Category: Blog

Even with the ACA, is healthcare in America bankrupting its citizens?

A recent New York Times/Kaiser Family Foundation survey found that 1 in 5 insured American’s struggle to pay medical related expenses. On March 23, 2010, President Obama signed the Affordable Care Act, which enacted comprehensive health care reform. The massive law contains countless provisions, with some of the most controversial and contested being the individual and employer mandates. Due in part to the mandates, decreased costs of yearly/monthly premiums, and restrictions on denying coverage for pre-existing conditions, the uninsured rate has dropped 6 percent, from 15.1 percent to 9.2 percent, since the ACA was enacted. Despite the impressive increase in insured American’s, the new NY Times/Kaiser study suggests that insuring more Americans is only one part of solving America’s mounting healthcare problems.

The study suggests that many Americans are taking second jobs, working longer hours, or cutting back on household expenses to pay the costs of medical treatment not covered by their insurance. Margot Sanger-Katz, in a NY Times article summarizing the study, suggests that although insurance premiums are lower, the lower premiums are offset by higher deductibles. The article highlights several examples of Americans that were blindsided by unexpected medical bills, including one individual who lost her home due to extensive medical costs despite being insured. Is there any solution to this growing problem? President Obama’s administration is constantly battling attacks on the ACA. Given Congress’ recent attempt to repeal portions of the ACA, which President Obama not surprisingly repealed on Friday, January 8th , it seems unlikely that Congress will pass any additional legislation to further regulate the insurance industry. What relief do Americans have when it seems that the only way to avoid medical debt is to stay healthy?

The Huffington Post suggests that the situation is not so bleak for at least some sectors of the population. “The data from the Centers for Disease Control and Prevention show that the number of people in households that faced problems paying medical bills decreased by 12 million from the first half of 2011 through the first six months of this year.” The data further suggests that “among the poor, the share of those with problems fell from 32.1 percent to 24.5 percent,” which is an even more significant decrease in problems than their middle-class counterparts.

With the uninsured rate at historic lows, and still many Americans struggling to make ends meet while receiving needed medical treatments, additional health care reform seems necessary. However, given the current political landscape and Congress’ overwhelming disdain for health care reform introduced by the current administration, it seems unlikely that much-needed change will occur. Where does that leave American’s who are facing the life-changing decision of depleting hard-earned savings to have a fighting chance at treatment, surgery or recovery? A recent article from the Las Vegas Review Journal suggests negotiating upfront with hospitals for fair rates can help control mounting medical expenses. However, more often than not, staying healthy is the best way to avoid medical debt and keep hard-earned money in the bank.

 

Supreme Court Denial of Stay Means Minimum Wage, Overtime Pay for Home Health Aides

For the first time since Congress passed FLSA in 1938, home health aides, also known as domestic service workers, are now eligible for minimum wage and overtime pay. Earlier this month, Chief Justice Roberts denied Home Care Association of America’s request for stay of issuance of mandate in the case Home Care Association of America v. Weil.

Home Care Association made waves across the labor law and health care industry this past August when the D.C. Circuit Court upheld Department of Labor (DOL) regulations that extend minimum wage and overtime protections to home health aides. Home Care Association may still appeal, but legal experts muse that even if the appeal is granted, it is unlikely to prevail.

Labor activists heralded the decision as a momentous occasion for the domestic work industry. The home health aide industry encompasses nearly two million domestic workers—and expanding. It is the fastest-growing occupation in the nation. Domestic workers typically operate behind closed doors in a highly unregulated economy with little workplace protections. As a result, labor trafficking and exploitation are consistent concerns in the industry.

In the decades since its inception in 1938, the Fair Labor Standards Act (FLSA) has left out home care aides and exempted them from wage-and-hour requirements. Some labor activities charge that the exemption is driven by racism against a class of workers largely composed of immigrants and women of color. The FLSA exemption meant that employers were not required to pay domestic workers minimum wage or compensate them for working overtime. The D.C. Circuit Court decision sweeps domestic workers under FLSA—and thereby formalizes the work of a sector that has been historically overlooked.

The Home Care Rule went back into effect on November 12, 2015. Between now and December 31, 2015, the DOL is adopting a relaxed enforcement policy. In a policy statement, the DOL said that it will “exercise prosecutorial discretion” during this period. When making decisions as to whether to bring enforcement actions, the DOL will consider the extent to which States and other entities have “made good faith efforts to bring their home care programs into compliance” with the Home Care ruling. DOL will commence more rigorous enforcement in 2016.

The ease-in period buys more time as home health organizations and hospitals make adjustments. A common source of complaint and frustration is funding. Institutions funded by payers like Medicare and Medicaid are still at a loss as to how they will accommodate the overtime pay mandates into their budgets. In the first industry-led report since the D.C. Circuit Court decision, several membership associations released a set of recommendations outlining potential next-steps for home health providers. The report cautioned states from reacting adversely, such as prohibiting all overtime hours. It also suggested that home health institutions work with state legislators to make more room in their state budgets for home health aide payments.

The D.C. Circuit Court decision is clearly a win for labor rights activities and domestic workers. But with budgetary challenges and a potential Supreme Court appeal on the line, whether and to what extent the Home Care rule will be enforced remain to be seen.

Fracking Creates Pregnancy Risk

This October the Johns Hopkins Bloomberg School of Public Health released a study linking fracking to adverse pregnancy outcomes, specifically premature births. Fracking, also known as hydraulic fracturing, is the “process of pumping chemical-laced water into shale to extract the oil or gas embedded within.” Fracking is a stimulation process used to access natural gas located 5,000-8,000 feet below the surface that was previously unavailable.

The study found that living within the most active area of fracking (most active quartile of drilling and production) activity was associated with a 40% increase in a woman giving birth prematurely (preterm is considered to be before 37 weeks gestation) and a 30% increase that an obstetrician had labeled their pregnancy high-risk. Of the pregnancies in the study 11% of those resulted in a premature birth with 79% of those preterm births taking place between 32 and 36 weeks.

Premature birth is a serious public health problem because it increases the risk of death and serious disability for children who are born prematurely. Children born prematurely may suffer from numerous health complications including breathing problems, feeding difficulties, cerebral palsy, developmental delay, vision problems, and hearing impairment. Preterm birth is the greatest contributor to infant death and the leading cause of long-term neurological disabilities in children. In 2010, preterm-related deaths accounted for 35% of all infant deaths and in 2005 preterm births cost the U.S. healthcare system 26 billion dollars.

The practice of fracking is a controversial topic for many reasons including other public health dangers fracking might be related to and the potential long-term environmental impact it might have. Preliminary studies conducted on births in Pennsylvania report an increased risk for low birth weight, which can be a sign of developmental problems. A Yale University study found that people living near natural gas wells are more than twice as likely to have respiratory illnesses and skin problems. There is also preliminary research suggesting that fracking is related to water pollution.

Additionally, fracking is a public health concern because its use and prevalence has rapidly expanded in the United States when much is still unknown about the dangers and long-term effects. The process of fracking dates back as early as the 1940s, while large scale use did not occur until 2003. It was around 2003 that “energy companies began actively expanding natural gas exploration with an emphasis in shale formations in Texas, Pennsylvania, West Virginia, Wyoming, Utah and Maryland.” Specifically, the expansion was supported by an EPA study released in 2004 announcing that fracturing posed no risk to the underground water supply. Shortly afterwards in 2005, fracking was exempted from the Safe Water Drinking Act in the Energy Policy Act of 2005 by the Bush administration. Fracking began in just a couple of states, but the practice has rapidly expanded and is now used in over fifteen states.

Although this study is not definitive, it shows that there are some public health risks associated with fracking and that more studies are needed. It is also a sign that the fracking industry should proceed with caution. Because fracking has relatively recently gained widespread usage, much is still unknown about the environmental consequences and the public health dangers fracking might cause.

Federal Funding Towards Preventative Care

Planned Parenthood Foundation provides easily accessible and affordable birth control, preventive health care measures, including breast and cervical cancer screenings, and medically safe and legal abortions resulting in vast improvements to the health of millions of women and children. The controversies surrounding Planned Parenthood does not negate the evidence that women, men, children, and families have reaped great benefits to their health since the Supreme Court’s decision in Roe v. Wade.

The Center for Medical Progress, an anti-abortion group based in California, released eight videos alleging Planned Parenthood violated federal law; first, selling fetal organs and tissues and, second, manipulating abortion procedures to procure intact fetuses. This conservative, anti-abortion group hired actors to go undercover as pro-choice, record and interview Dr. Deborah Nucatola, Senior Director of Medical Services at Planned Parenthood Foundation. David Daleiden led this manipulative deceitful attack as another attempt to terminate the foundation’s federal funding.

The Partial-Birth Abortion Ban Act of 2003 prohibits partial-birth abortions procured by intact dilation and extraction, (“intact D&E”). Under this law, 18 U.S.C. §1531,”Any physician who, in or affecting interstate or foreign commerce, knowingly performs a partial-birth abortion and thereby kills a human fetus shall be fined under this title or imprisoned not more than 2 years, or both.” In the Supreme Court decision of Gonzales v. Carhart, Justice Kennedy wrote the majority opinion upholding the Partial-Ban Abortion Act solely when the physician intends to perform an intact D&E, not the more common partial-birth abortion.

Differences exist between the more common partial-birth procedure known as dilation and evacuation and the illegal intact dilation and extraction method. The former first ensures fetal death has occurred before beginning the surgical abortion procedure. Whereas, the latter, “the person performing the abortion deliberately and intentionally vaginally delivers a living fetus until, in the case of a head-first presentation, the entire fetal head is outside the body of the mother, or, in the case of breech presentation, any part of the fetal trunk past the navel is outside the body of the mother.”

Congress’s intention behind the Act is that no partial-birth abortion exists that is medically necessary and consequently cannot put the safety of a mother first. However, the Supreme Court in Gonzales v. Carhart, only upheld the Partial-Ban Act solely to intact dilation and extraction and, furthermore, left open the possibility of an as-applied challenge if rendered medically necessary.

The paramount goal of an abortion is safety and care for the mother and her health. Mr. Daleiden alleges that Planned Parenthood is performing illegal partial-birth abortions. In one of the videos, Dr. Nucatola explains their success in receiving fetal organ tissue because the doctors perform abortions by using ultrasounds to ascertain the best location to grab the fetus with forceps. Any diversion of an abortion procedure for the purpose of gaining organ research is extremely unethical and it would defeat the primary purpose of the foundation providing safe, legal abortions.

Mr. Daleiden also alleges, “Planned Parenthood’s criminal conspiracy to make money off of aborted baby parts.” It is against federal law to sell fetal tissue. The foundation claims it makes no profit, but rather, the actual costs, including the cost to transport tissue to research centers, are reimbursed, which is standard across the medical field. Dawn Lagues, Planned Parenthood Executive Vice President, stated, “this was always about one thing – honoring the desire of women to contribute to lifesaving research. It was never about money.” Participating in this not-for-profit research is a voluntary and legal way to contribute towards creating successful vaccinations for diseases including Parkinson’s, polio, rubella, and chicken pox.

Irrespective of Planned Parenthood’s letter to Congress that proves the videos are heavily edited and inaccurate, the foundation announced they no longer will accept legal reimbursements from research in hopes to end another political anti-abortion attack.

Federal funding is imperative to Planned Parenthood providing women access to preventive care, life-saving screenings, and family planning services. While Federal funding is prohibited from paying for any abortions, these anti-abortion attacks on such an honorable and respected foundation will have devastating impacts. Restricting woman’s right to access medically safe, legal abortions and accessible preventive health screenings jeopardizes the health of women, their families, and our nation.

D.C. District Court Limits Discounts to Orphan Drugs

On October 14, 2015, Judge Rudolph Contreras of the District Court for the District Court of Columbia sided with drugmakers in a decision that narrowed the scope of 340B, a popular but controversial drug discount program. The decision effectively bars children’s hospitals, cancer hospitals, and rural hospitals from obtaining 340B discounts for so-called “orphan” drugs like Prozac.

The plaintiffs in the case, Pharmaceutical Research and Manufacturers of America (“PhRMA”), is a lobbying group comprised of 48 of the nation’s pharmaceutical heavyweights, including Novartis and Pfizer. PhRMA challenged an HHS Interpretive Rule, which would have expanded the scope of the drug discount program. PhRMA argued that the agency’s Interpretive Rule contravenes the plain language of 340B. Judge Contreras agreed.

Background to 340B and the Disputed Interpretive Rule

At the heart of this dispute are high-demand “orphan” drugs like Prozac. Orphan drugs are drugs developed to treat a rare disease or condition; the rare disease or condition is the “orphan” use. But, by and large, orphan drugs are more well-known for their non-orphan uses. In the case of Prozac, the drug’s designated orphan use is autism and certain types of body dysmorphic disorders. Yet most patients and providers use Prozac as a treatment for depression.

When the Affordable Care Act was passed, Congress significantly expanded the types of covered entities that would be eligible for 340B program discounts. The ACA added children’s hospitals, freestanding cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals to the 340B drug pricing program. The newly covered entities, however, are excluded from certain types of 340B program discounts.

Under 340B(e), newly covered entities do not have access to discounts for a “drug designated . . . for a rare disease or condition.” Pharmaceutical companies and providers disagreed over the scope of 340B(e). Pharmaceutical companies argued for a broader interpretation and insisted that the provision refers to all types orphan drugs.

To clarify the confusion, HHS issued an interpretive rule on July 23, 2014. Under the Interpretive Rule, drugmakers must offer orphan drugs at a discount to newly-covered entities when the covered entity purchases the drug for a non-orphan use. In the Prozac example, that means a covered entity like a rural hospital could get a discount on Prozac when purchasing the drug for depression (a non-orphan use), but not for autism (the designated orphan use). Drugmakers that fail to comply and refuse to offer the discount price must provide a refund to the covered entity for the overcharge.

D.C. District Court Applies Chevron Test, Vacates HHS Ruling

The court vacated HHS’s Interpretive Ruling, finding that it failed the Chevron test. Under the first prong of the Chevron test, the question is whether Congress has directly spoken on the precise question at issue. If so, the agency must follow the intent of Congress as clearly expressed in the statute. If the congressional intent is unclear, the court proceeds to the second step of the Chevron analysis to determine whether the agency’s ruling is “based on a permissible construction of the statute.”

In this case, Judge Contreras concluded Congress’s intent was clearly expressed in 340B(e) and its related statutory provisions, and that the second part of the Chevron analysis was unnecessary.

The court held in favor of the pharmaceutical company and rejected HHS’s Interpretive Rule.

After concluding that the Interpretive Rule failed the first prong of the Chevron analysis, the Court vacated the Interpretive Rule as “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” In effect, the D.C. District Court’s decision signals a victory for pharmaceutical companies who now do not have to provide orphan drugs at a discount for newly-covered entities like children’s hospitals and rural hospitals.

Experts Foresee Legal Attacks on Other Parts of Drug Discount Program

HHS can still appeal. In the meantime, legal experts weighed in on Law360 and predicted that the decision could encourage drugmakers to lodge additional lawsuits on other parts of the 340B program. In particular, the pharmaceutical industry has railed against the “mega-guidance” that HHS released in August 2015 for the drug pricing program. The omnibus guidance is still in the note and comment process, with the current 60-day comment period ending on October 27, 2015.

Lawyers speculate that this decision leaves the omnibus guidance vulnerable to legal attack. Based on this decision, pharmaceutical companies can challenge the mega-guidance in court as soon as it is finalized, before HHS even attempts any type of enforcement. As Kristi Kung of Pillsbury Winthrop Shaw Pittman stated, “The court here found that the agency didn’t actually have to take an enforcement action against a manufacturer for there to be [a lawsuit].”

Reactions from Providers Underscore Deep Disappointment, Concern Over Access

The District Court decision struck a deep nerve among hospitals and providers. Immediately after the decision was released, the American Hospital Association (AHA) released a statement expressing its deep disappointment.

“This decision comes at a steep cost for the vulnerable patients cared for by rural and cancer hospitals,” AHA stated. “[The decision] will reduce access to critical services and treatments for some of the most vulnerable patients in society. Sadly, the biggest beneficiary of this ruling is the pharmaceutical industry – it does nothing to help either patients or taxpayers.”

The American Society of Health System-Pharmacists (ASPH) similarly stepped out in opposition of the decision. In its own statement, ASPH pointed out the adverse effects of the decision on access to care. According to ASPH, “this ruling will limit access to critical medications for the sickest patients in our healthcare system. . . . Without access to these discounts, participating hospitals may not be able to absorb the cost of providing care to patients who otherwise would not be able to afford it.”

In an interview with Modern Healthcare, the National Rural Health Association agreed, adding that the decision might cause rural hospitals to pass some orphan drug costs onto patients and could lead to some hospitals not stocking certain medications.

The overwhelming reaction against the decision is clear: the D.C. District Court decision creates public policy implications which cut off access to affordable care. By rejecting HHS’s orphan drug discount rule, this decision strongly disadvantages the same patients from underserved areas which the Affordable Care Act meant to assist.

Balancing a 5,455% Drug Price Increase with Innovation

By: Nawa Arsala

In a widely-criticized and controversial move, Martin Shkreli of Turing Pharmaceuticals increased the price of the drug Daraprim from $13.50 a tablet to $750. That is 5,455% more expensive than it was only two months ago. The seemingly overnight price increase has caused waves in the political arena, the pharmaceutical industry, and the financial market.

Daraprim is approved by the Food and Drug Administration to help prevent malaria and treat toxoplasmosis, an infection caused by a parasite. It is also used to prevent other kinds of infections, at the discretion of doctors. Although these uses are not explicitly included in Daraprim’s approved labeling by the FDA, doctors are able to prescribe as they see fit, which is known as off-label usage. Courts have deemed that off-label usage by doctors is permissible, and constitutes the practice of medicine. Some of these off-label uses include treating opportunistic infections of HIV. Moreover, Daraprim is also used on cancer patients on chemotherapy, whose immune systems are weakened and get infections. This can explain the outcry from patient advocates, claiming that Turing has raised the prices of a “cancer drug” or a “HIV drug.”

Martin Shkerli, CEO of Turing, has had a rocky and controversial history in the pharmaceutical industry. He began vilifying certain small drugmakers online, while simultaneously selling their stock short. This means that he’d profit if share prices fell. Many in the industry found this behavior as sneaky. In 2011, Shkreli founded the biotech firm Retrophin, which focused on medicines for rare, life-threatening diseases, and orphan drugs. Eventually, Shkreli was publically ousted and sued for arranging a series of backdoor deals using company cash and stock. Shkerli has since countersued demanding that Retrophin pay Shkreli more than $70 million reflecting company stock he’s owed and damage to his image as a businessman. 

In the case of Daraprim, Shkerli argues that the price is actually to the benefit of the patients in the long run because innovation is necessary. The Food & Drug Administration also tends to agree, granting market exclusivity to encourage innovation. Shkerli ascertains that only 2,000 people in the United States are prescribed Daraprim every year. Moreover, while many other life-saving drugs must be taken for life, Daraprim only needs to be taken for about six weeks. He believes this drastically reduces the cost for the drug because only one course is needed. Nonetheless, this could explain why there is currently no generic version, as there is not a substantial financial incentive to manufacture Daraprim to produce a drug that only needs one course, and for so few patients.

The pharmaceutical market has long been a hot-button political issue because it is where a free market economy and public health must agree. There is rising criticism over the cost of health care in general, and particularly drugs. With the upcoming presidential elections, many potential candidates are weighing in on Shkerli’s decision. Democratic presidential candidate Hillary Clinton said “price gouging like this in the specialty drug market is outrageous.” Vermont Senator Bernie Sanders took it a step further by sending a letter to Mr. Shkerli, requesting more information about the drug hike. Shkerli has yet to respond to the letter and Sanders believes he is “holding hostage the patients who rely on this lifesaving medication, as well as the hospitals that administer it, by charging unconscionable prices for a drug on which he has a monopoly just because he can.” Public outcry has called for antitrust laws to remedy the price increase. However, under U.S. antitrust law, a unilateral price increase, when done in agreement or not in response to competition, is almost never actionable.

Ultimately, after worldwide criticism, Shkreli promised to lower the price of the drug. To date, that lowered price remains unspecified. Ed Painter, a spokesperson for Turing Pharmaceuticals recently explained that more than half of Daraprim’s sales “continue to participate in federal and state programs such as Medicaid” and a drug discount program, that often lead to costs that are “as low as $1 per bottle.” Nonetheless, almost four weeks after Shkerli made this promise, the price remains the same. It is important to note that Turing is part of a growing trend of price increases in pharmaceuticals that include massive manufacturers such as Pfizer, Merck and Valaent. Shkerli’s latest response to the backlash was “there have been hundreds of companies that have raised [their drug prices] higher, and they’re not rolling back their prices, so why should we?”