The head of the federal Medicare and Medicaid agency said Wednesday in Atlanta that the new White House regulation on pharmaceutical TV ads will bring “much-needed pricing transparency to the market for prescription drugs.’’
The new policy, announced Wednesday, will require companies to disclose prices in TV ads for any drugs that will cost above $35 for a month’s supply or a usual course of therapy.
“Patients have the right to know the prices of health care services,’’ Seema Verma, administrator of the Centers for Medicare & Medicaid Services, told the National Rural Health Association’s annual conference. “At CMS, we are serious about empowering patients with pricing information across the board.’’
Verma also told conference attendees that the agency is applying “a rural lens to CMS programs and policies to lower costs, ensure access and improve quality of care for rural Americans.’’
And she told GHN in an interview that the Trump administration is receptive to states’ ideas for federal waivers that could change state Medicaid and private insurance rules. Georgia is in the process of formulating waiver requests that will be made to the federal government.
Price transparency has been a longtime problem in health care. Many Americans have only a vague idea whether the amounts they are charged are reasonable or wildly excessive. But recent efforts by health insurers, state legislatures and private firms have begun to reveal more price information for consumers.
GHN reported last week that Atlanta health care costs are at the higher end among 112 metropolitan markets, according to the Health Care Cost Institute.
Just this week, Healthcare Pricing Specialists reported that average hospital price for a routine electrocardiogram in Georgia, $290.67, is 15th-highest among the 50 states. Still, it’s far below the highest price – Nevada’s $548.93.
Prescription drugs represent perhaps the most prominent pricing issue among the public and lawmakers.
The new White House rule will most likely be challenged by the drug industry, which argues that revealing the list price will confuse consumers and could violate the companies’ First Amendment rights, the New York Times reported. While the list price of some drugs can be thousands of dollars a month, patients with insurance that covers their prescriptions frequently pay far less, often less than $50.
Verma noted that patients’ co-insurance payments are typically calculated as a percentage of a drug’s list price, as is the case in Medicare Part D.’’ She added that patients who are uninsured or who are in high-deductible plans often have to pay a drug’s full list price.
“Pharmaceutical companies will now have to compete on price,’’ Verma told the NRHA conference.
She linked the drug pricing initiative to a separate requirement that hospitals post prices of services on their websites.
That information, with a myriad of medical codes and jargon, has been confusing to consumers.
Revealing the hospital pricing data is just a first step, Verma told GHN. ”We’re very serious about price transparency,’’ she told GHN. “Some hospitals have dropped their prices.’’
A focus on the rural health crisis
Rural health care is getting new attention under the Trump administration, Verma said.
Since 2010, more than 100 rural hospitals have closed their doors and nearly 40 percent of rural hospitals are operating in the red, she said. Seven Georgia hospitals are among those that have closed.
Rural areas even have fewer primary care doctors than urban areas, and these patients tend to have more chronic disease, and are more likely to be uninsured or underinsured.
“Maternal health is a growing concern in this country,’’ Verma said. “About 700 women die each year in the U.S. due to pregnancy or delivery complications. Just yesterday, CDC issued a report saying 60 percent of these deaths are preventable. The death rate is higher for rural women.’’
CMS has begun initiatives to raise reimbursements for rural hospitals and facilitate payments under Medicare for telemedicine services, Verma noted.
She said the agency’s Rethinking Rural Health Initiative aims to ensure that rural Americans “have access to high-quality care” and also to “support rural providers and not disadvantage them, address the unique economics of providing health care in rural America, and reduce unnecessary burdens in a stretched system to advance our commitment to improving health outcomes for Americans living in rural areas.’’
The transformation of rural health care will come with collaborative efforts that begin at the local level, Verma said.
The new model will offer a pathway for stakeholder coalitions of providers, employers and insurers “to invest collectively in increasing access and improving health care delivery,’’ she said. “A one-size-fits-all approach doesn’t work and local communities know what works best for them.’’
On the theme of local input, she said, “We do not have all the answers, sitting in our bureaucratic bubble in Washington, D.C. We know that each rural community is unique.’’
Verma said CMS had met with Georgia Gov. Brian Kemp on his waiver initiative, and she added that she would be touching base with Kemp again Wednesday. Georgia officials have begun the process of soliciting bids from consulting firms on a contract to develop the state’s waiver proposals.
“I think it’s too early to understand what direction they’re going in, in terms of this waiver,’’ Verma said.
She said that the Trump administration is reviewing a proposal to raise the federal match level to 90 percent if states want to expand their Medicaid programs to 100 percent of the federal poverty level, or roughly $12,500 in income for an individual.
That’s the level that Kemp has targeted in his waiver effort.
Currently, that 90 percent match is only available for states that expand Medicaid for people at up to 138 percent of poverty, under the Affordable Care Act. At the poverty level, the match is expected to be the normal 67 percent.
Georgia has one of the nation’s highest rates of people without health insurance.
Verma, when asked about the administration’s support of litigation to eliminate the ACA, said federal officials have met to discuss a potential replacement plan for the 2010 law.
A federal judge has declared the ACA invalid, ruling that the health law’s “individual mandate,” the requirement that everyone have health insurance, became unconstitutional when Congress scrapped the enforcement mechanism. That ruling is being appealed to higher courts and has not affected the workings of the ACA thus far, but the White House is urging that the judge’s decision be upheld.
“We believe the individual mandate is unconstitutional,’’ Verma said. “We also believe every American should have access to affordable, high-quality care.’’