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News November 2012

Washington Watch

Washington Roundup

By Alan M. Schlein

"The average senior is going to benefit by carefully scrutinizing their situation, because every year the market changes," Avalere President Dan Mendelson told the Associated Press recently. Avalere crunched the numbers based on bid documents that the plans submitted to Medicare. The report found premium increases for all top 10 prescription plans, known as PDPs.

c_stingerfall_smShop Carefully to Avoid Medicare Price Hikes

Millions of seniors enrolled in popular Medicare prescription drug plans face double-digit premium hikes next year if they don’t shop carefully for a better deal, a private company that analyzes the highly competitive drug plan market says.

With the November elections just weeks away, the analysis by Avalere Health comes as a reality check dose of cold water against the upbeat announcements made recently by Medicare. In August, the Obama administration announced that the average premium for basic prescription drug coverage will stay the same in 2012, at $30 a month.

While that number is accurate, as an overall indicator for the overall market, it is not necessarily very helpful to individual seniors, since it doesn’t reflect price swings in the real world. So Avalere Health looked at the specific health plan offerings and found that seven of the top 10 prescription plans are raising their premiums by 11 percent to 23 percent, according to a report released recently.

"The average senior is going to benefit by carefully scrutinizing their situation, because every year the market changes," Avalere President Dan Mendelson told the Associated Press recently. Avalere crunched the numbers based on bid documents that the plans submitted to Medicare. The report found premium increases for all top 10 prescription plans, known as PDPs.

But the most popular plan – AARP’s MedicareRX Preferred – is going up only 57 cents per month nationally, to $40.42 from the current $39.85.

But don’t blame the President’s health care law as the culprit for the increases. In fact, “Obamacare” has been improving the prescription benefit by closing the coverage gap known as the doughnut hole, which catches people with high drug costs when they fall between coverage levels. What’s causing the price hikes seems to be market dynamics. Some insurers are introducing new low-premium options to gain a competitive advantage on plans that are raising their prices.

The seven plans with double-digit premium increases, according to Avalere Health, were:

  • Humana Walmart-Preferred Rx Plan (23 percent);
  • First Health Part D Premier (18 percent);
  • First Health Part D Value Plus (17 percent);
  • Cigna Medicare Rx Plan One (15 percent);
  • Express Scripts Medicare-Value (13 percent);
  • HealthSpring Prescription Drug Plan (12 percent);
  • Humana Enhanced (11 percent).

Another two plans in the top 10 also had single-digit increases:

  • SilverScript Basic (8 percent)
  • WellCare Classic (3 percent).

But some lower cost plans have also entered the market. Premiums for the AARP MedicareRx Saver Plus Plan will average $15 a month nationally, although it won’t be available everywhere. That’s $3.50 less than the current low-cost leader, the Humana Walmart plan, whose premiums are rising to $18.50. The new AARP plan is run by UnitedHealth Group Inc, the nation’s largest health insurance company. United pays AARP for the right to use its name on a range of Medicare insurance products, a deal that benefits both partners.

Medicare's open enrollment season starts Oct. 15, and beneficiaries have a wide variety of choices of taxpayer-subsidized private prescription plans. Seniors and family members can use the online Medicare Plan Finder ( to input individual prescription lists and find plans in their area that cover them.

The Avalere study did have some good news for the Obama administration. When the projections were adjusted to account for seniors switching to lower-cost coverage, premiums for 2013 are likely to remain steady.

But the biggest premium announcement is still to come. Almost all seniors pay the Part B premium for outpatient care, including those with traditional Medicare as well as those in private plans. Currently $99.90 a month, the Part B premium is expected to rise by about $7 for 2013, according to the government’s own projections.


Bigger Role for Nurse Anesthetists?

Should nurse anesthetists, who treat patients for pain at clinics all over the United States, be given greater powers to administrate painkillers to seniors in chronic pain? Medicare is considering whether to reimburse a specialized type of nurse for giving chronic-pain treatments, a move opposed by some doctors and one that critics say could complicate the battle against prescription painkiller abuse.

By November 1, the Centers for Medicare and Medicaid Services (CMS) is expected to decide whether nurse anesthetists should be directly reimbursed by Medicare for evaluating, diagnosing and treating pain with epidural injections or prescription painkillers called opioids. The current guidelines, from 1989, are unclear as to whether nurse anesthetists can only treat pain in the operating room, or whether they can help people manage chronic pain problems like back or neck aches.

According to Medicare, the federal health program for the elderly and disabled, there are about 45,000 nurse anesthetists in the United States. Most work in hospitals and surgery centers, where they numb pain for patients undergoing procedures like hip replacements and colonoscopies. They also often create treatment plans for some patients with acute pain.

Under a proposal being considered by CMS, starting in January, 2013, nurse anesthetists would be reimbursed at the same rate as doctors are, signaling to private insurers and states that they are qualified to treat pain and may assume a more active role with such patients.

Right now, nurse anesthetists in every state can provide some chronic-pain treatment – things like injecting steroids to reduce swelling or refilling implanted pumps with pain medications. In 24 states, they can also write prescriptions for controlled substances like hydromorphone or oxycodone. But under the new rules, far more nurse anesthetists could write prescriptions, if more choose to treat chronic pain.

According to Medicare’s figures, in 2010, only about 4,000 – or 0.17 percent – of the nearly 2.4 million Medicare claims for commonly billed chronic pain procedures were from nurse anesthetists.

Not surprisingly, doctors’ groups, including the American Medical Association and the American Society of Interventional Pain Physicians are strongly opposed to the CMS proposal, arguing that the change could lead to a huge surge in painkiller prescriptions. The doctors argue that the nurse anesthetists lack sufficient training and education and that prescription drugs could end up in the hands of patients who don’t need them. They also suggest that unnecessary tests or inappropriate injections from nurse anesthetists could drive up health costs.

A group of 14 Congressmen who are all members of the GOP Doctors Caucus sent a letter opposing the rule change recently. On the other side, the AARP and the National Rural Health Association have written letters to CMS in support. The American Association of Nurse Anesthetists, which favors the new rule, suggest that many patients sometimes have to travel long distances for care or forgo treatment altogether.

Brian Bradley, nurse anesthetist from Butte, Montana, told the Wall Street Journal recently that some patients travel up to 100 miles to see him. “If you’re saying I can’t treat chronic pain, you’re telling me I’m a fireman but can only put out fires in the living room and bathroom.” Bradley is one of the few nurse anesthetists charging Medicare for chronic-pain treatments.

One option for CMS would be to require the nurse anesthetists as well as doctors to receive specific training as a condition of being able to bill Medicare for treating chronic pain. Under current law, no medical professional is required to be certified to treat chronic pain. Right now, doctors who don’t specialize in pain treatment also don’t get specialized training in pain medicine. The only training many get is the exposure to pain medicines that they have in medical school or in their residency.

What’s changed since the 1989 rules involving nurse anesthetists and reimbursement for chronic pain meds were written, is the growth of a $9 billion chronic pain medicine industry. CMS is expected to make its determination by November 1.


User Fee Bill Becomes Law

Before Congress went home for the fall campaign, lawmakers approved and President Obama signed legislation designed to speed U.S. reviews of generic drugs. Congress has been working on the FDA User Fee Correction Act for a long time to help the Food and Drug Administration clear a backlog of 2,700 generic drug applications and cut review times for copycat medicines to 10 months from an average of almost three years.

The FDA collects millions of dollars in user fees from the pharmaceutical and medical device industries each year in exchange for using the funding to improve the drug and device approval process. In addition to accelerating reviews, the fees would allow more frequent FDA inspections of facilities outside the U.S., which supply 80 percent of the nation’s drug ingredients. These overseas facilities are usually inspected about once every nine years, on average, compared with every 2-3 years for domestic plans, a 2010 Government Accountability Office report found.

Earlier this year, lawmakers reauthorized the pharmaceutical and device user fee agreements and authorized new user-fee programs for the generic-drug and biosimilars sectors. But the new law may still fall victim to a budget impasse. That’s because of what’s become known as the “fiscal cliff.”

Drug and device reviews, which rely heavily on fees paid by companies, may slow or halt in January because the Food and Drug Administration must receive certain funding from Congress before it can spend any of the industry money. That appropriations level is at risk unless lawmakers resolve the budget issues by January 1. If not, automatic spending cuts and tax increases take place –including huge cuts in most domestic spending programs as well as a sizable cut in Pentagon funding. Under the “budget sequester” law, the user-fee programs could not be funded. If lawmakers don’t resolve the budget fight, the Food and Drug Administration’s $3.87 billion budget could face an 8.2 percent cut, or $318 million.


Better Coordinated Care Proposed

New legislation being proposed by Sen. John Kerry, D-Mass., and Philadelphia-area Congresswoman Allyson Schwartz, D-Pa. would promote better coordination between medical and social services for the elderly.

Under the Older Americans Act, lawmakers established a variety of services for seniors including home-delivered meals, transportation and legal assistance. Building on that law, Schwartz and Kerry would ensure that an elderly diabetic, for example, would get their meals provided and coordinated with a doctor’s care.

“Preventable and highly manageable chronic diseases consume 75 percent of healthcare costs, making it vital that we find commonsense solutions to ensure that seniors can better manage their chronic diseases,” Schwartz said in a statement. “Improved coordination of care is essential to ensuring that seniors can live healthier lives and remain independent in their homes as long as possible.”

The lawmaker’s bill would instruct state and regional Agencies on Aging to promote care coordination plans aimed at seniors with chronic illnesses.


Also contributing to this column were: AP, Wall Street Journal, Modern Healthcare, the Hill, Kaiser Health News and Bloomberg News

Alan Schlein runs, an internet training and consulting firm. He is the author of the bestselling “Find It Online” books.

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