KFF's CEO: Final Thoughts on Health Care and the Election

Drew Altman heads the nonpartisan Kaiser Family Foundation, a reliable source of health care data and analysis. His "Quick Take" (Oct. 30) is important reading, and I've reprinted a few key points below (emphasis added):

• This is a fork-in-the-road-election between one side—Vice President Harris—committed to building on existing public programs and protecting consumers, and the other—former President Trump—whose administration will attempt to devolve responsibility to states, and deregulate and dramatically cut federal health funding, both as a policy goal and to pay for tax cuts. 
• Regardless of who is elected, there will be a debate about extending the enhanced ACA premium subsidies. . . . Premium subsidies sound obscure, but the consequences for people and spending are real and substantial:
• The subsidies affect about 20 million people.
• Failure to extend them means a 79% increase in premiums, an average $705 increase.
• It costs $335 billion over 10 years to do it.
• The biggest thing that happens if Vice President Harris is elected is that all of the possible dramatic changes a Trump administration could make for the federal role in health evaporate overnight. . . .
• Agencies like the FTC and CMMI and, above all the FDA, will breathe a sigh of relief, not to mention the Department of Education. 
• There will be no leadership position anywhere in the federal government in health for RFK Jr.
• Mifepristone will continue to be distributed as it is today. 
• Equity will continue to be a priority in federal health programs.
• If former President Trump wins, an alternative history will play out. 
• Medicaid and Mifepristone are likely to be prominent targets; one to pay for tax cuts and the other because it’s the primary way women get abortions now. . . . 
• Some ideas favored by Trump will get through, and others will hit a wall of laws and regulations and bureaucratic resistance. Trump cannot simply decree that RFK Jr. “go wild” on health, food and medicines, and, like Star Trek’s Captain Picard, “make it so.” But a lot will get through. Everyone will need a law degree as legal challenges to Trump regulations, waivers, executive orders and agency reorganizations dot the health policy landscape and command attention. 
• Philosophically, this election is a choice in health between aggressive incrementalism and a sharp right-hand turn in federal policy and spending but take it from this political scientist: no one should doubt the capacity of our system and institutions to thwart dramatic change in any direction.

Toddler's Snake Bite Costs $290K+ to Treat

Two-year-old Brigland Pfeffer was playing with his sibs in their San Diego backyard when he was bitten by a rattlesnake. Ouch! His was one of the 7,000-8,000 venomous snakebites that occur in the U.S. each year. The N.Y. Times reported a surge in the venomous snake population in Southern California 18 years ago, and 20% of all such snakebites occur in that state. So young Brigland's close encounter may have been a surprise, but it was far from a shock.

The shock came when the bills for Brigland's treatment started rolling in. As reported by Kaiser Family Foundation in this morning's on-line Health News, the final bills totaled "$297,461, which included two ambulance rides, an emergency room visit, and a couple of days in pediatric intensive care. Antivenom alone accounts for $213,278.80 of the total bill."

Despite the 2021 passage of the No Surprises Act, there are a few surprises in the final bills:

• The Pfeffer's health insurer paid a large chunk of these bills, but refused payment of a second ambulance ride that took Brigland from Palomar Health's ER Rady Children's Hospital where he was admitted to the pediatric ICU:

Pfeffer said she received a letter this summer indicating they owe an additional $11,300 for Brigland’s care. While the landmark No Surprises Act protects patients from many out-of-network bills in emergencies, the law controversially exempted bills for ground ambulances.

• Experts who reviewed the hospitals' bills described the charges for antivenom "eye-popping." The "Freakonomics" podcast ran a story on the high costs for antivenom in July of this year. KFF's report provides a useful summary of the story behind the charges. The first clue is in the two hospitals' different charges per vial of the serum:

Palomar [Medical Center Escondido], where emergency staffers treated Brigland, charged $9,574.60 per vial, for a total of $95,746 for the starting dose of 10 vials of Anavip.

Rady, the largest children’s hospital on the West Coast, charged $5,876.64 for each vial. For the 20 vials Brigland received there, the total was $117,532.80. [emphasis added]

What explains the difference?

One explanation is that hospitals mark up products to balance overhead costs and generate revenue. . . . 

 For instance, Medicare . . . pays about $2,000 for a vial of [the antivenom] Anavip . On average . . . that is the price hospitals pay for it.

Leslie Boyer, a doctor and toxicology researcher, helped found a group that was instrumental in developing Anavip, as well as the other available snake antivenom, CroFab, which dominated the market for decades. In 2015, she published an editorial in the American Journal of Medicine breaking down the “true” cost of antivenom. 

Boyer's editorial is well worth reading.

Using cost data collected from factory supervisors, animal managers, hospital pharmacists and other sources, Boyer developed a model for a hypothetical antivenom, at a final cost of $14,624 per vial. She found the cost of venom, included in that total, was just 2 cents. Manufacturing accounted for $9 of the $14,624 total. [emphasis added]

More than 70% of the price tag — $10,250 — is attributable to hospital markups, her research showed. 

 And then there's the surcharge for legal expenses:

Anavip entered the market in 2018 as the only competitor to CroFab. But its makers settled a patent infringement lawsuit with CroFab’s maker, requiring the makers of Anavip to pay royalties until 2028.

Anavip debuted at a retail price of $1,220 per vial. Boyer noted that the price later rose to cover the manufacturers’ millions of dollars in legal costs. 

The reporting on snake antivenom -- from manufacture to treatment to the inevitable legal costs -- gives us a snapshot of the best and the worst features of our healthcare system. 

1. Best. Brigland's hand, arm, and possibly life were saved because a relatively rare medication was available at two local hospitals, including a pediatric facility, via a healthcare infrastructure (including 9-1-1, emergency transportation with a treatment team on-board). We have a healthcare delivery system (for those who can acess it) that is among the best in the world [cite].
2. Not the best. Many if not most rattlesnake bites occur in rural settings far from the world-class doctors and hospitals in a city like San Diego. In a word, the excellence we are so proud of (and pay so much to maintain) is, in geographical terms, spotty.
3. Worst. The cost of Brigland's treatment exceeded the median price of a home in 16 states and was close to the median home price in 5 or 6 more. Most of that was for the antivenom medication and most of the charge for that was due to hospital mark-ups. As one commenter told KFF, hospital charges -- thousands of which reside in their chargemasters -- are largely fictitious and are neither regulated nor controlled by any public or private body. As the National Academy for State Healthcare Policy blogged in 2020:

[T]he chargemaster rates hospitals use are nearly meaningless*. . . . 

Hospital chargemaster rates are the equivalent of Manufacturers Suggested Retail Price or MSRP in car buying markets. They are little more than the price a seller would ideally like to charge a consumer. Hospitals set their own chargemaster rates – there is no legal requirement or set formula a hospital must follow when establishing the basis between chargemaster rates and costs. As a result, chargemaster rates are unlikely to be accurate reflections of actual hospital expenses.

Recently, The Montana Office of the Commissioner of Securities and Insurance examined the ratio between 10 acute hospitals’ expenses and chargemaster rates.

The state concluded that what the hospitals listed as chargemaster rates for all payers would cover between 192 to 384 percent of the hospitals’ actual costs.

A hospital may also change chargemaster rates at any time – prior notification is not always required – and mark-ups on hospital-purchased services and supplies like durable medical equipment are not disclosed. All of these features make it difficult for public and private payers to use chargemaster rates as a way to establish relevant prices to pay to hospitals. Hospitals instead negotiate discounts off their chargemaster rates with individual and group plans.

In fact, almost no one actually pays the publicized chargemaster rates. The vast majority of health care consumers are represented by a payer of some kind, such as a commercial health insurance company, Medicaid, or Medicare. Commercial insurers negotiate the actual prices they pay during the process of contracting with providers. Medicare and Medicaid establish their own payment levels independent of hospitals’ chargemaster lists – Medicare through the federal government and Medicaid through state governments.

* But chargemaster prices aren't entirely meaningless: 

The cruel irony of the chargemaster is that the uninsured are the most likely to be billed chargemaster rates because they are not represented by a payer. 

Our healthcare "system," which daily provides the kind of excellent care Brigland received, seems to thrive on financial chaos. Despite the No Surprises Act, the costs of care are higher than any other industrialized country, often unpredictable, subject to substantial variations from institution to institution even within a single city, and frequently unfair. 

For Brigland's parents, this episode of care cost them $7,200 (their out-of-pocket maximum) plus $11,300 for that second ambulance ride that their insurer refused to pay. One not-so-minor irony: At the end of the transcript of the Freakonomics podcast about the high cost of antivenom, there was one comment. It ended with this sentence: "Oh, and if you get bitten in Australia, anti-venom is free because we have universal health care! :-)" Ouch, indeed.

"Climate change is the most significant threat to human health in the 21st century"

That's the bottom line from Admiral Rachel L. Levine, M.D., the U.S. Assistant Secretary for Health. She's the guest on a podcast hosted by the Commonwealth Fund. Here are a few examples of what she is talking about:

Levine, who oversees the federal Office of Climate Change and Health Equity, talks about how weather-related events are already having a serious impact on our fragile health system supply chain, even though those effects can go unnoticed by the broader public. [1] In communities repeatedly ravaged by storms or heat waves, a lack of blood donations is leading to delays in surgeries and treatment for diseases like sickle cell. [2] In rural Alaska, where the melting permafrost is wreaking havoc on wildlife populations, native tribal communities are forced to rely on shipments of food items that are typically high in sugar and salt — a diet contributing to rising rates of hypertension, diabetes, and heart disease.

Adding injury to more injury, "[w]hen the ground thaws, microbes begin feasting on organic matter in soils that have been frozen for millennia.

These microbes release carbon dioxide and methane, potent greenhouse gases. As those gases escape into the atmosphere, they further warm the climate, creating a feedback loop: Warmer temperatures thaw more soil, releasing more organic material for microbes to feast on and produce more greenhouse gases. [source]

We usually think of weather-related catastrophes in terms of storm surges, killing winds, floods, and similar threats to life, limb, and property. Admiral Levine provides a valuable and often-overlooked  perspective on the effects of climate change on human health.

Texas AG Sues Pediatrician for Providing Gender-Affirming Treatment

Last week Texas Attorney General Ken Paxton sued Dr. May Lau, a Dallas pediatrician and assistant professor at UT-Southwestern Medical School, for violating Texas's statutory ban on gender-affirming care for persons under the age of 18. Here are some helpful links, ending with links to a relevant U.S. Supreme Court case that will be argued in December:

1. A few newspapers have picked up this story (WaPo, NY Times, Dallas Morning News), all behind a paywall except for this one: The Texas Tribune (Oct. 17, 2024). There is also free coverage from NBC News, CNN, and KERA News (NPR affiliate in Dallas).

2. The AG's complaint is on his official website here. The essence of the complaint is:

a. Dr. Lau provided gender-affirming care to a minor, and

b. She misrepresented the nature of her treatment, allegedly (1) to cover up the medical rationale for testosterone therapy and (2) to secure insurance coverage for the treatments.

 3. The Texas law that provides the basis for the AG's lawsuit is HB 14 (eff. September 1, 2023). It is codified in various places in the Texas Code, e.g.:

a. § 62.151, Health and Safety Code: (g)  The child health plan may not provide coverage for services prohibited by Section 161.702 that are intended to transition a child's biological sex as determined by the child's sex organs, chromosomes, and endogenous profiles. 

b. § 161.702, Health and Safety Code: PROHIBITED PROVISION OF GENDER TRANSITIONING OR GENDER REASSIGNMENT PROCEDURES AND TREATMENTS TO CERTAIN CHILDREN. For the purpose of transitioning a child's biological sex as determined by the sex organs, chromosomes, and endogenous profiles of the child or affirming the child's perception of the child's sex if that perception is inconsistent with the child's biological sex, a physician or health care provider may not knowingly:

               (1)  perform a surgery that sterilizes the child,

  including:

                     (A)  castration;

                     (B)  vasectomy;

                     (C)  hysterectomy;

                     (D)  oophorectomy;

                     (E)  metoidioplasty;

                     (F)  orchiectomy;

                     (G)  penectomy;

                     (H)  phalloplasty; and

                     (I)  vaginoplasty;

               (2)  perform a mastectomy;

               (3)  provide, prescribe, administer, or dispense any of the following prescription drugs that induce transient or permanent infertility:

                     (A)  puberty suppression or blocking prescription drugs to stop or delay normal puberty;

                     (B)  supraphysiologic doses of testosterone to females; or

                     (C)  supraphysiologic doses of estrogen to males; or

               (4)  remove any otherwise healthy or non-diseased body part or tissue. 

c. Sec. 161.704.  PROHIBITED USE OF PUBLIC MONEY.***

d. Sec. 161.705.  PROHIBITED STATE HEALTH PLAN REIMBURSEMENT.***

e.   Sec. 161.706.  ATTORNEY GENERAL ENFORCEMENT. (a) If the attorney general has reason to believe that a person is committing, has committed, or is about to commit a violation of Section 161.702, the attorney general may bring an action to enforce this subchapter to restrain or enjoin the person from committing, continuing to commit, or repeating the violation.***

4. In Texas v. Loe (No. 23-0697, June 28, 2024) the Texas Supreme Court reversed the trial court's preliminary injunction against enforcement of HB 14, concluding:

The trial court concluded that the law likely violates the Texas Constitution, and it temporarily enjoined the law’s enforcement. On direct appeal of the temporary injunction, we do not attempt to identify the most appropriate treatment for a child suffering from gender dysphoria.  That is a complicated question hotly debated by medical experts and policy makers throughout this country and the world.  And, to be sure, neither this Court nor any party to this proceeding suggests that children suffering from gender dysphoria are undeserving of treatment and support.  The reverse is obviously true: they, like all children, deserve the most appropriate treatment together with support, love, and empathy.  We emphasize, though, that the only question we are called upon to answer is a distinctly legal one: whether plaintiffs in this case have established a probable right to relief on their claims that the Legislature’s prohibition of certain treatments for children suffering from gender dysphoria violates the Texas Constitution. 

We conclude that plaintiffs failed to meet that burden.  We have said—and we reaffirm today—that fit parents have a fundamental interest in directing the care, custody, and control of their children free from government interference.  But we have never defined the source or precise scope of this interest, and our precedents make clear that this interest is not absolute.  Indeed, we have never held that a fit parent’s interest in caring for her child free from government interference, though weighty, triggers heightened scrutiny of every statute that restricts any asserted right connected to that interest.  When developments in our society raise new and previously unconsidered questions about the appropriate line between parental autonomy on the one hand and the Legislature’s authority to regulate the practice of medicine on the other, our Constitution does not render the Legislature powerless to provide answers. 

For the reasons explained below, we conclude the Legislature made a permissible, rational policy choice to limit the types of available medical procedures for children, particularly in light of the relative nascency of both gender dysphoria and its various modes of treatment and the Legislature’s express constitutional authority to regulate the practice of medicine.  We therefore conclude the statute does not unconstitutionally deprive parents of their rights or physicians or health care providers of an alleged property right in their medical licenses or claimed right to occupational freedom.  We also conclude the law does not unconstitutionally deny or abridge equality under the law because of sex or any other characteristic asserted by plaintiffs.  We therefore reverse and vacate the trial court’s order (footnote deleted and emphasis added).

  5. In the United States Supreme Court, a very similar Tennessee law will be debated in December. Tenn. SB 1 (eff. July 1, 2023) codified as Tenn. Code § 68-33-103) broadly prohibits medical or surgical treatments for minors with gender dysphoria. A similar law was enacted in Kentucky. Two district courts granted preliminary injunctions to block enforcement of the laws while challenges were being considered in their courts. On appeal from those decisions, the Sixth Circuit -- in a wide-ranging opinion -- reversed the two district courts, concluding that all the usual factors related to injunctions -- including the likelihood of prevailing on the merits of the challenge -- favored denial of the challengers' motions. See L.W. v. Skrmetti (6th Cir., Nos. 23-5600 and 23-5609, Sept. 28, 2023). The challenge in the Supreme Court is limited to the issue presented by the petition for certiorari: "Whether Tennessee Senate Bill 1 (SB1), which prohibits all medical treatments intended to allow 'a minor to identify with, or live as, a purported identity inconsistent with the minor’s sex' or to treat 'purported discomfort or distress from a discordance between the  minor’s sex and asserted identity,' Tenn. Code Ann.  § 68-33-103(a)(1), violates the Equal Protection Clause of the Fourteenth Amendment" (emphasis added). 

6. According to the 6th Circuit, 35 states have legislated on this subject, with 21 states prohibiting medical or surgical treatments (or both) and 14 states passing laws protecting patients who seeks such treatment. 

7. My old firm, Covington & Burling, filed an amicus brief in support of the challengers and urging reversal of the 6th Circuit on behalf of the American Academy of Pediatrics, the American Medical Association, and 23 additional medical and health care associations and societies. Additional amicus briefs in support of the challengers were filed by the American Psychological Association and the American Bar Association and literally scores of other amici including many in support of the Commonwealth of Kentucky.

Health Care Fraud: Texas Style

On Oct. 15 a federal jury in Houston convicted the owner of a firm that operated 14 pharmacies, on fifteen counts including conspiracy to commit mail fraud, conspiracy to violate the anti-kickback statute, bribery concerning programs receiving federal funds, conspiracy to commit bribery, five counts of healthcare fraud, and six counts of money laundering, resulting in $160 million in fraudulent claims that were paid by Medicare. 

As described by the Office of the U.S. Attorney for the Southern District of Texas:

From 2014 through 2021, Mohamad Mokbel led a company called 4M Pharmaceuticals which operated 14 pharmacies with straw owners. The jury heard evidence that Mokbel illegally purchased thousands of Medicare beneficiaries, including their identification number, personal health and physician information. Mokbel targeted elderly diabetic patients who are dependent on diabetic testing supplies to manage their blood sugar levels. Mokbel paid $16 to $40 per Medicare beneficiary.  

To maximize reimbursements and without regard for medical necessity, Mokbel then directed 4M employees to use the Medicare beneficiaries’ patient data to run insurance claims to determine if Medicare or other insurance plans would cover and reimburse at a high rate for the topical creams, Omega-3 pills and other medications that Mokbel intended to sell through 4M pharmacies.

At Mokbel’s direction, 4M employees would then fax pre-filled prescription requests to the patients’ doctors appearing to be for diabetic testing supplies with topical creams added at the bottom. They also included false representations that the patient was requesting a 4M Pharmacy fill their medications. In reality, Mokbel had previously purchased the patient’s personal information, the patient had not selected a 4M Pharmacy and the patient was often unaware the request was being made on their behalf. 

Many doctors apparently took the representations in the fax at face value and did sign and send back the prefilled prescription requests to 4M. Mokbel’s call center in Houston and later in Egypt then contacted the patients and made false and misleading statements about the topical cream and their doctor’s order. Mokbel’s pharmacies then shipped out numerous topical creams, often on auto-refill, and excessively billed Medicare, Medicaid and private insurance plans. 

Mokbel made over $200 million as a result of the scheme. 

The money value of the fraud is considerably less than the record for Medicare fraud, but what caught my eye was the complexity of the scheme and the lineup of law-enforcement agencies involved in the case: Homeland Security Investigations (HSI) Houston, the FBI, IRS Criminal Investigation, the U.S. Department of Health and Human Services, the U.S. Food and Drug Administration, and the Texas Attorney General’s Medicaid Fraud Control Unit. This was a big, big deal for these investigators.

New England Journal of Medicine: "The Failing U.S. Health System"

It should come as a shock to no one that our health care "system" is only a "system" in the loosest sense of the word. "System" implies a set of common goals, a comprehensive design, and coordination of effort toward achieving the system's purposes. The result is about what you would expect with a largely profit-based set of arrangements among participants who are often working at cross-purposes.

The recent report from the Commonwealth Fund ("Mirror, Mirror 2024: A Portrait of the Failing U.S. Health System") paints a dismal picture. The website has the report and useful chartpacks in PowerPoint and PDF. Here's the executive summary:

• Goal: Compare health system performance in 10 countries, including the United States, to glean insights for U.S. improvement.
• Methods: Analysis of 70 health system performance measures in five areas: access to care, care process, administrative efficiency, equity, and health outcomes.
• Key Findings: The top three countries are Australia, the Netherlands, and the United Kingdom, although differences in overall performance between most countries are relatively small. The only clear outlier is the U.S., where health system performance is dramatically lower.
• Conclusion: The U.S. continues to be in a class by itself in the underperformance of its health care sector. While the other nine countries differ in the details of their systems and in their performance on domains, unlike the U.S., they all have found a way to meet their residents’ most basic health care needs, including universal coverage.

Three of the authors provide an expanded version of this abstract in this week's edition of the New England Journal of Medicine (apparently for free). Here are some of the main points:

• We can be proud of our process for delivering care. Compared to nine peer countries, we are ranked #2, quite close behind New Zealand.
• But the cost of this care is astronomically high and the results place our health outcomes dead last among this peer group:
  
  
  
  
  
  
• "Many of the U.S. health system’s shortfalls result from persistent economic barriers to obtaining essential care. The Affordable Care Act and related policies reduced the proportion of uninsured people to its current level of 7 to 8%. But 26 million Americans still lack insurance. . . . Substantial progress toward this goal could be made by building on existing programs, such as the Affordable Care Act, Medicare, and Medicaid." Note to self: This strategy requires political will and adequate financing at the state and federal levels. I'm not optimistic.
• "The U.S. health care delivery system has profound problems that result in huge inefficiencies and excessive costs that would limit the benefits of expanded coverage. One such problem is the country’s worsening shortage of primary care clinicians . . . . Improved compensation and reductions in administrative burdens for primary care clinicians would help the health system recruit and retain such clinicians and build desperately needed capacity." See Note to self above.
• "A second delivery-system failure is the high prices charged by U.S. health care facilities and professionals, which far exceed prices in other health systems. These high prices largely account for the extraordinary costs of care in the United States, which would make expanded coverage less affordable and which drive employers, who purchase insurance for more than half of Americans younger than 65 years of age, to impose high deductibles and copayments." The authors suggest scrutiny of the extensive consolidation of providers -- institutional and individual -- underway. But: The the premium-price train left the station far earlier than the consolidation boom. Consolidation may be exacerbating the problem, but the problem goes back decades, is cultural,  and it runs deep.
• "Improvements in coverage and the delivery system will need to be complemented by policies targeting critical influences on health outside the health sector. The United States lags behind comparator countries when it comes to addressing the social determinants of health, such as poverty, homelessness, inequality, and hunger. . . . The toll of gun violence in the United States also demands policy attention." See Note to self above.

This report gives us a good differential diagnosis and then prescribes the policy equivalent of "lose weight, exercise more, cut back on meat and dairy, reduce stress in your life, and start getting enough sleep." We all know this is the Path to Enlightenment (or at least to health maintenance), but how many patients take this advice? 

Health Care Policy and the 2024 Election

The presidential campaign hasn't been much about health law, and up to two-thirds of adults are concerned about the lack of discussion. Perhaps to remedy this situation -- or to keep the candidates honest if and when they deign to discuss health care -- the nonpartisan Kaiser Family Foundation (KFF) has just posted a new tool; here's their announcement:

A new KFF tool generates data-driven fact sheets that lay out the health care landscape in every state against the backdrop of the 2024 election.

These state “snapshots” provide information on a variety of health care topics that may be the focus of campaign and policy debates. Topics include

• health costs; 
• medical debt;
•  women’s health policy, including state abortion, contraception and maternity laws and policies;
•  health coverage, including the Affordable Care Act, Medicare and prescription drug coverage, Medicaid, and employer-sponsored insurance;
•  gender affirming care; and
•  basic information on health status, population and income. 

The new tool is part of KFF’s broader collection of Election 2024-related resources, including our side-by-side comparison of the candidates’ positions and records on health policy issues. 

Other election-related features include:

• Springfield, Ohio: How Candidates Amplify Misinformation, by KFF President and CEO Drew Altman
•  How Campaign Rhetoric Harms Immigrants, by Mollyann Brodie, executive vice president and chief operating officer of KFF and executive director of the Public Opinion and Survey Research Program
• Misinformation vs. Immigrant Experiences Using Health Insurance and Other Programs, by Samantha Artiga, a vice president at KFF and director of the Racial Equity and Health Policy Program
• Protecting People with Pre-Existing Conditions, by Cynthia Cox, a vice president at KFF and director of the Program on the ACA.
• The VP Debate May Focus on the “Working Class,” But Will They Discuss Medicaid?, by Robin Rudowitz, a vice president at KFF and director of the Program on Medicaid and the Uninsured
• A Brief History of the Affordable Care Act, by Rakesh Singh, vice president of Health Policy Initiatives at KFF
• Protecting People with Pre-Existing Conditions 

FTC's Final Rule on Noncompetes: Recent Developments

Health Affairs has posted a new article by Erin C. Fuse Brown, Megha Reddy, and Christopher M. Whaley: "The FTC's Noncompete Rule: Legal Challenges And Potential Solutions For Physician Markets." It's a welcome comprehensive review of what the rule does and doesn't do and its current legal status. (My summary of the rule is here. (4/24/24)) It's well worth reading.

The article does a nice job of summarizing the August decision out of the Northern District of Texas, holding that the FTC's rule exceeds its statutory rulemaking authority and is arbitrary and capricious. Unlike another district court, which found the rule to be invalid but enjoined its enforcement only against the plaintiff in the case, the order in the Northern District case entered a nationwide injunction against the rule's enforcement. 

Although the trial court didn't cite the Supreme Court's Loper Bright decision (discussed here and here), the authors point out that the decision represents a Loper Bright-like refusal to accord any deference to the FTC's interpretation of its rulemaking authority. The FTC is "considering" an appeal. I hate to predict, but I'd be surprised if there's no appeal, although its appeal would be to the ultra-conservative Fifth Circuit Court of Appeals, where an affirmance would be likely, imho.

Hall Render on the Latest Ruling Against the FTC in Challenge to Its Noncompete Rule

The good folks at Hall Render have posted an alert concerning last Thursday's injunction against enforcement of the FTC's final rule banning almost all noncompete clauses. The injunction came out of the Middle District of Florida and favors only the named plaintiff in the suit, not the entire country. Other district courts earlier disagreed over similar requests for injunctions:

• Ryan, LLC v. FTC (Northern District of Texas): injunction granted against FTC's enforcement of the final rule.
• ATS Tree Services, LLC v. FTC (Eastern District of Pennsylvania): injunction denied (plaintiff failed to show both irreparable harm and the likelihood of prevailing on the merits).

As for the long-running debate over whether the politics of the appointing president makes a difference to the outcomes in specific cases, Hall Render notes: "The presiding judge in the Ryan, LLC lawsuit in Texas was appointed by then-President Trump in 2019. The presiding judge in the ATS Tree Services, LLC lawsuit in Philadelphia was appointed by President Biden in 2022."

The most recent Hall Render post includes this reminder: "Limits on FTC Jurisdiction: Don’t lose sight that the FTC lacks jurisdiction over nonprofit entities." That means the FTC's final rule doesn't apply to the 49.2 percent "of the 4,644 Medicare-enrolled hospitals [that] are non-profit" (HHS Office of Health Policy, August 2023).

Texas Governor Abbott Weaponizes Charity Care

Uncompensated care is a serious issue that requires a serious response from serious politicians. On Thursday, rather than doing something to alleviate the crisis in Texas, Governor Greg Abbott chose to weaponize the issue in his ongoing battle with the Biden Administration over control of the Texas-Mexico border.

Texas's nonprofit and for-profit hospitals alike can be challenged by the volume of uncompensated care they provide. The federal Emergency Treatment and Active Labor Act (EMTALA) requires all hospitals that receive Medicare funds to provide emergency care without regard to the patient's ability to pay. Added to that, if the patient needs to be admitted as an in-patient in order to stabilize their emergency medical condition, the cost of the hospital's EMTALA obligation can really sky-rocket.

Add to that Texas's requirement that nonprofit hospitals must provide a certain amount of uncompensated care in order to maintain their nonprofit status as well as their state tax-exempt status. 

Beginning in 1954 a hospital's federal tax-exempt status required the provision of charity care to the extent of its financial ability, but that requirement ended in 1969. The Affordable Care Act (ACA) does require hospitals to provide charity care, though it does require tax-exempt hospitals to report on community needs, including uncompensated care, and on the hospital's own level of uncompensated care (26 USC § 501(r)). My hope is that the hospital reports, as well as the IRS summaries that the ACA required be sent to Congress, will result in the reinstatement of a charity-care requirement. Time will tell.

As a result of these state and federal rules, the distribution of uncompensated care is spread unevenly among hospitals across the state. There are some for-profit hospitals that report higher levels of uncompensated care than nonprofit providers. And among the nonprofit hospitals, the cost of charity care as a percentage of net revenues varies wildly. This is often a function of location. Residents of wealthier communities tend to have decent health insurance (and other assets to pay for care that is not covered by their insurance policies), while poorer communities have a higher percentage of uninsured and under-insured residents. 

The Affordable Care Act expanded insurance coverage, to be sure, but the uninsured rate in the U.S. is still hovering around 9%, slightly better than our poverty rate of around 11%. Texas's numbers aren't just higher than the national average; they are alarmingly, embarrassingly so. Poverty: 14% (33% higher than the national rate). Uninsured: 16.6% (about twice the national rate). If Texas cared about doing something to improve the health of our poorest residents, it could expand Medicaid eligibility (with matching federal dollars picking up the lion's share of the cost) with the stroke of a pen. 

For that to happen, we would need leaders who are serious about helping our uninsured poor population to get the health care they need. This past week, however, Gov. Abbott demonstrated his lack of seriousness and instead chose to turn uncompensated care into a political football in his on-going battle with the federal government over control of our border with Mexico. On Thursday (Aug. 8) the governor issued an executive order calling upon hospitals to report their costs of providing uncompensated care to patients who are in the country illegally. Abbott's plan is clear: 

"Texans should not have to shoulder the burden of financially supporting medical care for illegal immigrants," Mr. Abbott said in an Aug. 8 news release. "Texas will hold the Biden-Harris Administration accountable for the consequences of their open border policies, and we will fight to ensure that they pay back Texas for their costly and dangerous policies."

Political point: scored. Human suffering: unchanged. 

U.S. DOJ Closes Gun Show Loophole; Judge Kacsmaryk (Of Course) Blocks Rule (Of Course) in 4 States

As I have noted before, firearm violence is a public-health disaster. The Justice Department has taken a major step in the effort to keep firearms out of the hands of high-risk individuals. As reported by the Washington Post and Kaiser Family Foundation (emphasis added):

In a move that officials touted as the most significant increase in American gun regulation in decades, the Justice Department has finalized rules to close a loophole that allowed people to sell firearms online, at gun shows and at other informal venues without conducting background checks on those who purchase them. Vice President Harris and U.S. Attorney General Merrick Garland celebrated the rules and said they would keep firearms out of the hands of potentially violent people who are not legally allowed to own guns. (Stein, 4/11)

I'm a little late to the party on this development, but this is a big enough deal to warrant paying some attention.

That's the good news. 

Then there's the bad news (from The Hill (6/12/24):

A federal judge in Texas blocked the Biden administration’s attempt to close the so-called gun show loophole on Wednesday, expanding a prior temporary ruling to impact Texas, Louisiana, Utah and Mississippi.

Judge Matthew Kacsmaryk ruled last month that the requirement to run a background check before purchasing a firearm could not go into effect in Texas. His final ruling Wednesday expands that injunction to the three other states.

The judge is the ever-ready, go-to federal jurist in Amarillo for conservative litigants from around the country who are keen to block the Biden Administration's reforms. (Bloomberg Law, May 9, 2024)

Members of Congress have expressed concern about the steady stream of anti-Administration rulings coming out of Amarillo in favor of far-flung litigants, usually with the flimsiest of connections to the Northern District of Texas. But so far, the Northern District judges have rebuffed suggestions to reform their procedures for assigning cases.

Health Care Fraud & Abuse: The Week in Review

It's been a busy week-and-a-half on the health-fraud enforcement front. I like posting these DOJ/Office of Inspector General updates for a number of reasons. [1] The scope and variety of the fraud schemes is truly impressive, exceeded only by [2] the brazenness of the fraudsters and [3] the success rate of the state and federal enforcement offices.

THE WEEK IN REVIEW

• United States Files False Claims Act Complaint Against Erlanger Health System -- July 26, 2024: This qui tam action is for alleged violations of the Stark Law in the form of "compensation Erlanger paid to [employee] physicians [that] was well above fair market value." 
  
  
• Precision Lens Agrees To Pay $12 Million To The United States For Kickbacks To Doctors In Violation Of The False Claims Act -- July 25, 2024: From the announcement -- 

"Precision Lens provided kickbacks to [ophthalmic surgeons] in the form of travel and entertainment, including high-end ski trips, fishing, golfing, hunting, sporting, and entertainment vacations, often at exclusive destinations. For many of the trips, physicians were transported to luxury vacation destinations on private jets, including trips to New York City to see a Broadway musical, the College Football National Championship Game in Miami, Florida, and the Masters Tournament in Augusta, Georgia. Precision Lens sold frequent flyer miles to its physician customers at a significant discount, enabling the physicians to take personal and business trips at well below fair market value.

 

"The jury found that Precision Lens’s conduct resulted in $43,694,641.71 in fraudulent claims submitted to Medicare. By operation of the statute, the court entered a $487,048,705.13 judgment against the company and its owner, which included treble damages and civil penalties under the False Claims Act. Following post-trial motions, the court reduced the judgment to $216,675,248.55. After the United States conducted a review of the defendants’ financial position and ability to satisfy the judgment, the parties entered into a settlement agreement which requires Precision Lens and the estate [of the deceased owner of Precision Lens] to immediately pay $12 million to resolve the United States’s claims." [emphasis added]

• Substance Use Disorder Treatment Clinics To Pay More Than $850,000 To Resolve Allegations They Knowingly Overbilled Medicaid For Office Visits -- July 25, 2024: This is a standard-issue "upcoding" case. From the announcement -- The U.S. and Virginia "contended that, from 2016 through mid-2023, the clinics submitted claims to Virginia Medicaid containing code 99215, which signifies a meeting with a patient involving at least two of the following three components: a comprehensive medical history, a comprehensive medical examination, and medical decision making of high complexity. However, the clinics knew the meetings were regular check-ins during substance use disorder treatment and did not meet those criteria."
  
  
• United States Obtains $26M In False Claims Act Judgments Against Laboratory Companies And Their Owner -- July 25, 2024: This is a default judgment (i.e., for failure to defend the government's allegations), which (based upon memory alone) seem pretty rare. The allegations were that the defendants 

"sought to profit from the unfolding COVID-19 pandemic by offering COVID-19 tests to nursing homes as a way to bill Medicare for a wide array of medically unnecessary respiratory pathogen panel (RPP) tests. The complaint alleged that these RPP tests were not medically necessary because the beneficiaries had no symptoms of a respiratory illness and because the tests were for uncommon respiratory pathogens.

 

"The complaint also alleged that Britton-Harr and Provista Health submitted claims for RPP tests that were never ordered by physicians and sometimes for RPP tests that were never performed, including over 300 claims that stated that the nasal swab test sample was supposedly collected from the beneficiary on a date after the beneficiary had died."

COVID-19 fraud and elder fraud. Despicable. 

• Santa Paula Doctor Pleads Guilty To Health Care Fraud For Role In Hospice Scam That Bilked Medicare Out Of $3.2 Million -- July 24, 2024: False certification of terminal condition --> submission of fraudulent claims of hospice eligibility.
  
  
• Riverside County Chiropractor Agrees to Pay $180,000 to Resolve Allegations of Health Care Fraud -- July 24, 2024: Another upcoding case? Medicare was billed for surgically implanted neurostimulators when the defendant actually "taped a disposable 'electroacupuncture' device called 'Stivax' to their patients’ ears. Stivax devices do not require surgical implantation and are not reimbursable by Medicare."
  
  
• Mental Health Services Providers Pay Over A Million To Settle False Claims Liability -- July 24, 2024: Defendants billed various government health care programs for physician services that were actually performed by nonphysicians who were not directly supervised by a physician. 'Some services occurred on dates when the physicians were traveling outside of the United States and thus unable to provide the services. Others allegedly occurred at times when it was not logistically possible for the physicians to have rendered them or directly supervised the services themselves due to the sheer volume of patients at multiple office locations located in and around the Houston area."
  
  
• Admera Health Agrees To Pay Over $5M To Settle False Claims Act Allegations Of Kickbacks To Third Party Marketers -- July 24, 2024: Classic.
  

• Doctor Convicted For Illegally Distributing Over 1.8M Doses Of Opioids And $5M Health Care Fraud Scheme -- July 23, 2024: Physician convicted of "conspiring to illegally distribute over 1.8 million doses of Schedule II controlled substances, including oxycodone and morphine, to drug-seeking individuals and drug abusers and for defrauding health care benefit programs of more than $5.4 million."
  
  
• Two Individuals Indicted For Stealing More Than $150,000 From MassHealth Program -- July 23, 2024: A Massachusetts Medicaid member is alleged to have falsely submitted timesheets  attesting to personal-care assistant (PCA) services that were never rendered. because the PCA was incarcerated during the time periods in question. 
  
  
• Topeka Man Charged With Embezzlement -- July 22, 2024:  Program manager and director of the Prairie Band Potawatomi Nation’s Diabetes Prevention Program is accused of embezzling $5,000 or more in federal grant money. 
  
  
• Owner Of Home Health Care Company Convicted Of Multimillion Dollar Heath Care Fraud Scheme -- July 22, 2024: For years, defendant's company billed the Massachusetts Medicaid program for home health services it did not provide, were not authorized, or were not medically necessary. The company also paid kickbacks and laundered illegal proceeds. The fraudulent billings amount to "at least" $100 million. The owner of the company used the proceeds "to treat herself to million-dollar cash bonuses, a lavish house, and a Maserati." Crime pays . . . until it doesn't.
  
  
• Attorney General Bonta Secures Sentencing of Southern California Dentist for Medi-Cal Fraud -- July 22, 2024: Defendant owned dental practice where she served as a dentist and carried out the fraudulent billing scheme. Under defendant's contract with a Federally Qualified Health Center that participates in Medi-Cal, she received reimbursement for each day of service billed rather than for the individual services provided to the patient. However, her dental practice fraudulently split its services over multiple days on its claims for reimbursement in order to maximize reimbursement from Medi-Cal. 

SCOTUS and Health Agencies (Part 2)

The totally excellent health-policy journal, Health Affairs, posted an analysis of the likely impact of the death of the Chevron doctrine on some hotly (or at least frequently) litigated federal health-law issues: "Supreme Court Overrules Chevron Doctrine: Ripple Effects Across Health Care," by Zachary Baron et al. (I have no idea if this article is available only to subscribers (like me) or is free to the public. The latter, I hope.)

The authors start with Chevron itself, a useful three-paragraph introduction especially for anyone -- lawyers and non-lawyers alike -- with limited or no familiarity with Chevron deference.

After that, the authors focus on six areas of possible impact as a result of the Court's decision in the Loper Bright Enterprises case (discussed by this blog on July 7):

1. Nondiscrimination Protections. This includes "the battle over the meaning of 'sex' under Section 1557 [of the Affordable Care Act], which prohibits discrimination in health care on the basis of race, color, national origin, disability, age, and sex."
2. Medicare Reimbursement. An early test might be a case currently pending before the Supreme Court for its 2024 Term: Advocate Christ Medical Center v. Becerra. As the authors point out, there are few statutes that rival the Medicare statute in complexity, and lower courts often decide these reimbursement disputes by relying on Chevron: If the statutory provision is unclear (which is often the case), the courts defer to any reasonable interpretation by HHS/CMS. That was the case in Advocate Christ Medical Center. If I had to guess, this case might be remanded for reconsideration in light of Loper Bright, but there will be others!
3. Medicare Advantage. Noting that "federal agencies often face hurdles to accomplishing their regulatory goals separate and aside from Chevron, . . . the path forward for litigation over the MA program following Chevron being overruled is not clear." Not necessarily good news for "more than half, or 51 percent, of the eligible Medicare population."
4. Medicare Drug Negotiation. BigPharma has been fighting this program since before its enactment, bringing "a slew of constitutional, statutory, and agency authority claims against the negotiation program, [and] industry has lost on the substance of all their legal arguments." Will Loper Bright help the drug makers in future court challenges to the program. The authors think not.
5. Private Health Insurance. In the more than 2,000 legal challenges to the Affordable Care Act and its volumes of regulations, Chevron has played a role in the final rulings of many cases but far from all. The authors look at a couple of cases involving the No Surprises Act that are currently pending before the Fifth Circuit. The authors conclude: "Now, the Administration and health care providers are sparring about the fallout from the Loper Bright decision and how it will impact the pending Fifth Circuit decisions. Yet with the current Fifth Circuit taking such a strict approach to statutory interpretation even when Chevron remained on the books, the Administration faces a challenging environment there."
6. FDA. Chevron deference has been "critical to allow FDA to use its expertise to administer very complex and technical programs that widely touch industry and health care consumers alike. . . . Overturning Chevron could open the floodgates to challenges of a wide variety of FDA regulations." 

The authors conclude:

This revised legal regulatory landscape opens up new opportunities to challenge regulations and other agency actions by future administrations. These challenges may affect the implementation of agency regulations addressing consumer protections, access to health care services, women’s rights, and other measures that impact health care costs. . . . The level of disruption remains uncertain, and may be felt unevenly, but the trend line remains clear: Courts more than ever will have the final say on complex policy decisions that affect the health of millions of Americans."

Oh, happy day. {sigh} 

SCOTUS and Health Agencies

The New England Journal of Medicine today posted a Perspective piece (apparently free, at least for now) by Rachel Sachs and Erin Fuse Brown: "Supreme Power — The Loss of Judicial Deference to Health Agencies." I won't go into the details of the recent Supreme Court opinions, but I discussed them in an earlier post here. The cause for concern is the Court's overruling of the 40-year-old Chevron case, which obligated federal courts to defer to reasonable agency interpretations of federal statutes that were silent or ambiguous with respect to the issue in question. 

The Court was vague about how lower courts should decide such cases in the future. "Deference" is out; apparently "respect" -- at least when Congress has delegated interpretive authority to the agency -- is in, but what does "respect" mean? Without guidance from the Court, "the implications . . . are highly uncertain and potentially vast. The decision could open the door to more, and broader, challenges to actions taken by health agencies, such as the Centers for Medicare and Medicaid Services (CMS) and the Food and Drug Administration (FDA)."

If this sounds like a mess, it is exactly that. Eliminating a deferential standard of review will encourage litigation by opponents of the health-related decisions of agencies such as CMS (which runs Medicare and Medicaid) and the FDA (and EPA, the Public Health Service, NIH, etc.). And the final word on often technical scientific public-health issues will be decided by generalist judges. I hesitate to quote myself, but I'll make an exeption:

Consider for a moment that many of these disagreements will concern technical, scientific, or policy expertise that agencies typically have in abundance and that courts usually lack. Justice Gorsuch illustrated just such a contrast in an opinion in the past two weeks in which he confused nitrogen oxide (a pollutant that was the subject of EPA regulation at issue in Ohio v. Environmental Protection Agency, No. 23A349 [Opinion: Gorsuch; decided 6.27.2024]) with nitrous oxide ("laughing gas"). Unfortunately, this is no laughing matter.

The Cruelty of Texas's Abortion Ban (SB 8)

A recent MSNBC News report (posted July 11, 2024, 4:19 PM CDT) illustrates the casual cruelty of Texas Senate Bill 8, which bans abortions after a fetal heartbeat is detectable except when continuing the pregnancy presents a threat to the life or major bodily function of the pregnant person.

When Samantha Casiano of East Texas found out she was pregnant with her fifth child, she was ecstatic. But at a 20-week ultrasound, she received shocking news. Her baby was diagnosed with anencephaly, a rare and fatal condition that prevents the skull and brain from fully forming. . . .

“I was told that it meant that my daughter was incompatible with life. And I wouldn’t be adding another little human to our family. It was really hard to hear that. It felt like it was a dream -- a really, really bad dream, Casiano, 30, recounted. . . . 

“Just imagine yourself waking up every morning, knowing that your daughter was going to die. You can feel her kick and move, but she’s going to die. So you have to plan her funeral while she’s inside of you,” said Casiano. “And that’s probably the hardest thing any mother has to go through…It was traumatizing and hard.. Just thinking about it now is just me makes my stomach hurt. And I was forced to go through it. It was torture.”

Torture. C'mon, Legislature. Think about it.

Texas is not alone in its lack of humanity. According to the authoritative Guttmacher Institute, only D.C. and 9 states do not restrict abortion based on gestational duration. The remaining 41 states either ban abortions with very limited exceptions (14 states) or impose a gestational ban of varying lengths:

• 6 weeks (3 states)
• 12 weeks (2 states)
• 15 weeks (1 state)
• 18-23 weeks (5 states)
• 24-26 weeks (16 states)

And as the Institute says about these gestational bans: "Anyone denied abortion access in their state must either overcome the logistical and financial hurdles of traveling out of state, navigate a self-managed abortion or carry an unwanted pregnancy to term."

The Casiano case is an example: "Casiano said she was unable to travel outside of the state for an abortion due to financial and logistical constraints. So, she was forced to go to term with her baby." 

Torture. C'mon, Texas Voters. Think about it.

Controversial Donor-Organ Retrieval Technology Highlighted on NPR

It's called normothermic regional perfusion ("NRP") and was the subject of a useful story on National Public Radio ("NPR") this morning.

There are two ways to be dead in this country: dead according to neurological criteria ("brain death" -- an increasingly controversial concept) and dead according to cardio-pulmonary criteria. According to the latter, death occurs when there is an irreversible cessation of all cardiac and pulmonary function. This is the standard adopted in the Uniform Determination of Death Act and adopted by statute, regulation, or judicial decision in all 50 states and the District of Columbia. Pulselessness and lack of spontaneous respiration: They have signalled death for eons. 

The development of CPR sharpened the concept of cardiopulmonary death. If CPR (or, in a clinical setting, Advanced Cardiac Life Support) fails to reëstablish a pulse, irreversibility is established and death can be declared.

A procedure known as circulatory determination of death ("DCD") allows this sequence of events to occur in an operating room. It begins when ventilator support is withdrawn from a prospective organ donor. The surgical team waits for up to 90 minutes (times may vary by institution) for the cessation of cardiac and pulmonary function. If that occurs, the clock starts clicking (typically for 5 minutes, longer at some institutions) to see if the patient experiences autoresuscitation. If not, irreversibility is deemed to be established, the patient can be declared dead, and the organ retrieval may begin.

DCD organ donations were originally controversial -- including a Cleveland prosecutor's 1997 assertion that DCD may be tantamount to killing patients for their organs (NY Times; may be behind paywall) -- and are still opposed by a minority of experts. On the other hand, DCD is actively promoted by UNOS and is supported by a majority of ethics commentators.

NRP takes DCD one step further and arguably pushes beyond the outer limits of irreversibility. There are various forms of NRP, but most appear to involve cutting off any possible blood flow to the brain and reestablishing circulation by connecting the donor to ECMO (Extra-Corporeal Membrane Oxygenation). At least one version of this process may result in restarting the donor's heart. You can see the possible conflict with the requirement of irreversibility. 

The NPR story is a good introduction to the controversy. For a deeper dive, the American Journal of Bioethics ("AJOB") devoted an entire issue to NRP. (This, too, may be behind a paywall.) If AJOB is unavailable, run this search in NIH's PubMed service. Today it pulled up 69 articles, including some that are available for free.