatively new layer of bureaucracy called Pharmacy Benefit Management (PBM) companies to negotiate cheaper rates based on bulk purchases. Then there are other assorted rebates and discounts patients can score. When the smoke clears, about 33 percent of the initial list price disappears.
In 2017, pharmaceutical companies paid $153 billion in rebates, up from $74 billion in 2012.
All of this led Rep. James Lower (R-Cedar Lake) to ask the obvious question: “Why do the clawbacks? Why do the rebates? Why not have a lower price to begin with and not go through this bureaucratic nightmare?”
The answer: That is the way it is. Apparently, there are rebates available for people buying in volume. Everyone wants the sweet deal. Human resource people do not want to mess with it so these PBMs take care of it for […]