This Week in Healthcare Reform: 11 September 2020

Patients continue to find themselves vulnerable to exorbitant coronavirus testing hospital fees; voters are unsupportive of the rebate rule; plans to improve rural health focus on broadband and telehealth; and, the transition to Medicaid managed care plans improves primary care for states.

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Week in Review

Coronavirus Testing Fees: The wide variability in the list price for COVID-19 diagnostic testing from hospital to hospital was reported earlier this summer, with those tests costing anywhere from $20 to $850, not including the cost of the provider visit, facility fee, or other services.  Reports continue to surface of patients finding themselves on the wrong side of these charges, which can run into the tens of thousands of dollars.  In fact, one such patient – a doctor – went to his own facility for a coronavirus antibody test, where his insurance company was billed nearly $11,000 by his organization’s free-standing emergency room for what he essentially knew to be an $8 test.  A new survey from AHIP seeks to shine a spotlight on the issue, specifically on the price-gouging that occurs when those tests are administered out-of-network.  The analysis found that out-of-network providers charged significantly more than the average cost for coronavirus tests.  Further, one-in-ten charged three times the average cost.  This is especially worrying, given that 9.4 percent of claims for testing were from out-of-network providers.

Rebate Rule Opposition: While voters generally support efforts to address the issue of prescription drug costs, that support falters when any proposed legislative or regulatory action threatens to increase those costs.  That’s reflected in a new poll in which voter support takes a nosedive for the recently-resurfaced “rebate rule” targeting the rebates used by pharmaceutical benefit managers (PBMs) in their negotiations with Big Pharma.  That rule would effectively eliminate of the only tools available as a check against drugmakers’ pricing power.  As a result, costs to seniors and taxpayers would go up dramatically, as confirmed by a recent report.  According to the report, not only would premiums go up for Medicare Part D prescription drug plan beneficiaries, but taxpayers would also be on the hook for more than $200 billion in additional costs.  And, it’s worth pointing out that, in addition to doing nothing to lower prescription drug costs for consumers, it essentially hands pharmaceutical companies more than $100 billion in revenue should rebates be eliminated.

Rural Health: A new plan from the Department of Health & Human Services (HHS) seeks to improve rural health by focusing on virtual care.  Released by HHS late last week, the proposal acknowledges the gaps in health care faced by rural communities across the country.  The coronavirus health crisis has exposed many of these critical gaps while drawing much-needed attention to the steep health care challenges afflicting these regions.  Those challenges include access, a shortage of providers, and higher incidents of chronic health conditions.  The 84-page plan includes steps to expand the availability of telehealth, funding to providers to provide virtual emergency consult care to communities without access to specialists, and investments to recruit and train EMS personnel in rural areas.

Medicaid Managed Care: It’s been well established that access to primary care is a critical component in an individual’s overall health and well-being.  Not only does it help avoid or delay the onset of more expensive chronic conditions, but primary care also helps reduce costly hospitalizations or visits to the emergency room.  This holds especially true when it comes to vulnerable Medicaid enrollees.  For states, this boils down to making primary care more accessible and effective for this high-need population.  With that goal in mind (i.e., improving the scope, quality, and performance of primary care in Medicaid), states are increasingly turning to managed care organizations (MCOs) to administer their Medicaid programs.  These MCOs have been shown to be good, accountable stewards of taxpayer dollars, delivering real savings to states, while connecting Medicaid enrollees to the critical care they need.


Last month’s Health Sector Economic Indicators report from nonprofit health care research and consulting firm Altarum showed that health spending continued to rebound in June, and that many of the health care jobs lost in the immediate wake of COVID-19 had been regained, although the pace of the recovery had slowed.

Stay safe and be well.

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