The Oceanside Unified School District filed a lawsuit in U.S. District Court for the District of New Jersey against pharmaceutical and pharmacy benefit companies. The lawsuit alleges that three pharmaceutical manufacturers – Eli Lily, Novo Nordisk, and Sanofi – and three pharmacy benefit managers – Express Scripts, CVS Caremark, and Optum RX – colluded to inflate the price of insulin paid by the district’s self-funded health plan.

The lawsuit describes a scheme in which pharmacy benefit managers (PBMs) secure billions of dollars in rebates from pharmaceutical manufacturers in exchange for including their insulin products on the PBMs’ list of approved drugs, known as formularies. Manufacturers then artificially raise their prices to pay for those rebates, shadowing each other in lockstep rather than competing to offer lower consumer prices.

The lawsuit points out that insulin is a century-old medication, and while its production costs have decreased with little need for new investments in innovation, research, or development, its price has surged by more than 1000 percent since 2003. This dramatic increase is attributed to a pricing strategy involving pharmaceutical manufacturers and pharmacy benefit managers.

One of the attorneys representing the School District said in a press release that “like many organizations with self-funded health plans, the Oceanside Unified School District should not be forced to pay inflated and unreasonable insulin prices created by a scheme between big pharma and benefits managers to engage in unfair and deceptive trade practices.

This lawsuit aims to address these practices under state unfair business laws and federal Racketeer Influenced and Corrupt Organization (RICO) laws.”

According to the story published by NBCSandiego.com, Oceanside Unified School District is one of more than 200 school districts joining in the lawsuits nationwide. The attorney representing it says they’re anticipating more districts from San Diego County to come forward.

However, some employers with self-insured pharmacy benefits plans may become targets of litigation themselves. A study published by The American Journal of Managed Care last July conducted a national survey of 110 employer drug benefit decision makers for organizations with self-insured pharmacy benefits.

The study found that nearly two-thirds of employers reported having rebate agreements with a rebate guarantee for specialty drugs.The person or entity most influential to rebate strategy decisions was often a benefits consultant (37.3%), a human resources/benefits leader (29.1%), or a benefits broker (21.8%). Employers with rebate guarantees ascribed a higher level of importance to guarantees when selecting a PBM than employers receiving rebates without a guarantee and those who do not receive rebates.

The study concluded by saying “As the public discourse on PBMs and drug rebates continues, it is important to recognize the role employer benefits consultants may play in perpetuating employer reliance on guaranteed rebate arrangements.”

Responding to this study, the Mahoney Group warned “the reliance on drug rebate guarantees poses an elevated fiduciary risk for employers, especially in light of the Consolidated Appropriations Act (CAA) of 2021, which imposes tighter fiduciary duties on sponsors of group health plans.”

Large, self-insured employers are also beginning to face lawsuits from their workers over claims of mismanaging health and pharmaceutical benefits and violating their fiduciary duties under the Employee Retirement Income Security Act. Employees at Johnson & Johnson earlier this year filed a federal class-action lawsuit against their New Jersey-based employer alleging that over the years they have paid millions of dollars more for drugs than they should have. Wells Fargo was also sued by employees in a July class action for allegedly paying inflated prices to its contracted pharmacy benefits manager, Express Scripts.

In a statement to NBC 7, Eli Lily said, in part: “These allegations are baseless. It is the school district and other health plans – not Lilly – who negotiate the terms of their rebate arrangements, including whether to pass those rebates on to people who take insulin.”

CVS Caremark also responded, saying, in part, “Pharmaceutical companies alone are responsible for the prices they set in the marketplace for the products they manufacture … we intend to vigorously defend against this baseless suit.”

The Leapfrog Group, an independent nonprofit focused on patient safety, released its fall 2024 Hospital Safety Grade, evaluating nearly 3,000 hospitals on their ability to prevent medical errors, accidents and infections. The Hospital Safety Grade uses up to 30 performance measures to assign an A, B, C, D or F to individual hospitals and uses a public, peer-reviewed methodology, calculated by top patient safety experts under the guidance of a National Expert Panel. It is transparent and free to the public. Leapfrog analysts use the data to observe national performance trends and state rankings.  

For fall 2024, Utah ranks number one with the highest percentage of “A” hospitals for the third cycle in a row, followed by Virginia and Connecticut in second and third. The latest Grades also show hospitals are making progress in patient safety across several performance measures including notable improvements in healthcare-associated infections, hand hygiene and medication safety.

Healthcare-Associated Infections (HAIs).

Since Leapfrog reported Hospital Safety Grades in fall 2022, when HAI rates were at their highest peak since 2016, average HAI scores have declined dramatically:

– – Central line-associated bloodstream infections (CLABSI) decreased by 38%.
– – Catheter-associated urinary tract infections (CAUTI) decreased by 36%
– – Methicillin-resistant Staphylococcus aureus (MRSA) decreased by 34%

Hand Hygiene

As Leapfrog detailed in its 2024 Hand Hygiene Report, since Leapfrog began public reporting a tough new standard for hand hygiene in 2020, the percentage of hospitals achieving the standard has soared from 11% to 78%.

Medication Safety

Medication errors are the most common type of error that occur in hospitals and the new Hospital Safety Grade suggests improvements in how hospitals prevent them. Two of the measures in the Leapfrog Hospital Safety Grade show this progress:

Computerized Physician Order Entry (CPOE): Leapfrog tracks how well hospitals use CPOE systems to catch common errors in prescribing, such as prescribing the wrong dose or prescribing a medication with a dangerous interaction with other medications the patient takes. Studies have shown CPOE systems can reduce harm from prescriber errors by as much as 55%. In 2018, only 65.6% of hospitals met Leapfrog’s Standard, while this year, that number rose to 88.1%.

Bar Code Medication Administration (BCMA): Leapfrog scores hospitals on deployment of BCMA systems, which use barcodes at the bedside to ensure the right patient gets the right medication at the right time. In 2018, 47.3% of graded hospitals met the standard, while this year, 86.9% did.

Trends in Safety Grades by State

Key findings on state performance on the fall 2024 Leapfrog Hospital Safety Grade include:

– – The states with the highest percentages of “A” hospitals are Utah, Virginia, Connecticut, North Carolina, New Jersey, California, Rhode Island, Idaho, Pennsylvania, Colorado and South Carolina
– – Utah ranks #1 in percentage of “A” hospitals for the third Safety Grade cycle in a row.
– – California ranks in the top 10 for the first time since fall 2014.
– – There were no “A” hospitals in Iowa, North Dakota, South Dakota or Vermont.

The Leapfrog Hospital Safety Grade is the only hospital ratings program focused exclusively on preventing medical errors and patient harm. It is fully transparent, free to the public and updated biannually in the fall and spring.

Detailed hospital performance information, including patient experience and safety measures, as well as grades for individual hospitals searchable by states and localities is available.

On June 16, 2009, fire destroyed the building in which defendant Cory Michael Hoehn and his roommate, Forest Kroll, had leased an apartment.

An investigator for the building’s insurer, plaintiff California Capital Insurance Company determined that “careless smoking” on the patio caused the fire. Although the investigator reached no conclusion about who started the fire or who was present when it began, California Capital sued Hoehn and Kroll in March 2010 for “general negligence,” alleging that they caused the fire due to “improperly discarded smoking materials.” The company asked for $472,326 in damages.

In March 2010, the company attempted to serve Hoehn with a complaint and summons in the lawsuit. The affidavit supporting the return of service stated that the summons and complaint were left with Shannon Smith and identified Smith as “Girlfriend,” “Co-Occupant,” and “a competent member of the household.” A copy of the summons and complaint was also mailed to Hoehn’s address. California Capital was unable to serve Kroll and dismissed him from the lawsuit.

In April 2011, approximately a year after attempting to serve Hoehn, California Capital requested and obtained a default judgment against Hoehn for $486,528, based on an investigator’s declaration that careless smoking habits caused the fire.

In March 2018, California Capital assigned its rights to the default judgment to Sequoia Concepts, Inc. Based on a May 2018 writ of execution, the sheriff of Placer County, in January 2020, served on Hoehn’s employer an earnings withholding order, placing a lien on Hoehn’s wages in order to begin payment of the default judgment.

In March 2020, Hoehn filed a motion to set aside the default judgment. In a supporting declaration, he stated as follows: He did “not recall receiving or seeing the Summons or Complaint at any time.” Shannon Smith “did not live with” him at the apartment and he “never received a summons or complaint or any legal paperwork from [her] at any time. He “did not receive any request for judgment or notice of a default judgment hearing” in the case. He learned that there had been a default judgment against him in January 2020, when his employer informed him that a lien had been placed on his wages. He promptly contacted an attorney who filed the motion to set aside the default judgment.

Hoehn’s motion sought relief on two theories: (1) the court should exercise its power under section 473(d) to vacate the judgment; and (2) the judgment was obtained by extrinsic fraud or mistake. The trial court, following a long line of appellate court opinions, held that relief under section 473(d) was not available because Hoehn made the motion more than two years after entry of the default judgment. Regarding Hoehn’s second asserted ground for relief, the court concluded that “the fact that the proof of service of summons misidentifies Shannon Smith as a co-occupant” did not “demonstrate that the statement constitutes extrinsic fraud.”

The Court of Appeal affirmed. Relying on Trackman v. Kenney (2010) 187 Cal.App.4th 175 (Trackman) and Rogers v. Silverman (1989) 216 Cal.App.3d 1114 (Rogers) – and rejecting Hoehn’s criticisms of those decisions – the court concluded that relief under section 473(d) was time-barred. It further concluded, like the trial court, that the mistake in service was insufficient to make out a claim of extrinsic fraud that would support equitable relief from a default judgment.

The California Supreme Court reversed in the case of California Capital Insurance Co. v. Hoehn -S277510 (November 2024)

Code of Civil Procedure section 473, subdivision (d) provides in relevant part that a court “may . . . on motion of either party after notice to the other party, set aside any void judgment or order.” Under this provision, a party may move to vacate a judgment on the ground of improper service of process.

A line of decisions, followed by the Court of Appeal has held that such motions must be made within a “reasonable time” if the challenged judgment is not void on its face and its invalidity must be established by extrinsic evidence. To set the outer limit for what constitutes a reasonable time, courts have borrowed the two-year time limit of section 473.5, which applies where proper constructive service was given but the defendant did not receive actual notice.

The California Supreme Court granted review in this case to decide whether these decisions are correct. It held that they are not, and said that this judicially created rule finds no footing in the statute’s text, has not been adopted by the Legislature, and lacks any sound justification.

The Supreme Court therefore reversed the Court of Appeal’s judgment.

The Lown Institute is an independent think tank advocating bold ideas for a just and caring system for health. The Lown Hospitals Index, a signature project of the Institute, is the first ranking to assess the social responsibility of U.S. hospitals by applying measures never used before like racial inclusivity, avoidance of overuse, and pay equity.

As many as 30 million people receive medical care for a spine problem each year. While surgery is an appropriate treatment option for some, many procedures are performed despite little to no evidence of benefit, and they come with risks. Possible complications include infection, blood clots, stroke, heart and lung problems, paralysis, and even death.

In this current study, hospital overuse was measured using Medicare fee-for-service and Medicare Advantage claims data for three years of the most recently available data (2020-2022 for fee-for-service and 2019-2021 for Medicare Advantage).

Spinal fusion and/or laminectomy was defined as overuse for patients with low-back pain if they did not have radicular symptoms, trauma, herniated disc, discitis, spondylosis, myelopathy, radiculopathy, radicular pain or scoliosis. Spinal fusion-only cases were not considered overuse for patients with stenosis with neural claudication and spondylolisthesis. Laminectomy-only cases were not considered overuse for patients with stenosis who had neural claudication. Vertebroplasty was defined as overuse for patients with spinal fractures caused by osteoporosis, excluding patients with bone cancer, m- yeloma, or hemangioma.

Researchers examined hospital data for common back surgeries, including spinal fusion, laminectomy, and vertebroplasty, for which clinical trials have repeatedly shown lack of benefit for certain patients. Patients with low-back pain caused by aging (excluding cases with neurologic symptoms, trauma, or structural abnormalities) receive little to no benefit from spinal fusion or laminectomy. Patients with spinal fractures caused by osteoporosis (excluding cases with bone cancer, myeloma, or hemangioma) receive little to no benefit from vertebroplasty.

Key Takeaways Include:

– – More than 200,000 procedures met criteria for overuse and are estimated to have cost Medicare around $2 billion over a three-year period.
– – On average, 14% of spinal fusions/laminectomies met criteria for overuse, with individual hospital overuse rates ranging from less than 1% to more than 50%.
– – On average, 11% of patient visits for osteoporotic fracture resulted in an unnecessary vertebroplasty, with individual hospital rates of overuse ranging from zero to 50%.
– – New Hampshire, Iowa, Massachusetts, and Pennsylvania had the highest overuse rates of spinal fusion/laminectomy with rates over 18%. Arkansas, Kansas, Oklahoma, and Nevada had the highest overuse rates of vertebroplasty, with rates over 16%.
– –  California overuse rate for Vetebrosplasty was 7.3% and was 13.4% for Spinal Fusion/Laminectomy.
– – U.S. News Honor Roll hospitals had varied performance. At Cleveland Clinic fewer than 1% of patient visits with osteoporotic fracture resulted in an unnecessary vertebroplasty, compared to nearly 20% at Mayo Clinic Phoenix.
– – A total of 3,454 physicians performed a measurable number of low-value back surgeries. Over three years, these physicians received a total of $64 million from device and drug companies for consulting, speaking fees, meals, and travel, according to Open Payments data analyzed by Conflixis.

Mount Nittany Medical Center in Pennsylvania has the highest rate of unnecessary spinal fusion/laminectomy in the nation at 62.8%. The hospital performed 535 procedures with 336 of them meeting criteria for overuse. Lown’s research also found that a single physician is responsible for 92% (308) of those overuse procedures.

Notable variation in spinal fusion/laminectomy overuse rates are present even among the nation’s most prestigious hospitals, including those on the U.S. News & World Report Honor Roll for America’s Best Hospitals. At UC San Diego (1.2% overuse rate), the hospital performed 783 procedures with only 15 meeting criteria for overuse. While at the Hospital of the University of Pennsylvania (32.6% overuse rate), 641 procedures were performed with 209 meeting overuse criteria.

According to a study published by Journal of Family Medicine and Primary Care, the side effects and risks associated with the medical intervention are called iatrogenesis. Iatrogenesis is composed of two Greek words, “iatros,” which means physicians and “genesis,” which means origin. Hence, iatrogenic ailments are those where doctors, drugs, diagnostics, hospitals, and other medical institutions act as “pathogens” or “sickening agents.”