Tagged Cost and Quality

Oregon Releases People Found Not Guilty By Reason Of Insanity More Quickly Than Nearly Every Other State

A ProPublica investigation shines a light on Oregon’s unique process of reviewing the cases of defendants found not guilty by reason of insanity. About 35 percent of the people in that category were charged with new crimes within three years of being freed by state officials.

New Guidelines Say Any Kind Of Exercise In Small Doses And Less Sitting Improve Health Starting As Early As Age 3

Getting a sedentary nation off the sofa — only 20 percent of us get the recommended amount of exercise a day — is a big concern for the government, which updated its guidelines Monday for the first time in 10 years. Since the first guidelines were issued, research has expanded the recognized benefits of movement, including reducing the risk of cancer, anxiety and depression and improving cognitive function and sleep.

Measure To Cap Dialysis Profits Pummeled After Record Spending By Industry

Record-breaking spending by the dialysis industry helped doom a controversial California ballot measure to cap its profits.

The industry, led by DaVita and Fresenius Medical Care, spent nearly $111 million to defeat Proposition 8, which voters trounced, 62 to 38 percent, and appeared to approve in just two of 58 counties. The measure also faced strong opposition from medical organizations, including doctor and hospital associations, which argued it would limit access to dialysis treatment and thus endanger patients.

The opposition presented a powerful message that “if you can’t get dialysis, you will die,” said Gerald Kominski, a senior fellow at the UCLA Center for Health Policy Research. “If you didn’t know that, the commercials made it clear.”

Despite arguments about the outsize profits of dialysis companies, Kominski said the “Yes on 8” case wasn’t as clear. The measure, sponsored by the Service Employees International Union-United Healthcare Workers West, sought to cap dialysis clinic profits at 115 percent of the costs of patient care. Revenues above that amount would have been rebated primarily to insurance companies. Medicare and other government programs, which pay significantly lower prices for dialysis, wouldn’t have received rebates.

The union raised nearly $18 million — a large sum for most initiatives but about 16 percent of what the opposition mustered.

The proposition also was poorly written and difficult for voters to understand, said Erin Trish, associate director of health policy at the USC Schaeffer Center for Health Policy and Economics. Trish said she wasn’t surprised by the landslide defeat given the widespread ads against the initiative about the potential harms to patients. “The message came through loud and clear,”  she said.

Trish said health care industry groups genuinely viewed Proposition 8 as a poor initiative — but they also didn’t want to see rate regulation. “This is not what most of these associations want to open the door to,” Trish said.

Generally speaking, said Jessica Levinson, a professor at Loyola Law School, voters’ default on initiatives is “no.” In addition, money spent against an initiative is usually more effective than money spent for it. Levinson said people weren’t 100 percent sure what they were voting on with Proposition 8. All of those factors made passage “an uphill battle,” she said.

Kathy Fairbanks, a spokeswoman for the opposition, credited the electorate for properly sorting out the facts. “Voters did their homework and saw who lined up on both sides,” Fairbanks said. “All the leaders of the medical community were against Proposition 8 because of the negative impact it would have had on patients and access to dialysis.”

Proponents of the measure argued that highly profitable dialysis companies don’t invest enough in patient care and that they need to hire more staff and improve clinic safety. Opponents said passage would have forced clinics to cut their hours or close altogether, resulting in more emergency room visits by dialysis patients.

SEIU-UHW said the opponents tried to “scare and mislead” voters. It vowed to continue targeting profitable dialysis companies with another measure on the 2020 ballot, as well as through legislation.

“We exposed problems within the dialysis industry and we put a spotlight on a sector that has operated in the shadow for far too long,” said Sean Wherley, spokesman for the “Yes” campaign. “But we are not finished yet. … The need is still there to hold this industry accountable.

He added that the union is proud to have put a spotlight on “the inflated charges that drive up health care costs for all California.”

Critics say that SEIU-UHW, which represents more than 95,000 workers in California, uses state and local ballot initiatives as a way to pressure legislators and gain bargaining power. They’ve sponsored measures on such topics as hospital and clinic funding, access to affordable insurance and training for in-home caregivers.

The union maintains its goal is simply to improve health care.

Two other Bay Area initiatives sponsored by SEIU, aiming to limit hospital pricing, also were defeated Tuesday, indicating that the ballot box may not be the best place to address concerns about costs in the health care industry.

“This is too complicated to do by ballot proposition,” Trish said.

Dialysis patients participated heavily in both the pro and con sides of the initiative, appearing in dramatic television ads and presenting their personal stories on social media.

Lili Hernandez, 27, who began treatment four years ago, showed up to her appointments at a DaVita clinic in Hollywood with “Yes on Prop. 8” placards even as  the clinic posted “No” signage, she said.

Hernandez supported the initiative because she believes the corporations should be held accountable, she said. “They take advantage of how much money they can charge, but don’t give the best service,” she said. “Too many people are at risk of infection and neglect.”

She woke up Wednesday feeling defeated. “I was awake last night, checked results online, had my cry and went to sleep,” she said, adding that she thinks people were confused about the initiative and believed the “false ads.”

Meanwhile, DeWayne Cox, a dialysis patient from Los Angeles, expressed relief. “This means that voters got the message, they understood,” he said.

Cox, 56, said he comes from a union family and believes in unions, but this was a “terrible” move by SEIU because it could lead to cutbacks in services. “Not only was this scary for me, but they made me angry,” he said, noting concerns about potential cutbacks in services. “If their motive was truly to help patients, they would have written a better, more precise measure.”

The measure became the most expensive race in California this year. Industry giants DaVita and Fresenius Medical Care, which operate nearly three-quarters of the chronic dialysis clinics in California, were responsible for more than 90 percent of the contributions in opposition to the measure

The California Medical Association, the California Hospital Association and the California chapter of the American College of Emergency Physicians all opposed Proposition 8. “Our concern was the impact on patient care,” said hospital association spokeswoman Jan Emerson-Shea. “If dialysis clinics were forced to close and patients needed care, we are the only place within the health care system that is open 24/7.”

Municipal ballot initiatives sponsored by SEIU-UHW targeted Stanford Health Care in Livermore and Palo Alto by attempting to cap prices at 115 percent of the “reasonable” cost of care. Under the initiatives, hospitals and other medical providers would have been required to pay back any charges above the cap each year to private commercial insurers. The initiatives failed dramatically, losing 77 to 23 percent in Palo Alto and in Livermore, 82 to 17 percent.

Voters did approve three statewide health care initiatives Tuesday, however:

  • Proposition 2 won 61 to 39 percent, allowing the state to issue $2 billion in bonds for housing for homeless people in need of mental health services. Bond money will be distributed to counties and repaid with proceeds from the Mental Health Services Act, which levies a 1 percent tax on personal incomes of $1 million and above.
  • Proposition 4, which won by the same margin, allows the state to distribute $1.5 billion in bonds to help the state’s 13 children’s hospitals’ pay for construction and equipment. It was the third time in 14 years that voters had agreed to subsidize the hospitals.
  • Proposition 11, passing with  59 percent of the vote, requires private ambulance employees to remain on call during their breaks — just as firefighters, policemen and other public emergency workers do.

Samantha Young and Harriet Rowan contributed to this report.


KHN’s coverage of these topics is supported by
California Health Care Foundation
and
Blue Shield of California Foundation

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

House Dems In New Seats Of Power Will Steer Health Policy, Attack Drug Prices

For the first time since passing the Affordable Care Act, Democrats will soon control the House of Representatives and its powerful health committees. But Republicans’ tightened grip on the Senate means those hoping for another round of dramatic, progressive reforms may be disappointed.

Empowered by voters outraged over Republican attempts to chip away at the law’s protections for the sick, Democrats owe much of their midterm takeback to health care issues. And Democratic leaders say they are ready to get back to work, this time training their sights on skyrocketing drug prices, among other policy conundrums, with a majority of House votes and a slate of new committee chairmanships in hand.

In a few weeks, House Democrats will meet to elect their leaders, including several committee chairs who will be responsible for the nation’s health care policy and spending in the coming years. Hill denizens expect those currently serving as the top Democrat on most House committees to ascend to the chairmanships, with few if any members mounting serious challenges.

Those basking in a post-“blue wave” glow would do well to temper their expectations, recalling that the Republican-controlled House had already voted 54 times to unravel some or all of the Affordable Care Act by its fourth birthday in 2014. In most cases, Democrats in the Senate and White House stopped those efforts in their tracks.

With the Senate (and the presidency) remaining under Republican control and even fewer moderate Republicans left in the House after this election, Democrats will struggle to move legislation without Republican support. What they can do is hold hearings, launch investigations and generally unnerve the pharmaceutical industry, among other likely adversaries.

And there’s a chance they could strike a deal with President Donald Trump, whose administration is moving to crack down on drug companies.

Who are the members most likely to wield the gavels? And what will they do with that power? Here’s a look at some of the major committees that influence health policy — and the people who may lead them.

The Committee on Energy and Commerce: Rep. Frank Pallone, New Jersey

Pallone, who has served in the House for 30 years, became the top Democrat on this influential committee in 2015. Should he become chairman, he would be responsible for the broadest health portfolio in the House, which includes Medicaid, public health, insurance and drug safety. This is the committee that marked up the Affordable Care Act in 2009 (when Pallone chaired the health subcommittee) and the House Republican repeal effort in 2017.

Under the Trump administration, Pallone has touted his stewardship of bipartisan legislation reauthorizing the fees charged to manufacturers to review the safety of prescription drugs and medical devices. He has also called for hearings on “mega-mergers” like the proposed merger between CVS and Aetna and worked with other Democrats to counter Republican attempts to undermine the Affordable Care Act.

Unsurprisingly, his influence over health care issues has attracted a lot of money from pharmaceutical companies, health professionals, HMOs and other industry players. By mid-October, Pallone had received more than $945,000 in campaign contributions from  the health sector for this election, according to the Center for Responsive Politics. According to a KHN analysis, nearly $170,000 came from political action committees associated with pharmaceutical companies.

The Committee on Oversight and Government Reform: Rep. Elijah Cummings, Maryland 

Cummings could prove the pharmaceutical industry’s biggest headache come next year. Having served as the committee’s ranking member since 2011 — a post that lacks the chairman’s subpoena power — he has been champing at the bit to hold drugmakers accountable.

Shortly after Trump’s inauguration, Cummings approached him about working together to lower the cost of prescription drugs (to no immediate avail), and he has partnered with other lawmakers to demand information from pharmaceutical companies about their drug pricing strategies. Previewing what a Cummings-led committee might look like, he has even launched his own investigations into drug costs, releasing reports with his findings.

Drugmakers have wasted few campaign contributions on Cummings: He has received just $1,000 from their PACs this election, according to data analysis by KHN.

In a statement to Kaiser Health News, Cummings said Democrats would conduct “credible, responsible oversight” of the Trump administration, adding: “For healthcare, that means investigating skyrocketing prescription drug prices, actions that would threaten protections for people with preexisting health conditions, and efforts to undermine the Medicaid program.” 

The Committee on Ways and Means: Rep. Richard Neal, Massachusetts

Ways and Means oversees Medicare and influences health policy through its jurisdiction over taxes. Though Neal became the top Democrat on this committee in 2017, he has been involved in health care much longer, having played a part in the crafting of both the Affordable Care Act and the failed reform effort under the Clinton administration in 1993.

Facing a primary challenger who touted her support for “Medicare-for-all” in his deep-blue district, Neal denied that he opposes the progressive single-payer proposal. But he also said Democrats should focus on shoring up the Affordable Care Act, particularly its protections for those with preexisting conditions and caps on out-of-pocket expenses. (He won handily.)

The health sector was by far one of the top contributors to Neal’s re-election campaign this year, giving more than $765,000, according to the Center for Responsive Politics. Neal’s district includes the headquarters of several health insurers and other medical companies, which makes him a prime target for campaign contributions.

The Committee on Appropriations: Rep. Nita Lowey, New York

If chosen, Lowey would become the first woman to chair the powerful House Committee on Appropriations, holding the nation’s purse strings.

Like Neal and Pallone, Lowey was first elected to Congress in 1988, and she became the committee’s top Democrat in 2013. She has been a dedicated and effective advocate for investing in biomedical research into major diseases like diabetes and Alzheimer’s, as well as public health programs like pandemic preparedness.

She has also long championed women’s health issues, proving a vocal critic of the Trump administration’s proposed gag rule on Title X funding, among other policies. Watch for her to continue to push back on the administration’s efforts to restrict access to abortion rights.

And on the Senate side, the Committee on Finance: Sen. Chuck Grassley, Iowa?

The rumor mill favors Grassley, the Republican who has served most recently as the chairman of the Senate Committee on the Judiciary, to replace retiring Sen. Orrin Hatch (R-Utah).

Senate Republican leaders have signaled that entitlement programs like Medicare and Medicaid could use trimming and, with Republicans emerging from the midterms with a slightly bigger majority, this committee could have its hands full.

Hatch proved a friend to the pharmaceutical industry, and his war chest reflected that, taking in more than $850,000 in campaign contributions from drugmaker PACs in the past decade alone, according to a Kaiser Health News analysis. But Grassley has taken a more adversarial approach to the industry, working with a Democratic colleague last summer to pressure drug companies to list their prices in direct-to-consumer ads, for instance.

Grassley held the chairmanship from 2003 to 2006, leaving him two more years at the top, should he want it. (Senate Republican chairs may serve for only six years.) But he might choose to stay on as head of the Judiciary Committee, in which case the next chairman may be the next-most-senior Republican: Sen. Mike Crapo of Idaho.

More Oversight Needed To Avoid Dangerous Nursing Home Situations During Disasters, Senate Inquiry Finds

The Senate report says that state and federal officials must do more to improve safety at nursing homes, while the Centers for Medicare and Medicaid Services argues that new rules help clarify emergency procedures. In other nursing home news, Synergy Health Centers announces that it will close two of its 10 Massachusetts facilities.

More Oversight Needed To Avoid Dangerous Nursing Home Situations During Disasters, Senate Inquiry Finds

The Senate report says that state and federal officials must do more to improve safety at nursing homes, while the Centers for Medicare and Medicaid Services argues that new rules help clarify emergency procedures. In other nursing home news, Synergy Health Centers announces that it will close two of its 10 Massachusetts facilities.

Ad Check: What Happens If California Limits Dialysis Center Profits?

California voters are being bombarded with ads in what is the most expensive ballot measure campaign this year. They are being asked to decide Tuesday whether the state should limit the profit of kidney dialysis centers to 15 percent over the cost of patient care, with revenue above that rebated primarily to insurers.

What exactly would happen if voters approve Proposition 8 is still vague, and the $127 million raised to persuade voters hasn’t made it any clearer.

Both sides are making bold statements. But even the Legislative Analyst’s Office, nonpartisan officials who advise the state Legislature, said Prop 8 could result in a “net positive impact in the low tens of millions of dollars to net negative impact in the tens of millions of dollars.” In other words: No one knows.

Here’s what both sides had to say and what they base it on.

Against Proposition 8

The dialysis companies, mostly DaVita and Fresenius Medical Care, have contributed more than $110 million to fight Prop 8, more than six times what the “Yes on 8” campaign has raised. Their ads feature concerned health care professionals and dialysis patients warning voters of the terrible effects Prop 8 would have on dialysis patients and taxpayers in California.

This ad is just one in a series in heavy rotation on TV stations across the state. Like most of the “No on 8” advertisements, it prominently cites the Berkeley Research Group when claiming Prop 8 “would force many dialysis clinics to shut down, and threaten the care that patients need to survive.”

The narrator of the ad goes on to say “studies show Prop 8 will increase health care costs by hundreds of millions of dollars,” again citing the Berkeley Research Group.

The Berkeley Research Group is a large international consulting firm hired by the “No on 8” committee to analyze the proposition’s economic impact. It was paid more than $200,000 by the committee, according to campaign finance reports filed with the California secretary of state.

The consulting firm — which is not affiliated with the University of California — based its analysis on financial data from dialysis clinics around the state, including self-reported totals for direct patient care, quality improvements and “non-allowable” costs. Non-allowable costs, which might include some management staff positions and corporate overhead costs, will be ironed out through a public rule-making process if Prop 8 is passed.

The researchers used their own interpretation of non-allowable costs, took that to calculate how many clinics would surpass the 15 percent margin, and then applied the reimbursements that Prop 8 would require to conclude that “most clinics will migrate to having negative operating margins.” The analysis estimated that Prop 8 would increase health care costs for taxpayers by between $12 million and $2.6 billion annually.

Whether that happens depends on how clinics could adjust their operations to decrease their expenses that are not considered allowable patient care costs.

There is nothing unusual about relying on consultants to supply ammunition for a political campaign. “The effort to marshal research to support an advocacy campaign is not at all uncommon,” said Edward Walker, a sociology professor at UCLA specializing in political lobbying by businesses. He also pointed out that the advocacy campaigns often try to distance themselves from the research they pay for.

The Berkeley Research Group report leaves no room for uncertainty. “It is certain that Prop 8 will result in the closure of numerous clinics and the withdrawal of dialysis services from hundreds of thousands of patients,” the report said.

For Proposition 8

The Yes committee is funded almost exclusively by the Service Employees International Union-United Healthcare Workers West. The union has long fought to organize workers at dialysis clinics. Rather than focus on Prop 8’s possible effects, the “Yes” ads criticize the dialysis industry in general. The labor union has contributed more than $17 million to the “Yes on 8” committee, the largest amount SEIU has ever shelled out.

This ad starts out dramatically: “$150,000 a year,” the narrator intones. “That’s how much big dialysis corporations charge some patients, a 350 percent markup over the cost of care.” The ad doesn’t cite a source, but the figure roughly matches what industry financial analysts say private health insurance pays for dialysis.

Dialysis companies argue that the low reimbursement rate from Medicare — which covers about 90 percent of patients — is the reason they are forced to charge more for the 10 percent who are covered by private insurance. Those private insurance payments allow them to remain profitable. SEIU argues that high rates for private insurance contributes to higher overall health care costs and points out that the dialysis companies have a higher profit margin than hospitals in the state.

DaVita, a for-profit company that runs half of all dialysis clinics in California and is the biggest contributor to the “No on 8” campaign, reported profits of $1.8 billion on revenue of $10.9 billion last year, almost all of which came from its dialysis business.

The “Yes on 8” ad also cites an investigation by ProPublica, a nonprofit news organization, which found that the U.S. has one of the highest fatality rates for dialysis in the industrialized world. The narrator says, “Dialysis corporations make a killing, driving up insurance rates while patients report blood stains and cockroaches in their clinics,” while a quote from the ProPublica article is flashed on the screen. It says: “dangerous conditions, inadequate care, higher-than-expected mortality rates.”

While the ProPublica report did find troubling conditions in dialysis clinics around the country, the allegation of cockroaches was from a different report. ProPublica’s investigation examined records from more than 1,500 clinics in a number of states, including California, and it noted filthy or unsafe conditions in almost half of the units. But it doesn’t say the problem is any better or worse in California.

The “Yes on 8” committee’s communications approach is part of an ongoing campaign to challenge the power and profits of large dialysis companies, and organize their workers.

“This is in part a proxy battle between the labor unions and the dialysis centers,” Walker said. “It’s a way to increase the pressure and the leverage.”


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

Podcast: KHN’s ‘What The Health?’ Open Enrollment And A Midterm Preview

Nov. 1 marks the start of Open Enrollment for people buying their own coverage for 2019 in most states. Despite the turmoil surrounding the Affordable Care Act, most consumers will have more choices and mostly flat — and in some cases lower — premiums.

What will happen to the health law going forward, however, will depend largely on what happens in the midterm elections Tuesday. Important health decisions will result not just from which party controls the U.S. House and Senate, but who wins governorships and comes to control state legislatures as well.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Anna Edney of Bloomberg News, Margot Sanger-Katz of The New York Times and Joanne Kenen of Politico.

Among the takeaways from this week’s podcast:

  • With changes in the ACA marketplace for 2019, it will be very important for consumers to look at the variety of options. Those earning less than 200 percent of the federal poverty level (just under $24,300 for an individual) are likely well served by silver plans on the federal health law’s exchanges. But the choices for benefits and prices are much more complicated for people earning more than that.
  • People who don’t get insurance through work or the government and earn too much to qualify for premium subsidies under the health law might be tempted to try the new, less-expensive short-term plans being touted by the Trump administration. But they should be cautious and consider two major downsides: The plans likely won’t cover preexisting conditions, and the benefits will be skimpier than those of ACA plans. For example, many short-term plans are expected not to cover mental health and maternity services or prescription drugs.
  • Federal officials announced Wednesday that Wisconsin could implement work requirements for some Medicaid enrollees. They also said, however, that the state could not begin drug testing for the enrollees.
  • If Democrats take control of the House or Senate, it’s possible that they could work with President Donald Trump on some specific issues, especially efforts to bring down drug prices or consumer protections against surprise medical bills.
  • Perhaps the biggest change that could come from the election results is an increase in the number of states that expand Medicaid under a provision of the ACA. Seventeen states have not taken that step, but several deep-red states in the West have the question on their ballots, and the outcomes from governors’ races in other states could also lead to expansion.

Rovner also interviews Barbara Feder Ostrov, who wrote the latest “Bill of the Month” feature for Kaiser Health News and NPR. It’s about a California college professor whose skin rash led to a $48,000 bill for allergy skin testing. You can read the story here.

If you have a medical bill you would like NPR and KHN to investigate, you can submit it here.

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

Julie Rovner: The Washington Post and Kaiser Health News’ “For The Disabled, A Doctor’s Visit Can Be Literally An Obstacle Course — And The Laws Can’t Help,” by Rachel Bluth.

Anna Edney: Bloomberg Businessweek’s “Your DNA Is Out There. Do You Want Law Enforcement Using It?” by Drake Bennett and Kristen V Brown.

Margot Sanger-Katz: The Federalist’s “How An Obscure Regulatory Change Could Transform American Health Insurance,” by Christopher Jacobs.

Joanne Kenen: The Atlantic’s “The Harder, Better, Faster, Stronger Language Of Dieting,” by Amanda Mull.

To hear all our podcasts, click here.

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

Billions In ‘Questionable Payments’ Went To California’s Medicaid Insurers And Providers

California’s Medicaid program made at least $4 billion in questionable payments to health insurers and medical providers over a four-year period because as many as 453,000 people were ineligible for the public benefits, according to a state audit released Tuesday.

In one case, the state paid a managed-care plan $383,635 to care for a person in Los Angeles County who had been dead for more than four years, according to California State Auditor Elaine Howle.

She said she found “pervasive discrepancies” in Medicaid enrollment in which state and county records didn’t match up from 2014 to 2017, leading to other errors that persisted for years. The bulk of the questionable payments, or $3 billion, went to health plans that contract with the state to care for 80 percent of enrollees in California’s Medicaid program, known as Medi-Cal.

The program for low-income residents is the nation’s largest and funded by both the federal and state governments. The state findings echo similar problems cited by federal officials and come at a time when the Trump administration has applied extra scrutiny to California’s spending on Medicaid.

In the report, the state auditor said it’s critical for the state to have accurate information on eligibility “because it pays managed care plans a monthly premium for an increasing number of Medi-Cal beneficiaries regardless of whether beneficiaries receive services.”

(Story continues below.)

California paid a managed-care plan $383,635 to care for a person in Los Angeles County who had been dead for more than four years.

California’s Medicaid program has 13.2 million enrollees, covering about 1 in 3 residents. It has an annual budget of $107 billion, counting federal and state funds. Nearly 11 million of those enrollees are in managed care plans, in which insurers are paid a monthly fee per enrollee to coordinate care.

The state’s Medicaid enrollment soared by more than 50 percent since 2013 due to the rollout of the Affordable Care Act and the expansion of Medicaid. Enrollment grew from 8.6 million in December 2013 to more than 13 million in December 2017, according to the audit report.

In the case of the dead patient, a family member had notified the county of the enrollee’s death in April 2014. However, the person’s name remained active in the state system, and California officials assigned the patient to a managed-care plan in November of that year.

From then on, the state kept making monthly payments of about $8,300 to the health plan until August 2018, shortly after the auditor alerted officials of the error. Auditors didn’t identify the health plan.

There also were costly mistakes in cases in which Medi-Cal pays doctors and hospitals directly for patient care – a program known as “fee for service.”

For instance, the state auditor found that Medi-Cal paid roughly $1 million in claims for a female patient in Los Angeles County from June 2016 to December 2017 even though the county office had determined in 2016 that she was ineligible.

In a written response to the auditor, the California Department of Health Care Services said it agreed with the findings and vowed to implement the auditor’s recommendations. However, the agency warned it may not meet the auditor’s timeline, which called for the main problems to be addressed by June 2019.

In a statement to California Healthline, the agency said it is implementing a quality control process and “where appropriate, DHCS will recover erroneous payments.”

Early on in 2014, as the ACA rolled out, the state struggled to clear a massive backlog of Medi-Cal applications, which reached about 900,000 at one point. There were widespread computer glitches and consumer complaints amid the increased workload at the county and state level.

In addition to questionable payments for care of ineligible enrollees, Howle and her audit team also discovered some patients who may have been denied benefits improperly. The state auditor identified more than 54,000 people who were deemed eligible by county officials but were not enrolled at the state level. As a result, those people may have had trouble getting medical care.

In February, a federal watchdog estimated that California had signed up 450,000 people under Medicaid expansion who may not have been eligible for coverage.

The inspector general at the U.S. Department of Health and Human Services said California made $1.15 billion in questionable payments during the six-month period it reviewed, from Oct. 1, 2014, to March 31, 2015.

In August, Seema Verma, administrator of the U.S. Centers for Medicare and Medicaid Services, told a U.S. Senate committee that she was closely tracking California to ensure the state “returns a significant amount of funding owed to the federal government related to the state’s Medicaid expansion.”

Verma expressed concern that states had overpaid managed-care plans during the initial years of Medicaid expansion, resulting in “significant profits for insurance companies.” By year’s end, she said she expects the federal government to recoup about $9.5 billion from California’s Medicaid program, covering overpayments from 2014 to 2016.

Tony Cava, a spokesman for Medi-Cal, said the state has already returned about $6.9 billion to the federal government and expects more than $2 billion more to be sent back by December.


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

Pricey Precision Medicine Often Financially Toxic For Cancer Patients

Kristen Kilmer hugs her 12-year-old daughter at their home in Spearfish, S.D.(Kristina Barker for KHN)

When Kristen Kilmer was diagnosed with incurable breast cancer at age 38, her first thought was of her 8-year-old daughter. Kilmer lost her own mother as a teenager and was determined to get more time with her only child.

Kilmer searched for experimental treatments, opting for an unproven approach in which researchers select drugs based on the genes in patients’ tumors. Doctors have selected her treatments for the past three years based on the unique, ever-changing DNA of her cancer cells. Now 41, Kilmer has responded better than anyone dared to hope. Her cancer has gone into hiding; her tumors are no longer visible on medical scans.

Researchers call the strategy “precision medicine.”

Kilmer’s insurance company calls it experimental. As a consequence, her insurer has covered only a fraction of her care, forcing Kilmer to make an agonizing choice: stop taking a drug that costs nearly $17,000 a month or pay out-of-pocket, burdening her family with tremendous debt.

“When you are looking at your daughter, you ask yourself, ‘Do I take a medication that might allow me to see her graduate high school?’” asked Kilmer, of Spearfish, S.D. “Or do you stop taking it to avoid causing her financial harm?”

Kristen Kilmer says she would rather go without her cancer treatment than financially burden her daughter and husband, Chet Kilmer.(Kristina Barker for KHN)

The high cost of cutting-edge tests and treatments is threatening to keep precision medicine — one of the most celebrated areas in cancer research — out of reach for many patients. Patients who pay for these new treatments on their own “could be in debt for decades,” said Dr. Scott Ramsey, director of the Hutchinson Institute for Cancer Outcomes Research in Seattle.

Already cancer care is hugely expensive. A recent study in the American Journal of Medicine found that 42 percent of patients depleted 100 percent of their assets — an average loss of $92,000 — within two years of diagnosis.

Precision medicine involves running expensive tests called genomic sequencing, which scan the DNA of tumors to find mutations that might be susceptible to available drugs. Although the field is relatively new, hundreds of thousands of cancer patients have had their tumors sequenced to identify cancer-related mutations, according to testing companies.

Medicare, the government insurance plan for people 65 and older, announced in March that it will pay for genomic testing for people with advanced cancers — a decision that could add $2.5 billion to federal health care costs, according to a May analysis in Health Affairs.

Few private insurers cover the tests, leaving some patients with surprise medical bills.

Carrie Wyman, who also has advanced breast cancer, discovered that her insurance plan doesn’t cover genomic sequencing only after she received a $5,800 statement.

“I just assumed it would be covered,” said Wyman, 50, a resident of La Plata, Md., who has six children and stepchildren. “I was blindsided, to be honest with you.”

Looking For Financial Assistance

Yet paying for that initial test is just the beginning. As Kilmer learned, finding the money for ongoing treatment is far more challenging, said Dr. Gary Lyman, who studies way to improve health care quality at Seattle’s Fred Hutchinson Cancer Research Center.

In some cases, genomic tests match patients to experimental drugs available only in clinical trials. Although these trials sometimes provide free medications, many cancer patients can’t afford to travel to participate in them. Kilmer drives 12 hours round-trip every month to participate in a clinical trial in Sioux Falls, S.D. The expenses add up quickly, she said.

Kilmer, who was diagnosed with incurable breast cancer at 38, takes Lynparza, which costs nearly $17,000 per month. (Kristina Barker for KHN)

Kilmer spreads out her daily medications, including Lynparza (center).(Kristina Barker for KHN)

Kilmer’s genomic tests identified a rearrangement in the PALB2 gene. Preliminary studies suggest that tumors with this genetic rearrangement could be susceptible to the drug Lynparza, but those effects haven’t been definitively proven in large-scale studies. The Food and Drug Administration has approved Lynparza only for breast cancer patients with a mutation called BRCA.

Legally, doctors can prescribe Lynparza “off label” to anyone with cancer. But insurance programs are reluctant to cover off-label treatments, unless they’re specifically recommended in expert guidelines.

Kilmer has spent much of the past three years battling insurance officials and begging drug companies for financial assistance. The drugmakers have been generous, allowing her to take a rotating cocktail of experimental drugs for free because of her modest income.

In September, however, AstraZeneca decided to end Kilmer’s financial aid. Kilmer appealed the drug company’s decision.

Paying thousands of dollars a month is not an option, Kilmer said. Her family already carries significant credit card debt from earlier cancer treatments. She estimates that she has spent about $80,600 out-of-pocket treating her illness, including $23,600 on her early breast cancer therapy and $57,000 treating metastatic disease.

Kilmer said she would rather stop taking Lynparza than financially burden her daughter and husband, a truck driver.

“It’s not worth it,” Kilmer said. “I will not put my family into that kind of debt.”

Kristen and Chet Kilmer, a truck driver, outside their home in Spearfish, S.D.(Kristina Barker for KHN)

Uncertain Benefits

Insurers say costs aren’t their only concern. Evidence is lacking that the precision medicine approach will work consistently, they argue.

America’s Health Insurance Plans, an industry group, said genetic sequencing remains unproven.

Cathryn Donaldson, the group’s spokeswoman, described recent scientific advances as “remarkable and noteworthy.” But she said insurers “need a more definitive answer” about whether the tests help the average patient live longer.

The South Dakota State Employee Health Plan — which runs Kilmer’s insurance plan — said it bases its coverage decisions on science and reviews “published, randomized data about the safety and efficacy of the requested drugs.”

Although genetic testing has become the standard of care for melanoma and a common type of lung cancer, no one knows if genomic sequencing will extend the lives of people with other types of cancer, said Dr. Carolyn Presley, an assistant professor at the Ohio State University Comprehensive Cancer Center.

In early October, after Kaiser Health News began researching Kilmer’s story, she learned that AstraZeneca has agreed to continue providing Lynparza for free.(Kristina Barker for KHN)

Without insurance coverage, some cancer patients simply give up on treatment.

A study of more than 1,000 women with advanced breast cancer — presented at a September meeting of the American Society of Clinical Oncology — found that 54 percent had stopped or refused treatment due to cost. The women in the study may have been more vulnerable than most, because 30 percent were uninsured, about twice the national rate.

In an August study in JAMA, researchers found that relatively few of those who hoped to benefit from precision medicine actually ended up on a medication. Just 15 percent of those who underwent genomic sequencing ended up taking a targeted therapy, according to the study. The study didn’t ask participants why they failed to get a targeted drug, but Presley, the lead author, said it’s likely that some patients couldn’t afford them.

“We’re finding the mutations, but patients aren’t getting the drugs,” Presley said. Without insurance, she said, “you and I would not be able to afford these medications. It’s a huge barrier.”

Within hours of the publication of this story, AstraZeneca called Kilmer to notify her that it would continue to provide financial aid. Her medication arrived in the mail the next day.

“It’s a huge relief,” Kilmer said.


KHN’s coverage of these topics is supported by
Laura and John Arnold Foundation
and
Gordon and Betty Moore Foundation