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Tag: 2018 News

Walmart and Home Depot Join Employer Drug Cost Battle

Reuters reports that Walmart and Home Depot, two of the top 10 U.S. employers, have embraced a health insurance strategy that punishes drugmakers for using discount cards to keep patients from switching or stopping their medications.

Large U.S. companies have started tightly managing how employees and their family members use these popular discount, or copay, cards for everything from multiple sclerosis treatments to widely-used rheumatoid arthritis medications sold through a specialty pharmacy.

The move reflects their frustration that the coupons, which lower patient out-of-pocket spending, can be a disincentive to seeking less expensive treatments and drive up health plan costs.

For certain therapies, the insurance programs extract more money from the drugmaker or redirect the employee to a cheaper medicine, according to benefits experts.

Home Depot’s program, run by CVS Health, has a particular focus on therapies for cystic fibrosis, hepatitis C, cancer, HIV, psoriasis, pulmonary arterial hypertension and hyperlipidemia, or extremely high cholesterol, according to health plan documents provided to Reuters. The company, which has 400,000 employees, said the program affects fewer than 1 percent of its plan members. Yet those participants can have an outsized impact on spending because of how costly it is to treat their conditions.

Specialty drugs can account for more than half of a corporate health plan’s spending on medicines. Employers who use the most comprehensive program at CVS can save up to 7 percent on their total specialty medication costs, CVS told Reuters.

The programs, known as copay “accumulators” and copay “maximizers,” are expected to expand in the next two years, from about 25 percent of U.S. employers to as much as 50 percent, according to the National Business Group on Health.

Drugmakers “are concerned about it because the bottom line is that it will cost them more money,” said Brian Marcotte, the group’s chief executive.  Drugmakers are worried about the hit to profits if many more employers sign on. They are also concerned because they cannot easily track when the programs are being used.

Eli Lilly & Co executives said last week that copay accumulator programs were having an impact on its Taltz psoriasis drug and Forteo for osteoporosis, but that it did not feel there was “significant exposure.”

Pfizer and AstraZeneca executives said in recent interviews with Reuters that they are monitoring the effect of these programs.

AbbVie, maker of top-selling arthritis treatment Humira, said in April it expects moderately higher spending on copay assistance this year.

Pharmaceutical industry spending on copay cards has more than doubled to $7 billion over the past five years, mostly due to coupons offered on higher-cost specialty drugs.

A copay “accumulator” recognizes when an employee uses a drugmaker discount card and makes sure that money does not apply toward their annual out-of-pocket spending requirement.  When the copay card runs out of money, a patient must either cover the full copay cost, get a new discount card, or stop filling the prescription. The program can apply to almost any drug coupon used at a pharmacy working with the pharmacy benefit manager.  A copay “maximizer” is more limited in scope, but potentially as costly to the drugmaker.

Express Scripts Creates New Competitive Dynamic

Express Scripts announced it is introducing a novel formulary to provide employers and health plans a better opportunity to leverage changing dynamics to help lower their members’ out-of-pocket costs.

The Express Scripts’ National Preferred Flex Formulary provides a way for plans to cover lower list price products, such as new authorized alternatives that drug makers are bringing to the market, and reduce reliance on rebated brand products.

Drug makers set drug prices, and can lower them at any time. However, immediate list price decreases for products already on the market can pose challenges for employers and health plans that already have underwritten plan offerings and benefit designs for upcoming years based on existing economics.

By introducing authorized alternative products, through a new or additional National Drug Code (NDC) with a lower list price, we can create a competitive dynamic more similar to a generic coming to market. Cash-paying patients can have immediate access to the lower-priced medication. Meanwhile, employers and health plans can choose which product to cover that is best for their plan and their members: the lower-priced option or the original brand, which may have a rebate.

Over time, plans, pharmacies and others in the supply chain can transition to a new pricing model and the drug maker could ultimately retire their high list price product.

The National Preferred Flex Formulary is a comprehensive formulary that will mirror our industry leading National Preferred Formulary — covering more than 3,800 brand and generic medications — and will follow Express Scripts’clinical-first formulary decision process for all new therapies that come to market.

When a manufacturer launches a lower-cost authorized alternative to a branded medication currently on the market, Express Scripts will evaluate the product for placement on the National Preferred Flex Formulary.

If appropriate, the authorized alternative product will be added to the Flex formulary with preferred or possibly non-preferred status. The innovator brand-name product, and potentially other products in the therapy class, then will be excluded from coverage.

Members enrolled in the Flex formulary who have a high-deductible or co-insurance plan design can have immediate access to the lower-priced authorized alternative medication.

Branded innovator products will remain preferred or non-preferred on other formularies, including Express Scripts’ National Preferred Formulary, while the authorized alternative product may be excluded.

Robert Caton M.D. Takes Plea Deal

Dr. Robert Caton, a Modesto orthopedic surgeon accepted an agreement with the prosecution in September, pleading guilty to a misdemeanor charge of false and fraudulent claims and accepting kickbacks. More than 20 felony counts and enhancements in the original criminal complaint were dismissed.

Caton was sentenced to three years probation and agreed to pay $175,270 in restitution to the scammed insurance companies. He also agreed to pay $18,000 to a victim’s witness emergency fund.

“He accepted responsibility and paid back the money he made from the arrangement with Mr. King,” said Shaddi Kamiabipour, a senior prosecutor for the Orange County district attorney. She said the penalty was not unusual for someone whose involvement was less than others.

He was the first of 26 doctors, pharmacists and business owners to accept a plea deal following the massive indictments.

A similar plea deal could be offered to the other local physicians because there’s no evidence their patients were physically harmed, an Orange County prosecutor said.

Five local physicians charged with participating in a $40 million fraudulent billing and kickback scheme are set for pretrial hearings in December and January.

A total of six doctors who practice in Modesto were arraigned in April 2017 on felony counts of conspiring to commit medical insurance fraud, false and fraudulent claims and insurance fraud, following a multiagency investigation led by the California Department of Insurance.

Authorities said they were among 26 doctors, pharmacists and business owners in California charged with participating in the alleged conspiracy to maximize profits from workers compensation patients. Charged with masterminding the scheme are Tanya Moreland King and her husband Christopher King of Beverly Hills, who owned Monarch Medical Group, King Medical Management and One Source Laboratories in Southern California.

Irvine pharmacists Charles Bonner, RPh., 56, and Mervyn Miller, RPh., 66, both owners of Steven’s Pharmacy, were accused of conspiring with Christopher and Tanya King by selling more than $1 million in compound creams that were not FDA approved nor have known medical benefits. The Kings purchased the creams for between $15 and $40 per tube. These products were then billed to patients’ workers’ compensation insurance carriers for between $250 and $700 dollars per tube. Tanya King is accused of recruiting physicians to participate in this scam by paying a flat $50 rate or a share in the profits.

Doctors John Casey, Jonathan Cohen, Mohamed Ibrahim and William Pistel of Stanislaus Orthopaedic and Sports Medicine on East Orangeburg Avenue are set for a pretrial hearing Jan. 18 in Orange County Superior Court. Another Modesto physician, Jerome Robson, has a pretrial court date Dec. 3.

Fake Medical Researchers Indicted

Prosecutors unsealed a 47-count Federal Indictment against two Richland, Washington based companies, Mid Columbia Research LLC and Zain Research LLC, and their owner, Sami Anwar. The Indictment charges the defendants with conspiracy to commit wire and mail fraud, fraudulently obtaining controlled substances, and furnishing false information to the U.S. Drug Enforcement Administration (DEA). The Indictment also seeks the forfeiture of at least $274,642.80 representing the proceeds of the alleged fraud.

The Indictment charges that the defendants fraudulently conducted and falsified a drug trial designed to study an experimental alternative treatment for daily opioid users who suffered from chronic pain. Prosecutors say the defendants enrolled ineligible study subjects and forged physician signatures and falsified medical records and other documentation designed to make it appear as though a licensed physician had determined that the subjects were eligible for the study.

The Indictment further charges that the defendants falsified records and study data designed to make it appear as though subjects were participating in the study and were receiving the experimental treatment when they were not, in order to falsely bill for the study and obtain over a quarter of a million dollars from the drug company that was sponsoring the study.

The Indictment charges that the defendants created false and fraudulent documentation to hide the fraud from the sponsor, monitors, and federal regulators. The Indictment also charges that the defendants fraudulently obtained controlled substances, including the narcotic opioids hydrocodone/acetaminophen (which is commonly sold as Vicodin) and morphine, by falsely representing that these drugs would be and were being used for legitimate research purposes when they were not.

Finally, the Indictment charges that the defendants submitted a false and fraudulent application to the DEA in a failed attempt to obtain Gamma Hydroxybutyrate (commonly known as “GHB” or the “date rape drug”) for a separate sleep disorder study that the defendants also hoped to obtain funding for.

United States Attorney Harrington said “Investigating fraud and opioid-related crimes is a top priority for the Department of Justice. The United States Attorney’s Office for the Eastern District of Washington will continue to use all of the investigative and legal tools available to us to do so.”

DEA Special Agent in Charge of the Pacific Northwest Region Keith Weis was extremely pleased with today’s announcement, stating that “Conducting legitimate research is the foundation in which modern medicine is built on. To exploit that under the false premise of conducting lifesaving research to aid those who suffer opioid dependency is appalling, illegal, and criminal.” Weis further added that, “This investigative action in Eastern Washington is part of a continuing state wide strategy addressing illicit opioid access and diversion currently endangering our communities.”

The conspiracy, mail, and wire fraud charges against Defendant Sami Anwar each carry a maximum penalty of a 20-year term of imprisonment; a $250,000 fine, or double the gross gain or gross loss, whichever is greater; a 3-year term of court supervision; and restitution. Following the grand jury’s return of the Indictment, United States Magistrate Judge Mary K. Dimke issued a warrant for the seizure of over $175,000 from one of Mr. Anwar’s bank accounts constituting some of the proceeds of the alleged fraud.

FDA Has 200 Submissions for Non-Opioid Pain Products

When President Trump declared a public health emergency over the abuse of heavy-duty painkillers like oxycodone and hydrocodone, he ordered all government agencies to take action in response to the death of 70,000 Americans last year from opioid overdoses.

The FDA told Reuters it has received over 200 submissions from companies seeking a speedy approval process for their devices. These range from Stimwave’s Halo to painkilling products made by Abbott Laboratories and other industry heavyweights as an alternative to opioids.

“We’re pleased by the robust interest in this innovation challenge and the acknowledgement from developers about the unique and important role medical devices, including digital health technologies like mobile medical apps, have the potential to play in tackling the opioid crisis,” FDA Commissioner Scott Gottlieb said.

The FDA has been increasingly reluctant to greenlight new opioids for market but earlier this month approved a potent opioid-based painkiller from AcelRx Pharmaceuticals Inc placing tight restrictions on its distribution and use. In a rare move, Gottlieb made a public statement at the time, explaining the decision.

The regulator’s push for alternatives to opioids has helped drive interest from venture capital funds and institutional investors this year in firms promising to develop alternatives, according to interviews with device companies, financial services firms and brokerage Cowen & Co.

For example, privately-held Virpax Pharmaceuticals, which makes an aerosol spray that delivers a non-opioid pain drug, said it had four or five banks interested in running its Series A investment round this summer versus just one in the past.

Abbott, like rivals Boston Scientific Corp and Nevro Corp, makes neuromodulation implants which stimulate the nervous system to mask pain signals before they reach the brain.

Abbott has submitted an entry for the competition in the hope it will slash waiting times, which often stretch several months just to get an initial meeting, according to Dr. Allen Burton, Abbott’s medical director of neuromodulation.

While neuromodulation is only a small part of Abbott’s large medical device business, the unit is seen as a growth engine for the company. Burton estimates between 10-to-20 percent of the growth Abbott has seen in its neuromodulation business could be tied to doctors prescribing its devices for pain after surgery or from injury to patients that are opioid averse.

Boston Scientific did not apply for the contest, but the company is investing “heavily” in its neuromodulation unit, which was its fastest-growing at nearly 23 percent in the latest quarter.

Although the FDA contest is limited to devices and app-based solutions for pain and addiction, the current regulatory climate is also conducive to companies developing opioid-alternative pharmaceuticals.

Drugmakers including Pfizer Inc, Eli Lilly and Co, Regeneron Pharmaceuticals Inc and Teva Pharmaceutical Industries Inc have been packing their pipelines with potential solutions to the crisis and there are 120 non-opioid drugs under FDA review this year, up some 650 percent since 2013, according to business intelligence firm Informa.

BLS Report Shows Decrease in Work Injuries

The Bureau of Labor Statistics is a unit of the United States Department of Labor. It is the principal fact-finding agency for the U.S. government in the broad field of labor economics and statistics and serves as a principal agency of the U.S. Federal Statistical System.

This week it published the first in a series of two news releases from BLS covering occupational safety and health statistics for the 2017 calendar year.

A second release in December will provide results from the Census of Fatal Occupational Injuries (CFOI) of all fatal work injuries occurring in the U.S. during the calendar year. The CFOI uses diverse state, federal, and independent data sources to identify, verify, and describe fatal work injuries to ensure that counts are as complete and accurate as possible.

According to its report, there were approximately 2.8 million nonfatal workplace injuries and illnesses reported by private industry employers in 2017, which occurred at a rate of 2.8 cases per 100 full-time equivalent (FTE) workers.

Private industry employers reported nearly 45,800 fewer nonfatal injury and illness cases in 2017 compared to a year earlier, according to estimates from the Survey of Occupational Injuries and Illnesses (SOII).

The 2017 rate of total recordable cases (TRC) fell 0.1 cases per 100 FTE workers to continue a pattern of declines that, apart from 2012, occurred annually since 2004.

The rates for different types of cases – days away from work (DAFW), days of job transfer or restriction only (DJTR), and other recordable cases (ORC) – were unchanged from a year earlier.
– The rate for DJTR cases has remained at 0.7 cases per 100 FTE workers since 2011.
– Nearly one-third of nonfatal occupational injuries and illnesses resulted in days away from work.
– Among the 19 private industry sectors, only manufacturing and finance and insurance experienced statistically significant changes in their overall rates of nonfatal injuries and illnesses in 2017 – each declined by 0.1 cases per 100 FTE workers compared to 2016.

There were 882,730 occupational injuries and illnesses in 2017 that resulted in days away from work in private industry, essentially unchanged from 2016. The private industry incidence rate for DAFW cases was 89.4 cases per 10,000 full-time equivalent (FTE) workers in 2017.

The median days away from work—a key measure of the severity of cases – was 8 in 2017, unchanged from 2016.

Ricardo Lara Likely Next Insurance Commissioner

With numbers still coming in and some important races still too close to call, Ricardo Lara, a Democratic California state senator known for his “health for all” legislation, is likely the winner of the race for California insurance commissioner post.. The California Secretary of State reports that as of 8:36 am on November 8, 100% of the precincts have reported, and Lara has the lead over Steve Poisner by 50.8% to 49.2%

Lara, has represented California’s 33rd District in the state Senate since 2012. He has a narrow lead over Steve Poizner, a former California insurance commissioner who ran as an independent. Lara supports universal, comprehensive health coverage for all Californians.

As a state senator, Lara wrote the Health4All Kids Act. The act extended the state’s Medicaid program, Medi-Cal, to cover about 250,000 California children in families that have trouble documenting the children’s immigration status.

Lara later co-introduced S.B. 562, a bill that could create a single-payer health care system for California. The bill would prohibit insurers from offering traditional major medical coverage in competition with the universal health coverage program, according to a copy of the bill text. Because the proposed program would cover dental care, vision care, chiropractic care, home health care and acupuncture, the bill might also ban the sale of some kinds of supplemental health insurance products, such as dental insurance, vision insurance, alternative health care insurance, and long-term care insurance that covers home health care.

Members of the California state Senate passed S.B. 562 by a 23-14 vote on June 1, 2017. California Assembly Speaker Anthony Rendon declined to have the Assembly act on the bill. Rendon said the bill was incomplete, according to a statement Rendon released in June 2017.

Lara is expected to work with the incoming governor, Gavin Newsom, and the state legislature on health care. Health care came up as a top issue in polling.

Lara – who was endorsed by outgoing California Gov. Jerry Brown, as well as by the Union of Health Care Professionals and the United Farm Workers of America – has also been talking about the possible effects of wildfires and climate-caused events on Californians’ health.

Lara has pledged in his campaign materials to support consumers, patients, working families and vulnerable populations. His platform also includes efforts to improve infrastructure and education.

In an official ballot statement, Lara notes that his father was a factory worker. He says his parents believed in the value of having insurance to protect their modest property. He states that, as his parents aged, “they sacrificed a little more to buy life insurance. They did it because they knew they were one accident, one fire, one burglary, one serious illness away from losing everything they had worked for.”

CDI Approves Comp Rate Lower Than WCIRB Suggests

The California Insurance Commissioner adopted and issued a revised advisory pure premium rate, lowering the benchmark to $1.63 per $100 of payroll for workers’ compensation insurance, effective January 1, 2019. Commissioner Jones has reduced the advisory pure premium rate by about 42 percent since January 2015 when the Commissioner approved an average pure premium rate that was $2.81 per $100 of payroll.

With an average filed pure premium rate of $2.13 per $100 of payroll as of July 1, 2018, insurers were on average applying pure premium rates that were approximately 19.7 percent more than the corresponding average advisory pure premium rate of $1.78 approved by the commissioner as of that date.

The indicated advisory pure premium rate level of $1.63 approved by the Commissioner today is about 23.5 percent lower than the industry filed average pure premium rate of $2.13 as of July 1, 2018.

“Savings for workers’ compensation insurers continue and all of those savings ought to be shared with employers,” said Insurance Commissioner Dave Jones. “Cost savings in the workers’ compensation system have helped insurers and employers deserve to share in the cost savings through lower premiums. I renew my call on workers’ compensation insurers to pass along savings to employers.”

Commissioner Jones’ decision results in an advisory pure premium rate that is below the $1.70 average rate recommended by the Workers’ Compensation Insurance Rating Bureau (WCIRB) in its filing. Jones issued the advisory rate after a public hearing and careful review of the testimony and evidence submitted by stakeholders. The pure premium rate is only advisory, as the Legislature has not given the commissioner rate authority over workers’ compensation rates.

The WCIRB’s pure premium advisory rate filing demonstrated continued decreases in costs in California’s workers’ compensation insurance market. The pure premium advisory rate reduction is based on insurers’ cost data through June 30 of this year. Insurers’ net costs in the workers’ compensation system continue to decline as a result of SB 863, SB 1160, and AB 1244 enacted by the Legislature and Governor Jerry Brown. The WCIRB notes continued favorable medical loss development including acceleration in claim settlement.

WCIRB Reports Overall Reduction in Medical Costs

The WCIRB has released the California Workers’ Compensation Aggregate Medical Payment Trends report comparing medical payment information from 2015 to 2017. The WCIRB analysis is based on medical payment data representing 92% of the California workers’ compensation insurance market.

Overall, there was a cumulative 8% reduction in medical payments per claim from CY2015 through CY2017, comparable to the cumulative two-year reduction (10%) from CY2014 to CY2016 (Table 1). The decline in paid per claim was largely driven by the declines in utilization (e.g., paid transactions per claim declined by 8%).

The downward trend reflects a continuation of the savings generated by the reforms to the medical care delivery enacted by Senate Bill No. SB 863 in 2012, anti-fraud efforts and the continued sharp decline in pharmaceutical costs.

There were sharp declines in the average paid per transaction for pharmaceuticals (24%), pharmacies (28%) and pharmacists (27%) since 2015. This continues to be a result of reductions in the prescribing of controlled substances, reduced physician office dispensing, implementation of the Federal Upper Limits on prescription drug prices, as well as the continued shift from brand to generic drugs. (These reductions pre-date the implementation of the new drug formulary implemented in January 2018 pursuant to Assembly Bill No. 1124).

There were sharp decreases in the share of workers’ compensation claims with any opioid prescription from 18.2% in 2015 to 11.6% in 2017. The medical payments on the claims with at least one opioid prescription were, on average, more than three times higher than those on the claims without opioid prescriptions.

Common non-opiate analgesics and topicals, Topical Corticosteroids, and other medications sometimes used to relieve pain such as Anticonvulsants and Central Muscle Relaxants experienced a combined increase of 4.8%. On the other hand, Opioid Agonists, Opioid Partial Agonists and Opioid Combinations totaled a 2.8% decrease in their share of pharmaceutical payments from CY2016 to CY2017.

There was a significant change in the mix of Medical-Legal (ML) services in 2017. The share of ML104 (the most comprehensive and expensive service) transactions declined by 22.7%, while that for ML102 (the most basic ML evaluation) increased by 42.6%. This resulted in an 8% decline in the average cost of a medical-legal report in 2017 following a number of years of increases.

The procedure code set related to Physical Medicine and Rehabilitation was the greatest gainer between CY2016 and CY2017 and received the second largest amount of payments (21.7%). The Office or Other Outpatient Services continued to grow, and received the largest amount of payments (33.5%).

The full report is available in the Research section of the WCIRB website, California Workers’ Compensation Aggregate Medical Payment Trends – Updated through Calendar Year 2017

Cal/OSHA Adopts Emergency Form 300A Regs

Governor Brown signed AB 2334 into law last summer. The new law requires that, as part of occupational injury and illness reporting, employers additionally file specified injury and illness forms electronically with Cal/OSHA no later than February 1 of each year.

And requires Cal/OSHA to develop a searchable database for one of those forms relating to summary information on its web site by a date specified and further requires Cal/OSHA to post those forms on the database within 90 days of receipt. “While posting of injury information at each worksite is important, specific workplace injury and illness information is not accessible to the public and prospective employees in an easily accessible database on the Internet.”

The new law seems to have been triggered by federal initiatives to reduce employer reporting requirements.

The federal Occupational Safety and Health Administration (OSHA) adopted the Improve Tracking of Workplace Injuries and Illnesses rule in 2016. This rule requires electronic submission of certain occupational injury and illness reports by covered employers with at least 250 employees and by smaller employers in high-risk industries. In the fall of 2017,

However, OSHA issued a Notice of Proposed Rulemaking to potentially relax these workplace injury and illness reporting requirements.

In response to the federal initiative to reduce employer reporting requirements, California decided to pass a new law that went the other way – Increase employer reporting requirements. To quickly implement AB 2334, Cal/OSHA’s emergency regulations requiring certain employers in California to electronically submit each year their Form 300A summaries of work-related injuries and illnesses to federal OSHA have been approved by the Office of Administrative Law (OAL).

The following employers must submit online the Form 300A covering calendar year 2017 by December 31, 2018:

All employers with 250 or more employees, unless specifically exempted by section 14300.2 of Title 8 of the California Code of Regulations.

Employers with 20 to 249 employees in the specific industries listed in Appendix H of the emergency regulations. There are approximately 67 industries on this list. Examples include construction, manufacturing, wholesale trade, grocery and specialty food stores, and similar industries. .

Employers described above that are now required to submit their 300A summaries online each year should follow the instructions on federal OSHA’s Injury Tracking Application webpage.

Cal/OSHA will proceed with the formal rulemaking process to make the emergency regulations permanent by submitting the required documentation to OAL. The rulemaking process will include a public comment period and public hearing. The dates for the comment period and public hearing will be posted on Cal/OSHA’s proposed regulation page.

The California Division of Occupational Safety and Health, or Cal/OSHA, is the division within the Department of Industrial Relations (DIR) that helps protect California’s workers from health and safety hazards on the job in almost every workplace.

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