This Week in Healthcare Reform: January 15th, 2021

The vaccine rollout hits a bumpy patch; meanwhile, investigations into coronavirus testing-related price-gouging ramp up; a lawsuit is filed challenging the outgoing Administration’s costly and unpopular “rebate rule”; and, payers focus their investments on social determinants of health.

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Week in Review

Vaccination Plans: With multiple vaccines now having been authorized for emergency use, the logistics behind the manufacturing, distribution, and administration of those vaccines have proven to be problematic.  Public health officials already faced an uphill battle, having to combat disinformation and distrust in seeking to vaccinate a wary population.  Now, new polling shows that the public is growing increasingly frustrated with the initial rollout process.  As new cases continue to spike, experts say that fixing the distribution system must be a top priority.  Meanwhile, the Administration announced this week that it was changing tack and would now be urging states to release all doses of the vaccine in an effort to accelerate vaccinations, forcing states to further reevaluate their prioritization plans, leaving many scrambling to figure out how exactly to handle the tidal wave of appointments.  However, health authorities caution that expanding access will only further snarl up the rollout process, given that it will be months before the supply of the vaccine will be able to meet that kind of increased demand.

Price-Gouging: It didn’t take long for reports of coronavirus testing price-gouging to surface.  Updated analysis in the fall showed that nearly a quarter of all COVID tests administered were out-of-network.  Further, of those out-of-network tests, as many as 16 percent of them were billed at three times the average cost.  No one questions the important role that testing will play in our ability to better limit the spread of the coronavirus.  Lawmakers, for certain, understood this when they required coverage for diagnostic testing with no cost-sharing.  The result, unfortunately, has seen less scrupulous providers take advantage of the situation by charging exorbitant amounts.  Research found that prices ranged from as little as $20 to as much as $850 per diagnostic test, with about half coming in between $100 and $199, and nearly one-in-five priced at over $200.  At the local level, health authorities all over the country are now investigating reports of patients and insurers being billed by providers for tests that are supposed to be administered without cost-sharing.  For instance, in Houston, where one woman was charged nearly $18,000 for two drive-through COVID tests.  And, in Kansas City, where officials are looking into a lab that had a list price of almost $1,000 per test.

Rebate Rule Lawsuit: A new lawsuit was filed earlier this week challenging the outgoing Administration’s controversial “rebate rule”.  That rule targets the rebates that pharmaceutical benefit managers (PBMs) negotiate on behalf of employers, health plans, government programs, and consumers, thereby extracting savings from drugmakers.  Multiple analyses have shown that eliminating those rebates will only increase costs and do nothing to lower drug prices.  In fact, according to the Department of Health & Human Services’ (HHS) own analysis, and AARP, the rebate rule threatens to raise premiums for seniors enrolled in the Medicare Part D prescription drug program by as much as 25 percent and will increase Medicare spending by approximately $200 billion – all while handing Big Pharma a huge windfall.  The lawsuit, filed by the Pharmaceutical Care Management Association (PCMA) on Tuesday, challenges that the finalized rule circumvented the proper rulemaking process, failing to account for the Centers for Medicare & Medicaid Services’ (CMS) own timeline for issuing implementing guidance.  Stakeholders quickly lined up in support of the lawsuit.

SDoH: While the coronavirus continues to exact transformational changes on our health care delivery model, the focus on social determinants of health (SDoH) – which has only been reinforced in the wake of the public health crisis – remains a priority for stakeholders across the health care spectrum.  For their part, insurers have embraced the critical role they play in making sure that a dedicated focus on SDoH is intricately woven throughout our evolving health care delivery and reimbursement model.  And, with the New Year just underway, they’re not wasting any time, announcing strategic partnerships and key investments for 2021 that look to address issues of food scarcity, housing insecurity, and health equity.


On Monday, the Food and Drug Administration (FDA) released its latest Focus Areas of Regulatory Science (FARS) report, outlining the specific topic areas that will serve as the backbone of the agency’s regulatory science focus heading into 2021.  As laid out, the FDA will target its investment on three strategic initiatives this year, including: harnessing the power of data; leveraging innovation to increase choice and competition; and, empowering patients and consumers.

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