Author: WorkCompAcademy

A biosimilar drug (also known as follow-on biologic or subsequent entry biologic) is a biologic medical product which is almost an identical copy of an original product that is manufactured by a different company. Biosimilars are officially approved versions of original “innovator” products, and can be manufactured when the original product’s patent expires. Reference to the innovator product is an integral component of the approval.

And lower-cost copies of these complex biotech drugs could save the United States and Europe’s five top markets as much as 98 billion euros ($110 bln) by 2020, a new analysis showed on Tuesday as reported in an article by Reuters Health. Realizing those savings, however, depends on effective doctor education and healthcare providers adopting smart market access strategies, the report by IMS Institute for Healthcare Informatics said.

The potential for copycats to take business from original biotech brands is increasingly grabbing the attention of investors, with many worried about the impact on profits at companies like Roche and AbbVie. It also presents an opportunity for an emerging group of biosimilar specialists, such as South Korea’s Celltrion and large generic drugmakers with biotech know-how, like Novartis’ unit Sandoz.

A saving of 98 billion euros is based on eight major branded biotech drugs, including AbbVie’s Humira and Roche’s Herceptin, that are set to lose patent protection over the next five years. It also assumes an average biosimilar price discount of 40 percent, and savings would fall to 74 billion euros at a 30 percent discount and 49 billion at 20 percent. The IMS forecast covers Germany, France, Italy, Britain, Spain and the United States.

The European regulatory authorities led with a specially adapted approval procedure to authorize subsequent versions of previously approved biologics, termed “similar biological medicinal products”, or biosimilars. This procedure is based on a thorough demonstration of “comparability” of the “similar” product to an existing approved product. In the United States, the Food and Drug Administration (FDA) held that new legislation was required to enable them to approve biosimilars to those biologics originally approved through the PHS Act pathway. The FDA gained the authority to approve biosimilars (including interchangeables that are substitutable with their reference product) as part of the Patient Protection and Affordable Care Act signed by President Obama on March 23, 2010; on March 6, 2015, Zarxio obtained the first approval of FDA.

Interest in biosimilars has grown significantly in the past two years thanks to the arrival of copies of sophisticated antibody drugs that are among the world’s biggest-selling prescription medicines. Europe has lengthy experience with biosimilars, having approved the first such products 10 years ago, but uptake still varies widely from country to country, depending on local market conditions.

Physician Robin Chorn, M.D. and workers’ compensation applicants Robert Kalestian, Tanya Vounov, and Latasha Buie petitioned the Court of Appeal for a writ of mandate asking it to enjoin the Workers’ Compensation Appeals Board from enforcing two recently enacted provisions of the Labor Code pertaining to the lien filing fees, sections 4903.05 and 4903.8.

Petitioners contend that section 4903.05, which imposes a filing fee of $150 on certain medical liens filed in workers’ compensation cases, deprives them of their state constitutional rights to due process (Cal. Const., art. I, § 7), equal protection (Cal. Const., art. I, § 9), and petition for redress of grievances (Cal. Const., art. I, § 3). Petitioners claim that section 4903.8, which restricts payment of lien awards to individuals other than those who incurred the expenses, substantially impairs their constitutional right to contract. (Cal. Const., art. I, § 9.) Finally, they argue that both statutes contravene the constitutional mandate that workers’ compensation laws “accomplish substantial justice in all cases expeditiously, inexpensively, and without any encumbrance of any character.” (Cal. Const., art. XIV, § 4.)

The Court of Appeal rejected the request in the published case of Chorn v WCAB and Kamala Harris and ruled that the challenged provisions of sections 4903.05 and 4903.8 do not violate any of the constitutional provisions identified in the petition.

Article XIV, “section 4 of the state Constitution ‘affirms the legislative prerogative in the workers’ compensation realm in broad and sweeping language’ . . . . [Citation.]” (Stevens, supra, 241 Cal.App.4th at p. 1094.) “[T]he notion that . . . Section 4 itself imposes separate restraints on the plenary powers it confers on the Legislature has been decidedly rejected.” (Ibid.) Likewise, the Legislature’s broad power to regulate and enact limitations upon workers’ compensation matters “has been repeatedly affirmed.” (Ibid. [collecting cases].) Thus, “nearly any  exercise of the Legislature’s plenary powers over workers’ compensation is permissible so long as the Legislature finds its action to be ‘necessary to the effectiveness of the system of workers’ compensation.’ (Greener v. Workers’ Comp. Appeals Bd., supra, 6 Cal.4th at p. 1038, fn. 8.)” (Stevens, supra, 241 Cal.App.4th at p. 1095.) “The California Constitution does not make a workers’ right to benefits absolute” (Rio Linda Union School District v. Workers’ Compensation Appeals Board (2005) 131 Cal.App.4th 517, 532), nor does it make lien claimants’ rights to reimbursement absolute, as their rights arise out of and are derivative of the underlying workers’ compensation claim (see Perrillo v. Picco & Presley (2007) 157 Cal.App.4th 914, 929).

Here, the Senate Rules Committee’s analysis of SB 863 states that the lien system was “out of control” and could be reined in by “re-enact[ing] a filing fee, so that potential filers of frivolous liens have a disincentive to file.” “[F]ar from conflicting with Section 4’s mandate to provide substantial justice,” the lien reforms implemented in sections 4903.05 and 4903.8 advance this goal by taking aim at problem liens that impede the functioning of the workers’ compensation system. (Stevens, supra, 241 Cal.App.4th at p. 1096.) “It is not our place under the state Constitution to ‘second-guess the wisdom of the Legislature’ in making these determinations. (Facundo-Guerrero v. Workers’ Comp. Appeals Bd., supra, 163 Cal.App.4th at p. 651 [ ].)” (Stevens, supra, 241 Cal.App.4th at p. 1096.)

It may be that Uber type competition is about to challenge the medical transportation industry in California, hopefully bringing lower prices and better service.

EMS Find, Inc. announced the launch of its updated website. The on-demand medical transportation mobile application developed by the Company is now available for download in Google Play Store and the updated version of it is now offered in Apple App Store.

Within one month the Company plans to release the desktop version of its software for scheduling and tracking of medical transport. Availability of iOS, Android and Desktop versions will facilitate the seamless integration between medical transporters and health care providers.

The Company says it is engaging in several strategic partnerships with the leading industry peers with focus to provide the ultimate solution to manage medical transportation fleet scheduling tasks as well as integration with the Uber Platform to allow any Uber Driver to assist in transportation to medical appointments of the patients who are not requiring ambulances or other specialized medical equipment.

The Company is also working on expanding its B2B solution by implementing the claim billing functionality along with an automatic verification of patient’s eligibility to receive medical insurance compensation for transportation. EMS Find’s solution offers many important features such as verification of validity of drivers’ certifications to deliver the trip.

EMS Find App is designed to dramatically reduce the paper load and the time, currently burdening the social workers, case managers and other health care professionals in charge of scheduling, fraud reduction and elimination of the unpaid and empty trips by the ambulance companies.

The Company says it has been making progress with practical implementation of its business plans along with continuing its software development, . The recently announced pilot testing of its mobile app in California is expected to involve about 50 ambulances and other special medical vehicles interacting with several skilled care facilities in and around Los Angeles County with the goal of launching and growing commercial service in the greater Los Angeles and surrounding counties in 2-3 months.

The revenue model under development there will include per booked trip fees as well as principal transportation brokerage fees.

The Patient Protection and Affordable Care Act (ACA) created the Consumer Operated and Oriented Plan Program – known as the CO-OP Program. Under the CO-OP Program, the Department of Health and Human Services (HHS) distributed loans to consumer-governed, nonprofit health insurance issuers. A new Majority Staff Report of the U.S. Senate Permanent Subcommittee on Investigations says that HHS ultimately received $2.4 billion of taxpayer money to fund 23 CO-OPs that participated in the program. Twelve of those 23 CO-OPs have now failed, leaving 740,000 people in 14 states searching for new coverage and leaving the taxpayer little hope of recovering the $1.2 billion in loans HHS disbursed to those failed insurance businesses.

Congress initially allocated $6 billion for the Obamacare CO-OP program, with the goal of establishing CO-OPs in all 50 states as well as the District of Columbia. Subsequent legislation slashed some of this funding. The CO-OPs ultimately suffered $376 million in losses in 2014 and more than $1 billion in losses in 2015. By the end of 2014, the 12 collapsed insurance nonprofits had already exceeded their projected worst-case-scenarios by more than $263 million, four times more than what they initially projected.

None of the failed CO-OPs have repaid a single dollar, principal or interest, of the $1.2 billion in federal solvency and start-up loans they received. In addition, there remains substantial liability for unpaid claims including fully processed 2015 claims as well as incurred but unprocessed 2015 claims. The CO-OPs report that they continue to receive some 2015 medical claims through the first quarter of 2016, and many received claims are still being processed to determine coverage.

Based on the most recent balance sheets provided to the Subcommittee, the failed CO-OPs currently owe an estimated $742 million to doctors and hospitals for plan year 2015, including incurred claims. An insolvent health insurer’s debt to providers takes priority over other liabilities, so those claims are likely to be the first to be paid out of remaining assets. But if a CO-OP’s medical claims alone exceed assets, payment to providers can be in doubt. Based on their submissions, at least six CO-OPs currently owe more in medical claims alone than they hold in assets. Three of those CO-OPs – the Colorado CO-OP, the South Carolina CO-OP, and CoOportunity – have access to guaranty associations capable of paying some or all unpaid medical claims.

Guaranty associations serve as a mechanism to pay covered claims occurring as a result of an insurer’s insolvency. Associations were created to alleviate these problems and ensure the stability of the insurance market. The Colorado CO-OP projects that substantially all of its $96.6 million in unpaid medical claims will be paid by the state’s guaranty fund. Similarly, the South Carolina CO-OP estimates that all of its $48 million in unpaid claims will be paid by the state’s guaranty fund. The first CO-OP to close, CoOportunity, reports that $114.1 million of its unpaid medical claims have now been paid by the Iowa and Nebraska guaranty associations.

The other three CO-OPs with serious shortfalls, however, will not be bailed out by guaranty funds. The New York CO-OP reports that it had $379.5 million in unpaid medical claims and $157.54 million in assets as of December 31, 2015 – a $222 million shortfall, excluding any other liabilities. No portion of that shortfall will be covered by New York’s guaranty fund. Most of the New York CO-OP’s unpaid claims are owed to doctors and hospitals, and a non-negligible share – $373,000 as of January 31, 2016 – is owed directly to patients.

Similarly, the Louisiana CO-OP reports $34.4 million in assets and $43.3 million in unpaid medical claims as of January 31, 2016, and none of that $9 million shortfall will be covered by a guaranty fund. The same is true of the $7 million shortfall on the Kentucky CO-OP’s January 2016 balance sheet, which shows $77.5 million in unpaid claims and only $70.5 million in assets.

It is likely that some of the cost of these losses will translate to cost drivers in workers’ compensation claims.  Certainly, the guarantee funds will distribute the cost by way of assessments to other insurers who will in turn pass the costs to policyholders everywhere.  Medical providers who are not paid in one system, will demand higher fees to compensate them in another system.  The epic failure of the CO-OP Program is not good news for anyone.

A federal judge in California granted the United States’ motion to dismiss portions of CIGA’s complaint regarding Medicare payments, holding that California’s insurance codes are preempted by federal law in the case of California Insurance Guarantee Association v. Sylvia Mathews Burwell, et al., No. 15-cv-1113, C.D. Calif..

CIGA is currently paying several claims under various workers’ compensation policies issued by now-insolvent insurers. Some of these claimants also received payments from Medicare for items and services that were otherwise covered by these policies. Where Medicare pays benefits for a loss that is also covered by another insurer, the Medicare Secondary Payer statute, 42 U.S.C. § 1395y, designates Medicare as the “secondary payer” and generally requires those other insurance plans (called “primary plans”) to reimburse Medicare for all benefits it paid. Concluding that the workers’ compensation policies were “primary plans” within the meaning of the statute, the United States demanded that CIGA reimburse it for the Medicare benefits paid to these claimants. CIGA refused, prompting the United States to commence collection proceedings.

CIGA filed a declaratory and injunctive relief action against Defendants Sylvia Mathews Burwell, United States Department of Health and Human Services, and the Centers for Medicare and Medicaid Services contending that it was not required to reimburse the United States for Medicare benefits paid to individuals whose losses may also be covered by CIGA.

The United States argued that claims made by the United States could never be defeated by a state-imposed time limit, CIGA argued that the California Guarantee Act is a state law that regulates the business of insurance, and thus supersedes any general federal law allowing claims to be filed outside the Guarantee Act’s filing deadline. In reply, the United States argued that McCarran-Ferguson does not apply because (1) the Guarantee Act’s claims filing statute does not regulate the “business of insurance,” and (2) that the Medicare Secondary Payer statute is at any rate a federal statute that specifically regulates the business of insurance.

Ultimately, the California District Court for the Central District of California held that the McCarran-Ferguson Act did not subject the United States to California’s claims filing deadline because the Act was never intended to waive the federal government’s sovereign immunity. CIGA’s claims against the United States were dismissed to the extent that they were based on the United States’ failure to file timely proofs of claim under California’s Guarantee Act.

The Court cited the familiar rule that “[w]hen the United States becomes entitled to a claim, acting in its governmental capacity and asserts its claim in that right, it cannot be deemed to have abdicated its governmental authority so as to become subject to a state statute putting a time limit upon enforcement.” United States v. Summerlin, 310 U.S. 414, 417 (1940); see also Bresson v. C.I.R., 213 F.3d 1173, 1176 (9th Cir. 2000). This common law rule has its origins in the concept of sovereign immunity; just as the states cannot sue the federal government without its consent, the states cannot enact laws that purport to bind the federal government without its consent.