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Power, politics, and care for the poor in Texas
Local officials in Austin, Texas promised twelve years ago that if voters approved millions of dollars in new property taxes, it would be a win-win. The city would get a brand-new medical school and teaching hospital, and low-income people would get more health care services.
It was a novel strategy to circumvent the state legislature and funnel hundreds of millions of dollars through a local agency called a hospital district. Sort of like a school district, it’s charged with spending local tax dollars, and has a legal responsibility to provide health care services for the poor.
My investigation found that the hospital district in Travis County, where Austin is, allowed the University of Texas at Austin to use the money for administrative costs at the medical school, without providing direct health care services for poor patients. Instead, UT’s health clinics are charging the county for millions extra for actual medical services. And UT belongs to the second-richest university system in the country, thanks to the state’s oil money.
The agency’s problems with provision of care for the poor don’t stop with the medical school, either. Its partnership with one of the country’s largest Catholic health systems, Ascension, has devolved into an ugly legal battle and resulted in less care for poor patients.
It’s a cautionary tale of how powerful, rich interests can overshadow programs meant to care for poor patients, even in the most liberal county in Texas. Read the full investigations into medical school funding, and the breakdown of the alliance with Ascension.
Pharmacies’ New Year squeeze
A Biden administration rule to make fees PBMs charge pharmacies more transparent was welcome news to pharmacists, at least in theory. But in practice, the transition to the new system will mean that pharmacies face a cash flow crunch as fees overlap in 2024.
Before the rule, PBMs would charge pharmacies fees months after the fact. But now that the fees are shifting to be more up front, pharmacies will still be paying off fees from 2023 even as the new 2024 fees are piling up. The Biden administration is maintaining that its hands are tied, and it can’t force PBMs to give pharmacies more flexible payment plans during the transition.
I spoke with the co-owner of a family-run pharmacy in Oklahoma who said pharmacists are looking at potentially taking out loans to help smooth the transition. The issue has caught the attention of a prominent senator, and will be one to watch at the beginning of the year.
UnitedHealth’s secret rules to restrict rehab care
My colleagues Bob Herman and Casey Ross have been relentlessly reporting on UnitedHealth’s use of algorithms to cut off rehab care for Medicare Advantage patients. But their latest installment shows that UnitedHealth had secret rules in place to restrict which seriously ill patients even got rehab care in the first place.
Internal documents obtained by STAT showed that UnitedHealth outlined strict parameters for clinicians who initially reviewed referrals for rehab care. The documents show, for example, that frontline clinician reviewers were blocked from approving rehab care for most patients who lived permanently in nursing homes.
But the company in November abruptly told reviewers to stop following the policies and rely more on their own discretion. The company said the decision to pull back was not related to greater federal scrutiny of denials, but was driven by an internal review that found more of the cases could be handled by the frontline clinical reviewers, who are mostly nurses and therapists.
Read the full investigation here.
New year, new state legislative sessions
States are aiming to increase their oversight of health care costs in their brand-new legislative sessions in three major ways this year, my colleague Brittany Trang reports.
Brittany’s wrap-up includes a measure in Maine to expand the reach of the new prices that Medicare will negotiate for prescription drugs, and seven states that could renew their efforts to create prescription drug affordability boards.
Other areas to watch include heightened antitrust scrutiny, and whether more states actually move to cap health care expenditures in their states. Here’s the full rundown.
PhRMA brings on ex-pharmacy lobbyist
After shaking up the highest ranks of its federal lobbying team, PhRMA hired Yong Choe last quarter to lobby on PBM and drug pricing issues, according to federal lobbying disclosures. PBM reform is sure to be a hot topic early next year as lawmakers debate government funding packages.
Before signing on with PhRMA, Choe lobbied for Rite Aid for nearly a decade, and lobbied for the National Association of Chain Drug Stores before that. He also worked on business issues at the Republican Study Committee under the leadership of Rep. Jim Jordan (R-Ohio).
What we’re reading
- America has a life expectancy crisis. But it’s not a political priority, The Washington Post
- We wish we’d written that: STAT staffers share their favorite stories of 2023, STAT
- How rock-bottom prices drive shortages of generic drugs used in hospitals, NPR
- There’s a less intimidating alternative to EpiPens for dangerous allergic reactions. Why won’t the FDA approve it? STAT