Oct 10, 2019

Axios Vitals

Good morning. Bad news for you if you vape: Your life insurance might be getting more expensive, Bloomberg reports.

Today's word count is 879, or ~3 minutes.

1 big thing: Health care's fraud and abuse law overhaul

Doctors are at the center of changes to self-referral and anti-kickback laws. Photo: Katherine Frey/The Washington Post via Getty Images

The Trump administration is proposing to loosen regulations that prohibit doctors from steering patients insured by federal programs to facilities where they have a financial interest and which outlaw health care companies from offering bribes and kickbacks in exchange for patient referrals.

Why it matters: The industry has long clamored for an overhaul to these laws, which companies say obstruct their goals of providing "value-based care." But critics worry the broad and vague changes could engender more fraud and abuse than there already is, Axios' Bob Herman reports.

Driving the news: The Department of Health and Human Services would create new exemptions for the physician self-referral law and the federal anti-kickback statute — decades-old, complex laws that forbid payments that encourage unnecessary care and increase taxpayer costs.

  • Hospitals, doctors, nursing homes and other entities would be able to create "value-based arrangements," and those deals could include exchanging bonuses or other types of "remuneration" without running afoul of referral laws.
  • For example, under these exemptions, a hospital could provide a nursing home with a behavioral health nurse for certain discharged patients.

Between the lines: The overarching concern is everyone's definition of "value" is different. How will regulators know whether providers are acting in good faith to coordinate care, or if they are using "value-based care" as a cover to control patient referrals and enrich themselves?

A major exclusion: Pharmaceutical companies, medical device firms, labs and medical equipment makers are cut out from the changes because the federal government is afraid those companies would "misuse the proposed safe harbors."

  • HHS Secretary Alex Azar told reporters the government may consider separate regulations for value-based drug contracts.

The bottom line: These changes come as hospitals, physicians, pharmaceutical companies and others are paying out billions of dollars every year in fraud settlements.

2. A drug for only one patient

The first ultra-personalized drug — made for one patient, the only one who will ever take it — is raising all kinds of new questions about how to handle a scenario that's likely to only become more common, the New York Times reports.

Driving the news: The drug, described yesterday in the New England Journal of Medicine, treats the neurological disorder of an 8-year-old girl.

  • The genetic presentation of her disease is unique, but one of her doctors had an idea about how to treat it, which was eventually successful.
  • It's unclear how much developing the drug cost, but the girl's mother and doctor raised $3 million through a foundation and on GoFundMe.

The big picture: This raises huge questions about how to regulate this kind of extreme precision medicine, who should get it and who should pay for it.

  • Researchers will have to decide which of the tens of thousands of patients with rare diseases to prioritize when creating custom drugs.
  • Families would likely end up on the hook to pay for such custom drugs, automatically limiting who has access to them.
  • It's also unclear how much evidence the FDA needs of such a drug's safety and how to evaluate its efficacy.

The bottom line: We now have no choice but to answer these kinds of questions as they play out in real life. Ultra-precision medicine is no longer only theoretical.

3. Most Americans support vaping flavors ban

Almost three-quarters of likely 2020 voters support banning flavored vaping products, according to a new survey by Schoen Consulting, commissioned by the Campaign for Tobacco-Free Kids.

Why it matters: Some Republicans have warned that President's Trump's proposed ban on flavors could anger vapers and risk his 2020 chances, as my colleague Alayna Treene has reported.

  • But this survey suggests there's more political risk to inaction.

By the numbers: The administration's proposal is supported by 77% of Democrats, 74% of Republicans and 70% of Independents, per the survey.

  • When asked whether it's more important to help adult smokers quit by giving them access to the vaping products of their choice or to reduce the number of kids who vape, 60% of respondents sided with the kids and 29% with adult smokers.
  • The survey included a national random sample of 1,000 likely U.S. voters, and has a margin of error of +/-3%. The data was collected from Sept. 20–27.

Read the results.

4. What's next for Purdue

Protestors outside of Purdue Pharma's headquarters last month. Photo: Erik McGregor/LightRocket via Getty Images

Purdue Pharma has to resolve ongoing inquiries with the Justice Department before finalizing its plan to enter bankruptcy, the Wall Street Journal reports, citing the newly released terms of the settlement.

Purdue's bankruptcy plan, and its proposed settlement to resolve the national opioids lawsuit, are already facing resistance from state and local governments, Axios' Sam Baker notes.

  • Some critics fear the company is getting off too easy for its role in a crippling epidemic.
  • Arizona is now the 25th state to oppose the proposed settlement, Reuters reports. State officials balked after Purdue's bankruptcy announcement.
  • Those states have argued in court filings that Purdue transferred more money to the Sackler family, which ran the company, than it had led them to believe.

What's next: Purdue will be back in bankruptcy court Friday to ask for a pause in the ongoing litigation.

5. Trump, aging seniors fuel MA growth

Health insurers continue to see Medicare Advantage as a lucrative business, especially as aging baby boomers have propelled enrollment to about 22 million people, Bloomberg reports.

Why it matters: Health insurers and the Trump administration are working fast to sign people up for the private Medicare plans instead of traditional Medicare. And the president's executive order last week aims to keep funneling even more people toward Medicare Advantage over time, Axios' Marisa Fernandez writes.

By the numbers: About a third of all Medicare enrollees are in Medicare Advantage, according to the Kaiser Family Foundation.

  • Insurers collect a fee from the government for each person who signs up, Bloomberg notes. It added up to about $254 billion in 2019.

What to watch: The share of traditional Medicare enrollees is decreasing, and it's predicted more than half of Medicare members will be in private plans by 2025, Bloomberg reports. The enrollment period opens Oct. 15.

Go deeper: Trump still doesn't have an alternative to "Medicare for All"