By: Andrew Silverio, Esq.
On July 24, 2020, the White House issued an “Executive Order on Increasing Drug Importation to Lower Prices for American Patients” as part of a handful of executive orders aimed at drug costs (available at https://www.whitehouse.gov/presidential-actions/executive-order-increasing-drug-importation-lower-prices-american-patients/). At first glance, the order seems to take sweeping steps to facilitate the importation of prescription drugs, but does any of it really represent a departure from existing law? The order specifically orders the Secretary of HHS to take action in three ways:
As it relates to the first item, it’s clear that this does not represent any new law or authority. Under section 804(j)(2) of the FDCA, “The Secretary may grant to individuals, by regulation or on a case-by-case basis, a waiver of the prohibition of importation of a prescription drug or device or class of prescription drugs or devices, under such conditions as the Secretary determines to be appropriate.” This order is simply an instruction to utilize said authority, and it is not clear how or whether these waivers would differ from the existing FDA policy of enforcement discretion, which is quite broad and under which individuals are rarely prosecuted for importing prescription drugs for personal use. The important caveat that the importation must pose “no additional risk to public safety” suggests that there may be no real change at all, as this is one of the biggest factors in the FDA’s existing policy of enforcement discretion, and the key element cited by the FDA and pharmacy stakeholders in pushing back against importation.
In regard to the second item, the specific inclusion of insulin is interesting, and perhaps represents the most significant element of this order. The proposed rules outlined in 2019 by the FDA and HHS did not specifically include insulin (available at https://www.hhs.gov/about/news/2019/07/31/hhs-new-action-plan-foundation-safe-importation-certain-prescription-drugs.html), and the drug’s special storage and safety requirements are a barrier to its inclusion in existing avenues of importation.
While we’re on the topic of the proposed rule, the third item in the executive order is nothing more than an instruction to continue that rulemaking process. So, is this order a dramatic step toward real federal action allowing drug importation, or just a token announcement that doesn’t really accomplish anything? Unfortunately, it’s simply too early to tell, and we will have to wait and see what HHS does in response. It is worth noting that when the proposed rule came out, it was met with harsh criticism from our northern neighbors, many of whom discussed potential action by the Canadian government to counter any such importation efforts in order to protect their own drug supply. As such, action taken by the United States in regard to Canadian drug importation won’t be the only factor in whether the practice ultimately becomes both legal and practical.
By: Nick Bonds, Esq.
While some of the United States is tentatively beginning to reopen, much of the country remains firmly under social distancing orders. The ripple effects of keeping people cooped up with their families vary wildly, but many are reveling in the extra time spent together, and are finding numerous ways to stay sane and entertained in the face of the Covid-19 pandemic.
Some of this has led to fairly predictable shortages, but there are reasons for hope. Aside from the struggle of grocery stores (and even a few global online retail-giants-who-shall-not-be-named) to keep toilet paper, disinfectant wipes, and hand sanitizer in stock, the fact that our stores’ shelves have been rendered entirely barren should be seen as a testament to the resilience of our modern supply chain.
Nonetheless, there are a number of things you just can’t find right now. Toilet paper remains scarcer than I’d like it to. The meat case at my local store has been pretty sparse of late. You probably can’t buy a Nintendo Switch from a traditional retail outlet at MSRP to save your life right now. And, spurred by the hordes of energetic youths with no safe outlet for their boundless energy, trampolines are flying off of shelves.
This got me thinking… plenty of people find perfectly mundane ways of injuring themselves in the home. Sure, social distancing keeps us safe from the coronavirus, and protects us in plenty of other ways. Fewer drivers on the roads means fewer car accidents. Fewer kids playing peewee football means fewer broken collarbones. But as a former kid myself, I can tell you: we will find a way to injure ourselves, trampoline or no. And fear of the coronavirus may well make people wary of visiting an emergency room (preferably an urgent care clinic), even when truly necessary, exacerbating injuries and prolonging the healing process. This will almost certainly lead to higher claims costs for plans down the line.
All this to say, it is imperative that we all keep up with our personal well-being in this time of social distancing. If anything, this pandemic may help all of us maintain a greater awareness of our personal health. Companies that encourage telemedicine can help their employees build a rapport with their healthcare providers, leading to better health outcomes and ultimately saving plans money. Keeping ourselves and our families mentally and physically engaged throughout this time will keep us all healthier and saner until we can finally go to our offices again. If it takes a videoconference with your doctor (or a trampoline/black-market videogame console) to make that happen, maybe it’s worth it.
By: Andrew Silverio, Esq.
Anyone who works in health benefits is familiar with surprise billing – the specific kind of balance billing which occurs when a patient visits an in-network physician or hospital, and receives an unexpected balance bill from an out-of-network provider that they didn’t have an opportunity to select, and in many cases, didn’t even know they had utilized. Common culprits are anesthesiologists, assistant surgeons, and outside lab work.
We often think of this as primarily a problem for emergency claims. This makes a great deal of sense, since when someone presents at an ER or is brought there via ambulance, they likely won’t have an opportunity to ask questions about network participation or request specific providers. However, according to surprising data released in the Journal of the American Medical Association on February 11, 2020 entitled “Out-of-Network Bills for Privately Insured Patients Undergoing Elective Surgery With In-Network Primary Surgeons and Facilities (available at jamanetwork.com/journals/jama/fullarticle/2760735?guestAccessKey=9774a0bf-c1e7-45a4-b2a0-32f41c6fde66&utm_source=For_The_Media&utm_medium=referral&utm_campaign=ftm_links&utm_content=tfl&utm_term=021120), these bills don’t actually seem to be more likely to arise from emergencies or other hospital stays where patients have less of an opportunity to “shop around.”
The study looked at 347,356 patients undergoing elective surgeries, at in-network facilities with in-network surgeons. These are patients who had ample opportunity to select their providers, and indeed did select in-network providers for both the surgeon performing their procedure and the facility in which it would occur. Shockingly, over 20% of these encounters resulted in a surprise out of network bill (“Among 347 356 patients who had undergone elective surgery with in-network primary surgeons at in-network facilities . . . an out-of-network bill was present in 20.5% of episodes...”) The instances that involved surprise bills also corresponded to higher total charges - $48,383.00 in surprise billing situations versus $34,300.00 in non-surprise billing situations.
The most common culprits were surgical assistants, with an average surprise bill of $3,633.00, and anesthesiologists, with an average bill of $1,219.00. In the context of previous research indicating that “20 percent of hospital admissions that originated in the emergency department . . . likely led to a surprise medical bill,” it seems that even when patients are able to do their homework and select in-network facilities and surgeons, they are just as susceptible to surprise billing. (See Garmon C, Chartock B., One In Five Inpatient Emergency Department Cases May Lead To Surprise Bills. Health Affairs, available at healthaffairs.org/doi/10.1377/hlthaff.2016.0970.)
Many states have enacted protections against balance billing and surprise billing, with Washington and Texas both recently enacting comprehensive legislation. However, these state-based laws have limited applicability, and there are to date no meaningful federal protections for patients in these situations. Until such protections are enacted, patients are left vulnerable to sometimes predatory billing practices, and plans are left to choose between absorbing that financial blow or leaving patients out in the cold.
By: Nick Bonds, Esq.
With the Legislature moving at a glacial pace, the Trump administration has doubled down on its policy objective to reduce health care costs through executive action and administrative rulemaking. A key part of their strategy involves a push to increase transparency in the health care industry – taking special aim at hospitals and drug manufacturers. The apparent logic being that if hospitals and drug makers have to share their actual prices, patient reaction will be strong enough to drag prices down. Experts disagree as to how effective these strategies would be in theory, but we may never have the opportunity to see their impact in practice.
High-profile initiatives to emerge from this approach have run in to a number of difficulties. The administration’s proposed rule requiring drug manufacturers to disclose their drugs’ list prices in their television ads has not been largely repulsed by the pharmaceutical industry, who have had a fair amount of success thus far blocking this rule in court. The pharmaceutical industry argued that this disclosure rule lacked authority and violated their free speech. Last summer, a federal judge in Washington, D.C. ruled that HHS exceeded its authority by compelling them to disclose their prices. HHS appealed, but this past week the U.S. Court of Appeals for the D.C. Circuit appeared unsympathetic. The appeals court agreed that HHS had not been granted the requisite authority by Congress to implement this drug pricing rule, and remained unconvinced that this pricing disclosure requirement would in fact help achieve the administration’s goal of bringing down drug costs. WE expect the administration to appeal yet again.
Announced last November, another transparency-minded federal rule requires hospital systems to disclose the price discounts they have negotiated with insurers for a wide swath of procedures. This disclosure is intended to inform patients of their prospective costs before they are incurred, empowering patients to shop around for the best prices. Here again, debate swirls as to whether this tactic would be effective. Meanwhile, hospital groups have implored the D.C. District Court to block these rules from taking effect echoing the arguments of the pharmaceutical companies before them: that the administration lacks the authority to implement its rule, and that the proposed rule violates their First Amendment rights. Time will tell if the courts come down on the administration’s side this time around.
Other Trump administration efforts have seen fewer setbacks: they have slashed regulations on short terms plans and association health plans (“AHPs”), more generic drugs have been approved, and they are plowing ahead with a notice of proposed rulemaking to allow importation of prescription drugs from Canada. Nonetheless, the number of Americans without health insurance continues to rise, as do marketplace premiums and the actual costs of care. The goal of reducing healthcare costs is an admirable one, we will see how effective the administration’s attempts will be.