Princess Health and UK pays big to settle a health-care debacle but keeps almost all details under wraps; Herald-Leader says trustees should worry. Princessiccia

Princess Health and UK pays big to settle a health-care debacle but keeps almost all details under wraps; Herald-Leader says trustees should worry. Princessiccia

hospitals Medicaid Medicare open government open records University of Kentucky

Gusty 05:37 Add Comment

"The University of Kentucky has spent more than $5 million in the last year to fix federal billing issues involving a Hazard cardiology practice it acquired three years ago, but UK officials have declined to provide documents detailing problems that led to the payments," including an audit of the Appalachian Heart Center that UK calls "preliminary" though the issue has been resolved, Linda Blackford reports for the Lexington Herald-Leader.

Most of the money went to Medicare and Medicaid, but $1 million went to a Washington lawyer whose billing records the university largely refused to release, citing attorney-client privilege. The university's trustees were told about the matter at a dinner meeting, which the Herald-Leader said it didn't cover because the agenda for the meeting did not include the matter. UK says no minutes were taken at the meeting, normally a social event that precedes formal meetings the next day.

The Herald-Leader said it would file an appeal with the attorney general, whose decisions in open-records and open-meetings matters have the force of law unless a court rules to the contrary. �We have strong concerns about the overall lack of transparency by the university in this case,� Editor Peter Baniak said. �Records about the issues involving this clinic should be public, as should the information presented and discussion that took place in an open meeting of the board of trustees.�

In an editorial, the newspaper attacked UK officials' secrecy about the case and other health-care issues, such as appealing an AG's decision that that the Kentucky Medical Services Foundation isn't a public agency. "Their imaginative legal arguments and bizarrely incomplete responses to requests for information by the Office of the Attorney General, this newspaper and a private individual should embarrass and trouble the trustees," it said, noting that a UK official said the university paid back "more than what was required."

"Who pays an attorney $1 million to settle a dispute by paying more than was owed?" the editorial asked. "If this were a one-off we might think that UK HealthCare and KMSF, which handles billing for UK physicians, are just muddling around to avoid admitting their deal went bad. But it�s only the latest in a series of stories that indicate a pattern of secretiveness in UK�s vast health-care empire."

Princess Health and Health-care consumers get little help resolving complaints, columnist says, citing some horrific examples. Princessiccia

Princess Health and Health-care consumers get little help resolving complaints, columnist says, citing some horrific examples. Princessiccia

consumers health care costs health insurance hospitals lung disease Medicare politics state governments

Gusty 18:08 Add Comment

By Trudy Lieberman
Rural Health News Service

Who protects consumers of health care?

Two recent emails from readers got me thinking about that question. I don�t mean consumers in their role as patients whose medical well-being is looked after by state medical boards and health departments that police doctors and hospitals. Those organizations don�t always do a perfect job protecting patients from harm, but at least they are in place.

But who protects patients when things go wrong on health care�s financial side? What happens when you receive a bill you didn�t expect and can�t afford to pay? What happens when insurers send unintelligible explanations of benefits you can�t understand? What about questionable loan arrangements to avoid medical bankruptcy? Consumers of health care are pretty much on their own.

From the 1960s though the 1980s when people complained, they got action from consumer organizations, government and even businesses that set up departments to handle complaints. That consumer movement is now but a flicker.

�We don�t have as many public-interest minded regulators, and officials who try to grab these issues by the horns and deal with them,� says Chuck Bell, director of programs for Consumers Union.

The emails I received show that although it�s an uphill battle to get redress, fighting back as an individual can get attention and may ultimately lead to better protections for everyone.

John Rutledge, a retiree, got snared in Medicare�s three-day rule by a hospital near his hometown Wheaton, Ill. At the end of March he took his wife, who was having breathing problems, to the hospital where she was held for three nights of �observation.� Patients must be in a hospital for three days as an in-patient before they are entitled to Medicare benefits for 100 days of skilled nursing home care, as I noted in a recent column.

Thousands of families have been caught when hospitals decide their loved ones are admitted for �observation,� a tactic that allows them to avoid repaying Medicare if government auditors find patients should not have been classified as �in-patients.� Playing the �observational� game is worth millions to hospitals but costs families tens of thousands of dollars when someone doesn�t qualify for Medicare-covered skilled nursing care.

Rutledge knew about the three-day rule. Both his doctor and a pulmonologist at the same medical practice recommended an in-patient stay, and Rutledge refused to sign a hospital document saying his wife was admitted for observation. Still, the hospital prevailed, claiming a consultant made the decision to keep her for �observation.�

Rutledge was stuck with a bill that, so far, totals over $15,000 for the skilled nursing care his wife did need. He said he had been a �significant donor� to the hospital foundation, and �I have told the foundation that what I spend as a result of �observation� will come out of what I planned to give them, starting with the annual gift.�

The second email came from Kathryn Green, a college history professor who lives in Greenwood, Miss. Green is fighting an air-ambulance company, which transported her late husband to a Jackson hospital after he suffered a fatal fall in their home. This �nightmare,� as she calls it, is a bill from the transport company that claims it�s outside her insurance network, and says she owes them $50,950.

�I am 63 and will have a devastated retirement if this is upheld,� Green told me.

Blue Cross & Blue Shield of Mississippi, the administrator for her insurance carrier the State and School Employees� Health Insurance Plan, paid $7,192 of the $58,142 the transport company billed. Blue Cross has told Green that she should be held harmless and should not be charged for the �balance after payment of the Allowable Charge has been made directly to that provider.�

Green is raising a ruckus and has taken her case to state and national media, members of Congress, the state attorney general, and the Mississippi Health Advocacy Program. The company has told her it will begin collection efforts.

In both cases there�s a legislative solution. The three-day rule can be fixed by counting all the time a patient spends in the hospital whether they�re classified as an �in� or as an �observational� patient. The ambulance problem can be fixed by changing the 1978 airline deregulation law that prevents states from interfering with fares, services, and routes. But money and politics block the federal changes that would help people like Rutledge and Green.

�It�s like playing a game of health-insurance roulette,� Bell says. �Your coverage exposes you to these gaps that have been normalized. It�s become the way of doing business.� A resurgent consumer movement could change all that.

What consumer problems have you had with balance billing? Write to trudy.lieberman@gmail.com.

Princess Health and In Pineville, a new administrator from a Texas management firm is shaking up the local hospital in an effort to save it. Princessiccia

Princess Health and In Pineville, a new administrator from a Texas management firm is shaking up the local hospital in an effort to save it. Princessiccia

doctors economy hospitals Medicare physicians

Gusty 10:16 Add Comment

Kentucky Health News

The crisis in rural hospitals is driven not only by changes in federal reimbursement and patients' increasing preference for larger hospitals, but in some towns by managerial shortcomings that may follow local tradition but hurt the bottom line. Changing those practices can be difficult, but the new administrator of the Pineville Community Hospital appears to be having success as he grabs the bull by the horns.

Stace Holland (Modern Healthcare photo by Harris Meyer)

Longtime rural hospital administrator Stace Holland has put PCH "on the road to recovery by cutting costs, bringing in more federal funds and getting staffers to change their ways," Modern Healthcare reports in a long story than delves into the details, from specific expense cuts to clashes with physicians.

The 120-bed hospital is staffed for only 30 (not counting a 26-bed nursing unit) and was losing $6 million a year. Eight months after taking over as CEO, "Holland is well on the way to turning around a struggling not-for-profit facility that still expects to lose $3 million this year. With support from the Plano, Texas-based Community Hospital Corp., which took over management of the hospital in October 2014, Holland already has made significant progress toward stabilizing its finances," Harris Meyer reports.

"Holland faced a challenge that is all too familiar to rural hospital leaders around the country: declining patient volumes; a preponderance of low-paying Medicare, Medicaid and uninsured patients; public and private rate squeezes; high incidence of chronic disease and drug abuse; difficulty in recruiting physicians; and a shortage of funds to invest in new equipment and services. . . .  To save the hospital, whose previous CEO served nearly 40 years, Holland, Chief Nursing Officer Dinah Jarvis, and CHC knew they had to take tough steps that would unsettle physicians, staffers and local residents accustomed to the old comfortable ways."

The new ways included a partnership with the Baptist Health hospital in Corbin to help PCH compete with the Appalachian Regional Hospital in nearby Middlesboro, partly with a 12-bed geriatric psychiatry unit; a federal rural health facility license that significantly boosted Medicare and Medicaid payments," and "clinical protocols to improve quality of care and reduce readmissions," which were so frequent in 2013 and 2014 that they drew Medicare's maximum penalty, Meyer reports. But the new protocols, such as "pre-discharge education of congestive-heart-failure patients about medication use and weight monitoring," riled some physicians.

Dr. Steven Morgan told Meyer, �They want to pound square pegs into round holes.� Dr. Shawn Fugate said he had to fight with CHC for "what he thought were adequate nurse staffing levels, and that CHC is making too many important decisions from afar," Meyer reports. As an employee of CHC rather than the hospital, Holland can "speak frankly," Meyer writes. "He recently told an older surgeon who serves on the board that it was time for him to retire."

Pineville is on the old Wilderness Road (in red) and US 25-E.

Pineville Mayor Scott Madon told Meyer, �Stace has an unbelievable task in what he's dealing with. He's trying to reinvent the rural hospital. He has to change the whole thinking, and people don't like it.� But longtime hospital board member David Gambrell, a real-estate agent whose son will start as a family physician there soon, said Holland's approach has been �refreshing. . . . We need that kind of honesty. It's taken Stace coming here to see we needed a new vision.�

Meyer reports, "Local leaders see the Pineville hospital's survival as pivotal to the future of the town and Bell County, which has no other hospital and has lost many coal-mining jobs. They say the hospital, the city's largest employer, is key to their economic redevelopment efforts. . . . The Pineville hospital has strong customer loyalty. Its staff�most of whom are local residents who have worked there for many years�have deep ties to the patient population." Wilma Sizemore, a 70-year-old disabled woman who was admitted in mid-February for bronchitis and dizziness, told him, �I wouldn't doctor nowhere else but this hospital. They treat me like family here.�

Princess Health and Trying to stop overdose epidemic, CDC tells docs to limit most opioid prescriptions to 3-7 days, use low doses and warn patients. Princessiccia

Princess Health and Trying to stop overdose epidemic, CDC tells docs to limit most opioid prescriptions to 3-7 days, use low doses and warn patients. Princessiccia

addiction drugs federal government health insurance Medicaid Medicare narcotics pain pain management prescription drug abuse prescription drugs

Gusty 20:35 Add Comment

Graphic from CDC guideline brochure

Kentucky Health News

Doctors who prescribe highly addictive painkillers for chronic pain should stop and be much more careful to thwart "an epidemic of prescription opioid overdoses" that is "doctor-driven," the federal Centers for Disease Control and Prevention said Tuesday, March 15.

"This epidemic is devastating American lives, families, and communities," the CDC said. "The amount of opioids prescribed and sold in the U.S. quadrupled since 1999, but the overall amount of pain reported by Americans hasn�t changed."

Kentucky ranks very high in use of opioids and overdoses from them, and Louisville reported a big increase in overdoses this month, Insider Louisville reports.

The agency said doctors should limit the length of opioid prescriptions to three to seven days, use "the lowest possible effective dosage," monitor patients closely, and clearly tell them the risks of addiction.

It said most long-term use of opioids should be limited to cancer, palliative and end-of-life treatment, and that most chronic pain could be treated with non-prescription medications, physical therapy, exercise and/or cognitive behavioral therapy.

The guidelines are not binding on doctors, but Dr. Thomas Frieden, the CDC director, "said state agencies, private insurers and other groups might look to the recommendations in setting their own rules," the Los Angeles Times reported.

However, Modern Healthcare reported that the guidelines are unlikely to change physicians' practices. "One current hurdle to curbing the number of prescriptions is that it's much easier for a busy clinician to prescribe a 30-day supply of oxycodone or Percocet to treat a patient's chronic pain than it is to convince him or her to do physical therapy," Steven Ross Johnson writes. "The time constraints affecting physicians' practice has never been more acutely felt than in this era of health-care reform that emphasizes quality and value-based payment."

Money could be a key in making the guidelines effective. Sabrina Tavernise of The New York Times writes, "Some observers said doctors, fearing lawsuits, would reflexively follow them, and insurance companies could begin to us them to determine reimbursement." The federal Centers for Medicare and Medicaid Services could also play a role.

Johnson notes that physicians are trained to "reserve opioids for severe forms of pain . . . but in the 1990s, some specialists argued that doctors were under-treating common forms of pain that could benefit from opioids, such as backaches and joint pain. The message was amplified by multi-million-dollar promotional campaigns for new, long-acting drugs like OxyContin, which was promoted as less addictive."

Purdue Pharma, maker of OxyContin, agreed to pay $600 million in penalties to settle federal charges that it over-promoted the drug to doctors, prompting the epidemic, especially in Central Appalachia.

"When reports of painkiller abuse surfaced, many in the medical field blamed recreational abusers. In recent years, however, the focus has shifted to the role of doctors," Harriet Ryan and Soumya Karlamangla report for the Times, noting that a 2012 analysis "of 3,733 fatalities found that drugs prescribed by physicians to patients caused or contributed to nearly half the deaths."

Doctors, insurers, drug companies and government agencies "all share some of the blame, and they all must be part of a solution that will probably cost everyone money," Caitlin Owens writes for Morning Consult, which also notes prescribers' complaints and CDC's responses.

Princess Health and Turn, Turn, Turn - from Columbia/ HCA Executive, to Virginia Secretary of Health and Human Resources, to Director of the Center for Medicare and Medicaid Services (CMS), to America's Healt Insurance Plans (AHIP). Princessiccia

Princess Health and Turn, Turn, Turn - from Columbia/ HCA Executive, to Virginia Secretary of Health and Human Resources, to Director of the Center for Medicare and Medicaid Services (CMS), to America's Healt Insurance Plans (AHIP). Princessiccia

AHIP Centers for Medicare and Medicaid Services CMS HCA Medicare revolving doors

Gusty 12:51 Add Comment

Marilyn Tavenner's career continues to revolve, er, evolve.

Columbia/ HCA

Marilyn Tavenner worked for Columbia / HCA, now HCA, although details of her job there are sketchy.  Apparently she worked there for a long time, according to a 2015 article in the Nashville Business Journal,

Tavenner work [sic] in a variety of roles for Nashville-based HCA Holdings Inc for 25 years.

She worked long enough to earn a fairly generous pension.  As a 2012 a Washington Times article stated,

In a recent filing with the U.S. Office of Government Ethics, she reported that through a supplemental executive retirement plan at HCA, 'I will continue to receive $162,524 for life.'

There are only sketchy accounts available about what she did at HCA.  The same Washington Times article noted she left in 2006, and

'Ms. Tavenner was a senior executive at HCA who retired from the company over six years ago,' said HCA spokesman Ed Fishbough.

The only description I could find of her duties there was in a Forbes blog post by Bruce Jepsen in 2015,

Tavenner, ... had experience working for investor-owned hospitals and with insurers when she was at HCA....

What does seem certain is that her career at Columbia / HCA overlapped that of CEO Rick Scott, and included some of the time when the company performed actions that led to some serious charges.  In a 2011 Boston Globe blog post, Suzanne Gordon wrote,

While Tavenner worked for HCA, the company was busily enhancing its profit margin by defrauding the Medicare, Medicaid, and TRICARE systems. Terry Leap’s new book, '"Phantom Billing, Fake Prescriptions, and the High Cost of Medicine: Health Care Fraud and What To Do About It,' details HCA’s sorry history. In 2000, for example, HCA paid fines of $840 million for improperly billing the government and in 2003 HCA had to fork over another $631 million.

We discussed the billion dollar plus Columbia / HCA fraud case, which did involve corporate guilty pleas, but like most other legal settlements between the government and big health care organizations, no consequences for any individuals who authorized, planned, or implemented the bad behavior.  There were many allegations that then Columbia / HCA Rick Scott, who is now the Republican Governor of the great state of Florida, created a business culture that enabled the fraud, and even knew about it, but he was never charged with a crime.

Ms Tavenner's role in Columbia / HCA when this was happening was never clear.


Virginia Department of Health and Human Resources

After her work at Columbia / HCA, Ms Tavenner became Secretary of Health and Human Resources for the great state of Virginia.  I could find little news coverage of her time there, much less any suggestion that her previous role with Columbia / HCA might have been viewed as a problem. 

Center for Medicare and Medicaid Services (CMS)

In 2010, Ms Tavenner went to work for the US Department of Health and Human Services.  In 2011, Ms Tavenner became acting administrator of CMS.


The only concerns raised about Ms Tavenner's former work with Columbia / HCA at the time she was appointed to run CMS came from the Boston Globe blog post noted above.

Although Tavenner may not have been personally involved in these scandals, it hardly seems wise to put her in charge of the government system her company helped defraud.

Nonetheless she got the position.  In 2014, a Wall Street Journal article from 2014 suggested Ms Tavenner remained cozy with here former boss, former Columbia / HCA CEO,  and now Florida Governor Rick Scott.  It recounted that a CMS contractor had been investigating a Florida nursing home chain,

Medicare investigators began looking into Florida skilled-nursing facilities in 2011 and found what they considered suspicious billing patterns at 33 homes. CMS contractor SafeGuard Services LLC was concerned about how often Florida nursing facilities were charging for the costliest physical and occupational-therapy services, according to documents. About a quarter of the 33 facilities were paid at least 20% more a day than their local rivals, a Journal analysis of Medicare data found.

Three of the 33 are owned by Plaza Health Network. Plaza Chief Executive William Zubkoff previously ran a hospital that was barred in 2006 from billing Medicare and other federal health-care programs following fraud allegations.

But then,

Some of the nursing homes contacted the Florida Health Care Association, a trade group. It asked lawmakers and Florida Governor Rick Scott, a Republican, for assistance, according to the group�s director and emails.

Gov. Scott contacted Ms. Tavenner, according to a person familiar with the investigation. The two had once worked together at hospital operator HCA Holdings Inc., where both had been executives. The governor�s office connected CMS to the Florida Health Care Association. The trade group put an owner of two of the nursing homes, William Kelsey, on the phone with Ms. Tavenner.

Mr. Kelsey told her the prepayment reviews were 'creating a real hardship on the business, staff and residents,' he recalled recently.

On Aug. 22, 2012, Ms. Tavenner ordered the agency�s antifraud officials to release payments for the 33 homes, including the two operated by Mr. Kelsey, according to emails.

A CMS spokesman said Ms. Tavenner got involved to ensure the agency was 'preserving access and quality of care.' The spokesman said Ms. Tavenner 'often discusses issues and concerns with elected officials�including Gov. Scott.'

Of course, Ms Tavenner had a previous relationship with Governor Scott due to their shared time at Columbia / HCA which probably was not like her relationships with other elected officials.  In any case, I could find no real echoes from this story, but Ms Tavenner resigned from CMS in 2015, not completely covered in glory.  A Bloomberg account of her resignation included,

 Marilyn Tavenner, the U.S. official who directed the stumbling roll-out of Obamacare as well as its recovery in recent months, will resign as head of the Centers for Medicare and Medicaid Services.

Tavenner said in an e-mail to staff that she�ll step down at the end of next month. She didn�t give her reasons for leaving.

The article suggested that she had her troubles in her role as head of CMS,

 As head of the agency, Tavenner was arguably the person most responsible for construction of healthcare.gov, the federal health insurance website that collapsed when it opened for business in October 2013. A UnitedHealth Group unit -- then run by Slavitt -- was hired to lead repairs.

In November of last year, Tavenner also acknowledged that her agency had made a mistake in its calculation of the number of people enrolled under Obamacare for 2014. About 393,000 individuals with both health and dental coverage were 'inadvertently counted twice,' she said in a letter to Representative Darrell Issa, a California Republican whose committee discovered the error.

'Tavenner had to go,' Issa said in a statement today. 'She presided over HHS as it deceptively padded the Obamacare enrollment numbers.'

On the other hand, Forbes blogger Jepsen did suggest that some in industry thought better of her than did Representative Issa.

 Tavenner, who had experience working for investor-owned hospitals and with insurers when she was at HCA, was seen as friendly to the health insurance industry and medical care providers. She had respect among lobbies and among both Democrats and Republicans on Capitol Hill....

The for-profit health insurance industry seemed to particularly like here,

'Marilyn leaves behind a legacy of leadership at a time of unprecedented change in our health care system,' said Karen Ignagni, chief executive of America�s Health Insurance Plans, the health insurance lobby....  'She was a thoughtful strategist and balanced manager who time and time again rolled up her sleeves to work with all stakeholders on solutions to advance patient care.'

One wonders whether some stakeholders, like AHIP, thought that she was treating them particularly well.  What the average Medicare patient or health care professional thought of her was not explored.


America's Health Insurance Plans (AHIP) (and LifePoint)

This suspicion was bolstered when Ms Tavenner, despite the negative opinions of people, even Republican people like Representative Issa, was named to be Ms Ignangni's successor.   That was announced just yesterday, July 15, 2015.  In Modern Healthcare we saw,

Marilyn Tavenner, the former head of the CMS who stepped down just six months ago, will now lead the country's dominant health insurance lobbying group.

The board of America's Health Insurance Plans on Wednesday named Tavenner as the group's next president and CEO. She replaces Karen Ignagni, who served as AHIP's top lobbyist for 22 years....

This job transition was covered in media outlets, but so far, only Modern Healthcare raised any doubts,

Her decision to head to AHIP raises uncomfortable questions about the dynamics between Washington politics and business. Tavenner will now be representing and lobbying on behalf of some of the country's largest health insurers�the same companies who are regulated by the CMS and are devoting more of their business to Medicare and Medicaid in the form of privatized managed care.

For her role in these dynamics, she likely will be well paid,

Tavenner is primed for a big pay raise as the top leader of AHIP. Ignagni made more than $2 million as AHIP's CEO in 2013. Tavenner made $165,300 last year, according to government records. She is also expected to make more than $300,000 in cash and stock as a board member of LifePoint Health, a for-profit hospital chain based in Brentwood, Tenn. Tavenner joined LifePoint's board in April.

Conclusions

So now Marilyn Tavenner shows she is securely within that club of insiders that run health care in the US.  Some celebrate the US health care "free market," in which one might expect for-profit insurers will fight with provider organizations, like for-profit hospital chains, over payment policies, overseen by government's impartial regulators.  Yet it appears that many of these organizations' leaders come out of the same pool of insider managers, and that individuals can lead or govern organizations that are supposed to be negotiating at arm's length.  For example, note that now Ms Tavenner is leading a for-profit insurance lobbbying group while governing a for-profit hospital chain.

One might think that such arrangements might not be good for the organizations that are supposed to be at arm's length.  One might think such arrangements might be worse for patients, health care professionals and the public at large.  If the large organizations that are supposed to be competing and negotiating in the market are led out of a single cozy in group, maybe instead of competing and negotiating they will mainly be about benefiting their leaders.

As we wrote before,...

 the constant interchange of health care insiders among government, large health care corporations, and the lobbying and legal firms which represent them certainly suggests that health care, like many other sectors, seems to be run by an amorphous group of insiders who owe allegiance neither to government nor industry.

However, those who work in government are supposed to be working for the people, and those who work on health care within government are supposed to be working for patients' and the public health.  If they are constantly looking over their shoulders at potential private employers who might offer big checks, who indeed are they working for?

Attempts to turn government toward private gain and away from being of the people, by the people, and for the people have no doubt been going on since the beginning of government (and since the Constitution was signed, in the case of the US).  However, true health care reform  would require curtailing the severe sorts of conflicts of interest created by the revolving door.

Real heath care reform would require  multiyear cooling off periods before someone who worked in the commercial world can get a job in a government whose work has direct effect on his or her previous employer or industry sector, and before someone who worked in government whose work had direct effect on a particular economic sector can accept a job for a company in that sector.

But real reform might spoil the party for those who transit the revolving door, so don't expect such reform to come easily.... 

Princess Health and Three doctors, nine others in western half of Kentucky are indicted in the largest-ever federal 'takedown' of Medicaid fraud.Princessiccia

Princess Health and Three doctors, nine others in western half of Kentucky are indicted in the largest-ever federal 'takedown' of Medicaid fraud.Princessiccia

accidents controlled substances courts doctors drug abuse drugs federal government fraud Medicaid Medicare narcotics pain physicians prescription drug abuse

Gusty 06:07 Add Comment

Former Dr. Fred Gott of Bowling Green was arrested.
(Photo: Miranda Pederson, Bowling Green Daily News)

Twelve people in the western half of Kentucky, including three doctors, have been charged with Medicaid fraud in what the federal government calls its biggest-ever "takedown" of the problem, Andrew Wolfson of The Courier-Journal reports.

The indictments allege "a half-dozen schemes involving nearly $8 million in alleged fraudulent billings," Wolfson writes. "The offenses include $5 million in false billings for muscle-relaxant injections that were never delivered to patients, as well as a staged car wreck in which three people allegedly conspired to get controlled substances and fraudulent reimbursements."

In another case, Wolfson reports, "a medical practice that treated car wreck patients is accused of using the DEA numbers of nurse practitioners to order hydrocodone for herself and falsely billing it to an insurance company. Nationally, the sweep resulted in charges against 243 people, including 46 doctors, nurses and other licensed medical professionals."

John Kuhn, acting U.S. attorney for the Western District of Kentucky, told Wolfson that about $1 billion of annual Medicare and Medicaid expenses are fraudulent. Medicare is the federal health-insurance program for people over 65; Medicaid is the federal-state program for the poor and disabled.

Former Dr. Fred Gott of Bowling Green, a 63-year-old cardiologist, was charged with "conspiracy to dispense controlled substances, health care fraud and money laundering," Deborah Highland reports for the Bowling Green Daily News. "The Bowling Green-Warren County Drug Task Force opened an investigation into Gott�s practices after Warren County Coroner Kevin Kirby alerted the task force about drug overdose deaths involving Gott�s patients, task force director Tommy Loving said."

Princess Health and The US' Multinational Trade Negotiations - Trading Away Its Own and Other Countries' Current and Future Restraints on Drug Prices?. Princessiccia

Princess Health and The US' Multinational Trade Negotiations - Trading Away Its Own and Other Countries' Current and Future Restraints on Drug Prices?. Princessiccia

CMS health care prices Medicare pharmaceuticals regulatory capture revolving doors trade policy US Trade Representative

Gusty 11:48 Add Comment

Trade Agreements More about Deregulation than Trade

International trade negotiations, especially their more technical aspects, seem far removed from health care and health policy, and unrelated to health care dysfunction.  However, it seems that such trade negotiations have become a back door route to affect health policy, especially national efforts to regulate health care intended to improve patients' and the public's health.  

We recently discussed how current multinational trade negotiations seem to be more about changing regulation in favor of big corporations than broadly advancing trade.  Some of the effects of the proposed trade pacts could have bad effects on patients' and the public's health, particularly by allowing corporations to challenge particular countries' public health policies outside of these countries' judicial systems, in kangarooish courts seemingly designed to favor corporate interests.  Also, the trade pacts' focus on intellectual property could lead to longer patent protection on drugs, biologics, and devices, raising health care costs.  However, attempts to figure out how proposed trade agreements could affect health care and public health were hindered by the secrecy surrounding the negotiations.

"Procedural Fairness" for Pharmaceutical Companies, not You and Me

Earlier in June, 2015, a part of the current draft of the Trans-Pacific Partnership (TPP) appeared on  Wikileaks, revealing yet another set of concerns about how the agreement could affect health care.  It was entitled "Annex on Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices," and hence was specifically about health care.

The bulk of the annex seemed to be about improving the treatment of drug, device and biotechnology companies by national agencies that make decisions about payments for their products. The annex apparently proposed establishing the companies' rights to rapid reviews, access to applicable procedures and guidelines, access to written decisions, company appeals of the agencies' decisions, and protection of corporate confidential information. On the other hand, there was nothing I could see in the annex about the rights of, say, patients or health care professionals.

We have noted the concern that international trade agreements may make government regulation subject to corporate appeal in "investor-state dispute settlement" (ISDS) processes, essentially international quasi-courts that are not subject to national judicial systems, may not provide for any input by parties other than governments and corporations (that is, by, for example citizens, patients or health professionals), and may not allow appeal.  Thus, by specifically incorporating new protections for corporations seeking favorable payments for their new products from national agencies, the annex could make it possible for the corporations to appeal to ISDS, going around national court systems.  As reported in the Huffington Post,

According to an analysis of the leaked document by Jane Kelsey, a law professor at the University of Auckland in New Zealand, these rules are enough to expose national health authorities to legal challenges under TPP�s investor-state dispute settlement process, or ISDS. ISDS empowers companies to challenge countries� domestic laws before a tribunal of international judges if they believe the laws unfairly limit investment. The tribunals have the power to impose significant fines on countries if their laws are found responsible for the investment hardship in question. While pharmaceutical companies could not challenge national health programs� policies through ISDS, their grievances would be eligible for ISDS if the companies claimed the policies hindered investment.

In fact, the Huffington Post article noted suspicions that the US Trade Representative (USTR) has been negotiating on behalf of big US drug, device and biotechnology companies to target price regulations in Australia and New Zealand,

Among the United States� TPP negotiating partners, pharmaceutical provisions have faced the greatest opposition from Australia and New Zealand, which have national health authorities that provide prescription drugs to their citizens at heavily discounted rates. The U.S. Trade Representative and U.S. pharmaceutical companies have targeted the cost containment measures in those countries� prescription drug programs for years. Pharmaceutical companies also claim that New Zealand�s drug approval process is opaque and difficult to navigate.

Why Explicitly Include the US Center for Medicare and Medicaid Services (CMS)?

However, anyone in the US who thinks that all the burden from the trade pact is only on other countries, particularly those down under, should think again. The draft trade pact annex also seemed designed to prevent any future attempts by the US government to control drug and device costs, especially for the US Medicare program, even though the current US President has proposed such attempts. 

Note that when the US program was extended to cover drugs, the legislation specifically forbade the government from negotiating prices, a provision that seemed more about protecting corporate revenues than the federal budget.  So, as reported by the New York Times,

The newly leaked annex, dated Dec. 17, 2014, lists Medicare and the Centers for Medicare and Medicaid Services as falling under its strictures.

The USTR pooh poohed any concerns about that,

Officials at the United States trade representative�s office, while declining to comment on a leak they would not acknowledge, said rules in the Pacific accord would have no impact on the United States because Medicare already adhered to them. The trade representative�s office helped develop the proposals.

'Already, transparency and procedural fairness are integral parts of the U.S. legal system and as such are principles reflected in U.S. trade agreements,' the representative�s office said in a statement.

Maybe preventing any government negotiation about, much less control of drug and device prices may be part of what the USTR called "procedural fairness."  In any case, if the US, and specifically CMS are doing so well, why bother giving this trade pact jurisdiction over them, unless to prevent any uppity future US government from daring to negotiate with the pharmaceutical industry?

The Huffington Post noted that

In an earlier statement, [Director of Public Citizen's Global Access to Medicine Project Peter]  Maybarduk expressed concern that the rules would 'limit Congress� ability to enact policy reforms that would reduce prescription drug costs for Americans �- and might even open to challenge aspects of our health care system today.'

He expanded on that in a commentary for The Hill,

Earlier this week, WikiLeaks published the draft TPP 'Annex' on healthcare technologies. In the five-page document, the U.S. government commits Medicare to rules and procedures that would make it difficult � if not impossible � to implement a national formulary that would provide leverage for proposed negotiations with drugmakers under Medicare Part D.

Medicare costs are expected to more than double from $77 billion in 2015 to about $174 billion in the next decade. In February, the president called for giving Medicare the power to negotiate prices with drug manufacturers to ameliorate this cost burden. Americans support giving Medicare negotiating power by wide margins and across party lines.

Negotiations are most effective if the U.S. government has leverage. Experts suggest that key leverage in Medicare negotiations should come from developing a national drug formulary � a list of drugs that Medicare would cover. A formulary would stimulate competition, reduce prices and lead to healthier outcomes for patients and the healthcare system.

But the leaked TPP 'Annex' shows that the pact would impose procedural requirements on formulary decisions, exact significant administrative costs and open up the drug review process to increased corporate influence. Medicare would have to live by these rules. The result could be a toothless negotiator, and a formulary filled with expensive drugs that have questionable public health benefits, if any.

Summary

So why did the US Trade Representative acquiesce to, if not actively promote, a trade pact that would limit the ability of the US government, specifically, CMS to try to put a damper on the ever rising health care prices that threaten to bankrupt individuals and maybe eventually the Medicare program itself? And why, incidentally did it do so when this appeared to contradict the current US President's own stated goal to have Medicare negotiate the prices it pays for drugs?  (And why, incidentally, did it promote a pact that would give international tribunals jurisdiction over US government actions when that may be unconstitutional according to an increasing number of experts?) 

The best speculation we offered before was that the USTR has been "captured" by industry, in part through the conflicts of interest generated by multiple passages through the revolving door by current and former USTR personnel. 

At the moment, the TPP has stalled again in the US Congress.  However, do not underestimate the ability of its proponents to get it moving again.  The now intermittent drip of secrets from the ongoing trade negotiations showing how little they have to do with trade, and how much they have to do with advancing corporate interests suggest the need for much more vigilance in defense of patients' and the public's health.

Meanwhile, I repeat again that we need to do a lot more to undo regulatory capture that affects health care, and stop the incessantly spinning revolving door.    Attempts to turn government toward private gain and away from being of the people, by the people, and for the people have no doubt been going on since the beginning of government (and since the Constitution was signed, in the case of the US).  However, true health care reform  would require curtailing the severe sorts of conflicts of interest created by the revolving door.

Real heath care reform would require  multiyear cooling off periods before someone who worked in the commercial world can get a job in a government whose work has direct effect on his or her previous employer or industry sector, and before someone who worked in government whose work had direct effect on a particular economic sector can accept a job for a company in that sector.