Samantha Liss, St. Louis Post-Dispatch, Author at �鶹Ů�� Health News

Hospitals And Pharmacies Grapple With Rising Drug Prices

Samantha Liss, St. Louis Post-Dispatch — Thu, 20 Nov 2014 20:42:50 +0000

Fed up with the rising price of drugs, Ascension Health last month did something unusual. It publicly banned a drug company’s sales reps.

The reason: The company had reclassified three cancer drugs, causing prices to spike.

In a memo to employees, Dr. Roy Guharoy and Michael Gray, two top executives with the Edmundson-based hospital chain, explained: “Already scarce resources will need to be stretched with potential serious impact on the range and breadth of health services we currently provide to our patients and our communities.”

The move proved largely symbolic.

Ascension, the nation’s largest nonprofit health care system, can’t stop buying the needed medications. And the drugmaker, Genentech, defended the reclassifications, saying it was done to ensure the safety of the drugs.

Still, the dust-up did succeed in sending a message to the pharmaceutical industry, says Nick Ragone, Ascension’s chief communications officer: Think twice before raising prices.

“The effect of the ban has been to galvanize other provider systems to speak out against these arbitrary and debilitating price increases,” Ragone said.

The message appears to be getting through.

On Capitol Hill, several congressmen just announced plans to hold hearings on rising drug prices.

Separately, the U.S. Department of Justice is investigating price hikes in generics, and issued subpoenas to two generic drugmakers, according to a report in the Wall Street Journal.

EXAMPLES

Every provider — from big chains, such as Ascension and Creve Coeur-based SSM Health, to much smaller players, such as St. Anthony’s Medical Center in St. Louis and Ladue Pharmacy — can point to recent drug price increases.

For example, St. Anthony’s says it is paying substantially more for doxycycline hyclate, a generic antibiotic that has been on the market for years, according to Dan Johnson, pharmacy director.

St. Anthony’s didn’t provide pricing specifics. But a statement last week issued by a congressional committee said the price of a bottle of doxycycline hyclate shot up to $1,849 from only $20 in fall 2013.

Over at SSM, the pricing problem continues to grow. “It’s always been a small issue, it just seems like there are more and more items that are heading in this direction, and creating a substantial problem for us,” said Tim Roettger, vice president of pharmacy services for SSM in St. Louis.

A year ago, Ascension paid $2.89 for a 45-gram tube of a generic topical steroid cream, clobetasol propionate. The health system is now paying $198.64 for the same tube.

Those kinds of increases add up. With a network of more than 131 hospitals across the country, Ascension’s spending on drugs has risen by $36 million, or 9 percent, in the last year. Two-thirds of the overall increase — $23.5 million — could be attributed to costlier generics, said Mary Ella Payne, Ascension senior vice president of advocacy.

“We can’t absorb these prices,” Payne said.

Ascension’s size gives it more leverage than most other hospitals, especially independent ones, to bargain with pharmaceutical manufacturers on prices. Still, Ascension’s scale has done little to curb the price hikes, Payne said.

And just because Ascension is paying more for generics doesn’t mean it will be paid more for their services by insurance companies to reflect the full cost of the drug.

“For inpatient care, hospitals are typically reimbursed on a per-procedure basis, so higher generic drugs costs could not necessarily be passed on to the payer,” said Adam Fein, president of Pembroke Consulting Inc.

What Fein means is that commercial insurance companies and Medicare already have set prices in place for each procedure or visit to a hospital. So even if a hospital were to bill the insurance carrier more to reflect the higher cost of a drug, it doesn’t mean the hospital will get paid what it actually bills the carrier.

An analysis published by Fein, considered an industry expert on the economics of the pharmaceutical industry, shows retail prices for generics have increased and in some cases there were “mega increases.”

But the impact isn’t limited to hospitals.

Rick Williams, owner of the independent Ladue Pharmacy, has been affected by the price hikes as well. Sometimes acquiring a drug costs more than how much he is paid by insurers for selling it to customers.

“Number one: We take care of our customers,” Williams said. “And we’re going to take it on the chin for them sometimes.”

REASONS

The price increases are getting attention on Capitol Hill, though it’s unclear what policy prescriptions a lame duck Congress can provide.

U.S. Sen. Bernie Sanders, the independent from Vermont, and Rep. Elijah Cummings, D-Md., announced they will hold a hearing this Thursday on “skyrocketing” prices for generics, like digoxin, a medication used to treat congestive heart failure, which went from 11 cents a pill in October 2012 to $1.10 a pill in June.

“These huge price increases are affecting the pocketbooks and health of millions of Americans,” Sanders and Cummings said in a joint statement.

The lawmakers are likely to hear examples of how drug prices are rising; they’re unlikely to get a clear explanation why.

Some industry analysts point to shortages as one of the major causes for price hikes, and those shortages can occur when manufacturers either incur problems making the drug or quit making it altogether. And when there are fewer manufacturers, it can cause a domino effect in the market as other manufacturers are left to pick up the slack to cater to remaining demand. Price hikes result.

But that’s how a free market works, said Ronny Gal, pharmaceutical industry analyst with Sanford C. Bernstein & Co.

“There are shortages, and some generic drug manufacturers are being opportunistic,” Gal said. But that’s not illegal.

As health care costs rise, the drug manufacturers are continually being squeezed to lower prices by everyone from retailers, hospitals to group purchasing organizations. That pressure on margins causes some to leave a certain drug behind, said Scott Griggs, assistant professor of pharmacy administration at St. Louis College of Pharmacy.

“With consolidation they are trying to become more efficient, they are trying to maintain their profits — but they’re also at the same time trying to make sure that they are utilizing the lines that will allow them the highest profits,” Griggs said.

Yet, over time, generics have saved the industry and consumers billions of dollars, the Generic Pharmaceutical Association said.

“Generic medicines are a critical part of systemwide efforts to hold down health care costs,” Ralph G. Neas, president and CEO of the association, said in a written statement. Citing a study by IMS Institute for Healthcare Informatics, Neas said generics saved $209 billion in 2012, $239 billion 2013 and more than $1.46 trillion over the last decade.

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Missouri’s Medicaid Applicants Get Put On Hold

Samantha Liss, St. Louis Post-Dispatch — Wed, 03 Sep 2014 13:44:40 +0000

Enrolling in Missouri’s Medicaid program has not been easy.

Many applicants have experienced a barrage of problems when trying to sign up for the program, including long delays until coverage kicks in, lost paperwork and a lack of one-on-one interaction with caseworkers. State officials have blamed a new computer system used to process Medicaid applications.

But there is another reason why some Missourians struggle to get help.

When Deborah Weaver, 28, had issues enrolling in the state’s Medicaid coverage for pregnant women, a switch from her Medicaid disability coverage, she was directed to use a toll-free number, 1-855-373-4636. When she called, Weaver endured long waits and received no guidance.

“I called them three or four times and each time it would take a minimum of 15 to 20 minutes to get through to a human being, only to be given the runaround,” Weaver said.

One time the wait dragged on for so long, Weaver ended the call, worried she was racking up too many minutes on her family’s cellphone plan.

The call center, run by a private company based in Mississippi, handles hundreds of thousands of calls from Missourians seeking help with issues ranging from Medicaid coverage to food stamps, which are defined as income maintenance programs.

Recent records obtained from the Missouri Department of Social Services by the St. Louis Post-Dispatch show that nearly half of the individuals that phoned the call center ended up hanging up, or “abandoning” the call.

And, like Weaver, callers are also spending more time on the phone waiting for an answer.

The average wait time rose to more than 17 minutes in July, up from an average of 3 minutes in July 2013. The maximum wait time increased to about 37 minutes in July, up from 18 minutes a year earlier, the records showed. The maximum wait time spiked to about 48 minutes in March this year.

Violating Contract

Callers are supposed to be directed to a call center staffer in three rings or 20 seconds, or placed in a hold queue within that same time frame, according to the call center’s contract with the state.

“Once in the hold queue, the caller must be connected to a live customer service representative within six minutes,” the contract states.

But callers are waiting in the queue much longer than six minutes.

The average queue time was slightly more than 13 minutes for the month of July, according to the state’s records. The last time the queue was under six minutes was in January.

A month after the Post-Dispatch began requesting data regarding the Jefferson City call center, the Department of Social Services sent a letter, dated Aug. 28, listing “significant concerns” about the call center’s performance to Rob Wells, president of YoungWilliams.

The letter points out the average monthly queue has been exceeding the six-minute limit since February.

The letter also indicates callers have received busy signals, which is not supposed to occur under terms of the contract.

The Department of Social Services now is requesting a corrective action plan within five business days of Aug. 28. Failure to respond to the letter may result in the state’s withholding 10 percent of the next monthly payment, the letter states.

The state signed a four-year contract with Jackson, Miss.-based YoungWilliams to begin operating a call center for income maintenance programs in January 2012 for the Department of Social Services Family Support Division.

YoungWilliams, founded by a group of lawyers, first focused on providing legal services for child support cases in Mississippi in 1993. From there, the company expanded its reach to other states to provide child support enforcement services, consulting and call center services, and services for income maintenance programs.

To date, YoungWilliams has been paid about $9.4 million for its services regarding income maintenance calls, according to the Department of Social Services.

On Aug. 27, an official with the Department of Social Services said that the department was aware of the wait times and that they were working with YoungWilliams to resolve the issue.

“IM (income maintenance) staffing levels at YoungWilliams have been low, which has led to longer wait times for customers who try to contact the information center. In order to address this concern, YoungWilliams immediately began recruiting additional staff members; however, there is a 5- to 6-week lead time to recruit, hire and train staff in preparation for the live call environment,” Rebecca Woelfel, spokeswoman for the Department of Social Services, said in an email.

However, these long hold times were unacceptable to Missouri Gov. Jay Nixon, according to Channing Ansley, the governor’s spokeswoman.

“Moving forward, the Governor’s expectation is that these issues will be resolved so that Missourians receive the quality customer service they expect and deserve,” she said Friday afternoon in a statement.

Mary Ann Wellbank, vice president of YoungWilliams, acknowledges that the call center is in violation of the contract, in particular the hold queue time. But that’s because the Jefferson City call center is receiving more calls, she said.

“For some reason, outside of our control, the incoming calls increased from an average of 141,000 calls per month in 2013 to 160,000 calls per month that we’re receiving now,” Wellbank said. “We’re not staffed enough to handle the calls.”

To help alleviate the situation, Wellbank said, 10 staffers are coming on line this week, and another seven are in the new hiring process.

Wellbank said the call center’s staffers had to navigate more systems the state has brought on line in order to review cases, which is contributing to more time on the phone with callers. All of which, Wellbank said, contributes to the increase in wait times as the same amount of staffers try to do more.

“We’re absolutely committed to rectifying the situation,” Wellbank said. “It will take some time, and we appreciate the concerns of the citizens and advocates.”

But critics say the call center is a glorified answering service because call center staffers are very limited in what they can actually do. Only eligibility specialists, who work for the Department of Social Services’ Family Support Division, can make changes to and help with application issues.

It wasn’t always this difficult to get help with a Medicaid application or food stamps, Weaver said. She used to visit the field office in Hillsboro, the closest office to her home in De Soto, and sit down with a caseworker, also known as an eligibility specialist.

But as the state has cut the department’s budget, it’s become harder to interact with an actual eligibility specialist. Now, people are mailing in applications or applying online.

“Before, you used to have human interaction; now someone walks you into a room and puts you in front of a computer and they leave,” Weaver said of the application process.

And when enrollment issues do arise, it’s nearly impossible to get a hold of an eligibility specialist, she said.

Under the call center contract, the staff provides information and general assistance to callers, but they can’t modify applications or make decision concerning eligibility and payments.

Instead, they typically send emails to the eligibility specialists in the field offices across the state requesting they call the applicant back within two days to resolve the issue.

Dropping Enrollment

The call-center difficulties comes as Missouri reported the single largest monthly drop in Medicaid enrollment.

The average enrollment dropped by 37,260 people, or 4.4 percent, at the end of June compared with a year earlier, according to a report by the Department of Health and Human Services.

And even though fewer people are enrolled in the state’s health plan for low-income Missourians, the backlog has increased. The number of pending Medicaid applications stood at 43,740 at the end of June 2014, up from 29,191 at the end of June 2013.

The precise details are unclear, but state officials say that the switch to a new software system is to blame for enrollment issues and that the issue is improving.

However, Joel Ferber, director of advocacy for Legal Services of Eastern Missouri, and other area health care experts also say the call center is contributing to the drop in enrollment.

“It’s an overwhelming problem because clients are unable to get answers to, and or assistance with, the problem they are having (delays or lost documents). The call center issues are part of the problem,” Ferber said.

Tim McBride, health care economist and professor at Washington University, said many of the people who needed state services weren’t able to wait on the phone.

“Where I can take 30 minutes off and have (a) phone conversation, it’s not feasible for someone who is trying to get on Medicaid,” McBride said. “If you’re disabled, it might be physically hard for you to stay on the phone.” And it might be more difficult for people who have mental health issues, McBride said.

Some also raised the issue that outsourcing itself helped create the current problems.

By terminating state workers and replacing them with call-center employees who lack the authority to make decisions, Missouri creates a system that is slow and inefficient, according to Adam Seehaver, organizing director for Local 6355 of the Communications Workers of America, the union representing workers within the Department of Social Services.

“The reason the wait times are what they are is that there is not enough staff to do the job, and it’s really that simple,” said Adam Seehaver, organizing director for Local 6355 of the Communications Workers of America, the union representing workers within the Department of Social Services.

Ansley, the governor’s spokeswoman, declined to comment on the question of outsourcing.

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Missouri Lags Behind In Insurance Pricing Transparency

Samantha Liss, St. Louis Post-Dispatch — Mon, 18 Aug 2014 12:22:59 +0000

Health insurance carriers all across the country are disclosing what they plan to charge customers for coverage in 2015 — almost everywhere, that is, except Missouri.

In Connecticut, for example, Anthem Health Plans Inc. submitted its rates to the state’s insurance department in May, requesting an average increase of 12.5 percent. The state denied the request on July 25. Anthem has until Aug. 31 to submit revised rates.

“We fairly dramatically pushed back on them,” said Anne Melissa Dowling, deputy commissioner of Connecticut’s Insurance Department. “They cannot sell this product without our assent.”

In Kansas, Insurance Commissioner Sandy Praeger also is receiving insurance carriers’ rates for 2015. Her department has 30 days to review the plans. If her department is uncomfortable with any proposed rate increases, Praeger steps in. She said, in most cases, she is able to negotiate a lower rate with the carrier.

And just this month, Illinois, which has rate review authority, opened up rate filing forms from insurers to the public via an online portal. Now the public can view what plans insurers will sell and how much they will charge.

Connecticut, Kansas and Illinois are among a long list of states and the District of Columbia that have some sort of authority to review insurance rates, meaning pricing, before plans are sold.

But that type of authority does not exist in Missouri.

The Show-Me State is one of the only states that does not have the ability to review health insurance rates. Wyoming is close behind; it has only the ability to review rates for health maintenance organizations, or HMOs.

Advocates say it’s time for a change in Missouri.

“Other states can sit down with the insurance company, ‘Can you justify an increase this large?’ But in Missouri that conversation doesn’t even happen,” said Andrea Routh, executive director of Missouri Health Advocacy Alliance.

Rate review authority means state governments can review the pricing and benefits of health insurance plans sold within the state. Some states, such as Connecticut, have the authority to deny rate increases; others do not.

There’s a special interest in rate review authority now because under the Affordable Care Act, Americans are required to have health insurance. And, under the Affordable Care Act, Americans have greater access to purchasing health insurance through the online insurance exchange, HealthCare.gov.

But last year, the first year HealthCare.gov opened for business, details about the plans offered to Missourians on HealthCare.gov were not available until after the website went live, on Oct. 1.

Only two carriers, Coventry and Anthem Blue Cross Blue Shield, offered plans on the Missouri exchange during the inaugural year. And while both are expected to offer plans again this year, details about their insurance products — as well as those offered by other insurance companies — are unlikely to be known before the Nov. 15 start of open enrollment on the exchange.

Earlier this month, the Missouri Department of Insurance reached a record settlement of $7.8 million with Anthem for overpricing of certain plans in Missouri from 2007 to 2010. Missouri’s Insurance Director John Huff believes that these settlements could be avoided if his department had the ability to scrutinize rates and benefits before they were sold in Missouri.

“By not having rate review authority, Missourians lack rate transparency, a competitive health insurance market and regulatory protection from being charged rates that are excessive, inadequate or unfairly discriminatory,” Huff said in a statement provided to the Post-Dispatch.

Until then, his department relies on consumers’ complaints to tip them off to unscrupulous behavior on the part of insurance carriers.

The Missouri Department of Insurance does have the authority to investigate insurance companies operating in the state per state statute. In Missouri it is illegal to use deceptive practices to sell insurance, and it’s illegal to misrepresent benefits within the policy, according to state statute.

So far, proposed legislation regarding rate review authority has failed in Missouri.

Sen. Paul LeVota, D-Independence, has tried twice to get rate review in Missouri through his previously filed bills, but he’s becoming less optimistic about his chances. Even still, he plans to file a third bill on rate review authority in January.

“The insurance industry has a chokehold on the Legislature,” Levota said. “In Missouri, we have no campaign finance limits at all, and that allows lobbying interests to have more power than in other states.”

Rep. Bill White, R-Joplin, also is fighting for more transparency through his legislation but he said it’s an uphill battle. He thinks giving rate review authority to the insurance department is a reasonable request since the department has the authority to review rates for all other types of insurance sold in the state.

“Things that seem like a no-brainer sometimes don’t get out of committee,” White said.

An insurance lobbyist would not comment on whether he would welcome rate review in Missouri.

“Input from our member companies would be paramount to what our position would be,” said Shannon Cooper, registered Missouri lobbyist for America’s Health Insurance Plans.

Officials with insurance carrier Anthem, a division of WellPoint Inc., would not comment on rate review authority.

“We believe that the current process in Missouri is working well for both consumers and carriers,” said Rohan Hutchings, spokesman for Coventry, which is owned by Aetna. “If things were to change in the future, we would work closely with the state through that process.”

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