Pharmacy benefit managers – the middlemen who negotiate drug purchases for insurers and large buyers – are coming under growing scrutiny and criticism both in Connecticut and nationwide for their role in the sharp rise of prescription drugs. The third-party companies, called PBMs for short, originally processed claims for pharmacies, but now are hired by Medicare, Medicaid and commercial health plans to manage pharmaceutical benefits. Their reach is broad: they choose what drugs are covered by insurance; negotiate purchasing deals with drug makers; determine co-pays for consumers; decide which pharmacies will be included in prescription plans; and decide how much pharmacies will be reimbursed for the drugs they sell. The growing legions of PBM critics, who include state Comptroller Kevin Lembo, pharmacists and their trade and service organizations, say that the industry is helping drive the unrelenting rise in prescription drug prices and insurance premiums.
PBMs, Lembo’s office and state pharmacists say, use a variety of tactics to capture cash from consumers, payers and pharmacies. One is spread pricing, where they pay the pharmacy less for a prescription than a payer gives them, sometimes even forcing the pharmacist to take a loss.
Fifteen Connecticut hospitals will lose 1 percent of their Medicare reimbursements this fiscal year as penalties for having relatively high rates of hospital-acquired conditions, data from the Centers for Medicare & Medicaid Services (CMS) show. The hospitals are among 800 nationwide being penalized – the highest number since the federal Hospital Acquired Conditions Reduction Program started five years ago, according to a Kaiser Health News (KHN) analysis of the CMS data. The penalties will be levied during the current fiscal year, which began in October 2018 and runs through September. Under the program, which was created by the Affordable Care Act, the government levies penalties based on hospitals’ rates of infection related to colon surgeries, hysterectomies, urinary tract catheters and central lines inserted into veins. It also reviews infection rates for Methicillin-resistant Staphylococcus aureus, or MRSA, and Clostridium difficile, known as C. diff, as well as rates of blood clots, sepsis, post-surgery wounds, bedsores and hip fractures, among other injuries.
With physicians’ compensation from pharmaceutical and medical device companies under increasing scrutiny, payments to doctors in Connecticut for consultant work rose to $8.5 million in 2017, up from $8 million in 2016. Payments for meals, travel and gifts also increased from $3.2 million in 2016 to $3.5 million in 2017, data from the Centers for Medicare & Medicaid Services show. Of the total $27.2 million in payments, $4.37 million – or 16 percent – went to 10 doctors holding licenses in Connecticut. The highest paid doctor was Dr. Paul Sethi, an orthopedic surgeon in Greenwich, who accepted slightly more than $1 million in 2017 in royalty fees, consulting work, and other services from several companies, including Arthrex Inc., and Pacira Pharmaceuticals Inc., maker of Exparel. The drug, Exparel, is marketed as an alternative to opioid painkillers post-surgery.
Most Connecticut nursing homes will see their Medicare reimbursements reduced in the coming year for having high resident readmission rates to hospitals. Of Connecticut’s 224 nursing homes, 75 percent (168) are being penalized by Medicare based on how often their residents were re-hospitalized within 30 days of discharge. Twenty-five percent (56) in Connecticut are receiving bonuses for having few readmissions, according to a Kaiser Health News (KHN) analysis of data from the Centers for Medicare and Medicaid Services (CMS). This is the first time nursing homes are being penalized or rewarded based on how many of their residents are readmitted to hospitals for conditions that could have been prevented. Medicare has administered a similar program for hospitals since the 2013 fiscal year.
Most Connecticut hospitals will lose a portion of their Medicare reimbursement payments over the next year as penalties for having high rates of patients being readmitted, new data from the Centers for Medicare & Medicaid Services (CMS) show. Statewide, 27 of the 29 hospitals evaluated—or 93 percent—will be penalized in the 2019 fiscal year that began Oct. 1, according to a Kaiser Health News analysis of CMS data. The Medicare program has penalized hospitals since the 2013 fiscal year for having high rates of patients who are readmitted within a month of being discharged. Nationally, hospitals will lose $566 million in penalties, which were instituted as part of the Affordable Care Act to encourage better health care delivery.
Three years ago, Meredith Phillips’ mother, Georgia Svolos, fell and broke her kneecap, setting off a downward spiral that landed her in nursing homes on and off for a year. In one facility, she fell and broke her knee again, necessitating more surgery. All of the facilities were noisy and chaotic, and one smelled of feces. So, when Phillips learned recently about moves by the Trump administration to ease regulations and fines on nursing homes, she was alarmed. “I’m horrified and frightened,” says Phillips, who lives in Westbrook.
Inside the 60 West nursing home in Rocky Hill, two residents played solitaire to the sound of soul music. Others sat in wheelchairs beneath a simulation of rolling clouds, while one got a haircut in a barbershop decorated with Red Sox posters. From the outside, the 95-bed, single-story facility set back from the road looks like any other nursing home. But many of the elderly and ill residents are actually paroled prisoners, and the home is being watched nationally as a potential game-changer for states grappling for ways to care for their aging inmate populations. 60 West is the first facility in the country to win approval from the Centers for Medicare & Medicaid Services (CMS) for federal nursing home funding—a designation that has national significance, experts say, because it’s a new option for cash-strapped states looking for ways to care for growing populations of older and sicker inmates.
At the Fresh River Healthcare nursing home in East Windsor, the chance that a short-stay patient will end up back in the hospital within 30 days of arriving at the facility is less than eight percent. Meanwhile, 12 miles away at the Greensprings Healthcare and Rehabilitation nursing home in East Hartford, more than a third of patients who came from hospitals will be readmitted in 30 days. The wide swing in nursing home patients’ re-hospitalization rates has a lot to do with the condition patients are in when they are discharged from inpatient stays, as well as the planning that goes into the transition to other care. The federal government has been penalizing hospitals since 2012 for high rates of patients returning within 30 days of discharge. But now, nursing homes (or skilled nursing facilities) also are being held accountable for hospital readmissions.
Connecticut has a high prevalence of Medicare beneficiaries living with Alzheimer’s disease or other dementias, often placing an enormous financial strain on caregivers who are spending thousands of dollars a year on care, reports show. “Alzheimer’s is the most expensive disease in America,” said Jennifer Walker, vice president of communications and advocacy for the Connecticut chapter of the Alzheimer’s Association. “The cost of care is very high.”
Medicare covers most fees for doctor visits, and some hospitalization, if needed; but other costs associated with care—including home health services, transportation, diapers for incontinence—are not covered. People with Alzheimer’s often suffer from other chronic illnesses such as diabetes, heart and hypertension, which add to the out-of-pocket costs for care. The financial burden is forcing families who rely on Medicare to tap into retirement savings, cutback on food and medical care for themselves, reduce work hours or quit work altogether to be caregivers, according to the Alzheimer’s Association report Alzheimer’s Disease Facts and Figures.
Dozens of Connecticut doctors accepted six-figure payments from drug and medical device manufacturers in 2015 for consulting, speaking, meals and travel, with six of the 10 highest-paid physicians affiliated with academic institutions, new federal data show. The top 10 doctors – less than 0.1 percent of the 11,000 who received payments – took in $3.6 million, or nearly 15 percent of the total $24.9 million paid out. Among them is the dean of the Yale School of Medicine, Dr. Robert Alpern, who received $445,398 in 2015 from two companies – Abbott Laboratories and AbbVie – in consulting fees, meals and travel expenses for serving on the boards of both companies. In 2014, he received $458,194 from the two companies. The Yale medical school began a research partnership with AbbVie in 2013, after the pharmaceutical company spun off from Abbott Laboratories.