Placing a thumb on the scale
Friday Pulse Check
Good morning and happy Friday. Thanks for subscribing to FLATLINING’S weekly newsletter that recaps all the things we have talked about in the past week.
As you may have noticed by now, I have been writing sarcastic comments about the No Surprises Act each week and I am happy to report….
Movement on the No Surprises Act
On Wednesday, a federal judge ruled in one of the multiple lawsuits against the Department of Health and Human Services regarding the Interim Final Rule (IFR) of the No Surprises Act. Judge Jeremey Kernodle agreed with the Texas Medical Association’s argument that the Qualified Payment Amount (QPA) was not an appropriate measure of how much a service is worth and that HHS did not give adequate time or notice for comments on the IFR.
The QPA is determined by the median in-network contracted rate for a particular insurer. For example: Anthem will look at all their contracts for a particular code (say 70553, an MRI of the brain with and without contrast) and find the median rate that they have contracted for that code. Seems legit. Well, the problem is that every contract includes that code even though radiologists would be the only ones to bill it. Because of this, the QPA might be significantly lower than what the service is worth and could even be lower than Medicare rates in some regions.
Additionally, as we reported back in January, some payors like Blue Cross and Blue Shield of North Carolina sent letters to current in-network providers demanding a rate cut or risk being kicked out of the network. They’re doing this because they know the QPA is significantly lower that what they’re paying out now.
This demonstrates two problems with Secretary Xavier Becerra’s IFR. Firstly, it gives an unfair advantage to the insurance companies in determining how much they will pay for out-of-network procedures. Judge Kernodle agreed. He even said that using the QPA “places its thumb on the scale.”
Secondly, it created an incentive for payors to kick providers out of the network simply because it is going to cost them less. The violates one of the basic principles of the NSA: get more doctors in-network so we don’t have to deal with this out-of-network nonsense.
Wednesday’s ruling was a win for doctors and patients. It was for doctors because their compensation is based on some arbitrary number created by the insurance companies. Doctors won’t have to face unnecessary pay cuts which would cause necessary cuts in services and quality. Since that is not as much of a worry anymore, it is good for patients.
If you want read more about the No Surprises Act, check out our explainer here.
Could universal healthcare be right on this issue?
Last week we told you about the outrage over a decision by Medicare not to cover a new Alzheimer’s drug called Aduhelm. It has a $30,000 yearly price tag per patient, it has limited effect, and exaggerated risk. Some Congressional Republicans believe that Medicare shouldn’t be deciding what drugs are covered and what isn’t. Some patients want the drug despite the risks and price tag because they are will to try anything slow or stop the progression of the disease. For the record though, most of the major delivery systems in the US are also not giving it to patients (including Johns Hopkins and Mass General).
What we pointed out then was the fact that sometimes economic decisions need to be made in healthcare. Should we (the taxpayer) be covering a drug that costs $30,000 a year per patient and could do more harm than good?
This week, we reported on a similar situation in Australia. This, for lack of a better term, is the other side of this coin. A relatively new drug called Trikafta (which is actually the combination of three drugs) was approved in the US to treat cystic fibrosis back in 2019. The drug was later approved in the United Kingdom and other European countries in late 2020 and in Australia in 2021.
Why is it that other developed countries took so long to approve a drug that, by all accounts, is a good drug? Well, it has a $300,000 per year per patient price tag and, unlike the US, those other countries have some form of socialized medicine. The taxpayers in those countries are the ones who must pay for it. That is why their governments took longer to decide if it was worth it to shell out all that money for the drug.
I’m not making that decision here one way or the other, but our point is that economics plays a much bigger role in healthcare that the average patient might realize and we should start to think through that lens if we’re going to make informed decisions about our healthcare.
The Russian invasion into Ukraine
Really quickly before I end, I want to share a non-FLATLINGING article I came across this morning. As I am sure you have seen by this point, Russia has invaded Ukraine and begun to seize land (including the Chernobyl power plant). The New York Times is reporting the Russian invasion could have a significant impact on the health of Ukrainian citizens particularly because of COVID-19.
Dr. Eric S. Toner with the Center for Health Security at the Bloomberg School of Public Health at Johns Hopkins University pointed out that if they are at war and people are crowding train stations and refugee camps, they are not going to be able to social distance or have access to masks.
Additionally, as Ukrainians flee to neighboring countries such as Poland, Moldova, Romania, and others, they will likely be bringing COVID-19 and other diseases with them. We will continue to monitor COVID-19 spread and the war in Ukraine here at FLATLINING.
Have a good weekend,
Matthew
