Tagged Cost and Quality

Children With Disabilities Endure Long Waits For Life-Changing Medical Equipment

Bev Baker-Ajene waited so long to get an adult-sized wheelchair for her teenage daughter, Savitri, that she eventually forgot she’d ordered it.

For the better part of a year, Baker-Ajene pushed Savitri — who has cerebral palsy, spastic quadriplegia and epilepsy — in a child-sized chair that was too small for her. Baker-Ajene said she also has run into problems getting an appropriate shower chair for 17-year-old Savitri. Because of that, she mostly gives her daughter sponge baths in bed.

“It’s ridiculously difficult to get what you need for your child,” said the 62-year-old Clovis, Calif., resident and graphic designer. “I’m tired now. I try not to argue with people anymore, because I need my energy for her.”

Bev Baker-Ajene was frustrated trying to acquire an appropriate wheelchair and shower chair for her teenage daughter, Savitri, who has cerebral palsy, spastic quadriplegia and epilepsy. (Courtesy of Bev Baker-Ajene)

Many California children with serious health care needs often wait months, or even years, before they receive essential medical equipment like custom wheelchairs, shower chairs and hospital beds, according to a recent report.

For some children, these long waits aggravate existing health problems, cause pain and pressure sores, or exacerbate developmental delays, said the report, published in May by the Lucile Packard Foundation for Children’s Health.

“It’s a big bureaucratic mess, and kids are suffering,” said Maryann O’Sullivan, an independent health policy consultant and author of the report.

In one case Sullivan documented, a boy with muscular dystrophy started kindergarten in a stroller because his parents could not get him an appropriate wheelchair in time, in part due to the slow insurance approval process. In another case, a 7-year-old with a serious bone disorder has remained in diapers for years while waiting for a state public health program for children to find a vendor to supply him with a modified commode.

A variety of factors lead to the delays. Families say they are often bounced between private health insurance companies and publicly funded programs such as Medicare, Medi-Cal and California Children’s Services (CCS), which provides coverage for 200,000 children with special health care needs. Once families have navigated that bureaucratic maze to obtain approval for equipment, low reimbursement rates paid by some of the public insurers can make it difficult to find vendors willing to provide the equipment.

Juno Duenas, the executive director of the San Francisco-based Support for Families of Children With Disabilities, said appropriate equipment can be essential to a child’s independence, future job prospects and ability to contribute to society.

Many parents say they struggle to get equipment, in part, because they don’t understand the system. Yuki Baba, a 54-year-old translator who lives in Berkeley, Calif., waited a year to get a hospital bed for her son, Nate, who has cerebral palsy. At 5, Nate was still sleeping in a crib he’d outgrown. Nate is insured by both California Children’s Services and Medi-Cal, the state’s health insurance program for low-income people, and Baba kept calling the wrong program for help.

“Because I didn’t know the system very well, I wasted a lot of energy and time,” she said.

Even when the approval process is smooth, low rates paid by the government-funded programs California Children’s Services and Medi-Cal can mean there are sometimes no outside vendors willing to provide equipment.

California Children’s Services covers treatments and therapies for children under 21 who meet income guidelines and have a range of eligible serious medical conditions, including cerebral palsy, traumatic injuries and cancer. Many of these children also are insured by Medi-Cal. Others have some private insurance coverage combined with CCS.

Dave Kramer-Urner, CCS administrator for Santa Cruz County, says he has a hard time finding vendors to provide padded bath benches, bidets and certain crutches because reimbursements from the program are low.

CCS rates haven’t changed in 10 years, he said. And the disappearance of small “mom and pop” vendors has exacerbated the problem. The last such vendor in Santa Cruz shut its doors three years ago, he said.

“The big companies have the capacity to say ‘no’ more easily,” he said.

O’Sullivan’s research relied on three existing surveys of parents, advocates and health care providers. She also interviewed dozens of medical therapists, nurses, physicians, vendors, advocates, parents and staff from Medi-Cal managed-care health plans.

O’Sullivan notes in her report that the California Department of Health Care Services, which administers both Medi-Cal and California Children’s Services, doesn’t track wait times for medical equipment and hasn’t set a minimum time frame for the delivery of such equipment.

Tony Cava, a spokesman for the department, said in an emailed statement that it “has been working for several years to improve health care and to emphasize quality and coordination of care for children and youth with special health care needs.”

The department will roll out a program in 21 counties in the coming months to coordinate health care under California Children’s Services and Medi-Cal, Cava said. The program should address many of the issues outlined in O’Sullivan’s report because it will reduce bureaucratic back-and-forth, he added.

However, the majority of children in the CCS program don’t live in those counties, so the changes won’t affect them.

Health Plan of San Mateo, which piloted the integration of Medi-Cal and CCS five years ago, has addressed many of the administrative hurdles detailed in the report, said Sophie Scheidlinger, the plan’s pediatric health manager. However, she continues to see delays due to a shortage of vendors willing to work with the public programs.

In the meantime, many parents fight to find workarounds — or just pay for things themselves.

Alison Beier’s son, Evan, was born two months early with renal failure, a malformed urinary tract and multiple congenital anomalies. While still an infant, Evan was stuck in the hospital for several days after doctors insisted that he needed an automated blood pressure monitor with an infant-sized cuff before they would release him. Neither his public nor private insurers would pay for one.

“Insurance wouldn’t pay for the monitor, we couldn’t afford the monitor, and we didn’t know how to get the monitor,” Beier said.

Eventually, Beier posted her problem on Facebook. A friend of a friend worked at the company that manufactured the monitor and was able to help her.

She feels blessed to have her son, who has gone through 50 surgeries and has battled rejection of his two transplanted kidneys since 2012. She describes him as a brilliant 8-year-old and “the happiest guy on the planet.” Still, advocating for his needs can be overwhelming.

“It’s like I’m always fighting for somebody to cover something,” she said.


This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

Pfizer CEO Has Knack For Making A Profit, But He Misplayed The Optics Of Raising Prices In Current Atmosphere

Like clockwork, Pfizer has been raising prices every six months, flying under the radar because most pharma companies were doing the same. But then the company caught the attention of President Donald Trump, and everything changed. In other pharmaceutical news: Novartis ditches antibiotics research; a patient advocacy group highlights a New Jersey candidate’s ties to high prices; and an experimental epilepsy drug moves forward toward approval.

Retooled Vaccine Raises Hopes As A Lower-Cost Treatment For Type 1 Diabetes

For Hodalis Gaytan, 20, living with Type 1 diabetes means depending on an assortment of expensive medicines and devices to stay healthy. Test strips. Needles. A glucose meter. Insulin.

The increasing cost of Type 1 diabetes, one of the most common serious chronic diseases, has created heavy financial burdens for families and generated controversy, with insulin prices more than doubling in the past decade.

Without her parent’s insurance, “I would not be alive,” said Gaytan, a student at the University of Maryland.

The burden of treatment is why a small study that shows promise for a simpler, cheaper alternative treatment to Type 1 diabetes is being met with hope — but also with caution and skepticism.

The research, published June 21 in the journal Nature Partner Journal Vaccines, showed that an older generic vaccine may help lower the blood sugar level of patients with Type 1 diabetes, decreasing their need for insulin. The vaccine, BCG, is used in a number of countries to prevent tuberculosis and has long been known to stimulate the immune system as well. That vaccine is relatively cheap, costing about $157 per dose in the United States, according to the health care technology company Connecture.

In the study, participants with long-standing Type 1 diabetes were injected with two doses of Bacillus Calmette-Guerin tuberculosis vaccine — known as BCG — four weeks apart. Three of the patients were observed for eight years. Nine participants were followed for five years.

The blood sugar levels — known as A1c — of those followed for eight years dropped by more than 10 percent three years after the injection and were sustained for five more years.

While the trial involved a tiny number of patients, the researchers — led by Dr. Denise Faustman, director of the Immunobiology Laboratory at Massachusetts General Hospital — are conducting a much larger Phase 2 trial of BCG to treat diabetes to see if the results hold up.

JDRF, a leading nonprofit organization that provides funding for research on Type 1 diabetes, and the American Diabetes Association issued a joint statement shortly after the new study was released, cautioning against misinterpreting the findings and stating that they “do not provide enough clinical evidence to support any recommended change in therapy at this time.” Both groups have partnered with drug manufacturers and device makers in the industry.

Still, Dr. Camillo Ricordi, director of the Diabetes Research Institute at the University of Miami, said he is “cautiously optimistic” about the findings, noting the “incredibly high price tag” for patients with diabetes. But he warned against generating “too much hype” among families before the treatment is proven to be effective.

Dr. Joseph Bellanti, professor emeritus of pediatrics and microbiology and immunology at Georgetown University Medical Center in Washington, D.C., was also encouraged by the studies’ findings. While he acknowledged the skepticism surrounding Faustman’s research, scrutiny is a necessary part of the scientific process, he said.

“We’re seeking the truth, and we want to make sure that the results and the interpretations are correct, Bellanti said, “and that requires healthy debate.”

Hodalis Gaytan was diagnosed with Type 1 diabetes six years ago after a routine physical. Without health insurance to pay for the expensive, lifesaving medicines, she says, she believes she would have died. (Courtesy of Hodalis Gaytan)

Faustman said her findings are important because they suggest that the vaccine could have positive effects in the treatment of diabetes, similar to what has been seen in previous research on other autoimmune diseases, like multiple sclerosis, that involve an immune system reaction against normal tissue.

“It also opens up a host of new possible treatment avenues,” Faustman said, adding that it could help in developing interventions for other groups suffering from chronic illnesses.

Type 1 diabetes, which typically is diagnosed in childhood, occurs when the immune system destroys the cells that produce insulin. People with Type 2 diabetes produce normal levels of this vital hormone, but their bodies don’t respond appropriately.

These findings surface as the country grapples with soaring insulin prices — a rise so significant it has prompted attorneys general in several states and at least one federal prosecutor to launch investigations targeting insulin makers Eli Lilly, Novo Nordisk, Sanofi and pharmacy benefit managers.

The United States already pays a steep price for its diabetes burden. According to the American Diabetes Association, the 24.7 million Americans living with the diagnosis last year spent $237 billion in direct medical costs.

For patients like Gaytan, the prospect of new medications to simplify and reduce the costs of her treatment is tantalizing. She injects herself with insulin and checks her blood sugar level about five times a day. And she attends therapy to help deal with the burden of living with a chronic condition, and worries about how she’ll afford it in the future.

“I know diabetics [whose] families pay for everything,” she said, adding they “just can’t afford it.”

According to Connecture, the list price for Apidra SoloStar — an injectable insulin product that Gaytan uses several times per day — increased from $33.24 per pen in early 2009 to $104.28 per pen in early 2018.

Faustman said her research has documented the mechanism by which the old vaccine reduces blood sugar levels. In the Phase 2 trial, she will attempt to replicate her findings by following 150 participants with the disease for five years. It will be at least another four years until results are published.

Ultimately, if BCG works to treat Type 1 diabetes, its current cheap price could rise, said Gerard Anderson, professor of health policy and management and medicine at Johns Hopkins University in Baltimore, who, like Kaiser Health News, receives money from the Laura and John Arnold Foundation. Though BCG is generic, pharmaceutical companies can raise the price by altering the drug and issuing a new patent.

Drugmakers are expert at retooling old drugs to treat new conditions, he said, adding: “It could result in no cost savings at all — and, in fact, a higher price.”


KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Retooled Vaccine Raises Hopes As A Lower-Cost Treatment For Type 1 Diabetes

For Hodalis Gaytan, 20, living with Type 1 diabetes means depending on an assortment of expensive medicines and devices to stay healthy. Test strips. Needles. A glucose meter. Insulin.

The increasing cost of Type 1 diabetes, one of the most common serious chronic diseases, has created heavy financial burdens for families and generated controversy, with insulin prices more than doubling in the past decade.

Without her parent’s insurance, “I would not be alive,” said Gaytan, a student at the University of Maryland.

The burden of treatment is why a small study that shows promise for a simpler, cheaper alternative treatment to Type 1 diabetes is being met with hope — but also with caution and skepticism.

The research, published June 21 in the journal Nature Partner Journal Vaccines, showed that an older generic vaccine may help lower the blood sugar level of patients with Type 1 diabetes, decreasing their need for insulin. The vaccine, BCG, is used in a number of countries to prevent tuberculosis and has long been known to stimulate the immune system as well. That vaccine is relatively cheap, costing about $157 per dose in the United States, according to the health care technology company Connecture.

In the study, participants with long-standing Type 1 diabetes were injected with two doses of Bacillus Calmette-Guerin tuberculosis vaccine — known as BCG — four weeks apart. Three of the patients were observed for eight years. Nine participants were followed for five years.

The blood sugar levels — known as A1c — of those followed for eight years dropped by more than 10 percent three years after the injection and were sustained for five more years.

While the trial involved a tiny number of patients, the researchers — led by Dr. Denise Faustman, director of the Immunobiology Laboratory at Massachusetts General Hospital — are conducting a much larger Phase 2 trial of BCG to treat diabetes to see if the results hold up.

JDRF, a leading nonprofit organization that provides funding for research on Type 1 diabetes, and the American Diabetes Association issued a joint statement shortly after the new study was released, cautioning against misinterpreting the findings and stating that they “do not provide enough clinical evidence to support any recommended change in therapy at this time.” Both groups have partnered with drug manufacturers and device makers in the industry.

Still, Dr. Camillo Ricordi, director of the Diabetes Research Institute at the University of Miami, said he is “cautiously optimistic” about the findings, noting the “incredibly high price tag” for patients with diabetes. But he warned against generating “too much hype” among families before the treatment is proven to be effective.

Dr. Joseph Bellanti, professor emeritus of pediatrics and microbiology and immunology at Georgetown University Medical Center in Washington, D.C., was also encouraged by the studies’ findings. While he acknowledged the skepticism surrounding Faustman’s research, scrutiny is a necessary part of the scientific process, he said.

“We’re seeking the truth, and we want to make sure that the results and the interpretations are correct, Bellanti said, “and that requires healthy debate.”

Hodalis Gaytan was diagnosed with Type 1 diabetes six years ago after a routine physical. Without health insurance to pay for the expensive, lifesaving medicines, she says, she believes she would have died. (Courtesy of Hodalis Gaytan)

Faustman said her findings are important because they suggest that the vaccine could have positive effects in the treatment of diabetes, similar to what has been seen in previous research on other autoimmune diseases, like multiple sclerosis, that involve an immune system reaction against normal tissue.

“It also opens up a host of new possible treatment avenues,” Faustman said, adding that it could help in developing interventions for other groups suffering from chronic illnesses.

Type 1 diabetes, which typically is diagnosed in childhood, occurs when the immune system destroys the cells that produce insulin. People with Type 2 diabetes produce normal levels of this vital hormone, but their bodies don’t respond appropriately.

These findings surface as the country grapples with soaring insulin prices — a rise so significant it has prompted attorneys general in several states and at least one federal prosecutor to launch investigations targeting insulin makers Eli Lilly, Novo Nordisk, Sanofi and pharmacy benefit managers.

The United States already pays a steep price for its diabetes burden. According to the American Diabetes Association, the 24.7 million Americans living with the diagnosis last year spent $237 billion in direct medical costs.

For patients like Gaytan, the prospect of new medications to simplify and reduce the costs of her treatment is tantalizing. She injects herself with insulin and checks her blood sugar level about five times a day. And she attends therapy to help deal with the burden of living with a chronic condition, and worries about how she’ll afford it in the future.

“I know diabetics [whose] families pay for everything,” she said, adding they “just can’t afford it.”

According to Connecture, the list price for Apidra SoloStar — an injectable insulin product that Gaytan uses several times per day — increased from $33.24 per pen in early 2009 to $104.28 per pen in early 2018.

Faustman said her research has documented the mechanism by which the old vaccine reduces blood sugar levels. In the Phase 2 trial, she will attempt to replicate her findings by following 150 participants with the disease for five years. It will be at least another four years until results are published.

Ultimately, if BCG works to treat Type 1 diabetes, its current cheap price could rise, said Gerard Anderson, professor of health policy and management and medicine at Johns Hopkins University in Baltimore, who, like Kaiser Health News, receives money from the Laura and John Arnold Foundation. Though BCG is generic, pharmaceutical companies can raise the price by altering the drug and issuing a new patent.

Drugmakers are expert at retooling old drugs to treat new conditions, he said, adding: “It could result in no cost savings at all — and, in fact, a higher price.”


KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Podcast: KHN’s ‘What The Health?’ ACA Under Fire. Again.

Democrats in the Senate are gearing up to fight President Donald Trump’s nominee to the Supreme Court, U.S. Circuit Judge Brett Kavanaugh. They argue he is not only a potential threat to abortion rights, but also to the Affordable Care Act.

Meanwhile, the Trump administration continues its efforts to undermine the workings of the Affordable Care Act. This week, officials announced a freeze on payments to insurers who enroll large numbers of sicker patients, and another cut to the budget for “navigators” who help people understand their insurance options and enroll for coverage.

This week’s panelists for KHN’s “What the Health?” are:

Julie Rovner of Kaiser Health News

Margot Sanger-Katz of The New York Times

Anna Edney of Bloomberg News

Julie Appleby of Kaiser Health News

Among the takeaways from this week’s podcast:

  • One reason Democrats are rallying around the health issue rather than the abortion issue is that there is more unity in their caucus over health than abortion. Also, the two key Republican senators who support abortion rights — Sen. Susan Collins (R-Maine) and Sen. Lisa Murkowski (R-Alaska) — also voted against GOP efforts to repeal the Affordable Care Act last year.
  • The Trump administration’s action on risk-adjustment payments sent yet another signal to insurers that the federal government does not necessarily have their backs and is willing to change the rules along the way.
  • The Trump administration says it wants to cut to payments for navigators because they are not cost-effective. But the navigator money does not come from taxpayers or government sources. It is paid from insurance industry user fees. These funds also go to support ACA advertising — which has also been cut. However, the user fees have not been reduced. In theory, reducing these fees could provide savings that could be passed on to consumers.
  • After being called out on Twitter by Trump, drugmaker Pfizer this week announced it would delay some already-announced price increases on about 100 of its drugs. It is worth noting that the president used his bully pulpit and gained some success. The six-month delay will mean that consumers will not experience an increase in cost at the pharmacy for at least that time period. But it still raises questions.
  • The Trump administration worked to block a World Health Organization resolution to promote breastfeeding. But while this seemed a clear case of promoting the interests of infant formula companies over public health experts, there was pushback from some women who say they are unable to breastfeed and feel stigma when they opt for formula instead. On the other hand, formula can be dangerous in developing countries without easy access to clean water.

Plus, for “extra credit,” the panelists recommend their favorite health stories of the week they think you should read, too:

Julie Rovner: Politico Agenda’s “The One Big Winner of the Obamacare Wars,” by Joanne Kenen

Julie Appleby: The New York Times’ “Doctor, Your Patient Is Waiting. It’s a Red Panda,” by Karen Weintraub.

Anna Edney: Politico’s “CMS Quit Test of Pricey Cancer Treatment Amid Concerns Over Industry Role,” by Sarah Karlin-Smith and David Pittman

Margot Sanger-Katz: HuffPost’s “Trump Administration May Be Preparing A New Obamacare Sabotage Effort,” by Jonathan Cohn

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcher or Google Play.

Podcast: KHN’s ‘What The Health?’ ACA Under Fire. Again.

Democrats in the Senate are gearing up to fight President Donald Trump’s nominee to the Supreme Court, U.S. Circuit Judge Brett Kavanaugh. They argue he is not only a potential threat to abortion rights, but also to the Affordable Care Act.

Meanwhile, the Trump administration continues its efforts to undermine the workings of the Affordable Care Act. This week, officials announced a freeze on payments to insurers who enroll large numbers of sicker patients, and another cut to the budget for “navigators” who help people understand their insurance options and enroll for coverage.

This week’s panelists for KHN’s “What the Health?” are:

Julie Rovner of Kaiser Health News

Margot Sanger-Katz of The New York Times

Anna Edney of Bloomberg News

Julie Appleby of Kaiser Health News

Among the takeaways from this week’s podcast:

  • One reason Democrats are rallying around the health issue rather than the abortion issue is that there is more unity in their caucus over health than abortion. Also, the two key Republican senators who support abortion rights — Sen. Susan Collins (R-Maine) and Sen. Lisa Murkowski (R-Alaska) — also voted against GOP efforts to repeal the Affordable Care Act last year.
  • The Trump administration’s action on risk-adjustment payments sent yet another signal to insurers that the federal government does not necessarily have their backs and is willing to change the rules along the way.
  • The Trump administration says it wants to cut to payments for navigators because they are not cost-effective. But the navigator money does not come from taxpayers or government sources. It is paid from insurance industry user fees. These funds also go to support ACA advertising — which has also been cut. However, the user fees have not been reduced. In theory, reducing these fees could provide savings that could be passed on to consumers.
  • After being called out on Twitter by Trump, drugmaker Pfizer this week announced it would delay some already-announced price increases on about 100 of its drugs. It is worth noting that the president used his bully pulpit and gained some success. The six-month delay will mean that consumers will not experience an increase in cost at the pharmacy for at least that time period. But it still raises questions.
  • The Trump administration worked to block a World Health Organization resolution to promote breastfeeding. But while this seemed a clear case of promoting the interests of infant formula companies over public health experts, there was pushback from some women who say they are unable to breastfeed and feel stigma when they opt for formula instead. On the other hand, formula can be dangerous in developing countries without easy access to clean water.

Plus, for “extra credit,” the panelists recommend their favorite health stories of the week they think you should read, too:

Julie Rovner: Politico Agenda’s “The One Big Winner of the Obamacare Wars,” by Joanne Kenen

Julie Appleby: The New York Times’ “Doctor, Your Patient Is Waiting. It’s a Red Panda,” by Karen Weintraub.

Anna Edney: Politico’s “CMS Quit Test of Pricey Cancer Treatment Amid Concerns Over Industry Role,” by Sarah Karlin-Smith and David Pittman

Margot Sanger-Katz: HuffPost’s “Trump Administration May Be Preparing A New Obamacare Sabotage Effort,” by Jonathan Cohn

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcher or Google Play.

Insurers Fall Short In Catching And Reporting Medicaid Fraud, Inspectors Find

Despite receiving billions of dollars in taxpayer money, Medicaid insurers are lax in ferreting out fraud and neglect to tell states about unscrupulous medical providers, according to a federal report released Thursday.

The U.S. Health and Human Services’ inspector general’s office said a third of the health plans it examined had referred fewer than 10 cases each of suspected fraud or abuse to state Medicaid officials in 2015 for further investigation. Two insurers in the program, which serves low-income Americans, didn’t identify a single case all year, the report found.

Some health plans terminated providers from their networks for fraud but didn’t inform the state. The inspectors said that could allow those doctors or providers to defraud other Medicaid insurers or other government programs in the same state.

In addition, some insurance companies failed to recover millions of dollars in overpayments made to doctors, home health agencies or other providers. The inspector general said insurers stood to benefit financially from this because higher costs can justify increased Medicaid rates in the future. (The report didn’t name specific insurers or states.)

Medicaid plans “are required by law to find fraud and abuse and to share information with states,” said Meridith Seife, a deputy regional inspector general in New York and a co-author of the report. “We are concerned anytime we see evidence that managed-care organizations are not doing that in a rigorous way. There’s a lot of taxpayer dollars at stake.”

In general, Medicaid has struggled for years with poor oversight and billions lost to improper payments, drawing regular scrutiny from federal auditors but little improvement. Authorities have found clinics overprescribing opioids to Medicaid patients and doctors running pill mills. Hospitals and other providers have falsified Medicaid claims, paid illegal kickbacks for patient referrals and billed for unnecessary services.

Health insurers serve about 55 million Medicaid patients across 38 states, and play an increasingly vital role in running the giant public insurance program. States generally split the cost of Medicaid with the federal government.

One in 5 Americans is on Medicaid and enrollment is poised to rise even further as more states consider expansion under the Affordable Care Act. About 75 percent of Medicaid patients are part of a privatized system in which managed-care companies are paid fixed fees per patient to coordinate their care. Big, publicly traded companies such as UnitedHealth, Anthem and Centene dominate the business. In some states like California, evidence shows the funding often flows to the plans with little oversight, sometimes regardless of their performance.

These companies tout their expertise at spotting suspicious billing patterns and chasing down criminals using sophisticated data mining, but the inspector general found that their fraud-fighting results don’t always match the rhetoric.

Andy Schneider, a former federal health official and now a research professor at Georgetown University’s Center for Children and Families, said the lack of reporting to states is “a big problem.”

“If states don’t know a provider has ripped off the managed-care organization, how can they protect other state programs or insurers from that behavior?” he said.

Last year, new Obama-era rules went into effect that seek to strengthen fraud-detection efforts in Medicaid managed care. For now, the Trump administration has endorsed those changes.

Last month, the administration said they would monitor state compliance and conduct more audits. 

“With historic growth in Medicaid comes an urgent federal responsibility to ensure sound fiscal stewardship and oversight of the program,” Seema Verma, administrator of the Centers for Medicare & Medicaid Services, said in a statement last month.

In a May 17 response to the inspector general, Verma cited the Obama administration’s managed-care rules and she agreed with nearly all of the recommendations the inspector general made to help remedy the problems.

In the report, the inspector general’s office examined data from the health plan with the largest Medicaid spending in each of the 38 states with managed care. Inspectors also conducted interviews with officials and insurance companies in five states. Among the findings:

  • The 38 plans received $62.2 billion in federal and state money in 2015. That represents about a quarter of the $236 billion Medicaid plans received that year. That figure has grown to nearly $300 billion last year, or about half of Medicaid spending overall.
  • The health insurers identified $57.8 million in overpayments related to fraud or abuse during 2015. Health plans only recovered $12.5 million, or 22 percent, of those overpayments. (Four of the health plans found no such overpayments all year.)
  • Insurers performed better on erroneous billing and other overpayments not related to fraud. Health plans collected 68 percent of the $831.4 million they identified in 2015.

Insurance industry officials say they couldn’t comment specifically on the audit until they had more time to review the findings. They agreed that the number of cases identified and shared with states appeared relatively small in comparison to the Medicaid spending involved.

Jeff Myers, chief executive of Medicaid Health Plans of America, an industry trade group, said state contracts vary widely and may not require health plans to report every questionable provider or billing discrepancy.

“Those numbers do seem low,” Myers said of the fraud instances cited in the report. “If the Trump administration and states decide they need to get more data and do more rigorous analysis, plans will provide it.”

Myers pushed back on the inspectors’ suggestion that insurers are purposely ignoring wasteful spending in order to boost their own revenue and profits from states.

“States look very seriously at ways to reduce Medicaid spending because every dollar spent on Medicaid is a dollar not spent somewhere else,” Myers said.

Some health-policy experts said the federal report reflects the insurance industry’s resistance to what it perceives as meddling in its private business even though plans are participating in a public program. “This kind of behavior, like not reporting bad actors, is totally consistent with their broader philosophy of ‘It’s my money and let me run my business,’” said Schneider, the former federal official.

Christopher Koller, former Rhode Island health insurance commissioner, said states bear the responsibility to address these problems in their contracts with health plans.

“This is one more example of how state oversight can often be insufficient,” said Koller, president of the Milbank Memorial Fund, a foundation focused on health policy. “States who think they can outsource all of the work to the private-sector ‘experts’ are not serving their citizens well.”

In 2015, the 38 health plans examined by inspectors collectively took 2,668 corrective actions, such as payment suspensions, against providers suspected of fraud or abuse, according to the report.

Eighteen health plans canceled contracts for a total of 179 providers “for cause” in 2015. Three of those insurers said they didn’t typically notify the state of provider terminations.

Now the new Medicaid regulations require insurers to notify states about providers’ terminations and other changes in their status, according to the report.


This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

Administration Cuts Grants Again To Health Law Navigators Arguing They’re Ineffective And Unnecessary

The Trump administration is also directing the insurance counselors, for the first time, to help people enroll in health plans that do not comply with the consumer protection standards and other requirements of the Affordable Care Act. The move comes just days after CMS froze a program that gave money to insurers to help stabilize the marketplace.

Can Insurers Use Genetic Testing Results? A Reader Wants To Know

This week, I answer questions from readers concerned about health insurance roadblocks in the face of a serious illness or medical crisis.

Q: I think genetic testing could be a great tool for physicians. My fear is what the insurance industry will do with the information, especially in today’s political climate. Could they decide that you have a preexisting condition and charge a higher rate, or not cover you at all?

No, they can’t do that — not now, anyway. Under the Genetic Information Nondiscrimination Act (GINA) of 2008, health insurers can’t use your genetic information, including your family medical history, genetic test results and genetic counseling or other genetic services, to discriminate against you.

That means health insurers can’t use your genetic information when making decisions about your eligibility for health insurance, coverage terms or how much you’ll pay.

If you develop symptoms of a disease or are diagnosed with a medical condition, however, GINA no longer protects you. That’s where the Affordable Care Act steps in. It prohibits health plans from turning people down or charging them more because they have a preexisting condition.

“GINA did something good, and the ACA was the next important step,” said Sonia Mateu Suter, a law professor at George Washington University who specializes in genetics and the law.

However, last month the Trump administration said it won’t defend that part of the law, which is being challenged in a lawsuit brought by the attorneys general of 20 states.

The administration said that since the penalty for not having health insurance has been eliminated starting in 2019, the provisions that guarantee coverage to people with preexisting conditions and prohibit insurers from charging them higher premiums should be struck down as well.

The issue is a priority with voters. In a June poll by the Kaiser Family Foundation, two-thirds of voters said that continuing protections for people with preexisting conditions was either the single most important factor or very important in their vote during the elections this fall. (Kaiser Health News is an editorially independent program of the foundation.)

Q: My husband fainted in the middle of the night. He received an MRI at a hospital emergency department in Kingston, N.Y., that is not in our insurance network.

Two months later, we received a bill for $23,657.39. Our insurance company paid $3,226.40, or 90 percent of what they considered to be a reasonable cost for the services provided. Our bill was for the balance.

Even though New York has a law that protects consumers against surprise medical bills, I learned that it doesn’t apply to us because our health plan is “self-funded.” Is there anything else that we can do?

You’re in a tough spot. The ACA prohibits most plans from charging consumers more in copayments and coinsurance for out-of-network emergency care than they’d owe if they were at an in-network facility.

But federal law doesn’t prevent out-of-network providers from billing consumers for the balance when a health plan doesn’t pay in full. This can happen because the plan doesn’t have negotiated rates with providers that aren’t in the network.

New York is one of six states that have laws with comprehensive protection for consumers against so-called surprise bills, according to an analysis by researchers at Georgetown University’s Health Policy Institute that was published by the Commonwealth Fund last year.

The others are California, Connecticut, Florida, Illinois and Maryland. Another 15 states have limited consumer protections in this area.

But self-funded plans such as yours, in which your employer pays medical claims directly instead of buying an insurance policy for that purpose, are exempt from this type of state regulation.

In this circumstance, your company’s human resources department may be your best bet, said Jack Hoadley, research professor emeritus at Georgetown’s Health Policy Institute, who co-authored the Commonwealth analysis.

“The employer may say, ‘I feel an obligation to my employee and we’ll cover this,’” he said. “But they can choose not to do that.”

Q: My wife has been taking Avonex for multiple sclerosis for 20 years. Our health plan’s coverage changed this year, but Express Scripts, which manages our pharmacy benefit, didn’t communicate the change until after it took effect. They mailed us a month’s worth of Avonex in February, and a few weeks later we received an invoice for $6,000. Express Scripts would not let us return the medicine for a refund. They said that they explained we would be billed that amount when they called to remind us we were due for a refill, but that’s not true. Do we have any recourse?

There is no easy answer for you. If you go to a brick-and-mortar pharmacy to pick up a prescription and you think the cost is too high, you can refuse the medication at the counter and walk away. But that’s not generally possible with a mail-order prescription. Once it arrives, it’s yours.

“The chain of custody is broken,” said Jennifer Luddy, a spokeswoman for Express Scripts, which manages the pharmacy benefits for companies and insurers. “We don’t know if it’s been opened or tampered with.”

Luddy said that typically employers communicate changes to workers’ pharmacy benefits for the upcoming year during the annual open-enrollment period. On an ongoing basis, drug copayment information is also available through the Express Scripts’ website, mobile app or by phone, she said.

However, there may be other factors to consider, say patient advocates. For example, about half of people with multiple sclerosis have cognitive problems, said Bari Talente, executive vice president of advocacy at the National Multiple Sclerosis Society.

“People need to make sure that the person who’s taking the drug really understands that the cost is changing,” Talente said.

Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column.

Can Insurers Use Genetic Testing Results? A Reader Wants To Know

This week, I answer questions from readers concerned about health insurance roadblocks in the face of a serious illness or medical crisis.

Q: I think genetic testing could be a great tool for physicians. My fear is what the insurance industry will do with the information, especially in today’s political climate. Could they decide that you have a preexisting condition and charge a higher rate, or not cover you at all?

No, they can’t do that — not now, anyway. Under the Genetic Information Nondiscrimination Act (GINA) of 2008, health insurers can’t use your genetic information, including your family medical history, genetic test results and genetic counseling or other genetic services, to discriminate against you.

That means health insurers can’t use your genetic information when making decisions about your eligibility for health insurance, coverage terms or how much you’ll pay.

If you develop symptoms of a disease or are diagnosed with a medical condition, however, GINA no longer protects you. That’s where the Affordable Care Act steps in. It prohibits health plans from turning people down or charging them more because they have a preexisting condition.

“GINA did something good, and the ACA was the next important step,” said Sonia Mateu Suter, a law professor at George Washington University who specializes in genetics and the law.

However, last month the Trump administration said it won’t defend that part of the law, which is being challenged in a lawsuit brought by the attorneys general of 20 states.

The administration said that since the penalty for not having health insurance has been eliminated starting in 2019, the provisions that guarantee coverage to people with preexisting conditions and prohibit insurers from charging them higher premiums should be struck down as well.

The issue is a priority with voters. In a June poll by the Kaiser Family Foundation, two-thirds of voters said that continuing protections for people with preexisting conditions was either the single most important factor or very important in their vote during the elections this fall. (Kaiser Health News is an editorially independent program of the foundation.)

Q: My husband fainted in the middle of the night. He received an MRI at a hospital emergency department in Kingston, N.Y., that is not in our insurance network.

Two months later, we received a bill for $23,657.39. Our insurance company paid $3,226.40, or 90 percent of what they considered to be a reasonable cost for the services provided. Our bill was for the balance.

Even though New York has a law that protects consumers against surprise medical bills, I learned that it doesn’t apply to us because our health plan is “self-funded.” Is there anything else that we can do?

You’re in a tough spot. The ACA prohibits most plans from charging consumers more in copayments and coinsurance for out-of-network emergency care than they’d owe if they were at an in-network facility.

But federal law doesn’t prevent out-of-network providers from billing consumers for the balance when a health plan doesn’t pay in full. This can happen because the plan doesn’t have negotiated rates with providers that aren’t in the network.

New York is one of six states that have laws with comprehensive protection for consumers against so-called surprise bills, according to an analysis by researchers at Georgetown University’s Health Policy Institute that was published by the Commonwealth Fund last year.

The others are California, Connecticut, Florida, Illinois and Maryland. Another 15 states have limited consumer protections in this area.

But self-funded plans such as yours, in which your employer pays medical claims directly instead of buying an insurance policy for that purpose, are exempt from this type of state regulation.

In this circumstance, your company’s human resources department may be your best bet, said Jack Hoadley, research professor emeritus at Georgetown’s Health Policy Institute, who co-authored the Commonwealth analysis.

“The employer may say, ‘I feel an obligation to my employee and we’ll cover this,’” he said. “But they can choose not to do that.”

Q: My wife has been taking Avonex for multiple sclerosis for 20 years. Our health plan’s coverage changed this year, but Express Scripts, which manages our pharmacy benefit, didn’t communicate the change until after it took effect. They mailed us a month’s worth of Avonex in February, and a few weeks later we received an invoice for $6,000. Express Scripts would not let us return the medicine for a refund. They said that they explained we would be billed that amount when they called to remind us we were due for a refill, but that’s not true. Do we have any recourse?

There is no easy answer for you. If you go to a brick-and-mortar pharmacy to pick up a prescription and you think the cost is too high, you can refuse the medication at the counter and walk away. But that’s not generally possible with a mail-order prescription. Once it arrives, it’s yours.

“The chain of custody is broken,” said Jennifer Luddy, a spokeswoman for Express Scripts, which manages the pharmacy benefits for companies and insurers. “We don’t know if it’s been opened or tampered with.”

Luddy said that typically employers communicate changes to workers’ pharmacy benefits for the upcoming year during the annual open-enrollment period. On an ongoing basis, drug copayment information is also available through the Express Scripts’ website, mobile app or by phone, she said.

However, there may be other factors to consider, say patient advocates. For example, about half of people with multiple sclerosis have cognitive problems, said Bari Talente, executive vice president of advocacy at the National Multiple Sclerosis Society.

“People need to make sure that the person who’s taking the drug really understands that the cost is changing,” Talente said.

Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column.