medicare

“Outrageously” priced weight-loss drugs could bankrupt US health care

bernie sanders, GLP-1, health, health care costs, medicaid, medicare, premiums, Science, wegovy, weight loss / Ryan Harris / May 18, 2024

Collision course —

Prices would need to be dramatically slashed to avoid increasing the national deficit.

Beth Mole – May 17, 2024 10: 08 pm UTC

Enlarge / Packaging for Wegovy, manufactured by Novo Nordisk, is seen in this illustration photo.

With the debut of remarkably effective weight-loss drugs, America’s high obesity rate and its uniquely astronomical prescription drug pricing appear to be set on a catastrophic collision course—one that threatens to “bankrupt our entire health care system,” according to a new Senate report that modeled the economic impact of the drugs in different uptake scenarios.

If just half of the adults in the US with obesity start taking a new weight-loss drug, such as Wegovy, the collective cost would total an estimated $411 billion per year, the analysis found. That’s more than the $406 billion Americans spent in 2022 on all prescription drugs combined.

While the bulk of the spending on weight-loss drugs will occur in the commercial market—which could easily lead to spikes in health insurance premiums—taxpayer-funded Medicare and Medicaid programs will also see an extraordinary financial burden. In the scenario that half of adults with obesity go on the drug, the cost to those federal programs would total $166 billion per year, rivaling the programs’ total 2022 drug costs of $175 billion.

In all, by 2031, total US spending on prescription drugs is poised to reach over $1 trillion per year due to weight-loss drugs. Without them, the baseline projected spending on all prescription drugs would be just under $600 billion.

The analysis was put together by the Senate’s Health, Education, Labor, and Pensions (HELP) committee, chaired by staunch drug-pricing critic Bernie Sanders (I-Vt). And it’s quick to knock down a common argument about the high prices for smash-hit weight-loss drugs. That is, with their high effectiveness, the drugs will improve people’s health in wide-ranging ways, including controlling diabetes, improving cardiovascular health, and potentially more. And, with those improvements, people won’t need as much health care, generally, lowering health care costs across the board.

But, while the drugs do appear to have wide-ranging, life-altering benefits for overall health, the prices of the drugs are still set too high to be entirely offset by any savings in health care use. The HELP committee analysis cited a March Congressional Budget Office (CBO) report that found: “at their current prices, [anti-obesity medicines] would cost the federal government more than it would save from reducing other health care spending—which would lead to an overall increase in the deficit over the next 10 years.” Moreover, in April, the head of the CBO said that the drugmakers would have to slash prices of their weight-loss drugs by 90 percent to “get in the ballpark” of not increasing the national deficit.

The HELP committee report offered a relatively simple solution to the problem: Drugmakers should set their US prices to match the relatively low prices they’ve set in other countries. The report focused on Wegovy because it currently accounts for the most US prescriptions in the new class of weight-loss drugs (GLP-1 drugs). Wegovy is made by Denmark-based Novo Nordisk.

In the US, the estimated net price (after rebates) of Wegovy is $809 per month. In Denmark, the price is $186 per month. A study by researchers at Yale estimated that drugs like Wegovy can be profitably manufactured for less than $5 per month.

If Novo Nordisk set its US prices for Wegovy to match the Danish price, spending to treat half of US adults with obesity would drop from $411 billion to $94.5 billion, a roughly $316.5 billion savings.

Without a dramatic price cut, Americans will likely face either losing access to the drugs or shouldering higher overall health care costs, or some of both. The HELP committee report highlighted how this recently played out in North Carolina. In January, the board of trustees for the state employee health plan voted to end all coverage of Wegovy and other GLP-1 drugs due to the cost. Estimates found that if the plan continued to cover the drugs, the state would need to nearly double health insurance premiums to offset the costs.

“Outrageously” priced weight-loss drugs could bankrupt US health care Read More »

Medicare forced to expand forms to fit 10-digit bills—a penny shy of $100M

car T-cell therapies, CMS, drug pricing, health, medicare, Pharmaceutical industry, Science / Blake Jones / April 2, 2024

more zeros —

Previously, some doctors had to divide bills by 10 and submit 10 claims to get costs covered.

Beth Mole – Apr 2, 2024 4: 53 pm UTC

High angle close-up view still life of an opened prescription bottles with pills and medication spilling onto ae background of money, U.S. currency with Lincoln Portrait.

In a disturbing sign of the times, Medicare this week implemented a change to its claims-processing system that adds two extra digits to money amounts, expanding the fields from eight digits to 10. The change now allows for billing and payment totals of up to $99,999,999.99, or a penny shy of $100 million.

In a notice released last month, the Centers for Medicare & Medicaid Services (CMS) explained the change, writing, “With the increase of Part B procedures/treatments exceeding the $999,999.99 limitation, CMS is implementing the expansion of display screens for monetary amount fields related to billing and payment within [the Fiscal Intermediary Shared System (FISS)] to accept and process up to 10 digits ($99,999,999.99).”

The FISS is the processing system used by hospitals and doctors’ offices to process Medicare claims.

Stat news, which first reported the update, noted that it’s not the first time CMS has struggled to make room for ever-increasing drug and treatment prices in its claims processing systems. In 2022, the agency had to give technical advice to doctors submitting claims for chimeric antigen receptor (CAR) T-cell therapy, which is used to treat blood cancers. CAR T-cell therapies run around half a million dollars, or eight digits. But in a different claims processing system, called the Multi-Carrier System (MCS), the money amount fields only included seven digits. In that case, rather than expanding the field, the CMS requested that doctors divide the bill by either five or 10, depending on the size, and then bill Medicare five or 10 separate times for a single claim.

CAR T-cell therapies aren’t the only treatments with eye-popping price points these days. Just last month, the drug Lenmeldy, a lifesaving gene therapy for a tragic childhood condition, set the current record for the highest drug price in the world at $4.25 million. Before Lenmeldy arrived, the hemophilia B drug Hemgenix held that record, with its price set at $3.5 million.

While these advanced therapies come with mind-boggling prices, prescription drug costs in the US are a problem across the board. In a KFF poll published in August, 28 percent of US adults reported difficulty affording their prescription medication, while 31 percent reported not taking their medicine as prescribed in the past year due to the cost. A federal report from 2022 found that Americans pay nearly three times more for prescription drugs than people in 33 other wealthy countries.

Medicare forced to expand forms to fit 10-digit bills—a penny shy of $100M Read More »

Judge tosses Big Pharma suit claiming drug price negotiation is unconstitutional

Astrazeneca, drug pricing, health, medicare, Pharmaceutical industry, PhRMA, Science / Blake Jones / February 14, 2024

tossed —

The judge ruled that the court lacks jurisdiction.

Beth Mole – Feb 13, 2024 7: 38 pm UTC

Enlarge / Stephen Ubl, president and chief executive officer of Pharmaceutical Research and Manufacturers of America (PhRMA), speaks during a Bloomberg Live discussion in Washington, DC, on Tuesday, Sept. 19, 2017.

A federal judge in Texas dismissed a lawsuit Monday brought by a heavy-hitting pharmaceutical trade group, which argued that forcing drug makers to negotiate Medicare drug prices is unconstitutional.

The dismissal is a small win for the Biden administration, which is defending the price negotiations on multiple fronts. The lawsuit dismissed Monday is just one of nine from the pharmaceutical industry, all claiming in some way that the price negotiations laid out in the Inflation Reduction Act of 2022 are unconstitutional. The big pharmaceutical companies suing the government directly over the negotiations include Johnson & Johnson, Bristol Myers Squibb, Novo Nordisk, Merck, and AstraZeneca.

Last month, a federal judge in Delaware heard arguments from AstraZeneca’s lawyers, which reportedly went poorly. AstraZeneca argued that Medicare’s new power to negotiate drug prices violates the company’s rights under the Fifth Amendment’s due process clause. The forced negotiations deprive the company of “property rights in their drug products and their patent rights” without due process, AstraZeneca claimed. But Colm Connolly, chief judge of the US District Court of Delaware, was skeptical of how that could be the case, according to a Stat reporter who was present for the hearing. Connolly noted that AstraZeneca doesn’t have to sell drugs to Medicare. “You’re free to do what you want,” Connolly reportedly said. “You may not make as much money.”

At a later point, Connolly bluntly commented: “I don’t find their argument compelling.”

Though the plaintiffs in the now-dismissed Texas also made an argument based on the Fifth Amendment’s due process clause, the case didn’t make it that far. US District Judge David Ezra in Austin, Texas, dismissed the case brought by one of the case’s three plaintiffs, saying the court lacked jurisdiction. And, because that one plaintiff is the only one based in the Western District of Texas, where the lawsuit was filed, he dismissed the case completely.

The three plaintiffs in the case were PhRMA, a powerful drug industry trade group representing high-profile drug makers, including Pfizer, GSK, Eli Lilly, and Sanofi; the Global Colon Cancer Association (GCCA); and the Texas-based National Infusion Center Association (NICA). Lawyers for the Biden administration filed a motion to dismiss the case, arguing that NICA is not a proper plaintiff.

Ezra found that for NICA to bring constitutional claims against Medicare’s price negotiations in a court, it is first required under federal rules to bring those claims through an administrative review process under the Medicare Act or the Centers for Medicare and Medicaid Services. Without a prior administrative review, the court has no jurisdiction.

“The Court lacks jurisdiction over NICA’s claims because the claims here ‘arise under’ the Medicare Act and the claims do not fall under the exception carved out for when claims may completely avoid judicial or administrative review. Therefore, NICA’s claims are dismissed without prejudice,” Ezra wrote in his ruling.

And, with the one Texas-based plaintiff, NICA, knocked out of the case, the Western Texas district is now the “improper venue” for a case brought by the remaining two plaintiffs, PhRMA and GCCA.

Ezra noted that in such situations, a judge can transfer the case to a court that would be considered a proper venue. But Ezra declined, noting that neither the plaintiffs nor defendants suggested a proper venue. And, even if they did, it likely wouldn’t matter, Ezra reasoned, because PhRMA and GCCA also haven’t gone through an administrative review.

“[T]he same federal jurisdictional defect likely exists for PhRMA and GCCA, as nothing suggests that either party has presented its claims to the [Health] Secretary,” Ezra wrote.

Ezra dismissed the case “without prejudice,” meaning the claims could be refiled. A spokesperson for PhRMA told FiercePharma: “We are disappointed with the court’s decision, which does not address the merits of our lawsuit, and we are weighing our next legal steps.”

Meanwhile, the first round of Medicare drug price negotiations is underway. Earlier this month, the federal government sent out its opening offers in the price negotiation process for the first 10 drugs selected. The bargaining will continue through the coming months, with an ending deadline of August 1, 2024. The prices will go into effect at the beginning of 2026.

Judge tosses Big Pharma suit claiming drug price negotiation is unconstitutional Read More »

Humana also using AI tool with 90% error rate to deny care, lawsuit claims

AI, claim denial, coverage, health, humana, insurance, insurance coverage, medicare, medicare advantage, nH Predict, nursing home, post-acute care, Science, unitedhealth / Ryan Harris / December 13, 2023

AI denials —

The AI model, nH Predict, is the focus of another lawsuit against UnitedHealth.

Beth Mole – Dec 13, 2023 9: 40 pm UTC

Enlarge / Signage is displayed outside the Humana Inc. office building in Louisville, Kentucky, US, in 2016.

Humana, one the nation’s largest health insurance providers, is allegedly using an artificial intelligence model with a 90 percent error rate to override doctors’ medical judgment and wrongfully deny care to elderly people on the company’s Medicare Advantage plans.

According to a lawsuit filed Tuesday, Humana’s use of the AI model constitutes a “fraudulent scheme” that leaves elderly beneficiaries with either overwhelming medical debt or without needed care that is covered by their plans. Meanwhile, the insurance behemoth reaps a “financial windfall.”

The lawsuit, filed in the US District Court in western Kentucky, is led by two people who had a Humana Medicare Advantage Plan policy and said they were wrongfully denied needed and covered care, harming their health and finances. The suit seeks class-action status for an unknown number of other beneficiaries nationwide who may be in similar situations. Humana provides Medicare Advantage plans for 5.1 million people in the US.

It is the second lawsuit aimed at an insurer’s use of the AI tool nH Predict, which was developed by NaviHealth to forecast how long patients will need care after a medical injury, illness, or event. In November, the estates of two deceased individuals brought a suit against UnitedHealth—the largest health insurance company in the US—for also allegedly using nH Predict to wrongfully deny care.

Humana did not respond to Ars’ request for comment for this story. United Health previously said that “the lawsuit has no merit, and we will defend ourselves vigorously.”

AI model

In both cases, the plaintiffs claim that the insurers use the flawed model to pinpoint the exact date to blindly and illegally cut off payments for post-acute care that is covered under Medicare plans—such as stays in skilled nursing facilities and inpatient rehabilitation centers. The AI-powered model comes up with those dates by comparing a patient’s diagnosis, age, living situation, and physical function to similar patients in a database of 6 million patients. In turn, the model spits out a prediction for the patient’s medical needs, length of stay, and discharge date.

But, the plaintiffs argue that the model fails to account for the entirety of each patient’s circumstances, their doctors’ recommendations, and the patient’s actual conditions. And they claim the predictions are draconian and inflexible. For example, under Medicare Advantage plans, patients who have a three-day hospital stay are typically entitled to up to 100 days of covered care in a nursing home. But with nH Predict in use, patients rarely stay in a nursing home for more than 14 days before claim denials begin.

Though few people appeal coverage denials generally, of those who have appealed the AI-based denials, over 90 percent have gotten the denial reversed, the lawsuits say.

Still, the insurers continue to use the model and NaviHealth employees are instructed to hew closely to the AI-based predictions, keeping lengths of post-acute care to within 1 percent of the days estimated by nH Predict. NaviHealth employees who fail to do so face discipline and firing. ” Humana banks on the patients’ impaired conditions, lack of knowledge, and lack of resources to appeal the wrongful AI-powered decisions,” the lawsuit filed Tuesday claims.

Plaintiff’s cases

One of the plaintiffs in Tuesday’s suit is JoAnne Barrows of Minnesota. On November 23, 2021, Barrows, then 86, was admitted to a hospital after falling at home and fracturing her leg. Doctors put her leg in a cast and issued an order not to put any weight on it for six weeks. On November 26, she was moved to a rehabilitation center for her six-week recovery. But, after just two weeks, Humana’s coverage denials began. Barrows and her family appealed the denials, but Humana denied the appeals, declaring that Barrows was fit to return to her home despite being bedridden and using a catheter.

Her family had no choice but to pay out-of-pocket. They tried moving her to a less expensive facility, but she received substandard care there, and her health declined further. Due to the poor quality of care, the family decided to move her home on December 22, even though she was still unable to use her injured leg, go the bathroom on her own, and still had a catheter.

The other plaintiff is Susan Hagood of North Carolina. On September 10, 2022, Hagood was admitted to a hospital with a urinary tract infection, sepsis, and a spinal infection. She stayed in the hospital until October 26, when she was transferred to a skilled nursing facility. Upon her transfer, she had eleven discharging diagnoses, including sepsis, acute kidney failure, kidney stones, nausea and vomiting, a urinary tract infection, swelling in her spine, and a spinal abscess. In the nursing facility, she was in extreme pain and on the maximum allowable dose of the painkiller oxycodone. She also developed pneumonia.

On November 28, she returned to the hospital for an appointment, at which point her blood pressure spiked, and she was sent to the emergency room. There, doctors found that her condition had considerably worsened.

Meanwhile, a day earlier, on November 27, Humana determined that it would deny coverage of part of her stay at the skilled nursing facility, refusing to pay from November 14 to November 28. Humana said Hagood no longer needed the level of care the facility provided and that she should be discharged home. The family paid $24,000 out-of-pocket for her care, and to date, Hagood remains in a skilled nursing facility.

Overall, the patients claim that Humana and UnitedHealth are aware that nH Predict is “highly inaccurate” but use it anyway to avoid paying for covered care and make more profit. The denials are “systematic, illegal, malicious, and oppressive.”

The lawsuit against Humana alleges breach of contract, unfair dealing, unjust enrichment, and bad faith insurance violations in many states. It seeks damages for financial losses and emotional distress, disgorgement and/or restitution, and to have Humana barred from using the AI-based model to deny claims.

Humana also using AI tool with 90% error rate to deny care, lawsuit claims Read More »

Caregiver Smart Solutions wins AARP’s best Eureka Park startup to help those 50+ to Age in Place with technologies focused on making homes smarter, safer, accessible, and fun!

caregiver, health, Health Tech, Highlights, medicare / Ryan Harris / January 16, 2022

January 15, 2022• byDarik Chandler

Caregiver Smart Solutions is The Best Way to Monitor Loved Ones As they Age In Place. By using AI for Aging in Place, we provide a proactive solution that enables your loved ones to retain their independence, dignity, and live on their own as long as possible while reducing your stress through Peace of Mind.

This was confirmed at CES 2022. It all started by winning the CTA Foundation Eureka Park Accessibility Contest. Then we won the International Business Times for Best of CES 2022. Then finally Caregiver Smart Solutions wins AARP’s best Eureka Park startup to help those 50+ to Age in Place with technologies focused on making homes smarter, safer, accessible, and fun!

We are helping our loved ones be able to live their “Golden Years” at home. At the same time, our system allows us – their adult children – to truly answer the critical question. – “How are they doing?” The insight we provide is stress-reducing, life-changing, and gives us so much incredible information!