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Monthly Archives: April 2015

Medicare Itemizes Its $103 Billion Drug Bill

The federal government popped the cap off drug spending on Thursday, detailing doctor-by-doctor and drug-by-drug how Medicare and its beneficiaries spent $103 billion on pharmaceuticals in 2013.

The most frequently prescribed drug was Lisinopril, a generic used to treat high blood pressure and help patients survive after heart attacks. The drug was prescribed or refilled nearly 37 million times by more than 7 million Medicare beneficiaries at a cost of $307 million.

pill money 570The brand drug Nexium, used to treat acid reflux and related stomach ailments, cost the most: $2.5 billion for 1.5 million Medicare patients, who filled 8 million prescriptions and refills. The total cost included what was paid by Medicare, beneficiaries and third party groups such as supplemental health plans. The cost covered not just the drug ingredients but also sales tax and dispensing fees. It did not, however, include manufacturer rebates.

Federal officials said they hoped that disseminating the data would lead to new revelations about the prescribing patterns of doctors and for particular drugs. The database identifies doctors by name.

This KHN story can be republished for free (details).

Niall Brennan, the chief data officer for the Centers for Medicare & Medicaid Services, said agency analysts have been examining the data for several years but that “the data is larger and diverse enough that other outside folks may develop insights that we have missed.”

Dan Mendelson, the CEO of Avalere, a Washington, D.C., consulting firm, said the data could provide patients with new questions about their prescription history when they visit their physician. “It’s really important to stimulate conversations that get patients more actively engaged in their care,” he said.

However, he noted that some doctors may not take kindly to a more inquisitive patient and longer conversations. “In the shorter term, I think it will irk some physicians,” he said.

The database tracked 3,450 different drugs prescribed by a million doctors, nurse practitioners, medical students, dentists and other providers.

Story continues below

The most expensive drug per prescription was Carbaglu, a man-made enzyme used to treat people with high ammonia levels in the blood caused by a rare disorder, according to a Kaiser Health News analysis of the data. The drug was dispensed only 24 times, but at nearly $Ȝ,000 per claim it cost the government $1.4 million.

Among drugs dispensed to at least 10,000 beneficiaries, the most expensive was Revlimid, which treats anemia in people with blood or bone marrow disorders, KHN found. It is used for some cancer patients. Dispensed for 24,637 patients, Revlimid cost $8,778 per claim. That totaled more than $1.3 billion.

Drug prescribing varied considerably among states, KHN found. Rhode Island and Nebraska had the most claims per Medicare beneficiary, averaging 4.6 per patient. Delaware had the lowest number, with the average number of claims per beneficiary at 3.3.

The CMS data is likely to be used in conjunction with other datasets the government has previously released, including what procedures individual doctors billed to Medicare and how much those cost. Analysts are also sure to look for relationships between drugs commonly prescribed by doctors and another Medicare database showing payments physicians received from drug companies for research, gifts, speaking fees, meals or travel.

The Pharmaceutical Research and Manufacturers of America called the data misleading. “Significant price negotiation exists in Part D and results in rebates of as high as 20 to 30 percent for branded medicines,” the association’s president, John Castellani, said in a written statement. “These savings are not reflected in the data. Rebates have been a significant factor in keeping Part D program costs hundreds of billions of dollars below original estimates, while still offering beneficiaries steady premiums and a robust choice of plans.”

The American Medical Association also cautioned that the data could be misinterpreted.

“The data does not account for varying strengths or dosage levels of the medications or varying patient needs,” the association said in a written statement. “For example, a physician could prescribe a low dose of a medication and at a later time need to prescribe another, stronger dosage for the same patient if the low dose isn’t meeting their need or if the patient has an adverse react.”

The government noted that the top 10 most commonly prescribed drugs were generic and the 10 most expensive drugs were all brand name. The finding is not surprising since some brand name drugs are protected from competition by their patents.

An analysis Medicare released with the data found that in some parts of the county brand drugs were dispensed much more frequently than generics. Doctors in the western part of the country, including Washington, Oregon, Idaho and Nevada, and parts of in the Midwest leaned heavily toward generics, which tended to be dispensed between 78 percent and 81 percent of times. Brand drugs were favored in much of Texas and Alaska, where generics were dispensed in between 65 percent and 75 percent of cases.

Federal officials also calculated how prescription patterns varied among medical specialties. Family practice doctors prescribed the most drugs, followed by internal medicine doctors. Among the biggest medical specialties, psychiatrists prescribed the most expensive drugs, averaging $104 for a prescription or refill. While hematologists and oncologists were not among the top prescribers, their drugs averaged $550 per claim. The average cost of all prescriptions or refills was $75.

The data does not present a complete picture of physician prescribing. Most notably, it includes only those drugs for 36 million beneficiaries that were billed to Medicare’s Part D program, which make up 68 percent of all the people on Medicare. It does not reflect the prescriptions doctors wrote for privately insured patients or those on other government programs such as Medicaid. It also reveals nothing about the quality of these treatments or what kind of patients each doctor saw.

To ensure that people could not identify beneficiaries, Medicare omitted prescriptions that were based on 10 or fewer claims per doctor. That excluded 13 percent of claims.

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Hope, Hurdles In Mental Health: A Medicaid Managed Care Firm’s First Year

Last spring Cardinal Innovations Healthcare Solutions took control of more than $200 million in Medicaid spending for Mecklenburg County residents with mental illnesses, addictions, autism and similar issues.

It was a controversial mandate from the state. County officials wanted to keep local control. Clients and their families feared the focus on cost control would erode care.

A year later, many Mecklenburg officials, mental health professionals and advocates say the managed care group, which already had roots in the region, is winning their confidence.

“Oddly enough, I think things are going well,” said county commissioner George Dunlap, who fought the takeover but later became a member of Cardinal’s board.

Rough spots remain, including disputes over paying for some of the most complex and expensive cases. Managed care demands a document-heavy, data-driven approach, and some clients have conditions that make progress tough to measure.

They’re people such as 12-year-old Bewlay Koury of Matthews, who has profound autism. Medicaid pays more than $ȩ,000 a year for support that lets Bewlay, who needs constant supervision and help with everyday tasks, live at home.

Her parents, Christy and Ken Koury, went into mediation with Cardinal after wrangling over the hours and type of service she needs (see accompanying story). They reached a compromise, but Christy still worries about her daughter’s future.

“The issue is that the legislature has cut all this funding, and they’ve brought Cardinal in to be the bad guy,” she said. “It’s an impossible task.”

But several professionals and advocates say Cardinal is serious about enforcing high standards and working through startup bumps.

When there are concerns, “all we have to do is pick up the phone and (Cardinal) people will come to our support groups. That has been well-received,” said Ellis Fields, executive director of theMental Health Association of Central Carolinas, an advocacy group for people with mental illness.

Cardinal, which is charged with providing care while keeping costs under control, says it has saved enough to extend services to almost 900 people in Mecklenburg so far this year. The not-for-profit organization is monitored by the N.C. Department of Health and Human Services, which regulates how much can be spent on administration and how savings can be used.

In the past year, Cardinal staffers have met with clients, advocacy groups and representatives of schools, courts, law enforcement and other agencies, trying to get a handle on local needs and issues.

This copyrighted story comes from The Charlotte Observer, produced in partnership with KHN. All rights reserved.charlotte observer 19.png

Nicole McKinney, Cardinal’s vice president in charge of Mecklenburg, says the “high-touch” approach is paying off as local residents realize the agency will listen to and work with them.

Money is limited

Like so many changes in health care, the Cardinal takeover stemmed from concerns about spending.

Lawmakers grappled with an ever-growing Medicaid system that repeatedly overspent the budget. The Kannapolis-based Cardinal (previously known as Piedmont Behavioral Healthcare) proposed a managed care pilot program that took over Medicaid for five counties north and east of Charlotte in 2005.

The General Assembly voted in 2011 to expand the model statewide. Mecklenburg County officials tried to adapt MeckLINK, a county agency, to the new model. But state health officials weren’t satisfied and eventually insisted that Cardinal, which had grown to cover 15 counties, add Mecklenburg to its territory.

Despite emotional public hearings and threats of a legal battle, the handoff took place April 1, 2014.

“There was a lot of fear of what was going to happen. We didn’t know if the world was going to stop on April 1,” said Heather Johnson, a lawyer with the nonprofit Council for Children’s Rightswho represents young people with behavioral health issues.

It didn’t – but many who work with Cardinal say there were bumps and snarls as the new group took over.

Who pays the bill?

Among the challenges: finding appropriate placement for teens who are in custody of Mecklenburg County’s Department of Social Services because they’ve been victims of abuse and who need intensive, constant care because of violent or self-destructive behavior.

Charles Bradley, director of Youth and Family Services for Mecklenburg County, says local facilities that can handle such needs are often full. For teens who have landed in psychiatric emergency rooms or juvenile detention, that means their only options for discharge are going back to parents who are unable to care for them or being placed in foster families that aren’t trained for such intense needs, he said.

In October 2014, the county signed a contract with New Hope treatment center in Rock Hill, which provides intensive therapy and constant monitoring at a daily rate of $429 per resident.

Because New Hope isn’t in Cardinal’s network, Medicaid doesn’t pay. And because it’s across the state line, North Carolina money isn’t available, leaving Mecklenburg County with the bill, Bradley said. The 20 youths who have been placed so far have run up about $200,000 in charges.

County and Cardinal staff have been trying to resolve the issue, both organizations say. If Cardinal doesn’t agree to pick up the costs, the county expects to spend another additional $500,000 in th󷄯-16 budget.

County Manager Dena Diorio, who was a skeptic about the Cardinal takeover, said in most cases the transition has gone well. But in this situation, “Cardinal’s going to go with the lowest level of services they can get away with,” Diorio said Wednesday.

Cardinal Chief Operating Officer Will Woodell said Thursday that it’s the county’s responsibility to provide “safe placement for these children until the best-practice, long-term treatment for the child can be determined.” The teens at New Hope haven’t had the assessment for their long-term needs, he said. Only after that is done will Medicaid pay for “medically necessary treatment services.”

Woodell and Diorio both say they’ll continue working together on long-term solutions to keep teens and adults out of jails, emergency rooms and life on the streets. This fall, Cardinal and Monarch, a Stanly County nonprofit that provides behavioral health services, will open a Charlotte crisis center for children and youth.

Worth the hassle?

The new approach to doling out Medicaid money comes with tougher scrutiny of social workers, psychologists, counselors and other care providers.

Some have opted out or been dropped. When Cardinal took over, MeckLINK passed along a list of 557 authorized providers. But Cardinal officials say they were unable to reach many of them, and it was unclear whether they were active with MeckLINK.

Cardinal declined to offer contracts to 18 of the MeckLINK providers. After the handoff, eight more providers chose to drop their contracts and two were involuntarily terminated, according to Cardinal numbers.

“They kind of cleaned house when they first came in,” said Johnson, the Council for Children’s Rights lawyer. The auditing that thinned the ranks is likely to be a good thing in the long run, she said, but it left the county with service gaps Cardinal is still trying to fill.

Cardinal’s McKinney disagrees: “We can comfortably say that we have the necessary services.”

Kristin Rogentine-Lee, a Charlotte psychologist who does testing and therapy for children, is one of those who opted out. She said Cardinal reviewed paperwork from 10 sessions and demanded that she repay $700. The errors they cited were minor, she said, such as failing to note a patient’s progress toward goals on one form. For children with deeply troubled lives, each session doesn’t necessarily bring measurable gains.

“It’s quantifying something that’s nonquantifiable,” Rogentine-Lee said. “I can see accountability and oversight, but nitpicking over these little things?”

When she appealed, Cardinal reduced her penalty to $350, Rogentine-Lee said. But Medicaid payments are already low, she added, and in January she asked to be dropped from Cardinal’s roster.

Sally Cameron, executive director of the N.C. Psychological Association, said the demands of managed care are causing Medicaid patients to lose the services of “very seasoned, valuable practitioners.”

“That’s not a Cardinal/Mecklenburg thing,” she added. “That’s an across-the-state problem.”

Dammeon Chisholm, who spent seven years as chairman of the Mecklenburg County Providers Council before handing off leadership this year, says he was worried about the transition. But he says Cardinal has worked with providers to resolve problems and help them understand the new requirements.

Chisholm is executive director of Charlotte’s Total Care and Concern, which provides services for people with intellectual and developmental disabilities. Like Cameron, he said the increased demands aren’t exclusive to Cardinal.

“It’s just something that’s part of the business,” he said. “There’s a lot of money at stake.”

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Viewpoints: Obama’s ‘Squandered’ Legacy; Challenges Of Telemedicine; New Genetic Tests

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State Highlights: N.C. Bill Would Forbid Asking Patients About Firearms; Calif. Individual Insurance Market Up 64%

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In Third Attempt, N.C. Senate Passes Autism Coverage Bill

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Texas, Ala. Consider Further Abortion Restrictions

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R.I. Wrestles With Ways To Reduce State’s Medicaid Costs

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Hospitals Prove Their Importance In Rural Towns

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Doctors Kicked Out Of Medicare Still Billing State Medicaid Programs

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Hint Of Higher Hospital Spending Sends Health Insurer Stocks Plummeting

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