Feb 10, 2020

Axios Vitals

Good morning. I hope everyone is well-rested, because this week may be just as busy as last.

Today's word count is 690, or a 3-minute read.

1 big thing: Congress still gridlocked on surprise medical bills

Illustration: Aïda Amer/Axios

Congress says it's trying again to pass legislation protecting patients from surprise medical bills, but it doesn't appear to have resolved any of the fights that derailed the effort late last year.

The big picture: Surprise billing is the unique issue that splits lawmakers not by party, but by which industry group — insurers or providers — they sympathize with more. And both industries are fighting hard for their favored solution.

Driving the news: Two House committees released new surprise billing proposals on Friday, confirming that while everyone wants to prohibit surprise bills, there's still no agreement on how to resolve payment disputes between insurers and providers.

  • The Ways and Means Committee proposal includes a mediation process for when insurers and out-of-network providers can't agree on a payment rate.
  • The Education and Labor Committee's proposal — also released Friday — is a blend of benchmark rates and arbitration to resolve surprise billing disputes, the same approach taken by the Energy and Commerce Committee.

What they're saying: The industry responded predictably to Friday's news.

  • The Coalition Against Surprise Medical Billing, a group representing employers, insurers and unions, blasted the two new proposals, while the Federation of American Hospitals released a statement in support of the Ways and Means plan.
  • The groups' positions on the Energy and Commerce plan are reversed.

The bottom line: Lawmakers are faced with the same hard decisions that they punted in December, and industry groups aren't giving any indication that they'll make things any easier for members.

2. Insurers may not pay for care they've approved

Insurers are increasingly requiring patients to receive preapprovals for drugs or medical care, but even if the care is approved, that doesn't mean the insurer will necessarily pay, Kaiser Health News reports.

Why it matters: If an insurer decides not to pay for the care after the fact, that leaves patients on the hook for what can be huge medical bills.

Details: The preapprovals, often called prior authorization, may include a note that they're not a guarantee of payment, leaving insurers free to change their minds.

  • Patients also may be told that no prior authorization is required for a procedure, only to be told after they have it done that the insurer did want a prior authorization in this case — and thus isn't paying the bill.

The big picture: Prior authorization is already a controversial practice; providers say it's unnecessarily burdensome, while insurers say the practice helps to cut back on waste and excess costs.

The bottom line: Turns out there's yet another way for patients to receive a surprise medical bill.

3. Why Biogen's patent win matters

Illustration: Sarah Grillo/Axios

Mylan is itching to make a generic version of Biogen's popular multiple sclerosis drug Tecfidera, but that won't be happening for a while now that federal patent reviewers turned down Mylan's patent challenge, Axios' Bob Herman reports.

The big picture: The victory for Biogen not only secures several more years of monopoly pricing for the company — Biogen has a history of raising Tecfidera's list price by at least 5% per year — but also likely will create a higher baseline price for when Tecfidera generics finally come out.

  • "Every year that goes by when a generic is delayed is another 6+% increase in the price the generic will cost when it finally hits the market," University of Pittsburgh professor and pharmaceutical expert Walid Gellad tweeted last week.

Go deeper: Higher prices for brand-name drugs inevitably lead to higher prices for generics

4. Hospitals prepare for the coronavirus

Even though the risk to Americans remains low, hospitals across the U.S. are making sure they're ready for the coronavirus, STAT reports.

Why it matters: If the virus does spread within the U.S., hospitals being caught flat-footed would be a travesty.

Details: Hospitals across the country are checking their emergency preparedness plans and meeting almost every day. They're making sure they have the staffing and supplies they'd need, reviewing inventories and educating staff on emergency protocols.

  • But as the New York Times notes, there's some concern about the fact that China supplies the U.S. with many vital medical supplies and medications.

What they're saying: "As we project outward with the potential for this to be a much longer situation, one of the things that we're actively working on is projecting the long-term needs for our health care system," Nancy Messonnier, director of Center for Disease Control and Prevention's National Center for Immunization and Respiratory Diseases, told reporters on Wednesday.

5. While you were weekending...

Editor's note: The first item has been corrected to say that the House Energy and Commerce Committee's surprise billing legislation would use a blend of benchmark rates and arbitration to resolve surprise billing disputes (not decide payment rates based on a benchmark).